St. of N.C. v. . Richmond Danville R. R. .

^* NOTE: Justice RODMAN did not sit in this case, by reason of his owning some shares of stock in the North Carolina Railroad Company. On the 11th day of September, 1871, the North Carolina Railroad Company leased its road to the Richmond and Danville Railroad Company for the term of thirty years, with leave to change the gauge of the said railroad track, upon condition that if the lessees did change the gauge, they should change it back to what it is now at the termination of the said lease, if required to do so by the lessors.

This action involves the determination of two questions:

1. Is the lease valid?

2. Is there anything in the law or public policy of North Carolina which forbids a change of gauge?

We have had the benefit of able and elaborate arguments upon the questions presented, but I may remark here, that most of the authorities cited have no application to the case at bar, for the reason that the questions here involved are to be determined by a construction of the charter of the North Carolina Railroad Company and our general legislation on the subject of railroads. These questions necessarily depend upon our statutes, and of course, cases determined upon other and different statutes can afford but little assistance in reaching a proper conclusion. In most instances they only tend to confuse. We admit the proposition, in its broadest sense, that the lease is void unless it be sanctioned by the legislation of both North Carolina and Virginia. The charter of the North Carolina Railroad Company is one of the most liberal ever granted in this State. We will not attempt to enumerate the privileges and powers conferred by it, further than to say that the Company was authorized to construct a railroad, with one or more tracks, without restriction as to gauge, and that they are expressly authorized, whenever they see fit, to farm out their right of transportation over said railroad; and the rights and duties of their lessees are further recognized, defined and placed upon an equality with themselves, by enacting that said Company and every person who may have received from them the right of transportation of goods, wares and produce on the said railroad, shall be deemed and taken to be a common carrier as respects all goods, wares, produce and merchandise entrusted to them for transportation.

This is an express grant of power from the State to the Company to lease their road whenever they see fit to do so, for we see no reason why a forced construction should be put upon the words "farm out" in order to divest them of their plain and obvious meaning, which is, in this connection, to lease.

Can any reason be suggested why the power to lease should not have been conferred upon the Company, since by the general law of the State, the whole road, with its franchise and all the rights and privileges thereof, together with all its corporate property, real and personal, might have been sold under execution for debt and conveyed by deed to the highest bidder? Rev. Code, chap. 26, sec. 9, et seq.

This legislation, taken in connection with the Act of 1871-72, chap. 138, known as the free railroad law, under which railroads may be constructed anywhere in North Carolina, and all roads, as well those already built as those to be constructed, are authorized to consolidate with other connecting roads, whether in or out of the State, shows conclusively that there is no policy in North Carolina which forbids the contract that has been entered into by these two Companies.

It is conceded that the Legislature of Virginia has authorized the Richmond and Danville Railroad Company to take this lease by an act passed on the 15th day of February, 1866, entitled "An act to authorize the Richmond and Danville Railroad Company to lease, hold and operate the Piedmont Railroad," and by an act amendatory of the above recited act, approved July the 11th, 1870.

Since, then, the contract of lease is authorized by the legislation of both States, there is no foundation upon which the further objection that the Richmond and Danville Railroad Company is a foreign corporation can rest.

There is no wall around North Carolina to exclude foreign corporations from entering the State and doing business here. On the contrary, it has been our policy to invite them in.

This is abundantly evidenced by the presence, for years in our midst, of almost every conceivable form of foreign corporations.

The rights of express, telegraph, insurance, mining, manufacturing and railroad companies, from other States, are daily recognized in our Courts, and by our Legislature, which has heretofore welcomed them, not only as profitable sources of revenue, but more especially as useful agents in developing the wealth and resources of the State.

It appears from the exhibits in this action, and it is also a matter of history, that the Richmond and Danville Railroad Company has been, since 1866, without objection, controlling and operating the Piedmont Railroad, nearly all of which lies within the limits of the State.

Whatever may have once been thought of the policy of excluding foreign corporations, the increasing demands of commerce have liberalized our ideas on the subject, and taught us to open our doors to all persons, natural and artificial, who wish to engage in honest business. This spirit of liberality is called the comity of nations, and it generally keeps pace with the civilization of a State, being recognized where wealth and intelligence characterize a people, and denied in barbarous counties.

Since the decision of the Supreme Court of the United States, in theBank of Augusta v. Earle, 13 Pet., 519, this comity of nations has been accepted, in its most liberal sense, by the States of this Union. In that case, TANEY, C. J., delivering the opinion of the Court, says: "The comity thus extended to other nations is no impeachment of sovereignty. It is the voluntary act of the nation by which it is offered, and is inadmissibly when contrary to its policy, or prejudicial to its interest. But it contributes so largely to promote justice between individuals, and to produce a friendly intercourse between the sovereignties to which they belong, that Courts of justice have continually acted upon it as a part of the voluntary law of nations. " And he quotes with approbation the following passage from Story's Conflict of Laws: "In the silence of any positive rule affirming, or denying, or restraining the operation of foreign laws, Courts of justice presume the tacit adoption of them by their own government, unless they are repugnant to its policy, or prejudicial to its interest."

In the same opinion, it is said "the intimate union of these States, as members of the same great political family, the deep and vital interests which bind them so closely together, should lead us, in the absence of proof to the contrary, to presume a greater degree of comity, and friendship, and kindness towards one another, than we should be authorized to presume between foreign nations."

We now come to the consideration of the second question: Is there any law or policy in North Carolina which forbids a change of gauge? There is no restriction in the charter, as to gauge, but the company was left free to adopt such gauge as would best promote their interests. But it is said that as other roads have been required to adopt the gauge of the North Carolina Railroad, that company is not now at liberty to change its gauge. Freedom to adopt any gauge was the grant of the sovereign to the North Carolina Railroad Company. How can that grant be revoked or qualified by provisions in the charters of other roads, with which the North Carolina Railroad has no community of interests, and whose purposes may be antagonistic to her own?

It is certainly a novel idea that a charter without restriction is to be subjected to all the burdens of other charters with restrictions. If we may import this restriction into the free charter, what is to prevent us from importing all other restrictions, in all other charters, which some one may imagine is in furtherance of a public policy?

But what is to become of this supposed public policy under the operation of the free railroad law, which allows any other roads to connect with the North Carolina Railroad at any point, and with any gauge they may see proper to adopt?

Our conclusion is, that the North Carolina Railroad Company not only had power, under their charter, to adopt originally such gauge, as in their discretion, would best promote their interest, but that if in the course of time another and a different gauge, either for the whole or only a portion of the road should be thought more advantageous, they were left free to change it at pleasure. We have seen that the North Carolina Railroad Company have leased their road to another Company with express permission to change the gauge if this other Company shall see proper to do so. This confers upon the leasee all the rights in this respect which were possessed by the lessor.

And now the Richmond and Danville Railroad Company say that the demands of trade and travel require a change of gauge on that portion of the road lying between Greensboro' and Charlotte, in consequence of the connections North and South of those points having a different gauge from that now in use on the North Carolina Railroad. Since the lease is valid, it is well that it clothes the lessee with large powers, such as to change shops, tracks, houses, c., for it is to the interest of the public that a Company, undertaking to meet the responsibilities of a common carrier, should not be trammelled and embarrassed by restrictions which would prevent them from properly executing their duties.

There was error in the order of injunction restraining the Richmond and Danville Railroad Company from changing the gauge of the North Carolina Railroad between Greensboro' and Charlotte, and the same is hereby dissolved.