Commonwealth v. Fayette County Railroad Co.

• Decision Date: 31 October 1867
• Court: Pennsylvania Supreme Court
• Parties: Commonwealth <I>versus</I> Fayette County Railroad Company.

55 Pa. 452

Commonwealth versus Fayette County Railroad Company.

Supreme Court of Pennsylvania.

May 20, 1867.

October 31, 1867.

May 20th 1867.

Before WOODWARD, C. J., THOMPSON, READ and AGNEW, JJ. STRONG, J., absent

Error to the Court of Common Pleas of Dauphin county.

Brewster, Attorney-General, for the Commonwealth, cited Acts of the 12th April 1859, § 1, Purd. 951, pl. 127, Pamph. L. 529; 29th April 1844, § 33, Purd. 949, pl. 118, Pamph. L. 497, May 1st 1857, Pamph. L. 665; Charles River Bridge v. Warren Bridge, 11 Pet. 420; Brewster v. Hough, 10 N. H. R. 138; Providence Bank v. Billings, 4 Pet. 514; West River Bridge v. Dix, 6 How. 507; Richmond Railroad Co. v. Louisa Railroad Co., 13 Id. 71; Gossler v. Georgetown, 6 Wheat. 596, 598; East Hartford v. Hartford Bridge Co., 10 How. 535; McLane v. U. States, 6 Pet. 404; Yeaton v. U. States, 5 Cranch 281; U. States v. Morris, 10 Wheat. 246; 2 Russ. & M. 35; Phalen v. Virginia, 8 How. 163; Balt. & Susq. Railroad v. Nesbit, 10 Id. 395; U. States v. Hodge, 3 Id. 534; Watson v. Mercer, 8 Pet. 88; 2 Sanf. S. C. R. 355 N. Ewing, for defendant in error, cited Acts of May 1st 1857, April 12th 1859, April 29th 1844, supra, February 19th 1849, § 20, Purd. 838, pl. 11, Pamph. L. 83; Iron City Bank v. City of Pittsburg, 1 Wright 340; Act April 16th 1850, Purd. 87, et seq., Pamph. L. 477; Street v. Commonwealth, 6 W. & S. 209.

The opinion of the court was delivered, October 31st 1867, by READ, J.

The learned judge in the court below assumed that the special Act of the General Assembly, authorizing the incorporation of the Fayette County Railroad Company, formed a contract between the state and the company, and was not affected by the 26th section of the 1st article of the constitution, which did not become a part of that instrument until several months after the 1st day of May 1857, the date of its passage. Looking at it in this point of view only, we should probably agree with the court below, whose opinion is sustained by the authorities cited in it in our own case of The Iron City Bank v. The City of Pittsburg, 1 Wright 340, and in the 8th edition of Angell & Ames on Corporations in 1866, p. 479, &c. and see Gilman v. City of Sheboygan, 2 Black 510.

There is, however, another view of the question in this case which does not appear to have been considered by the court below, and which in our opinion must govern our decision.

In order to preserve state control over acts of incorporation, the power to repeal, alter or amend them has been sometimes reserved in the constitution, or in general laws on the subject, or in any special acts of incorporation, and wherever it is so reserved its exercise does not impair the contract of which it forms a constituent part.

The special Act of Assembly in this case is to be found in the Pamphlet Laws of 1857, and is entitled "An act to incorporate the Fayette County Railroad Company." The 1st section authorizes the organization of the company, "subject to all the provisions of the act regulating railroad companies in this Commonwealth, approved the 19th day of February, A. D. 1849, and so far as the same are not altered or supplied by this act."

The 2d, 3d and 4th sections relate to the capital-stock subscriptions by the borough of Uniontown and to the borrowing of money, and the 6th to the time of commencing and completing the construction of the road, and the use of it. The 5th section authorizes the president and directors to pay, if they deem it expedient, 6 per cent. interest on all instalments paid in, to non-defaulting stockholders, until the road is completed. "Provided, also, that the stock of the said company shall not be subject to a tax in consequence of the payment of the interest hereby authorized" nor "until the net earnings of the said company shall amount to at least 6 per cent. per annum upon the capital invested."

By an "Act to equalize taxation upon corporations," passed 12th April 1859, Pamph. L. 529, the capital stock of all companies whatever, incorporated by or under any law of this Commonwealth, or that may be hereafter incorporated, shall be subject to and pay a tax into the treasury of the Commonwealth annually, at the rate of 1 mill for each 1 per cent. of dividend made or declared by such company.

Upon the return of the defendants the auditor-general and state treasurer settled an account charging them on their dividend of 3 55/100 per cent. with a tax of 155/200 mills, amounting to $190.63, which the defendants say they are secured from paying by the 5th section of their charter. This railroad company is "subject to all the provisions of the acts regulating railroad companies" above mentioned, one of which is contained in the 20th and last section in the following words: "Section 20. That if any company incorporated as aforesaid shall at any time misuse or abuse any of the privileges granted by this act or by the special act of incorporation, the legislature may revoke all and...