Howerton v. Tate

• Decision Date: 31 January 1873
• Citation: 68 N.C. 546
• Court: North Carolina Supreme Court
• Parties: STATE OF NORTH CAROLINA ex rel. WM. H. HOWERTON et al. v. S. McD. TATE et al.

68 N.C. 546

STATE OF NORTH CAROLINA ex rel. WM. H. HOWERTON et al.

v.S. McD. TATE et al.

Supreme Court of North Carolina.

January Term, 1873.

*1 The Legislature cannot authorize the presiding officers of its two branches to appoint proxies and directors in behalf of the State in corporations in which the State has an interest; nor can the Legislature itself make such appointments, for the reason that it would be an usurpation of executive power.

The Legislature by the Acts of 13th February, 1871, and 6th of April, 1871, having assumed to take the appointment of Directors for the State of the Western North Carolina Railroad from the Governor, it thereby dispensed with the necessity of his sending nominations to those offices to the Senate and left the Governor to pursue the law as far as he could.

CIVIL ACTION to recover the offices of directors on the part of the State in the Western North Carolina Railroad Company, (Eastern Division,) commenced in ROWAN Superior Court, and at Fall Term, 1872, a trial by jury having been waived by consent of both parties, the case was by agreement let for trial before his Honor, John M. Cloud, Judge of 8th Judicial District, on the -- day of January, 1873, in the City of Raleigh. The case was accordingly tried at the time and place agreed on.

The said Western North Carolina Railroad Company is a corporation duly created by Act of the General Assembly, ratified the 15th day of February, 1855.

The charter provides for eight directors on the part of the State and four on the part of private stockholders; and that those on the part of the State shall be appointed by the Governor, by and with the advice and consent of the Council of State, and the four on the part of the private stockholders shall be elected by them.

It also provides that the Board of Directors shall have power to fill vacancies in the Board. The defendants who claimed to be directors for and on behalf of the State, hold and claim their positions by virtue of the act of the Legislature, ratified the 13th day of February, 1871, and also of the act of 6th April, 1871, under which they took possession of the Road, property and effects of said corporation.

The relators were appointed by the Governor by and with the advice of the Council of State, Directors for the State in said corporation for the year beginning on the second Thursday in October, 1871. The said Directors met in Marion, in McDowell county, on the second Thursday in October, 1871, the time and place for the regular annual meeting of the stockholders; and a majority of the stock of private stockholders not being represented, the President of the Board, which had been illegally displaced, called a meeting of the stockholders in conformity with the by-laws of the corporation, to assemble in Statesville on the 26th of October, 1871, within twenty days from said second Thursday. A majority of the stock of private stockholders not being then represented, the said directors who had been appointed by the Governor organized as a Board. The relator William H. Howerton was duly elected President of the Board, and afterwards the Board appointed four other directors to fill the vacancies caused by the failure of the private stockholders to elect.

*2 A demand was made by the relator Wm. H. Howerton of the defendants for the surrender of the Road, property and effects of the corporation. The demand was refused and the relators, by leave of the Attorney General, brought this action in the name of the State. The opinion of the Court contains a full statement of the facts of the case. His Honor gave judgment for the plaintiff, and that the relators were entitled to offices and that they be admitted to the same, and the defendants ousted therefrom. Defendants appealed.

A. S. Merrimon and D. Coleman, for appellants .

Bailey, contra .

SETTLE, J.

In deciding the points presented in this record we have only to apply the principles enunciated in Clark v. Stanley, 66 N. C. Rep, 59 and the People v. Bledsoe and the People v. McKee, at this term.

We shall endeavor to do so in as few words as possible, and for the sake of convenience we will designate the boards of directors contending for the management of this road by the names of their respective presidents.

Clark v. Stanly decides that the Legislature cannot authorize the presiding officers of its two branches to appoint proxies and directors in all corporations in which the State has an interest.

We argue from this that they could not authorize a committee of their body to do so, and the prohibition is equally strong upon the whole number of members, and all for the same reason; it would be an usurpation of executive power. The Legislature itself, like the other departments of the government under our new Constitution, exists by a grant of power from the people, and it cannot exceed that grant, either directly or indirectly.

*3 The Tate board, who are the defendants in this action, and now in possession of the road, claim power and authority to hold the same under an act of the General Assembly, ratified the 13th day of February, 1871.

It will be observed that this act does not profess in terms to remove the Mott board, which is admitted then to have been in lawful possession of the road, but after providing for a meeting of the stockholders at Salisbury, declares that if a quorum of such stockholders and the State's proxy representing the stock of the State in said company shall be present at such meeting, it shall be competent for the stockholders of the said company for cause satisfactory to them, to remove the present board of directors, &c. The Legislature did not directly remove the directors appointed by the Governor, but it made a very forcible suggestion to the stockholders to do so, and the act goes on to say that in the event the present board of directors shall be removed, then F. N. Lucky and others (naming the eight persons who claim to be the State directors in the Tate board)...