Appeal
from Columbia Circuit Court, MINOR WALLACE, Special Judge.
Reversed.
STATEMENT
BY THE COURT.
This
suit was brought under sections 6749-6751, Kirby's
Digest, which in original form was as follows:
"Be
it enacted by the General Assembly of the State of Arkansas:
"Section 1. The franchise and all charter rights
whatsoever of any railroad company in and to all railroad
roadbed, bridge, depot, or other railroad property, as well
as the possession of and right to operate same, which may
have been acquired by such railroad under and by virtue of
any lease, shall be forfeited, and such railroad company
ousted of its right thereunder to operate, possess or
control the same, if such lease shall not have been made in
conformity with the statute governing the making of such
leases, or if such lessee shall fail to maintain said
property in good repair so as to afford safe and reasonably
prompt facilities of travel to the public, or shall fail to
furnish reasonable shipping accommodations for freight to
its patrons.
"Sec. 2. This act may be enforced, at the instance of
the State, by her Attorney General, by information in the
nature of quo warranto or other proper suit in any court
having jurisdiction.
"Sec. 3. That whenever any railroad company shall by
the judgment of any court rendered in any suit instituted
by the State, be ousted of the possession of or right to
operate, any railroad, bridge, depot or other property
leased to such company by any other railroad company, then
such lessor shall immediately succeed to all the rights in
and to said leased property, had and enjoyed by it at the
time of the execution of such lease; provided such lessor
shall have been in no way responsible for the acts upon
which said judgment was based, except in the making of said
lease.
"Sec. 4. That all laws in conflict herewith are hereby
repealed, and this act take effect from and after its
passage.
"Approved May 23, 1901."
The
complaint filed October 22, 1901, was as follows:
"The State of Arkansas, by her Attorney General
states and shows to the court: That the defendant, the
Louisiana & Northwest Railroad Company, is a railroad
corporation organized under the laws of the State of
Louisiana. That some time in April, 1897, the said
Louisiana & Northwest Railroad Company pretendedly leased
for 21 years from the defendant, the St. Louis Southwestern
Railway Company, a certain line of the railroad, a branch
of the said St. Louis Southwestern Railway Company, running
from the town of McNeil to Magnolia, Columbia County
Arkansas, a distance of six and four-tenths (6.4) miles
known as the Magnolia branch, together with the right of
way and all appurtenances thereto belonging; that
defendants are requested to attach a copy of said lease to
their answer. That no notice of the making of said lease or
of the meeting of the directors at which it was made was
ever given, as provided by law; nor was the making of said
lease ever approved by a two-thirds majority of the
stockholders or directors of said St. Louis Southwestern
Railway Company; that said Louisiana & Northwest Railroad
Company had not filed with the Secretary of State of
Arkansas its articles of incorporation as required by law.
Plaintiff further alleges that said Louisiana & Northwest
Railroad Company has for a long time past negligently
knowingly and willfully permitted the said line of
railroad, leased to it as aforesaid, to decay, to be out of
repair, to become unsafe and wholly unreliable in the
carriage of passengers and freight between McNeil and
Magnolia, Ark.; that said Louisiana & Northwest Railroad
Company has failed and refused to furnish cars or
reasonable transportation for freight along said railroad,
leased, as aforesaid, and has refused to take freight when
tendered it at Magnolia for McNeil and other points on the
main line of the railroad connected therewith.
"Wherefore, he prays that a writ of quo warranto be
issued, directed to and served on said Louisiana & Northwest Railroad Company, and said St. Louis Southwestern
Railway Company, commanding them to appear before this
court, and show cause, if they can, why the right and
franchise of said Louisiana & Northwest Railroad Company to
possess, use, and operate said line of railway under said
lease, and all other property described in said lease,
should not be declared forfeited and taken from it, and it
be ousted of the possession and the right to the possession
thereof."
Every
material allegation of fact was put in issue by specific
denial and positive allegation affirming the contrary of the
facts alleged by the State. Issues of law were also raised
which are discussed in the opinion. The case was tried before
the court, a jury trial being denied, and the following
judgment entered:
"And now, it appearing to the court that the
defendant, the Louisiana & Northwest Railroad Company, at
and before the institution of this suit, was, and still is,
operating the railroad extending from Magnolia, Ark., to
McNeil, Ark., a distance of six and four-tenths miles, and
known as the Magnolia branch, under a written contract of
lease, executed in April, 1897, with its codefendant, and
it further appearing that said lease was not executed under
authority of law, and not in accordance with the statute
directing how such leases may be made, the court finds that
said lease is invalid and of no effect.
"It further appearing that at the time of the
institution of this suit, and for a long time prior to said
time, the defendant, the Louisiana & Northwest Railroad
Company, did not maintain said railroad in a condition so
as to afford to the traveling public reasonably safe
facilities of travel, and at and during said time did not
furnish to its patrons reasonable shipping accommodation
for freight, and that such failure was wilful, unnecessary,
without reasonable excuse, and was continuous.
"It is further appearing that the St. Louis
Southwestern Railway Company, one of the defendants herein,
is not shown to have been responsible for the unsafe
condition of said railroad, nor the failure to furnish
proper shipping accommodations to the patrons of said road
in any other way than the making of said lease.
"The court is of the opinion that the right of the
defendant, the Louisiana & Northwest Railroad Company, to
any longer operate, possess or control said railroad should
be abrogated, and all of its charter rights claimed or
owned by it so to do should be forfeited, and that said
road should revert back to the St. Louis Southwestern
Railway Company, and the possession thereof should be given
to it, and that it be permitted and directed to proceed to
operate said road in accordance with the law and its
charter contract with the State of Arkansas.
"It is therefore considered, ordered and adjudged by
the court that the defendant, the Louisiana & Northwest
Railroad Company, quit and surrender possession of the
railroad extending from Magnolia, Ark., to McNeil, Ark.,
known as the 'Magnolia branch,' and described in a
certain lease executed by said Louisiana & Northwest
Railroad Company and its codefendant, St. Louis
Southwestern Railway Company, and shall quit and surrender
possession of all the depots, sidetracks and other
appurtenances belonging thereto, as well as all other
property covered by and described in said lease. And it is
further considered, ordered and adjudged by the court that
all charter rights owned or claimed by said defendant
railroad company to operate, possess, control or in any
manner interfere with said railroad, depots and other
property above described, be and is hereby forfeited, and
any effort on the part of said Louisiana & Northwest
Railroad Company to attempt in any way to interfere with,
operate or possess any part, or all, of said railroad, the
appurtenances thereunto belonging, or other property above
described shall be a contempt of court. It is further
ordered and directed that the said defendant, the St. Louis
Southwestern Railway Company, take possession of said
railroad, the appurtenances thereunto belonging and
property described above, and at once proceed to operate
the same in accordance with the laws governing railroad
companies in this State, and that the defendant, Louisiana & Northwest Railroad Company, pay all costs in and about
this cause extended. "
From
this judgment the railroad has prosecuted this appeal.
Case
reversed and cause remanded.
J. M.
Moore and W. B. Smith, for appellant.
Where a
retroactive construction of an act will affect vested rights,
the court will disregard the literal meaning, and give it
such meaning as will give the act a prospective effect. 59
Ark. 408; Endlich, Interp. Stat. §§ 271-273; 56
Ark. 495; 14 Ark. 464; 6 Ark. 484; 5 Ark. 510; 70 Ark. 262.
The State cannot complain of a waiver by the stockholders of
an act that is purely for their personal benefit. 145 U.S.
393; 51 F. 324. Forfeitures are only allowed for the plain
abuse of power by which the corporation fails to fulfill the
design and purpose of its organization. 10 Ohio 535; 32 Oh.
St. 487; 51 Miss. 602; 3 L. R. A. 518. Statutes working a
forfeiture are strictly construed. 13 Am. & Eng. Enc. Law,
55; Endlich, Interp. Stat. § 343; 59 Ark. 408.
Robert
L. Rogers, Attorney General, G. W. Hendricks, and A. S.
Kilgore, for appellant.
In the
execution of the lease neither the laws of Arkansas nor
Missouri were complied with. 71 Ark. 451; 12 F. 513;
Kirby's Dig. § 6742. Trial of the question of fact
by the court was proper, some of the proceedings being in the
nature of quo warranto. 50 Ark. 275; 32 Ark. 557; 34 Ark.
707; 26 Ark. 281; 40 Ark. 290.
J. M
Moore and W. B. Smith, for appellant...
