State v. Baltimore & O.R. Co.

• Decision Date: 30 May 1871
• Parties: THE STATE OF MARYLAND v. THE BALTIMORE AND OHIO RAILROAD COMPANY.
• Court: Maryland Court of Appeals

34 Md. 344

THE STATE OF MARYLAND v. THE BALTIMORE AND OHIO RAILROAD COMPANY.

Court of Appeals of Maryland

May 30, 1871

APPEAL from the Superior Court of Baltimore City.

The case is stated in the opinion of the Court.

The cause was argued before BARTOL, C.J., STEWART, BRENT MAULSBY, GRASON, MILLER, ALVEY and ROBINSON, J.

Philip Francis Thomas, S. Teackle Wallis, I. Nevett Steele and Attorney General Jones, for the appellant.

Even if the unconstitutionality of the Acts of Assembly in question were a matter involved in the present issue, there is no ground on which the Court could be justified in pronouncing them unconstitutional.

The Baltimore and Ohio Railroad Company was incorporated by the Act of 1826, ch. 123. By section 14 of that Act, it was empowered to make "lateral railroads in any direction whatsoever" in connection with its main road from Baltimore to the Ohio, and with the same power for the construction and repair of the lateral as of the main roads. By section 23, however, the State reserved to its citizens and companies subsequently incorporated, the right to connect with the Baltimore and Ohio Railroad, "any other railroad leading from the main route to any part or parts of this State" By section 18, the Baltimore and Ohio Railroad Company was prohibited from charging more than three cents a mile for any single passenger, or more than the same sum per ton of merchandize.

In the winter of 1830, the Baltimore and Ohio Railroad Company applied to the Legislature for its concurrence in a plan proposed by the company, for the construction of a railroad from Baltimore to Washington. The Act of 1830, ch. 158, was accordingly passed.

This Act proving ineffectual, the Act of 1831, ch. 30, was passed.

But this last Act brought no subscribers, and the railroad company, not being able to borrow the necessary funds, came again to the Legislature for relief, which was liberally accorded by the Act of 1832, ch. 175.

By the Act of 1844, ch. 103, the Baltimore and Ohio Railroad Company is authorized to reduce the rate of tolls for passengers from time to time, in its discretion, so, however, as that the charge between the two cities shall at no time be less for a single passenger, than $1.50, and that one-fifth of all such passage moneys shall be accounted for and paid into the State treasury as heretofore. The same law also authorizes round-trip tickets at reduced rates, in the discretion of the company, and allows a proportionate reduction in the fare of way-passengers.

The Act of 1845, ch. 370, allows a reduction of fare also, in the discretion of the company, in the case of passengers passing from either of the two cities, or a point beyond either to the other city or a point beyond it--thus covering the case of passengers over a distance who pass over the road as part of a longer route.

The Act of 1852, ch. 328, finally disposes of the whole matter, by withdrawing all limitations whatever upon the authority of the company to reduce the passenger tolls and by authorizing them, in terms, "to regulate the tolls to be paid for the transportation of passengers on the Washington branch of said road, in their discretion, not exceeding the maximum ($2.50) heretofore fixed by law: provided that one-fifth of the passage money received from the said branch road be accounted for and paid into the State treasury as now required by law." The only legislative restraint therefore which now exists upon the absolute control of the whole matter by the appellee, is the fixed maximum which it shall not exceed. Its power to reduce the fare to the lowest figure is absolute, and the only right or benefit secured to or enjoyed by the State, so far as the fare is concerned, is to receive one-fifth of what the company may in its discretion, charge and shall actually receive.

Such was the state of the law, in December, 1868, when the president and directors of the Baltimore and Ohio Railroad Company, approving the report of their finance committee, to the same effect, refused to pay over to the treasurer the arrear of the State's one-fifth of passenger tolls. The committee reported that "the company has not the right to continue to pay this tax:" that "it has not the legal power to apply any portion of its receipts from passengers travelling upon the Washington branch to the payment of this tax: nor can the sum of which the Governor requests payment be considered to be, in any sense, 'the money of the State.%' "

As to the unconstitutionality of the statutes under which the State's right to one-fifth of the passenger tolls arose, the company relied upon an opinion of its eminent legal adviser, the senior counsel of the appellee here, which mainly rested for its conclusions upon the case of Crandall vs. Nevada, 6 Wallace, 35. Upon that case the learned Judge of the Superior Court rested his opinion.

This case differs widely from the Nevada case. The laws in question were a contract made with the company by the State, at the urgent entreaty of the company and for its aid and benefit. They constituted a contract, not merely because Acts of incorporation are from their nature contracts, but because they were supported by good and valuable consideration; because they were eminently fair and just; because the company not only solicited but joyfully accepted them, and built and finished, and has enjoyed the profits of its road under them and by means of them. The right to one-fifth of the gross receipts from passenger fare was given to the State in exchange for a valuable privilege and option which it parted with, upon that consideration, and on the company's urgency. Though now called a "capitation tax," it was reserved as the foundation of a proper sinking fund to provide reimbursement to the State for the public moneys expended, upon the company's solicitation, and for its benefit.

But, it is contended that under the decision in the Nevada Case, 6 Wallace, 40, and the language used by Chief Justice TANEY in the Passenger Cases, (7 Howard, 283,) as the burden of the exaction falls, here, on the passenger, it is practically a tax on him, and therefore a restraint on his constitutional rights. Non sequitur. The usual fare exacted by any railroad company would, if this were true, be unconstitutional. But it is not true. The American citizen has a right to travel, but certainly it is not his constitutional prerogative to travel free. Nor is he constitutionally aggrieved because the rates of fare happen to be exorbitant. They always are, where there is a monopoly, and yet he cannot help himself. Nor are his constitutional rights any the more invaded because the State receives a share of the fare he pays, than if it were received by a private or corporate person other than the State, provided the fare be exacted as fare, and the State's share is compensation for her part in furnishing him the railroad conveniences for which fare is properly payable and exacted. A State might build a railroad herself and receive the whole of the fare, and make it a high fare also, if she chose, without thereby making the fare a "capitation tax" and unconstitutional.

Besides, the Supreme Court, in the Nevada Case, 6 Wallace, 39, makes it an element of the sort of "tax" which it pronounces unconstitutional, that it should require each traveller to pay "a specific sum to the State," for the exercise of the right of transit. Here there is no "specific sum" named or set. The company fixes its own fares, at its own rates, and is only restrained by a fixed maximum.

The legislation in question imposes no tax, and creates no unconstitutional exaction, but simply embodies a fair and valid contract between the State and the appellee, whereby the latter agreed, for good and valuable consideration, to pay to the State a portion of its receipts, and the State, on its part, and at the request of the appellee, surrendered, in exchange therefor, a valuable privilege, by the concession of which the appellee had originally tempted the State into the common enterprise. The State is entitled to every intendment in favor of the constitutionality of the laws in question, not only on the grounds which usually control such questions, but because of all the circumstances surrounding the particular legislation. Mayor, &c., vs. Balt. and Ohio R. R. Co., 6 Gill, 291, 298; Ohio Life Ins. Co. vs. DeBolt, 16 How., 435-437; Gray vs. Bennett, 3 Metc., 522; Lane County vs. Oregon, 7 Wallace, 80; Dartmouth College vs. Woodward, 4 Wheat., 592, 593, 594, 627, 629, 630; Dwarris on Statutes, 9 Law Library, 39-42, 44, 45, 60; Passenger Cases, 7 Howard, 402, 403, 409, 483; State Bank of Ohio vs. Knoop, 16 Howard, 378, 381, 389, 391; Gordon vs. Appeal Tax Court, 3 Howard, 145; Searight vs. Stokes, 3 Howard, 179.

But the constitutionality or unconstitutionality of the laws in question is not in any way involved in the case at bar, and the first prayer of the appellee ought to have been rejected, on that ground, as well as on the merits of the legal proposition which it embodies. The appellee's second prayer should have been refused on the same ground of irrelevancy to the issue, even if it had not asked an instruction that the State was not entitled to recover. In an action for money had and received like this, and under the conditions stated in the appellant's prayers, both of the instructions asked by the appellant should have been granted.

There is no pretence of any intentional violation of the Constitution. The unconstitutionality alleged is not supposed to arise from the breach of any particular provision of that instrument, but only from violation of its general scope and spirit. There is, therefore, no turpis contractus to be discussed upon this record; no public policy which...