State v. Manchester & L. R. R.

• Decision Date: 15 March 1901
• Citation: State v. Manchester & L. R. R., 70 N. H. 421, 48 A. 1103 (N.H. 1901)
• Parties: STATE v. MANCHESTER & L. R. R.
• Court: New Hampshire Supreme Court

48 A. 1103

70 N.H. 421

STATE

v. MANCHESTER & L. R. R.

Supreme Court of New Hampshire. Rockingham.

March 15, 1901.

Exceptions from Rockingham county.

Action by the state against the Manchester & Lawrence Railroad to recover the excess above the average of 10 per cent per annum of defendants' net receipts.Judgment in favor of defendants entered on the report of a referee, and plaintiff excepts.Case discharged.

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

Oliver E. Branch, for defendants.

PEASLEE, J.The state claims to recover from the defendants sums alleged to have been received by them in excess of the amount they are allowed to receive and retain as against the public.It charges that the defendants have divided to their stockholders more than the 10 per cent. specified in the statutory grants to them.The parties disagree as to what the amount is upon which the percentage is to be reckoned, and also as to whether the stockholders are entitled to interest upon deferred dividends.The claim of the state is that the defendants can divide 10 per cent upon the capital stock issued, and no more, while the defendants Insist that they are entitled to that per cent. upon all money expended in the construction of the road.It is not necessary to construe the provision of the charter upon this point (Laws 1847, c. 549, § 5), because it is so nearly identical with the general law as to be superfluous.State v. Manchester & L. R. Co., 69 N. H. 35, 49, 38 Atl. 736.The act which controls here is the law which was applicable to all railroads.Opinion of the Justices, 66 N. H. 629, 671, 33 Atl. 1076.It reads as follows: "Such corporations shall keep exact accounts of all their receipts and expenditures, and make annual reports thereof to the railroad commissioners, who shall annually communicate the same to the legislature, and in any and every year when their net receipts shall be found to exceed the average of ten per cent on their expenditures, from the commencement of their operations, the excess shall be paid into the treasury of the state, until otherwise directed by the legislature."Laws 1844, c128_: § 11.The question is, what was intended by the use of the word "expenditures"?Did the parties to the legislative grant understand that the meaning of this word included all that the corporation paid out in the construction of the road, irrespective of whether the funds so used were actually contributed by the owners of the enterprise, or was the amount so contributed (1. e. the capital stock paid in) the sum in mind?One intention which the legislature of 1844 had was to establish a general railroad law, and this intention found expression in the act of which the section under consideration forms a part.Railroad Co. v. Greely, 23 N. H. 237, 242.Sections 10 to 20 of the act"were evidently intended to be a system of uniform law applicable to all railroads."Opinion of the Justices, 66 N. H. 629, 650, 33 Atl. 107a it is therefore necessary to construe all the sections together.Each part is to aid in the interpretation of the whole."One part of a statute must be so construed by another, that the whole may (if possible) stand."The interpretation should furnish "matter for every clause of the statute to work * * * upon."1 Bl. Comm. 89;Barker v. Warren, 46 N. H. 124;Stanyan v. Town of Peterborough, 69 N. H. 372, 373, 46 Atl. 191.In another section of the act is the following provision: "The rates of toll for freight of passengers and merchandise, when the net income of the stock shall exceed ten per cent., shall be subject to alteration by the legislature, according as they shall deem just and expedient."Laws 1844, c. 128, 5 13.Here there is no uncertainty as to the principal sum upon which the percentage is to be computed.It is the capital stock,—the amount contributed by the owners of the joint venture.They are allowed a net income of 10 per cent. upon their investment, or, from the standpoint of the stockholders, upon their expenditures.Is the meaning different in section 11?

This section provides for the return of unreasonable exactions, as nearly as possible, to those who have suffered thereby.State v. Manchester & L. R. Co., 69 N. H. 35, 48, 38 Atl. 736.Section 13 provides a method by which like future exactions may be prevented.In one instance, there is to be an accounting for excessive charges received; in the other, there may be a legislative prohibition of the wrong in the future.It is natural to suppose that the limit of what was allowed to the railroad would be the same in either case.The evil to be guarded against or remedied was excessive tolls, and no reason appears why a rate should be considered unreasonable as to the future, and not as to the past.In section 11 the language is, "net receipts * * * on their expenditures"; and in section 13, "net income of the stock."In view of the fact that both provisions are found in one scheme of general law, the inference is that the phrases mean the same thing.If this is not so, the act is inconsistent with itself.The object to be attained is the same under either section,—the limitation of tolls to reasonable rates."The general statute was not a change of policy, but of method."State v. Manchester & L R. Co., 69 N. H. 35, 48, 38 Atl. 736.In pursuit of this object, both remedial and preventive legislation was enacted.If there is any evidence tending to show that the public rights sought to be protected were greater or less in the one case than in the other, it has not been pointed out.

If the defendants' position were sound, it would follow that, while the railroad could retain the sums here sought to be recovered, yet the state, by reducing the tolls, could have prevented the railroad from receiving the money.In this way one part of the act could be used to defeat the operation of another.Action by the state, reducing the tolls, might still later be nullified by the road.For example, if stock was issued to the amount of $500,000, and the road was built at a cost of $1,000,000 (of which sum the corporation owed one-half), the corporation could in the first year divide to its stockholders 10 per cent. upon the cost of the road, or $100,000.The state could not recover any part of this, but the legislature might enact that for the next year the tolls should be reduced so that the net income would be only $50,000.For this year the legal limit of the dividend, because of legislative action fixing the tolls, would be only one-half what it was the previous year.Now, If, in the third year, the corporation should fix its tolls so high that it would have $150,000 net profits, and should divide that sum to the stockholders, when sued for excess it would answer it had only divided an average of 10 per cent. from the beginning upon the cost of the road, and that the law allows.A construction which leads to such results puts "an undesigned and novel inequality in the place of uniformity, in violation of elementary principles."If a statute is capable of two meanings, one of which is more reasonable, and therefore more probable, than the other, that fact is necessarily considered, with all other competent evidence, on the question of intent.Opinion of the Justices, 60 N. H. 629, 33 Atl. 1076.

If the provisions of these sections were in acts passed at different times, there would be more ground for claiming that they had different meanings.When, as in this case, they are parts of one act, the rule to so construe it that the whole will, if possible, stand is of the highest importance.It has heretofore been said that the provision of section 11"relates to * * * an excess of net income above ten per cent." and that of section 13"to the alteration of tolls when the net income exceeds ten per cent"Opinion of the Justices, 66 N. H. 629, 671, 33 Atl. 1076.There was in that opinion no suggestion that the net income should be computed in one way in one event, and in another way in the other event.While there are many reasons for fixing the same sum as the basis for computation in each case, no reason 1s suggested for a different rule.The sole argument advanced is based upon a technical construction of the language of the act.The competent evidence tends to prove that the legislative intent was that the net income should be computed upon the basis of the stock."What is within the legally proved intention of the legislature is within the statute, though not within the letter; and what is within the letter, but not within the intention, is not within the statute."Opinion of the Justices, 66 N. H. 629, 655, 33 Atl. 1076.

The defendants' arguments against this conclusion are chiefly drawn from the construction which they say should be placed upon section 10 of the general law and section 9 of the charter."The state may, at any time after twenty years, resume the right and privilege of the corporation in such railroad, on giving one year's notice and paying to the corporation all it may not have received of its expenditures, at the rate of ten per cent. per annum."Laws 1844, c. 128, § 10. it is argued that here, at least, "expenditures" means cost of construction.An examination of the section shows the claim to be unfounded.The object of this section was different from that of sections 11and13.Their aim was to prevent the corporation from taking what did not belong to it, while this was enacted to enable the state to buy the property of the corporation.The property to be purchased was not necessarily the railroad free from all debt.It was "the right and privilege of the corporation in such railroad."For the amount stipulated, the state could succeed to the right of the corporation.Like any other successor who pays a price for the interest of another in an enterprise, the state would take the concern as it was, subject to the burden of debts, or made valuable by credits due to it.Here, as in the other sections, the...