The Cent. R.R. Co. v. Collins

• Decision Date: 31 December 1869
• Citation: 40 Ga. 583
• Parties: THE CENTRAL RAILROAD COMPANY et al., plaintiffs in error. v. STEPHEN COLLINS et al., defendants in error.
• Court: Georgia Supreme Court

40 Ga. 583

THE CENTRAL RAILROAD COMPANY et al., plaintiffs in error. v. STEPHEN COLLINS et al., defendants in error.

Supreme Court of the State of Georgia

(Atlanta, December Term, 1869.)

[COPYRIGHT MATERIAL OMITTED.]

Powers of Corporations. Injunction. Before Judge Cole. Chambers. Bibb county, November, 1869.

*Stephen Collins, as a stockholder in the Southwestern R. R. Company, and in the Atlantic and Gulf R. R. Company, and as a citizen of the State of Georgia, and of the city of Macon, Peter Solomon and Jas. A. Nisbett, trustees, in their own right, as citizens of the State of Georgia. and of the city of Macon, and as stockholders of the Southwestern R. R. Company, and George G. Hull, in his own right, as a citizen of the State of Georgia and stockholder of the southwestern R. R. Company, and all, also suing in be-half of all others, citizens of Georgia, or of the city of Macon, or stockholders in the Southwestern Railroad Company, the Central Railroad and Banking Company, the Atlantic and Gulf Railroad Company, and any other citizen or stockholder in any other companies, who may be interested and come in and be made parties to this bill, made the following averments: The said Southwestern Railroad Company is a private corporation, chartered by the General Assembly of the State of Georgia, whose principal office is at Macon, in the county of Bibb, for certain purposes, and with certain rights, privileges and franchises, distinctly set forth in said charter, which was granted on the 27th day of December, 1845, and amended at different times. The original charter of said railroad company accurately defined the purpose of the organization, and declared the rights and privileges granted it, with the restrictions and limitations upon those rights and privileges, the third section declaring among other things, "that the company herein incorporated, shall confine their efforts and enterprise to the building and completion of a railroad communication from the city of Macon to some point intermediate between Albany and Fort Gaines, to be agreed upon by the company, from which point the company may construct branch railroads to Albany and Fort Gaines, " and the rights and privileges granted by said charter were not enlarged by said amendatory Acts, nor was the restriction imposed by the said third section of said charter removed by any of the said amendatory Acts. The Central Railroad and Banking Company, of the State of Georgia, a corporation chartered by the General *Assembly of the State of Georgia, with its principal office at Savannah, Georgia, contributed materially to the building and equipment of the said Southwestern Railroad, and by the large amount of the capital stock of said Southwestern Railroad Company owned by it and by its stockholders, as well as by the large interest which it has in other railroads connecting with the said Southwestern Railroad, has for a series of years absolutely controlled the organization and the management of the said Southwestern Railroad Company.

These two great railroad corporations, acting together in perfect harmony, and having the control of almost unlimited means, have illegally combined and confederated together to break down all competing lines of railway, and to monopolize, as far as possible, the railroad transportation of the State of Georgia, and in carrying out this policy, the said Central Railroad Company has, within a few years past, granted large subsides to the railroad corporations of this and other States, leased hundreds of miles of railroad in this and other States, furnished large sums of money to connecting lines of steamboats and railroads in this and other States, until at the present moment it does, in fact, control almost absolutely the transportation, by sea and land, from New York to the western line of Alabama, and is still extending its connections and control, with the avowed purpose of monopolizing the transportation of freights and the travel between New York and Vicksburg, in the State of Mississippi.

As a necessity, to enable those corporations to carry out this policy of extension and monopoly, and as a necessary result of that policy, these two corporations have for severel years discriminated against the people of this State, by whom and for whose benefit they were created, in favor of the people of other neighboring and distant States, by establishing and exacting from the people of this State rates of freight and travel higher than those which they demand of the people of other States. And to such an extent has this discrimination against the people of this State been carried, that they have lost all the advantages of the admirable geographical position of their State, and have been, and are now compelled *to pay for travel and transportation of the produce, and for return freights, more for certain distances than the people of other States for greater distances; particularly have residents of the city of Macon, and interested in its prosperity, suffered from this policy. For not only have they discriminated against the people of Georgia in favor of the people of other States, but also against the city of Macon, and this section of the State, in favor of other sections which are more remote from the sea; and the city of Macon has actually been compelled, by this illiberal and illegal policy of discrimination against her and her citizens, to burthen herself with debt and her people with taxation, in efforts to free herself from the clutches of these two corporations, by opening other lines of railway, which these two corporations are attempting to break down, although in their own infancy they were materially aided by subscriptions of the city of Macon and of its citizens.

These two corporations were originally chartered for the benefit of all the people of this State, but have been and are now managed to the manifest injury of all the people of this State and the oppression of particular communities and sections of this State. This result has been reached by a manifest perversion of the purposes of their organization, and by palpable violations of their charters. These two corporations have subsidized all the lines of steamers running from New York to Savannah, with one exception, and are now controlling them for their own interest, and with the object to break down competing lines of railway, and have entered into contracts with said steamboat lines, by which said steamboat lines are bound, under heavy penalties, to refuse the transportation of freights which are not destined for their own roads, or for roads with which they are confederated.

With a full appreciation, for several years past, of the in-juries which have been inflicted upon them and upon the people of this State, by the policy of these corporations, as illustrated by the facts hereinbefore stated, and with the conviction that this policy has involved repeated violation ofthe charters of these corporations, complainants have forborne a * resort to the Courts until satisfied by a recent transaction of these corporations, that nothing else is left them for the protection of their rights and the rights of the people of the State.

They refer to the purchase, by said corporations, of 12, 383 shares of the capital stock of the Atlantic and Gulf Railroad Company, controlling and working the line of railway from Savannah to Bainbridge, in Decatur county, Georgia, the particulars of which may be gathered from the official copy of the report of the City Council of Savannah, and the agreement of said council with said corporations hereto appended, marked "Exhibit A." This purchase was illegal, and was before it was consummated, and before said stock was transferred, protested against formally in writing by George G. Hull, as a stockholder of the said Southwestern Railroad Company. Said purchase of stock is a violation of the charters of said corporations; it is unauthorized by law, inasmuch as it is not "necessary to the purpose of their organization, " or "for the legitimate execution of this purpose." Whatever party, whether William B. Hodgson, of the county of Chatham, or any other, was the nominal purchaser of said stock, the said Southwestern Railroad Company and the said Central Railroad and Banking Company were the real purchasers of said stock. The said two corporations, in the purchase of said stock, acted in concert and collusion, and the said purchase was the joint act of both. This purchase was made with the sinister and illegal purpose of controlling the management of the Atlantic and Gulf Railroad, so as to free the Southwestern Railroad from the competition of that road in freights and travel which inured to the benefit of the people of the State, and to prevent the use of the said Atlantic and Gulf Railroad from Doctortown to Savannah by the Macon and Brunswick Railroad, upon terms which would enable said Macon and Brunswick Railroad Company to complete successfully in freights and travel between Savannah and Macon with the said Central Railroad Company. The continuance of the competition which thispurchase of stock was designed to remove, is a matter of vital interest to the *people of the State, and especially to the city of Macon. A control of the Atlantic and Gulf Railroad, such as is designed by this purchase, contemplates discrimination against other railroads, and involves in such discrimination a plain violation of the charter of said Atlantic and Gulf Railroad Company. Said purchase of stock is illegal, because of the intention, as stated, with which it is made. If permitted, it will seriouslyimpair the value of the large investment of the State of Georgia in said Atlantic and Gulf Railroad, inasmuch as said Atlantic and Gulf Railroad will be managed by means of the controlling interest in the stock of said Atlantic and Gulf Railroad Company owned by said corporations and their stockholders, in the interest and for the benefit of the said Southwestern...