Mobile & Ohio Railroad v. Franks , 41 Miss. 494 ( 1867 )

Habéis, J.,

delivered the opinion of the court.

This action was brought against the plaintiffs in error to recover the value of cotton shipped at West Point, in this State, to be delivered in Mobile. The declaration is in the common form against a common carrier, on their general liability as such. The bill of lading specified that the cotton was shipped at the owners’ risk as to all damage or injury by fire while in course of transportation, and was signed by the plaintiff, as well as by the agent of the defendants. It was admitted that the cotton was destroyed by fire, casually, ’ and without the consent or negligence of the defendants, whilst in the regular course of transportation on the railroad, between the points of shipment and destination.

On the foregoing case the court refused the following instructions asked by the defendants:

1. That common carriers, by express stipulation in their contracts or bills of lading, may limit the extent of their liability at common law,- and provide against responsibility for losses occasioned by fire, and the like.

2. That by the terms of their charter the defendants have and possess such right, in common with other common earners of this State.

That the bill of lading in this case is a special contract between the parties, and the carrier is not liable thereon as a common carrier, but only as a special carrier; and the duties and liabilities of the defendants are governed by the terms of the special contract, and the action should be upon the special contract, or for a breach of duty arising therefrom.

4. That the charter or grant is a contract executed, and a succeeding legislature could not impair the obligation of the contract, or divest rights vested under it.

The case involves the construction and effect of the act of the legislature of this State, approved 9th December, 1863, pamph. 146, which enacts that “ The railroad companies in this State shall be liable, as common carriers, for the traiisportation of all freight and baggage received by them, any obligation that may be entered into between said railroad and other parties to the contrary notwithstanding.”

This act is untechnically and nnartificially drawn, but its intention is quite apparent to prohibit railroad companies in this State from making any contract with shippers, to limit their liability, as common carriers, for freight and baggage received by them for transportation, and to hold them responsible in all such cases as common carriers, notwithstanding such special contracts.

The point submitted for our decision upon this state of facts, by the written agreement of counsel appearing in the record, is, “whether the plaintiffs in error have the right to Vimit their liability by special contract, and provide against responsibility for losses occasioned by fire, provided such spécial contracts do not attempt to cover losses occasioned by negligence or misconduct.” In other words,1 whether the act of Mississippi of December, 1863, is obligatory upon 'the railroad companies of this State, holding them to the common law liability of common carriers.

It is insisted on behalf of plaintiff in error that its charter is a contract, without any clause of reservation to the State authorizing a change of its terms. That by express grant the company is authorized to regulate the manner of transportation, and to make all regulations concerning it, not forbidden bylaw. And that the effect of the act of December, 1863, of this State, is to compel the company to increase its charges for freight and transportation, and to compel it to do an insurance business, and hence the act is in violation of the charter contract, and unconstitutional. It is further insisted that the act makes this company a-common carrier, and in this respect violates the contract by requiring the company to assume the duties and obligations of common carriers, at common law.

In this country there is no diversity of opinion as to the rules to be applied in determining the powers and capacities óf a corporation. A corporation is an artificial being created by law, for specified purposes. It stands, therefore, on a very different footing from a natural person. There is this distinction between an individual and a corporation: “ An individual may perform all acts, and make all contracts, which are not in the eye of the law inconsistent with the welfare of society. A corporation possesses only the powers and capacities which are specifically granted by the act of incorporation, and such as are necessary to carry into effect the powers expressly granted, and hence it can make only such contracts as are connected with the purpose for which it was created, and which are necessary either directly or incidentally to answer that end. 2 Kent, p. 298; 7 How., Miss. R., p. 530; Abby v. Billups, 35 Miss. R., p. 630. In the case of McIntyre et al. v. Ingraham et al., 35 Miss. R., p. 25, it was held by this court that a corporation created by statute possesses only the powers which its charter confers upon it either •expressly or as incidental to its very existence, citing Dartmouth College case, 4 Wheat. 636; 2 Cranch, 127. It was father held, that in order to derive a power by implication, it must appear that the power thus sought to be implied is so necessary to the enjoyment of some specially granted right, that without it that right would fail.

We are then to look to the charter of this company to ascertain, first, whether there is an express delegation of power to this company, to limit its common law liability as a common carrier, existing at the date of its charter, by making special contracts on this subject with its customers; and second, if not, is such a power so neeessa/ry to the enjoyment of any other, specially granted, right, that without it such right would fail ?

It is not pretended by counsel for plaintiff in error, that there is any such express delegation of power to this company.

Is there any other power or right granted in this charter, which would fail, without a power was exercised by this corporation, to limit its common law liability as a common carrier, by contracts with its customers ?

It will be remembered that the purpose of the act, approved the 17th February, 1818, is declared in the 1st section to be to locate, construct, and finally complete a single double or treble railroad, or way, from some suitable point in the city of Mobile, in a westerly or north-westerly direction, to the west line of this State (meaning the State of Alabama), towards the mouth of the Ohio river, in such route as shall be deemed most expedient; and to transport, take, and carry property and persons, upon said railroad or way, by the power and force of -steam, of animals, or of any other mechanical or other power, or any combination of them, which said company may choose to apply.

This being the purpose of the organization of the company as declared by its chartér — the building a railroad to transport property and persons — it cannot be urged with any fairness, that it was not designed by its charter to create it a common carrier, as soon as the road could be built — both of property and persons, for hire or reward. Unless, therefore, this charter by its terms exempted the company from the obligations of the existing law of common carriers, in force in Mississippi at the date of its passage, and ever since ; or, by an enabling clause, empowered the company to exempt itself by special contracts with its customers, or to limit the extent of its liability— nothing can be more manifest than that it possessed no such power, and was never exempt at all from its common law obliga.tions in this respect, even prior to the act of December, 1863, of Mississippi, and that the State’s power to legislate in relation to the preservation of this cherished policy of the law, remained unimpaired, by this charter. There being no such express provision in the charter, we are to examine its provisions to see whether there is any other granted power or right, which would fail; without this corporation 'can limit by special contract with its customers, its common law obligations.

. By the seventh section of its charter “ the directors shall have full power and authority to make and prescribe such by-laws, rules, and regulations as they shall deem needful and proper, touching the disposition and management of the stock property, estate, and effects of said company, not contrary to this charter, or the laws of this State or of the United States, the transfer of shares,, .the duties and conduct of their officers and servants, touching the election of and meeting of the directors, and all matters whatsoever which may appertain to the concerns of said company,” etc.

By the tenth section the “ said company is authorized to construct,* erect, build, and use a single, double, or treble railway or road, of suitable width,” etc.; “ and also * * * to build and construct branch railroads on either side of the main road, not exceeding thirty miles, and shall have power to regulate the time cmd mcmner in which goods and passengers shall be transported, taken, and carried on the same; and shall have power to erect and maintain toll-houses and other'buildings for the accommodation of their concerns, as they may deem suitable for their interest.”

Section' twelve provides : “ That it shall be lawful for the company hereby incorporated from time to time, to fix, regulate, and receive the toll and charges by them to be received for transportation of persons or property on their railroad or way aforesaid, hereby authorized to be constructed, erected, built, or used, or upon any part thereof.”

These are the only clauses in the charter to which any reference is made by counsel on either side as bearing on this ques-r tion.

It is not insisted that in either of these clauses, or indeed in any part of the charter, is there any grant, dependent for its operative force on the existence of a power in this corporation, to limit by special contract its common-law liability as a common carrier. But it is said that its power to fix and regulate the tolls and charges for the transportation of property and persons will be thereby so affected that they will be compelled to increase said tolls and charges to enable them to meet the expenses incident to such liability, and that this is a violation of their contract with the State.

We have seen that the sole purpose of their charter was to enable them to build the road, that they might become common carriers, or transport property and persons along their line.

The argument then is — that if they cannot avoid their charter obligations, as common camel’s, their profits will be thereby diminished, and they will be compelled not only to increase their charges to meet such expense, but to assume the office of Common carriers, .and to become insurers, as such, and that this is a violation of a charter the sole purpose of which was to create them common carriers, and thereby subject them'to this very responsibility. The statement of the argument is its best refutation.

There is, then, no granted power or right in this charter which must fail, unless the corporation can exercise the power claimed, to limit by special contract with its customers, its common law liability as a common carrier. Hence no such power can be derived by implication. It is not the form of the contract, but the policy of the law which determines the extent of the carrier’s liability. "When he is charged as a carrier, it is on ground of an obligation imposed upon him by law. Edwards on Bailment, pp. 446-7.

The unbroken uniformity with which the courts have upheld and sustained the necessity, utility, and safety of Üih policy of the lam, has been the subject of just commendation by some of the ablest jurists and elementary writers. In the case of the Southern Express Company v. Moon, 39 Miss. R. p. 822, we have said, rigorous as this law may seem, and hard as it may actually be in some instances, it is, nevertheless, founded on principles of public utility and safety, to which all private considerations ought to yield. * * * The public policy, on ■ which the extraordinary liability of common carriers is founded, is too important to be thus virtually repealed by the fraud and circumvention of artfully contrived, printed or prepared, receipts thrust upon those to whom the hurry and press of railroad travel dqny the time of examination, or the opportunity of fair assent; and we then expressly waive the determination of the question, how far this great public policy, the growth and' maturity of ages, founded on public necessity and safety as well as public utility and convenience, can be repealed by special contract between the parties, and all the hazard and all the evils, intended by this policy to be prevented and avoided, again introduced.

. We still reserve for future consideration this general question, when it shall directly arise. The case before us does not necessarily call for its consideration.

The impossibility of placing the parties upon equal terms— in these cases.of contracts for the limitation of the responsibility of great corporations, as common carriers — presents an almost insurmountable obstacle to anything like fa/vr assent. Assent to the terms demanded by the 'corporation agent, or a denial by him of all the benefits of its facilities for transportation, for the most part leave the traveller,or shipper no alternative but submission to their dictation, however unjust or illegal. Hence the wisdom of the act in question,, if such act was necessary to accomplish the object in relation to the railroads of this State. There is nothing in the act inconsistent with the rights and powers confined upon this corporation by its charter. Its purpose was to protect and preserve the great principles of the law of carriers, as a matter of public policy, safety, and convenience. The power of the legislature, thus to guard the public safety, is undoubted.

The charges asked by plaintiff in error were all correctly refused.

Let the. judgement be affirmed.