Central Railroad v. Collins

McCay, J.

This is a bill filed by certain stockholders in the Central Railroad, certain stockholders in the Southwestern Railroad, and certain other persons who claim to come before the Court as citizens of the State of Georgia, and as such to be interested in the relief sought by the bill.

The substance of the charges is, that the Central Railroad and Banking Company, and the Southwestern Railroad Company, the former chartered to build and maintain a Railroad from Savannah to Macon, and the latter chartered to build and maintain a Railroad from Macon to the Chattahoochee River, are about to purchase from the city of Savannah, certain stock, including twelve thousand three hundred and eighty-three shares in the Atlantic and Gulf Railroad Company, a company chartered to build a Railroad from Savannah to Bainbridge, with the intent and purpose on the part of these two companies to use the stock thus purchased to affect the management of the Atlantic and Gulf Road.

The answers admit, in substance, the charges; but the injunction is sought to be dissolved on the ground that there are not proper parties to the bill, and on the further ground, that said Central Railroad and Banking Company, and Southwestern Railroad Company, have a right under their charters to make such a purchase.

There are, it is true, some other points made in the demurrer and motion to dissolve, but in the view taken of the case by the majority 'of the Court, these are the essential questions.

1. Upon the question of parties, we agree that the citizens, in their character as such, are not proper parties to this proceeding. The State as one of the stockholders of the Atlantic and Gulf Road is a proper party; but the simple citizen, who has no other interest, has not, as it seems to us, any rights in this controversy. This is a simple attempt to enjoin the making of a certain contract, a mere private suit, in which no one has a right to be heard, that' is not interested in the decree. The wrong done the public by the alleged violation of the charter cannot be reached in this proceeding except so far as it affects the interest of those whose j>ecuniary rights are affected by the proposed contract.

But, the stockholders in the Central and Southwestern Railroad Companies, and the Atlantic and Gulf Road and its stockholders, are proper parties. The former allege that this contract is a violation of their rights under the several charters, and the latter that it is injurious to its rights that these two rival roads should be permitted to acquire so controlling an interest in the management of its road. As this ground of the motion to dissolve is in the nature of a general demurrer, to be good, it ought to show there are no proper parties to the bill.

2. We think the stockholders of the several roads are proper parties, have a good cause of complaint, and we therefore think the Court did right to overrule the motion on this ground.

We do not think the profitableness of this contract, to the stockholders of the Central and Southwestern Railroad stockholders, has anything to do with the matter. These stock-' holders have a right, at their pleasure, to stand on their contract. If the charters do not give to these companies the right to go into this new enterprise, any one stockholder has a right to object. He is not to be forced into an enterprise not included in the charter.

That it will be to his interest is no excuse; that is for him to judge. By becoming a stockholder he has contracted that a majority of the stockholders shall manage the affairs of the company within its proper sphere as a corporation, but no further ; and any attempt to use the funds, or pledge the credit of the company not within the legitimate scope of the charter, is a violation of the contract which the stockholders have made with each other, and of the rights — the eontraet rights — of any stockholder who chooses to say, “ I am not willing.” It may be that it will be to his advantage, but he may no think so, and he has a legal right to insist upon it that the company shall keep within the powers granted to it by the charter: 1 Shelford on Railways, 71; 1 My. & K., 162-3; 4 Y. & Coll., 618; 2 Dan. P. C., 521; 5 Hill, 386; 18 Barbour, 318; 43 N. Hamp., 525; 6 Angel & Ames on Corp., 4th edition, and cases cited.

3. The real question in this case is as to the power of these two companies under their charters, each of which defines the object of the incorporation to-undertake the management of not only a wholly new enterprise from that set forth in the charter, but an enterprise chartered by the Legislature evidently in rivalry with these two roads.

In the argument of this case it was almost admitted that such a contract was expressly forbidden by the charter of the Southwestern Railroad. That charter contains these words, after defining the object of the company, to-wit: to build a road from Macon to the Chattahoochee: “The said company shall confine their efforts and their enterprise to the building and completion of a railroad communication from the city of Macon to some point intermediate between Albany and Fort Gaines,” etc., etc.: Acts, 1845, pamphlet 132. Surely it cannot be contended that the management and control of the Atlantic and Gulf Railroad is in harmony with this clause of the charter. As we shall show hereafter, even without these words the power would not exist, but the Legislature seems to have been more than ordinarily cautious, and, to make assurance doubly sure, has in express terms limited the right of the Southwestern Railroad Company to use its means for purposes other than those for which the charter was expressly given. The great question in the case is, therefore, the right of the Central Road to make this purchase. As the injunction might be sustained in favor of the stockholders of the Southwestern Railroad Company, yet if the city and the Central Railroad Company desire to consummate the trade, leaving out the Southwestern Railroad Company, and there be power in the Central so to use its funds, and so to contract, the injunction would have to be dissolved as to them. But we do not think the Central Railroad Company has, under its charter, the power claimed for it. The charter of this company was first granted in 1833 by the name of “The Central Railroad and Canal Company of Georgia,” for “ the purpose of opening a canal or railroad communication from the city of Savannah to the interior of the State,” and was, by its charter, “ made capable in law to buy, hold and sell real and personal property, and make eontraets, (indefinitely,) and do all lawful acts properly incident to a corporation and necessary and proper to the transaction of the business for which it was incorporated:” Prince’s Dig., 300. In 1835, the charter was remodeled, the name was changed to the Central Railroad and Banking Company, banking privileges were given to it, and its powers to build a canal were dropped out of the charter. The first words of the charter are: “ For the purpose of laying, building and making a railroad communication from the city of Savannah to the interior of the State” — (Macon.) It was made “capable and able in law to have, purchase, receive, possess, enjoy and retain to them and their successors, lands tenements, hereditaments, goods, chattels and effects, of whatsoever land, nature or quality the same may be, and the same to sell, grant, demise, alien or dispose of,” provided that said incorporation “ shall not purchase and hold more real estate than may be necessary and proper for the purpose of laying, building and sustaining said railroad, and such as shall have been bona fide mortgaged to it as security or conveyed to it in satisfaction of debts previously contracted in the course of its dealings, or purchased at sales upon judgments which have been obtained for such debts.” The road was required to be completed in eight years, (by 1843.) This charter further provides, that after twenty-five years have expired from the time fixed by this Act for the completion of the road, the banking powers should cease, but the “ said Central Railroad and Banking Company of Georgia, shall, after the lapse of said twenty-five years, be and remain incorporate and vested, as' to their own works, with all the estates, powers and privileges by this Act granted and secured, except the exclusive right, by this Act granted, (to build a railroad between Savannah and Macon,) and except the banking privileges hereby granted Prince’s Dig,, 326, 334. Subsequently, the time for the completion of the road was extended two years: Act of 1841. By the Act of 1835, the banking powers were to cease in twenty-five years after the expiration of the time fixed by this Act for the completion of the road. The Act of 1841 says nothing of the banking privileges, though it extends the time for the completion of the road two years.

Charters are to be construed strictly: Revised Code, section 2331. By the zoords of the charter the banking powers ceased in 1868, nor is there anything in the words or object of the amendment of 1841, to require the construction that the Legislature intended to extend also the banking powers of the company. It is a well settled rule for the construction of charters of incorporation, that they are to be construed strictly in their grants of power, and that nothing is to be implied in favor of the company. In the ease of the Charles River Bridge vs. Warren Bridge, 11 Peters, 543, Taney, C. J., says: “The rule of construction in such cases is well settled both in England and by the decisions of our own tribunals. In 2 Barn. & Adol., 793, in the case of the proprietors of the Stansbridge Canal against Wheeley and others, the Court say : The canal having been made under an Act. of Parliament, the rights of the plaintiffs are derived entirely from, that Act This,' like many other cases, is a bargain between a company of adventurers and the. public, the terms of which are expressed in the statute, and the rule of construction in such cases is now fully established to be this: That any ambiguity in the terms of the contract, must operate against the adventurers and in favor of the public, and the plaintiffs can claim nothing that is not clearly given them by the Act.” See also Revised Code, section 2331.

By the original charter, the banking privileges were to cease at the end of twenty-five years after the period fixed by that Act for the completion of the road, and it would be a violation of the rule laid down by Judge Taney to say that the extension of the time for the completion of the road by the Act of 1841, extends' also by implication, the banking powers of the company for a period of two years. Whilst the banking powers of this company were in existence, perhaps the investment of a portion of its funds in stocks of any kind, as a matter of legitimate banicing business, and not for the purpose and with the intention of controlling some other enterprise, -was within its powers. We do not, however, go into that subject as, at the date of the proposed contract, the banking powers of the company had ceased.

4. The question then before us is simply this: Has the Central Railroad Company, under its charter, after its banking powers have ceased, the right to make a contract with the city of Savannah by which it shall become the owner of twelve thousand three hundred and eighty-three shares of the Atlantic and Gulf Railroad, a road running also from Savannah to the interior of the State, to-wit: to Bainbridge on the Flint River. The right to make this contract is denied by Mr. Collins, Mr. Hull and others, stockholders in the Central Railroad and Southwestern Railroad Companies, who do not consent to the same, and insist upon it that it is a violation of their rights under the charter, for two reasons: 1st, that it is a contract ultra vires, beyond the powers granted in the charter. 2d, that it is a contract contrary to the pub-', lie policy of the State, and therefore void.

' It is replied to this that the bill and answer show that the Atlantic and Gulf Railroad Company is so managing its affairs, in carrying freights at ruinous rates from Bainbridge, as materially to injure the Central Railroad Company, and that the intent of this contract is merely to enable the Central Railroad Company to protect itself; that it is, in truth, necessary for self-preservation, and that the power to make it is derivable, from its expressly granted power to maintain its own road, that the power granted in the charter to “have, purchase, receive, possess, enjoy and retain to them, and to their successors, lands, rents, tenements, goods, chattels and effects, of whatsoever kind, nature and quality the same may be, and the same to sell, grant, demise, alien or dispose of,” is an indefinite grant to purchase and hold any kind of property whatsoever, and that this was so contemplated by the charter, because the power to purchase and hold linds is by a proviso restricted to such lands as it may acquire, in satisfaction of dents due it, and such as may be necessary and proper for laying, building and sustaining the railroad.

, At first blush, this last- position seems a very strong one; but upon a close examination of the whole section in which these words are found, and especially upon viewing them in the light of the long and well established rules for the construction of Acts of incorporation, the argument will appear more specious than sound.

5. The words immediately preceding those relied on, are: “for the'purpose of laying, bujlding and making a railroad communication from the city of Savannah to the interior of the State,” the subscribers, etc., “are made capable and able in law, to have, p'urchase, receive, possess and enjoy lands, rents,” etc., etc. The purposes of the charter are to enable the company to build and maintain the railroad, and it is for this purpose and for this purpose only any of its powers are granted. For this purpose it may acquire and hold any kind of property whatsoever, but for any other purpose it cannot only not acquire any kind of property, but the company itself has no existence whatever. These are the words of the charter. Nor is there anything in this detailed specification, of the things .which the company may own and possess that at all enlarges the purposes for which it may own and possess them. . Even without these words the company would have just the same powers. E^ery corporation “for the purposes declared by the charter,” might, by the common law, hold and possess any kind of real and personal property, and make any kind of a contract whatsoever: Angel & Ames on Corporations, 125,251; but for any other purpose it could hold nothing, and could make no contract of any kind: Angel & Ames on Corporation, 251, 252. Nor'is there anything in the proviso limiting the quantity of real property which the company may purchase and hold which enlarges the objects and purposes for which the company may purchase, hold and sell any kind and amount of personal property. The real estate which it may hold is limited in quantity, the personal is not. *

It is true that the restraining words as to real estate are themselves very broad, to-wit: “shall not hold more real estate than may be necessary and proper for the purpose of laying, building and sustaining said railroad;” but the fact that the Legislature added other words, to-wit: “and such as shall be bona fide, mortgaged or conveyed to it in satisfaction of debts,” etc., shows conclusively that the words “building, laying and sustaining” in the proviso, were intended to confine the company in its purchase and holding of real estate, to such as was necessary to lay the track upon, build the usual offices, stations, shops and depots upon, etc., and not in the enlarged sense in which' they are used in declaring the purpose.for which the charter is granted.

To give to these latter words the meaning contended for, to-wit: that they enlarge the powers granted as to personal property, indefinitely, so that the company may purchase and hold personal property for any purpose, would be to make the Central Railroad and Banking Company a corporation for any purpose whatever. It might, with the same reason, own steamships, take contracts for house-building, buy and sell cotton, open commission houses, keep hotels, buy and sell fancy stocks, or engage in any business or enterprise whatever, that the cupidity of its directors, or their fancy or their folly might suggest to them. It is either confined in all its powers, to the purposes and objects for which the charter is granted, or it is not confined to any particular purpose whatever, save that it shall not hold more than a certain quantity of real estate. Either the Central Railroad Company is, like other corporations, limited in the enterprises which it may undertake and the property which it may possess and the contracts which it may make, to such as come fairly within the scope and purposes of the charter, or it is without any limit at all, and the Legislature of 1835 has been guilty of the folly of granting a charter, indefinite in duration, with an immense capital, and capable,’ if it so desires, of engaging in any enterprise it pleases. I cannot so construe this charter. The very first words of it define and limit the purposes and objects for which all its powers are given, and the 24th section expressly provides that after its banking powers have ceased, it shall only “ be and remain incorporate and vested as to its own works, with the estates, rights, powers and privileges granted by the Act.”

But it is said that the power to purchase this stock is derivable from the power expressly given to “maintain the road that it is necessary for the self-preservation of the road, and arises by implication from the very purposes and objects for which the charter was granted. The basis of this argument is that it is necessary for the “maintaining” of the Central Railroad, that it shall take a decided part in the “management and maintaining” of the Atlantic and Gulf Railroad, and as by the admitted rules of the eommon law, a corporation may make all contracts necessary, either directly or incidentally, to enable it to effect the purposes of its creation, therefore it has the power to purchase enough of the stock of the Atlantic and Gulf Railroad to enable it to protect itself by controlling the unwise management of the Atlantic and Gulf Railroad.

The purposes of the charter of the Central Railroad are the “laying, building and making” the road. The words of the charter do not in express terms include the “maintaining and sustaining” it, but we do not doubt they are included, since the “maintaining and sustaining” are necessary to the very objects of the grant. But what does'a grant to maintain and sustain a railroad include? Can it in any fair sense be construed to authorise the engaging in any enterprise which will extend the business or lessen the rivalries of the company ? If this be so, the whole doctrine so frequently and so emphatically stated in the books and decisions is a sham. The “maintaining and sustaining” of the road, has reference to keeping it in repairs, supplying it with machinery, and such like acts, and not to projects for extending its busiuess, by schemes and enterprises not contemplated and expressed in clear, unambiguous terms, by the charter itself.

Every charter of a private corporation is a contract, first between the State and the corporation — to which each is solemnly bound — the State that it will not impair the obligation — the corporation that it will perform the objects of its incorporation and keep within the powers granted to it: 4th Wheaton, 518; secondly, between the stockholders themselves. The stockholders are bound to consent to the management of the affairs of the corporation by the majority, and by the by-laws which that majority makes. And the whole, on the other hand, agree with each other, that they will apply the funds of the company to the objects and purposes of the charter, and not otherwise: Young vs. Harrison, 6 Ga. R., 130. Both as to the State and between the corporators, the law of this contract is the charter. The State has granted to it no rights, and the individual stockholders have clothed it with no rights, except such as are clearly and expressly set down in the charter: 13 Penn., 133; 28th Penn., 352 ; 18 Howard, 341.

Corporators are too apt to forget this fundamental law of their being. In the daily habit of transacting business, in the name of the company as though it were an individual, they are apt to slide into the notion that a corporation is an individual in all respects, so far as business matters are concerned.

But a corporation is a mere creature of the law, and only exists at all, for the purposes declared in its charter, and has absolutely no powers but those which the law confers upon it. It is a creation of the law, and in the very nature of things is just what the law makes it, no more, no less; and by the word law here, I do not mean the general law which regulates the powers of persons, but the Act of incorporation, the charter, the constitution.

There are certain general rules which have, time out of mind, been adopted by the Courts in their investigation of the powers of incorporations, that it may be well to notice. 1st. As a corporation is the mere creature of the Act of incorporation, it has no other powers except such as are in said Act expressly granted, or are necessary to effect the ends and objects of its existence. 2d. Charters being private Acts, or rather contracts between the public and individuals,. the charter is to be strictly construed, nothing is to be taken by intendment or inference. Being a creature of the law, it is made up of just such rights as its charter gives it; not that every power which it possesses must be granted in detail, but it is confined in its operations, to the objects and purposes expressly set forth in its charter, and it can undertake no other enterprise than is there expressly mentioned: Frederick et al., vs. City Council of Augusta, 5 Ga., 561; Mayor, etc., vs. Macon & W. R. R. Co., 7 Ga., 221; 8 Ga., 23; 9 Ga., 213; Winter vs. Mus. R. R., 11 Ga., 438.

The books are full of decisions in illustration of these positions. In the case of the East Anglian Railroad Company vs. East. Count. Railroad Company, 7 English Law and Equity Reports, 505, the charter was for the “purpose-of mahing and maintaining” a particular railway. The company had leased another railway, and had covenanted to pay the costs of soliciting bills then pending in Parliament, by which the other railway should have power to make extensions and branches, and the action was for a breach of the covenant to pay said costs. Jervis, Chief Justice, in deciding the case, says. “ It is clear the defendants have a limited authority only, and are a corporation only for the' purpose ‘of making and maintaining’ the railway sanctioned by the Act, and that their funds cannot be applied for any other purpose than that directed by the Act. Indeed, it is not contended that a company so constituted can engage in new trades not contemplated by"their Act, but it is said they may embark in other undertakings,’ however various, provided the object of the directors be to increase the profit of their own railway. This is in truth thfe same proposition in another form ; if the company cannot carry on a new trade, because it is not contemplated by the Act, they cannot embark in other undertakings not sanctioned by the Act, merely because they hope the speculation may ultimately benefit the stockholders.”

In Wood vs. Greenville and Raleigh Plank Road Company, 3 Jones’ Equity (North Carolina Reports) 183, when a company was chartered “to build a plank road from Greenville to Raleigh,” the Court at the suit of a stockholder restrained the company from using the funds of the company to buy stages and horses, to establish a mail route over the road.

In Coleman vs. Eastern Counties Railway, 6 English, Railroad cases, 573, it was held that the directors of a Company have no right to pledge the funds of the Company in support of any project not pointed out by their charter, although such pi’oject may tend to increase the/traffic upon the Railway though a majority of the stockholders may have consented and the object be not contrary to public policy.

In the ease of Solomons vs. Lang 14th Jurist for December 1840, the company had power by its charter to “build and maintain ” a Railway. In a certain legal and legitimate way, under the charter, the company became possessed of certain shares in another Railway. Subsequently, it undertook to purchase other shares in the same company. Lord Langdale, M. R., held that this was an unauthorized application of the funds of the company.

This Court in Mayor, etc., vs. Macon and, Western Railroad, 7 Ga., 221, held that it was not in the power of the Macon and Western Railroad, chartered to carry passengers, etc., from Macon to Atlanta, to undertake to transport produce through Macon, across the bridge, to the Central Railroad depot.

In Merritt vs. The Shrewsbury & Chester Railway, the company undertook to improve the navigation of the river Dee, upon which, by their charter, they had wharves and warehouses, and upon which also came much of thé freight carried upon the road, but the Court held such an undertaking ultra vires: 3 Eng. L. & E. R., 149. In 16th English Law & Equity Reports, 180, it was held that a railroad company could not contract to pay the expenses of a managing committee of a new railway company in application to Parliament for a charter. See also E. A. R. R. Co. vs. The Eastern Co. Railway Co., 21 L. Rep., (N. S.,) and the Court say they are a corporation only for the purpose of making and maintaining the East. C. Railway, and they cannot engage in a new. trade. See, also, 10 Beavan, 1 ; 6 Railway Cases, 152; 43 N. H., 5115.

These cases all proceed upon the well established principle that a corporation has no powers except those expressly granted by its charter, and such as are necessary to the declared objects of the grant, that the charter is to be strictly construed, and that the capital stock, credit and property of every kind, is to be used solely for the purposes and objects of tjie charter. So long as a company confines itself within-the “purposes and objects declared by the charter,” the Courts will sustain it, but when it undertakes new and distinct enterprises not declared in the charter, under a pretence that they are in furtherance of the declared design, the Courts will restrain them. The power to do acts and make contracts necessary to enable a corporation to answer the ends of its creation, like the express grants of power, is also to be strictly construed, and is limited by all the cases and by the general principles of all the books, with .this qualification, that even for this purpose it cannot engage in any new and distinct-enterprise, involving new risks to its stockholders, and not-fairly within the terms of the original grant: 18th How.,. 341, 485; 2 Russ. & My., 480, 470; 4 Railway Cases, 492; 7 Hare Chan. R., 114; 4 My. & Craig, 134; 1 Edwards, 84; 22 N. Y., 274; 13 Eng. Law and Equity, 513 ; 4 Russ., 562; 1 Black, (U. S.) 449. The purchase of stock in another railroad company with intent to hold it, and especially, as is admitted by the answer in this case, with intent to use the power thus acquired to secure an interest in the management, either for good or evil, of the road, seems to come exactly within the principles which we have deduced from an unbroken series of decisions both in England and this country.^

If the Central Railroad Company may lawfully buy twelve thousand three hundred and eighty-three shares in this road, it may lawfully buy all the shares, become the owner of the road, and thus, without any grant from the State of Georgia, this company may have power to manage and maintain two railroads from Savannah to the interior of the State. Nay, the same principles precisely which would derive from its charter this power, would authorize it to become the owner of every railroad in the State, and of every other corporation and enterprise in the State, the management of which may in any way affect the interest of the Central Railroad Company. We do not think the stockholders of the Central Railroad Company, by their subscription, bound themselves to any such indefinite and unlimited enterprise. They contracted to give to the majority of the stockholders a control over their funds, for the purpose of making and keeping up and using a railroad from Savannah to Macon, and the appropriations of the capital, or credit, or funds of the company in any other enterprise, against the consent of any of the stockholders, is a violation of the rights of those stockholders, and a Court of Equity will restrain the company from such an act.

6. Thus far we have considered this question solely in reference to the right of a stockholder to insist upon it that the company shall not violate his rights by compelling him, against his will, .to become a partner in an enterprise not contemplated in the contract. But the stockholder has a right to insist upon it, that the funds of the company, in which he has an undivided interest, shall not be used in violation of the public policy of the State. He does not stand like a mere citizen on his rights as a citizen. He is one of the owners of the funds, property and credit of the incorporation. Its corporate privileges belong to him; at least he has a legal and pecuniary interest in them, and he has a right to refuse to allow them to be used against public policy, and to protect them against the danger of forfeiture by their uses contrary to that policy. It is, therefore, a pertinent question in this case whether it is or is not contrary to public policy that the Central Railroad Company shall be permitted to obtain such an interest in the Atlantic and Gulf Railroad as is contemplated by this purchase. All experience has shown that large accumulations of property, in hands likely to keep it intact for a long period, are dangerous to the public weal. Having perpetual succession, any kind of a corporation has peculiar facilities for such accumulation, and most governments have found it necessary to exercise great caution in their grants of corporate powers. Even religious corporations professing, and in the main, truly, nothing but the general good, have proven obnoxious to this objection, so that in England it was long ago found necessary to restrict them in their powers of acquiring real estate. Freed, as such bodies are, from the sure bound to the schemes of individuals— the grave — they are able to add field to field, and power to power, until they become entirely too strong for that society which is made up of those whose plans are limited by a single life.

There is, too, in this country, a reason for strictly construing charters, and for confining corporations to their powers, that does not exist in any other. Under other forms of government, if a charter be found to have privileges which prove dangerous, it is in the power of the State to alter or repeal the charter. But getting their grants, as most of our corporations do, from the State, they are held to be contracts, and it is not in the power of the State, under the Constitution of the United States, materially to interfere with the grant however improvident or unwise it may prove to have been. For these reasons it has, in this country as well as in England, ever been considered the very highest public policy to keep a strict watch upon corporations, to confine them within their appointed bounds, and especially to guard against the accumulation of large interests under their control. Without doubt much of the prosperity of this country is due to the large number of corporations which have been created, and especially have we to be thankful for the good effected by railroad companies. But I am strongly impressed with the conviction, that much of their success in developing the resources of the country is due to the very jealousy which has ever held them strictly to their charters, and has constantly been careful to prevent an undue accumulation of interests under one management. The certainty that each 'Stockholder has, that his funds will be applied to known and declared purposes, have made them favorite investments for prudent men, whilst the rivalry which opposing interests engender begets an energy, economy, skill and enterprise that have had much to do with the remarkable progress which such enterprises have made. A colossal enterprise, assured of handsome dividends by the possession of a monopoly, may well rest upon its position, knowing that however the country may suffer from its exactions, its own profits are secure. It is the rivalry of opposing interests, the struggle for success, nay, even for life, with dangerous opposition, that gives life, enterprise and success to railroads as to other human undertaking. It has been the conflict with thirty State lines, each with its opposing interests, and with numerous seaboard cities, each seeking to attract the rich outpourings from the great interior that has begotten the mighty net work of iron which interlaces our extensive territory, and I am convinced that there is no public policy1 more striking than that which, whilst it fosters every such undertaking, is yet careful ever to keep in view the dahger of a monopoly, and the good effect of rivalry and conflict between different companies. The Central Railroad is, and has long been, the pride of Georgia. The skill, energy and prudence with which its affairs have been managed, reflect great credit upon the men who have had these affairs in their control, and the State may well be grateful for the success that has followed. Yet, we cannot but think it would be a measure fraught with great public evil to give to that company permission to control and njanits great rival, the Atlantic and Gulf Road.

Already has the State empowered the Central Company to control the 'Waynesborough, the Southwestern, and the Eatonton and Muscogee Roads, making its whole line about six hundred milqs in length. But all these are feeding roads of the line from Macon to Savannah, and there is no rivalry between them. The Atlantic and Gulf Railroad has also Savannah for its eastern terminus, whilst its western end strikes the Flint River at Bainbridge, and, connected thus with the Chattahoochee, it opens an active and effective competition with the Central and Southwestern Railroads for the trade of our great cotton region. Indeed the admitted facts of this answer show that the very object of the contemplated purchase, the sole motive which prompts it, is to prevent the ruinous competition which the Gulf Road has already entered into for the freights of the Flint and Chattahoochee regions.

Even a petty tradesman cannot legally bind another not to carry on a particular business over any large extent of territory; and here is a contract, the object of which is unblushingly avowed to be to so get control of the Atlantic and Gulf Road, as that its present mode of carrying freights at low rates, shall cease, and the very object of the Legislature in granting the charter, and becoming itself a large stockholder, be thwarted.

As a matter of course if the power to make this contract was granted in the charter, the public policy, of such a grant would not be a matter for the consideration of the Courts ; but, as we are clear there is no such grant, we mention it as an additional reason why the rules for the strict construction of the charter should be adhered to, and the Courts should be prompt to lend their aid to the complainants, who, as they are stockholders in these roads, have a right to -insist upon it that funds and credit in which they 'have an interest shall not be used to the detriment of the public interests and in violation of the plain policy of the State. See cases quoted above, as to the rights of a corporation and the authority of even a single stockholder to interfere and restrain the company.

7. But it was said in the argument that the Legislature has plainly indicated, by its enactments, that the Central Railroad Company may acquire an interest in the management of the Atlantic and Gulf Railroad. , By the Act of 1852, the Central Railroad was clothed with power to lease several railroads by name as well as any other road that might “connect” with the Central; and by the Act of 1863 authority was given to the Central and Atlantic and Gulfj to connect their tracks at the city of Savannah. To this it may, in the first place, be replied, that any such power, though expressly granted, does not bind any of the stockholders who do not consent to it. Each stockholder has rights in the nature of contract, rights in the limitations, as well as in the grants to the corporation, and even the Legislative will cannot, under the Constitution of the United States, impair those contract rights by making him, against his will, an adventurer in an enterprise not contemplated by the original charter. See the' cases above. But under the rules which we have referred to for the construction of chartered rights, that they must be construed strictly, not carried beyond the express words of the Act, that ambiguous words are to be construed against the company and nothing to be taken by implication or intendment, even the right to lease would not give the right to buy or to become permanently interested in a road by the purchase of its stock. The two enterprises are wholly different in their nature and in their risks, and a stockholder might well consent to one and refuse to consent to the other. Nor is it fair to give to the language of the Act of 1852 such a meaning as to include within its provisions the Atlantic and Gulf Road, even though the Act allowing the Central and that road to connect be a valid Act under the Constitution of 1868. The words of the Act of 1852 are “other connecting roads,” and this after specifying by name, the Southwestern, Waynesborough and Eatonton Roads. These roads are feeders to the Central Road, their interests are in harmony, and both the public and the stockholders of each road are interested in their acting in concert. But the Atlantic and Gulf Road is a rival of the Central. Each terminating at the seabord, they penetrate, at their extremities, and by their connections, the distant SouthAvest, and it is the very life of the traffic and travel of that region, that these two great enterprises shall compete Avith each other for the public patronage.

But again, the Act of 1863 Avas passed during the Avar for a special purpose, avoAyed in the Act itself, and, whether avoAved or not,, plainly for the purpose of aiding in the Avar against the United States, and by the express terms of the Constitution of 1868, is void : Art. II., sec. 3d, Const. 1868. I only allude to the technical illegality of this Act as a reply to the claim which is attempted to be set up under it, when nobody pretends that such a consequence ever for a moment entered into the minds of those who passed it. All that is pretended is, that by allowing “the connection ” the Legislature has placed the road on a footing with those roads Avhich the Central Railroad may lease, though it is not even contended that it Avas the intent of the Legislature, by this Act, to grant any such privilege to the Central Railroad. 'To one technical, literal argument, Ave reply the other, that the Act upon its face is void, as being in aid of the war against the United States. One word more upon this same branch of the subject. These grants of the right to lease, imply the assent of the road that is leased, and to draw from such a power, to-wit:. a poAver to control a road with its assent — ■ the assent, it must be remembered, of every one of its stockholders — a right to control it by purchasing a majority of its stock, is an implication of a right to the injury of the others, in the very teeth of the settled rules for the construction of such grants, Avhich, as we have abundantly shown, has been universally adopted by the Courts, both of England and America.

8. But it is contended this bill comes too late — that the contract was consummated before the- bill was filed, and that the city of Savannah is not bound to take notice of the want of power in this company to make this contract. As to the Southwestern Railroad, the city is, as appears by the sale itself, a stockholder in that road. It appears also by the answers, that the Mayor of the city of Savannah, who signs this contract, is a large stockholder in the Central Railroad. And it is a further fact that the city of Savannah, as appears by the charter of the Central Railroad, was one of the corporators of that road: Prince’s Digest, 300. If it. were necessary to bring home notice to the city of this want of power, the evidence of notice is technically conclusive.

But if this contract is illegal, on account of public policy, notice is not necessary, since it is a settled rule that in such cases no person can be innocent, as everybody must be pre-^ sumed to know the law: Code, sec. 7.

We do not discuss the other position bearing upon this question of notice, to-wit: that by our law all Acts of the Legislature are public Acts, (Act of 1819; Prince, 215; Code, section 3762,) because we deem it unnecessary in this case, it being plain from the record, that the city of Savannah' had notice in law of the powers of these companies.