Illinois Cent. R. Co. v. Mississippi Cotton Seed Products Co

• Decision Date: 15 May 1933
• Docket Number: 30590
• Citation: 148 So. 371,166 Miss. 579
• Court: Mississippi Supreme Court
• Parties: ILLINOIS CENT. R. CO. v. MISSISSIPPI COTTON SEED PRODUCTS CO

148 So. 371

166 Miss. 579

ILLINOIS CENT. R. CO. v. MISSISSIPPI COTTON SEED PRODUCTS CO

No. 30590

Supreme Court of Mississippi

May 15, 1933

Division A

APPEAL from circuit court of Hinds county HON. W. H. POTTER, Judge.

Suit by the Mississippi Cotton Seed Products Company against the Illinois Central Railroad Company. From a judgment in favor of the plaintiff, the defendant appeals. Reversed, and cause dismissed.

Reversed, and cause dismissed.

May Sanders, McLaurin & Byrd, of Jackson, Chas. N. Burch, of Memphis, Tennessee, and R. V. Fletcher, of Chicago, Illinois for appellant.

The Gulf & Ship Island Railroad Company has not lost its rights under its legislative charter. The Legislature made the stock transferable by assignment and did not restrict its ownership to any particular person or corporation.

Chapter 542, Acts of 1982.

The corporate body, Gulf & Ship Island Railroad Company, is still in existence. The corporate entity has not been dissolved.

Clearly it was intended by the Legislature that the shares of stock in the corporation should be subject to purchase and sale just as in any other corporation.

10 Cyc., page 575, par. D; 10 Cyc., page 575, par. b; 10 Cyc., page 704, par. c; 33 Cyc., page 63.

Different and distinct corporations may have the same officers and shareholders and this community of officers and of members does not have the effect of merging the two corporations into each other.

10 Cyc., page 373; 7 R. C. L., page 25.

A corporation is for most purposes an entity distinct from its individual members or stockholders who, as natural persons, are merged in the corporate identity.

7 R. C. L. 25; 7 R. C. L., page 707, par. 712.

Distinct corporations may have same officers and shareholders.

10 Cyc., page 373, par. 10; Pullman's Palace Car Co. v. Mo. Pac. Ry. Co. et al., 115 U.S. 597, 29 (L. Ed.) U. S. 499; In re: Watertown Paper Co., 169 F. 252; Jessup et al. v. Illinois Central Railroad Co. et al., 36 F. Rep. 735; Monongahela Bridge Co. v. Pittsburg & Birmingham Traction Co., 196 Pa. St. 25, 46 A. 99, 79 Am. St. Rep. 685; McTighe et al. v. Macon Construction Co. et al. (Ga. case), 33 L.R.A. 800, at pages 802-803; A. T. & S. F. R. R. Co. v. Cochran, admr., etc., 7 L.R.A. 414; Moore, etc., Hardware Co. v. Towers Hardware Co., 87 Ala. 206, 6 So. 41; Fietsam v. Hay, 122 Ill. 293, 13 N.E. 501; Louisville Banking Co. v. Eisenman, 94 Ky. 83, 42 Am. St. Rep. 335, 21 S.W. 531, 1049.

The court was without any authority in this proceeding, to undertake to decide whether the franchise rights of the Gulf & Ship Island Railroad Company had been lost by any supposed merger or consolidation.

No private individual can maintain a suit to enforce the forfeiture of a charter, unless specially authorized by the state to do so, nor can a mere ground or cause for forfeiture be successfully used by him as a part of his cause of action in a collateral proceeding, nor can acts amounting to a forfeiture be set up by plea or answer in any collateral action.

1 Elliott on Railroads (3 Ed.), par. 66, page 124; North v. State, 107 Ind. 456, 8 N.E. 159; State v. Rio Grande R. R. Co., 41 Tex. 217; 5 Thompson on Corporations (2 Ed.), sec. 6520; Hinchman v. Philadelphia, etc., R. R. Co., 160 Pa. St. 120, 28 A. 652; Twelfth Street Market Co. v. Phila., etc., R. R. Co., 142 Pa. St. 580, 21 A. 902; Hammett v. Little Rock, etc., Co., 20 Ark. 204; Union Branch R. R. Co. v. East Tenn., etc., Co., 14 Ga. 327; Logan v. Vernon, etc., R. R. Co., 90 Ind. 552; La Grange R. R. Co. v. Rainey (Tenn.), 7 Coldw. 420; 19 L.R.A. 247 (Note); and 58 Am. Dec. 181; Connecticut and Passumpsic Rivers R. R. Co. v. Bailey, 24 Vermont 465, 58 Am. Dec. 181; 10 Cyc. 1086; 10 Cyc. 1087; Bohannon v. Binns, 31 Miss. 355; Middleton v. Georgetown Mercantile Co., 117 Miss. 134; Commonwealth v. Monongahela Bridge Co., 216 Pa. St. 108, 8 Anno. Cas. 68; Parker et al. v. Bethel Hotel Co., 31 L.R.A. 706.

The Gulf & Ship Island Railroad Company tariff H-2011 was and is a lawful and legal tariff.

If the tariff H-2011 was lawful and binding on the Gulf & Ship Island Railroad Company and the Illinois Central Railroad Company, then of necessity the tariff was lawful and binding on the shipper.

It seems to us that the agreement precludes any inquiry as to how or when Gulf & Ship Island tariff No. H-2011 was fixed and approved. The plaintiff and the defendant stipulated that it was a lawful tariff binding on the Gulf & Ship Island Railroad and the Illinois Central Railroad. If this be true, then the charges exacted were exacted under a lawful tariff.

4 R. C. L., page 604; Sou. Ry. Co. v. Buckeye Cotton Oil Co., 126 Miss. 562.

The order of the Mississippi Railroad Commission, dated December 3, 1925, is void and of no effect in so far as the Gulf & Ship Island Railroad Company is concerned, for three reasons: (1) The Gulf & Ship Island Railroad Company was not a party to the proceedings in which said order was entered; (2) The Mississippi Railroad Commission had no right, power or authority to prescribe rates for the Gulf & Ship Island Railroad Company; (3) The said order could not apply to the Gulf & Ship Island Railroad Company because of the federal injunction enjoining the railroad commission from undertaking to fix the rates for the Gulf & Ship Island Railroad Company.

Hinton v. Perry County, 84 Miss. 536; Gulf & Ship Island Railroad Co. v. Adams, 85 Miss. 772, 38 So. 348; Stone v. Y. & M. V. R. R. Co., 62 Miss. 607; Miss. Railroad Commission v. G. & S. I. R. R. Co., 78 Miss. 751; G. & S. I. R. R. Co. v. Adams, 90 Miss. 559.

The only power the railroad commission can exercise over the rates of the Gulf & Ship Island Railroad Company is to see that they do not exceed the limits fixed by the charter.

Stone v. R. R. Co., 62 Miss. 607; 4 R. C. L., pages 617-618, par. 89; Georgia R. & B. Co. v. Smith, 128 U.S. 174, 32 U. S. (L. Ed.) 377; Pengree v. Michigan Central R. Co., 118 Mich. 314, 76 N.W. 635, 53 L.R.A. 274; Stone v. Yazoo, etc., R. Co., 62 Miss. 607; Mississippi Railroad Commission v. Gulf & Ship Island Railroad Co., 78 Miss. 751.

The order of December 3, 1925, does not apply to the shipments in question in this suit because to so hold would be to deprive defendant, Illinois Central Railroad Company, of its property without due process of law and would unlawfully discriminate against the Illinois Central Railroad Company.

Mississippi Railroad Commission v. G. & S. I. R. R. Co., 78 Miss. 751; G. & S. I. R. R. Co. v. Adams, 90 Miss. 559; Stone v. Y. & M. V. R. R. Co., 62 Miss. 607; Bohannon v. Binns, 31 Miss. 355; 1 Elliott on Railroads (3 Ed.), page 124; Public Utilities Com. of Illinois v. Railroad Co., 278 Ill. 58, 115 N.E. 904; I. C. R. R. Co. v. R. R. Com. of Ky., 1 F.2d 805; I. C. C. v. L. & N. R. R. Co., 227 U.S. 88, 93; L. & N. R. R. Co. v. U.S., 245 U.S. 466; Mississippi Railroad Commission v. M. & O. R. R. Co., 154 Miss. 871.

Lotterhos & Travis, of Jackson, for appellee.

The Gulf & Ship Island Railroad has lost the right to fix its own rates by reason of acquisition of control by the Illinois Central Railroad Company.

The Gulf & Ship Island Railroad Company was organized under a special legislative charter approved February 23, 1882, and appearing in the Acts of 1882 as chapter 542, page 849.

It will be noted that the legislative charter of the Gulf & Ship Island Railroad granted the road the power to fix rates only to a limited extent; that is to say, its board of directors was authorized to fix the rates to be charged on freight up to certain maxima fixed as to certain classifications of freights as the same existed in 1882. The power which is relied on in this case by the appellant as a contract right free from interference can be exercised only by the board of directors and not by the railroad company generally through other officers or agents.

The charter powers of railroads to fix their rates are strictly construed.

2 Hutchinson on Carriers (3 Ed.), sec. 574; 4 R. C. L. Carriers, sec. 87, page 615; Mississippi Railroad Commission v. Y. & M. V. Railroad Co., 62 Miss. 607; Mississippi Railroad Commission v. Natchez, etc., Railroad, 62 Miss. 646; Mississippi Railroad Commission v. G. & S. I. Railroad, 78 Miss. 750, 29 So. 789; Chicago, etc., Railroad v. Minnesota, 134 U.S. 418, 33 L.Ed. 970.

In the case of Mississippi Railroad Commission v. G. S. I. R. R., supra, the Mississippi court held generally that the Gulf & Ship Island had a contract right under its charter to fix rates within the terms of the charter as to single line movements of freight, but that the court expressly excluded from its holding the question of joint traffic rates or rates applicable to shipments over the line of the Gulf & Ship Island and some other railroad, which is the case before the court at this time.

The charter power to fix rates is lost when control by stock ownership is acquired by another carrier, substantially amounting to a consolidation.

4 R. C. L. Carriers, sec. 91, page 619; St. Louis, etc., Railroad Co. v. Gill, 156 U.S. 649, 39, L.Ed. 567; Norfolk & Western R. Co. v. Pendleton, 156 U.S. 667, 39 L.Ed. 574; Covington & Lexington Turnpike Road Co. v. Sanford, 164 U.S. 578, 41 L.Ed. 560; Benwood v. Public Service Commission, L.R.A. 1915C, page 261.

The foregoing authorities establish a principle which, so far as we know, has never been denied. Under these authorities if the Illinois Central Railroad Company had purchased the properties of the Gulf & Ship Island Railroad and thereafter operated the two railroads as a single system, substantially as is done in fact, unquestionably there would be no further right to claim that the Gulf & Ship Island has the right to fix its own rates to any extent without legislative...