St. Louis, I. M. & S. Ry. Co. v. Paul

• Decision Date: 01 May 1897
• Citation: 40 S.W. 705
• Parties: ST. LOUIS, I. M. & S. RY. CO. v. PAUL. KANSAS CITY, FT. S. & M. RY. CO. v. BOLAND. SAME v. WHIDDICK.
• Court: Arkansas Supreme Court

40 S.W. 705

ST. LOUIS, I. M. & S. RY. CO. v. PAUL.

KANSAS CITY, FT. S. & M. RY. CO. v. BOLAND.

SAME v. WHIDDICK.

Supreme Court of Arkansas.

May 1, 1897.

Appeal from circuit court, Saline county; Alexander M. Duffie, Judge.

Appeals from circuit court, Craighead county; William H. Cate, Judge.

Actions by Charles Paul against the St. Louis Iron Mountain & Southern Railway Company, by John Boland against the Kansas City, Ft. Scott & Memphis Railway Company, and by Fritz Whiddick against the last-named corporation, to recover wages due the respective plaintiffs, and the damages allowed by statute for nonpayment. Plaintiffs in each case recovered judgments, from which the defendants respectively appeal. Affirmed.

Dodge & Johnson, for appellant St. Louis, I. M. & S. Ry. Co. Wallace Pratt and Olden & Orr, for appellant Kansas City, Ft. S. & M. Ry. Co.

BATTLE, J.

The appellees, Charles Paul, John Boland, and Fritz Whiddick, were day laborers in the employment, respectively, of the appellants, the St. Louis, Iron Mountain & Southern Railway Company and the Kansas City, Ft. Scott & Memphis Railway Company; one earning $1.25 a day, and each of the other two $1.35. Their employers discharged them without paying the wages they had, respectively, earned, and each brought a suit against his debtor for the amount due him, and the damages allowed by the act of the general assembly of the state of Arkansas entitled "An act to provide for the protection of servants and employés of railroads," approved March 25, 1889. The defendants did not deny that the wages claimed were due them, but resisted the recovery of the damages on the ground that the act under which they were claimed was in violation of the fourteenth amendment of the constitution of the United States and of the constitution of the state of Arkansas.

The first section of the act in question, to the extent it was sustained in Leep v. Railway Co., 58 Ark. 407, 25 S. W. 75, is as follows: "Whenever any corporation or person engaged in the business of operating or constructing any railroad or railroad bridge, shall discharge with or without cause, or refuse to further employ, any servant or employé thereof, the unpaid wages of such servant or employé then earned at the contract rate, without abatement or deduction, shall be and become due and payable, on the day of such discharge or refusal to longer employ; and if the same be not paid on such day, then, as a penalty for such non-payment, the wages of such servant or employé shall continue at the same rate until paid: provided, such wages shall not continue more than sixty days, unless an action therefor shall be commenced within that time." In sustaining it, the court held that the words "without abatement or deduction," as used in the act, mean "that the unpaid wages earned at the contract rate, at the time of the discharge, shall be paid without discount on account of the payment thereof before they were payable according to the terms of the contract of employment."

The railroad companies contend that they are persons, within the meaning of that word as used in the fourteenth amendment of the constitution of the United States; and that the act in question, as sustained and construed in Leep v. Railway Co., supra, is in violation of the amendment in this: it denies to them the "equal protection of the law." If it be conceded that they are persons, as contended, it would not follow that they are entitled to all the rights of natural persons. They possess only those rights, powers, or properties which the charters of their creation confer upon them, either expressly or as incidental to their existence. The same is true of all other corporations. All of them are creatures of the legislature. In their creation the legislature could and did divide them into classes, and give to each class such rights, capacities, and powers as it saw fit. Neither has the right to complain of a discrimination in favor of one against the other, or that all or any of the rights of natural persons have not been given to it.

The powers conferred upon them by their charters may be modified or diminished by amendment or extinguished by the repeal of the charters. The constitution of this state ordains: "The general assembly shall have the power to alter, revoke or amend any charter of incorporation now existing and revocable at the adoption of this constitution, or any that may hereafter be created, whenever in their opinion, it may be injurious to the citizens of this state; in such manner, however, that no injustice shall be done to the corporators." Const. art. 12, § 6. The railroad companies in this case do not deny, but tacitly concede, that their charters are subject to alteration under this provision of the constitution. The question is, did the legislature have the power to do so in the manner and to the extent it undertook by the act in question?

In commenting upon such a power to amend, which was reserved by the state of California, Mr. Justice Field, in delivering the opinion of the court in Railroad Tax Cases, 13 Fed. 754, said: "It [the state] may confer, by its general laws, upon corporations, certain capacities of doing business, and of having perpetual succession in their members. It may make its grant in these respects revocable at pleasure. It may make the grant subject to modifications, and impose conditions upon its use, and reserve the right to change these at will. But whatever property the corporations acquire in the exercise of the capacities conferred, they hold under the same guaranties which protect the property of individuals from spoliation. It cannot be taken for public use without due process of law, nor can it be subjected to burdens different from those laid upon the property of individuals under like circumstances. The state grants to railroad corporations formed under its laws a franchise, and over it retains control, and may withdraw or modify it. By the reservation clause it retains power only over that which it grants. It does not grant the rails on the road. It does not grant the cars on the track, nor the engines which move them; and over them it can exercise no power except such as may be exercised with reference to all property used by carriers for the public. The reservation of power over the franchise — that is, over that which is granted — makes its grant a conditional or revocable contract, whose obligation is not impaired by its revocation or change."

"In Sinking Fund Cases, 99 U. S. 700, the question was whether congress had the constitutional power to enact a law compelling the Union Pacific and Central Pacific Railroad Companies to set aside a portion of their current earnings as a sinking fund for the purpose of meeting a very large indebtedness secured by mortgage upon the roads, and payable at a future day. The majority of the court held that the legislation was valid as an exercise of the general legislative powers of the government, and also because the right to alter or amend the charters of the companies had been expressly reserved to congress." In commenting on the reserved power to amend or repeal the charters of corporations, in that case, Chief Justice Waite, in delivering the opinion of the court, said: "All agree that it cannot be used to take away property already acquired under the operations of the charter, or to deprive the corporation of the fruits actually reduced to possession of contracts lawfully made; but, as was said by this court, through Mr. Justice Clifford, in Miller v. State, 15 Wall. 498, `it may safely be affirmed that the reserved power may be exercised, and to almost any extent, to carry into effect the original purposes of the grant, or to secure the due administration of its affairs, so as to protect the rights of stockholders and of creditors, and for the proper disposition of its assets'; and again, in Holyoke Co. v. Lyman, Id. 519, `to protect the rights of the public and of the corporators, or to promote the due administration of the affairs of the corporation.' Mr. Justice Field, also speaking for the court, was even more explicit when, in Tomlinson v. Jessup, Id. 459, he said, `the reservation affects the entire relation between the state and the corporation, and places under legislative control all rights, privileges, and immunities derived by its charter directly from the state'; and again, as late as Railroad Co. v. Maine, 96 U. S. 510, `by the reservation * * * the state retained the power to alter it [the charter] in all particulars constituting the grant to the new company formed under it, of corporate rights, privileges, and immunities.' Mr. Justice Swayne, in Shields v. Ohio, 95 U. S. 324, says, by way of limitation: `The alterations must be reasonable. They must be in good faith, and be consistent with the object and scope of the act of incorporation. Sheer oppression and wrong cannot be inflicted under the guise of amendment or alteration.' The rules as here laid down are fully sustained by authority. * * * Giving full effect to the principles which have thus been authoritatively stated, we think it safe to say that whatever rules congress might have prescribed in the original charter for the government of the corporation in the administration of its affairs it retained the power to establish by amendment. In so doing it cannot undo what has already been done, and it cannot unmake contracts that have already been made, but it may provide for what shall be done in the future, and may direct what preparation shall be made for the due performance of contracts already entered into. It might originally have prohibited the borrowing of money on mortgage, or it might have said that no bonded debt should be created without ample provision by sinking fund to meet it at maturity. Not having done so at first, it cannot now, by direct legislation, vacate mortgages already made under the powers originally granted, nor release debts already...