State v. Manchester & L. R. R.

• Decision Date: 12 March 1897
• Citation: 38 A. 736,69 N.H. 35
• Parties: STATE v. MANCHESTER & L. R. R.
• Court: New Hampshire Supreme Court

38 A. 736

69 N.H. 35

STATE

v. MANCHESTER & L. R. R.

Supreme Court of New Hampshire. Rockingham.

March 12, 1897.

Action by the state against the Manchester & Lawrence Railroad. There was a demurrer to the declaration. Overruled.

The declaration is as follows: "In a plea of debt, for that the defendants are a corporation organized and existing, under and by virtue of the laws of said state, to construct and maintain a railroad from the city of Manchester, in our county of Hillsboro, to the state line, in Salem, in said county of Rockingham; and it was and is provided in and by their charter (section 5, c. 549, Laws 1817) that, in any and every year when the net receipts from the use of said road shall exceed the average of ten per cent. per annum from the commencement of their operations, the excess shall be paid into the treasury of the state. That in the year A. D. 1849 the defendants constructed their said railroad from said Manchester to the state line, in said Salem, and have maintained their said railroad to the day of the purchase of this writ; and the plaintiff avers that the net receipts received by the defendants from the use of said road have in each and every year since the 1st day of January, 1867, exceeded an average of ten per cent. per annum from the commencement of their operations, by a large sum, to wit, the sum of seven hundred and fifty thousand dollars, which said sum the defendants, though hitherto requested, have neglected to pay into the treasury of said state, whereby and by reason whereof an action has accrued to the plaintiff to have and recover of the defendants said sum of seven hundred and fifty thousand dollars. Also, for that the defendants are a corporation duly chartered and organized, under and by virtue of the laws of said state, to construct and maintain a railroad within said state, and from the 1st day of January, 1849, to the date of this writ, have owned and maintained a railroad extending from the city of Manchester, in our county of Hillsboro, to the state line, in Salem, in said county of Rockingham; and the plaintiff avers that the net receipts received by the defendants from the operation of their said railroad have exceeded the average of ten per cent. per annum on its expenditures from the commencement of its operations in each and every year from said 1st day of January, 1849, to the date of the purchase of this writ, by a large amount, to wit, by the sum of seven hundred and fifty thousand dollars, which said sum the defendants, though requested, have neglected to pay into the treasury of the state, whereby and by reason whereof an action has accrued to the plaintiff to have and recover of the defendants said sum of seven hundred and fifty thousand dollars." The defendants demurred.

E. G. Eastman, Atty. Gen., for the State.

Worcester, Gaefney & Snow and O. E. Branch, for defendants.

CARPENTER, C. J. The policy of the state to limit the profits of persons and corporations to whom it grants the franchise of constructing public highways, and of taking tolls for the use of them, as compensation for their services and disbursements, is older than the constitution, and has been uniformly maintained. It has been effectuated in various ways. The act entitled "An act to regulate ferries," passed February 28, 1783 (Laws [Ed. 1797] p. 341), and reciting in the preamble that "the demands of ferrymen within this state for carrying the subjects thereof and others across the rivers in the same state are exorbitant and arbitrary," required the courts of general sessions of the peace in each county to establish the rates of ferriage for every ferry in the county, and prohibited ferrymen from charging or taking any greater tolls than those prescribed by the courts. In many of the subsequent grants of ferries an equivalent provision, though superfluous was inserted. 11 Priv. Laws 1798,¹ p. 268; 12 Priv. Laws 1799, pp. 12, 16, 104, 150; 13 Priv. Laws 1800, pp. 118, 247; 13 Priv. Laws 1801, p. 247; 15 Priv. Laws 1804, p. 174; 16 Priv. Laws 1805, p. 116; 21 Priv. Laws 1817, p. 8. The act, with amendments not here material, has ever since been in force. Laws (Ed. 1830) p. 181; Eev. St. c. 64, § 2; Gen. St. c. 72, § 2; Pub. St. c. 80, § 2. Tollbridge charters have contained a similar provision, or have specified the rates of toll that may be taken. 4 Priv. Laws 1783, p. 495; 6 Priv. Laws 1792, p. 533; 8 Priv. Laws 1794, p. 256; 9 Priv. Laws 1795, pp. 77, 86, 246; 12 Priv. Laws 1802, p. 231; 16 Priv. Laws 1805, p. 227; Priv. Laws 1836, c. 69; Laws 1878, c. 150. Many charters provided that the bridge should become public property, free of toll, whenever the proprietors were reimbursed, by tolls or otherwise, for the expenses of erecting and maintaining the bridge, with interest at a specified rate. Priv. Laws 1839, cc. 30, 32; Laws 1848, c. 795. In some cases the justices of the court were required to so regulate the tolls that the proprietors should receive not more than a named annual per cent. of profit upon their investment. Laws 1816, c. 71; Laws 1817, cc. 10, 11; Laws 1818, c. 75; Priv. Laws 1835, c. 6; Priv. Laws 1836, cc. 69, 105; Priv. Laws 1838, c. 19. In 1877 the legislature, after reciting that the charter of Portsmouth bridge, granted in 1819 (Laws 1819, c. 50), required the proprietors to exhibit to the justices of the court an account of the stuns expended on the bridge, and the justices thereupon to fix the tolls; that the proprietors had negligently omitted to exhibit such account, and had themselves, without legal authority, established excessive and unreasonable rates of toll,—resolved "that the justices of the supreme court are hereby instructed to revise the rates of toll now collected by said proprietors of Portsmouth bridge and to establish the same at reasonable rates." Laws 1877, c. 180. Similar provisions are found in canal charters. 6 Priv. Laws 1792, p. 541; 8 Priv. Laws 1792, p. 92; 15 Priv. Laws 1804, p. 41; 20 Priv. Laws 1816, p. 419; 22 Priv. Laws 1824, pp. 448, 505, 513, 524; 24 Priv. Laws 1827, pp. 325, 339; 30 Priv. Laws 1833, p. 86. The last charter, granted in 1836, prescribed the tolls that might be taken, and provided that the "rate of toll may be increased or diminished by the court of common pleas on application to them, as in their opinion justice may require." Priv. Laws 1836, c. 102. The first turnpike charter was granted June 16, 1796. Laws (Ed. 1797) p. 325. It specified the rates of toll, and provided "that at the end of every twenty years an account of the expenditures upon said road and the profits arising therefrom shall be laid before the judges of the superior court for the time being; * * * and if the net profits for the said twenty years shall exceed twelve per cent. per annum, the said court may reduce the future toll, so far as that it may not exceed twelve per cent. and if the profits shall not amount to six per cent. the said court may raise the toll, so that it shall not be less than six nor exceed twelve per cent." All the numerous subsequent charters of turnpikes intended and necessary for the common and ordinary use of the general public have contained a like provision, with various modifications of time, rate per cent., and of the method of fixing the tolls, so that the authorized profits should not be exceeded. A few only are cited: 12 Priv. Laws 1799, p. 185; 13 Priv. Laws 1802, pp. 79, 326; 15 Priv. Laws 1804, pp. 57, 76, 112, 320; 16 Priv. Laws 1805, pp. 99, 118, 127, 279; 17 Priv. Laws 1807, p. 145; 18 Priv. Laws 1809, p. 243; 19 Priv. Laws 1812, pp. 154, 181; 21 Priv. Laws 1820, p. 537; 26 Priv. Laws 1828, p. 135; 30. Priv. Laws 1834, p. 297; Priv. Laws 1837, c. 3; Laws 1852, c. 1360. The first railroad charter, enacted January 1, 1833 (29 Priv. Laws 1832, p. 215), created the Boston & Ontario Railroad Corporation, granted tolls, to be fixed by the directors, and provided that, "if at the expiration of ten years from and after the completion of said road, the net income or receipts from tolls and other profits, taking the ten years aforesaid as the basis of calculation, shall have amounted to more than ten per cent. per annum upon the cost of the road, then the legislature may take measures to alter and reduce the rate of tolls and other profits in such manner as to take off the surplus for the next ten years, * * * and at the expiration of every ten years the same proceedings may be had," and "that the legislature shall not at any time so reduce said tolls and other profits as to produce less than ten per cent. per annum upon the cost of said road without the consent of the corporation." Under this charter no effective action was taken. The Concord Railroad was next incorporated, June 27, 1835. Priv. Laws 1835, c. 1. The charter granted a toll, to be fixed by the directors, and provided that, "if at the expiration of five years from and after the opening of said road for use, the net income or receipts from tolls and other profits shall have amounted to more than ten per cent. per annum upon the whole cost of the road from the time of the disbursements the legislature of this state may take measures to alter and reduce the rate of tolls and other profits in such manner as to take off the surplus for the next five years, calculating the amount of transportation upon the road to be the same as the five preceding years; and at the expiration of every five years the same proceedings may be had." The same provision, in nearly identical terms, is found in the other 12 railroad charters granted before December 25, 1844, except that in four of them the net profits were limited to 8 per cent. Priv. Laws 1835, cc. 7, 14, 37; Priv. Laws 1836, c. 60; Priv. Laws 1837, c. 1; Priv. Laws 1839, cc. 18, 20; Priv. Laws 1842, c. 3; Priv. Laws 1844, cc. 111-113, 188. The obvious purpose of the legislature in limiting and providing for the regulation of the tolls granted was to restrict the profits of the grantees within limits...