Collins v. Sherman ( 1856 )

Handy, J.,

delivered the opinion of the court.

The substance of this case is as follows: — In the year 1836, the legislature passed an act incorporating the Grenada Bridge and Turnpike Company, with power to construct a bridge across the Yalobusha river opposite the town of Grenada, and a turnpike road leading therefrom; to receive tolls for passage and transportation at specified rates; the location of the road and bridge to be fixed by the directors first chosen; and it was made the duty of the company to keep the road and bridge in constant repair, out of the profits arising from the tolls. The work was completed, and afterwards the bridge being destroyed by freshets, an act was passed by the legislature in 1848, authorizing the company to establish a ferry in lieu of the bridge. The complainant became the proprietor of the road and ferry in 1853, by purchase from the company. About the time this ferry was established, another ferry and road were established by certain individuals under authority of the Board of Police of the county, about a half mile above the first ferry. This latter ferry and road were purchased from the proprietors by the complainant and another individual, who in January, 1852, obtained an act of incorporation from the legislature, authorizing them to keep up the ferry and turnpike, to receive tolls, and fixing their location, and making it their duty to keep the road and ferry in constant repair, and the complainant afterwards became the sole proprietor by purchase. This charter extended to the year 1870, and the former one extended to the year 1860.

The bill alleges, that whilst these improvements were in operation and well kept, and more than sufficient to supply the public wants, the defendants combined and fraudulently procured an act to be passed by the legislature in March, 1852, incorporating them as a company to establish another ferry across the same river at Grenada, and a turnpike; under w'hich, in the year 1855, they established a crossing-place about one hundred yards above the first ferry of the complainant, and made a road leading out parallel with and between the complainant’s two roads, and for a considerable distance running within ten feet of one of them, so that persons crossing at the defendant’s ferry could use the lower road and bridges of the complainant, without paying toll, unless constantly watched; that the road and ferry of the defendants not being in conformity to the act incorporating them, they obtained another act by false representations, at the January session 1856, and by these means they are preparing their ferry and road for custom, greatly to the injury of the complainant, and in violation of his chartered privileges. The bill prays an injunction against the defendants from the use of their road, &c.

The defendants answered, and denied so much of the bill as charges fraud, and demurred to the residue; the demurrer was overruled, and the defendants thereupon bring the case here.

Before proceeding to consider the true question arising upon this bill, it is necessary to notice some of its statements which are urged as showing ground of equitable relief, apart from the main point on which the bill is founded.

These statements are, that the defendants’ road was constructed very near to one of the complainant’s roads, for a considerable distance, and that persons crossing at the defendant’s ferry could use the complainant’s road and bridges without paying toll. It is not alleged that any part of the complainant’s road is encroached upon or appropriated by the defendants, or that the defendants in any manner disturb the actual possession and use of the complainant’s road. The allegation in substance is, that the defendants’ road runs very near to the complainant’s, and that persons crossing at the defendants’ ferry and paying them toll, may make use of the complainant’s road without paying him toll, unless a strict watch is kept.

These statements do not appear to have been introduced as a' substantive ground of relief, and certainly they are insufficient for that purpose. The proximity of the defendants’ road to that of the complainant, would be no ground of complaint in law, if the defendants did not actually invade the possession of the complainant’s road; much less would it be any ground for hindering the defendants in the use of their chartered right, that other persons passing their ferry might commit a trespass upon the complainant’s property. If such trespass were even committed by the defendants, it would be no ground of relief in equity, by restraining the defendants from the exercise of their legal rights.

But the real ground on which the complainant’s equity is placed, is the infringement of his chartered rights by the defendants, in virtue of the powers claimed by them under their act of incorporation ; and this presents the question whether that act of the legislature was constitutional, with reference to the powers and privileges previously granted by the acts of incorporation of the complainant’s companies.

It is said that these prior charters were contracts between the State and the grantees, which the State could not violate or impair by reason of the prohibitions of the Constitution of the United States. This is true. To the extent of the powers and privileges specially granted, and of the restrictions upon the general powers of the State contained in these charters, such provisions being within the constitutional competency of the legislature, would be binding and inviolable. But what is the extent of the immunities granted ? They are very few and simple. First, the companies are incorporated by corporate names, with power to construct the contemplated works. Then they are required to keep them in repair by the tolls, and the periods of their corporate existence are fixed. The object of their creation was to promote the public convenience, and to enlarge the facilities for travel, and the transportation of the products of the country. The subsequent grant to the defendants was for the same purpose.

It is not sufficient that the charters under which the complainant claims were contracts ; but it must appear that exclusive privileges were thereby granted, which the legislature had not power to infringe by any subsequent act granting the same rights to others. If there be no such grant of exclusive privileges, it must be presumed that the legislature, in making the grant, intended to retain all the power over the subject-matter of it which they possessed, when the charter was granted. And the doctrine is now well settled, that exclusive privileges in grants to corporations cannot be founded on implication, and that the corporation can claim nothing that is not clearly specified in the grant or embraced in its spirit. The retention of the power by the State, is for the public benefit, to be exercised to that end whenever the State may deem it expedient; and, therefore, she is never held to be precluded of its exercise, except by a plain and manifest intention apparent in the grant. Beatty v. Knowles, 4 Peters, 168; Providence Bank v. Billings, Ib. 514; Charles River Bridge v. Warren Bridge, 11 Peters, 420, 547.

It is, therefore, incumbent on the party claiming the grant of an exclusive privilege under an act of incorporation, to show that it is clearly conferred by the charter, and that it was intended thereby that the State should preclude herself of the power to make grants to others which might impair the benefits accruing to the first corporation. If the exclusive right be not clearly granted, he has no reason to complain that the legislature has thought fit, in order to promote the welfare and convenience of the community, to exercise the power which it has retained, and confer powers upon other corporations which may render the enjoyment of the first grant less valuable. It was subject to that condition that he thought fit to accept the grant, and it must, of course, be held in subordination to the power over the subject-matter, reserved to the public and to be exercised by the legislature. It is but one of the numerous cases in which individual interest and advantage must yield to the public good; and the hardship and loss occasioned by the power over the subject reserved by the State, are but the result of the tacit agreement which he made with the State in accepting the grant.

In the charters under which the complainant claims, there is nothing to bind the State to a grant of exclusive privileges, either in the terms or in the objects of the charters. It is said, that the companies and the complainant who succeeds to their rights and duties, are required to keep the works in constant repair, and as a compensation for that, they were allowed the pecuniary benefits arising from travel and transportation over the road, and that their rights, in that respect, cannot be infringed by granting charters to other persons embracing the same objects.

But this is not to be regarded as a guaranty of an exclusive right to these companies. It is a duty imposed upon them by their charters, as a condition to the enjoyments of the rights granted, so long as they continue to use them. But they may at any time abandon the franchise and surrender the charters, in which event, they would be under no obligation to keep the works in repair, and liable to no penalty for their failure to do so. It would simply be a ground of forfeiture of the charters, and it cannot be held even to imply an obligation on the part of the State, that the companies should have the exclusive enjoyment of the rights granted to them, as a consideration for an obligation on their part to keep the works in “ constant and thorough repair.” This is still more manifest, from the fact that the first charter provides that the work shall be kept in repair from the tolls; thereby showing that this duty was only to be performed so long as the company thought fit to use the privileges granted to them.

We think it manifest, that there is nothing in the charters under which the complainant claims, which debarred the State from the exercise of her sovereign right to grant similar privileges to other persons, and that the charter granted to the defendant is not such an infringment of the franchises of the complainant, as to render the act unconstitutional and void.

The contrary view being the foundation of the relief sought in the bill, it follows that it cannot be maintained.

The decree is reversed, the demurrer sustained, and the cause remanded for further proceedings upon so much of it as depends upon the charge of fraud, which is denied by the answer.