Commonwealth ex rel. Attorney-General v. Pittsburg & Connellsville Railroad

The opinion of the court was delivered by

Sharswood, J.

This is an information in the nature of a quo warranto, filed by the Attorney-General, calling upon the defendants, by their corporate title, to show by what warrant they claim to have and use the franchise, liberties and privileges following, viz.: To be of themselves a body politic and corporate by the name of “ The Pittsburg and Connellsville Railroad Company” ; to maintain a certain railroad called the Pittsburg and Connellsville Railroad, extending from the city of Pittsburg, in the county of Allegheny, to the borough of Connellsville, in the county of Eayette; to extend the said Pittsburg and Connellsville Railroad beyond Connellsville to Smithfield, or any other point on the waters of the Toughiogheny, and within the limits of this Commonwealth ; and to extend the said Pittsburg and Connellsville Railroad to any point they may select in Somerset or Bedford counties, so as to form a connection with the Chambersburg and Allegheny Railroad, or any other railroad that may be constructed. To this the defendants have pleaded several pleas, setting forth their charter under an Act of Assembly, dated April 8d 1837, and subsequent Acts of Assembly, which they allege confer upon them the privileges which the Commonwealth claims that they have usurped. To these pleas the Commonwealth has replied, averring various grounds or causes of forfeiture. To these the defendants have filed rejoinders, to which the Commonwealth has demurred. It will be unnecessary to discuss these pleadings, because our decision dispenses with any examination of their sufficiency. It is one of the best-settled rules in pleading that a demurrer, whether special or general, places the whole record before the court, and it is against the party who has first failed in pleading that judgment must be rendered. If the replications, therefore, are substantially bad — if they show no legal cause of forfeiture or deprivation — it matters not whether the rejoinders are in law formal and sufficient, or otherwise.

I. It is claimed on behalf of the Commonwealth that the defendants have forfeited their charter under the laws of Pennsylvania, by procuring a charter from the Commonwealth of Maryland. We will assume the. fact to be so. It has been contended that such an act is inconsistent with the allegiance, which a corporation owes to the sovereign who created it — that it is crimen Icesce majestatis — a species of treason. No authority has been cited for the position. It seems to be rested on some supposed analogy to the case of individuals. A natural-born citizen of one country may place himself in a very dangerous and equivocal position by becoming a subject of and swearing allegiance to another sovereign. Nemo potest exuere patriam is the rigid rule of the common law, and so hard did it seem when applied in Macdonald’s Case, Foster 59, that the Crown interposed with a pardon. But Macdonald had accepted a commission in. the service of the French king, and was taken in arms against his native sovereign. For this he was indicted a.nd convicted of high treason — not for the simple act of having attempted to transfer his allegiance, which indeed by force of the maxim referred to he could not. It has never been pretended that such an attempted transfer was an overt act of treason, per se. Neither can a corporation transfer its allegiance by accepting a charter from another state. It does not thereby throw off its obligations under its original charter, nor can it take shelter under the wing of its new relation from the consequences of any violation of its duties under its old one. The act can in no way harm the Commonwealth. The courts will maintain and enforce all her rights against her own corporation without regard to any immunities she may claim to possess beyond her territories and within the jurisdiction of another state. It is true that a tenant forfeits his estate who attorns to a stranger; but that is because he thereby declaims holding under his landlord the very subject of the grant. It is the doctrine of the feud which gave the lord a right to resume it when the tenant denied his title. But under that system a tenant might have as many different lords as he had acres of land, and owe fealty and service to each in respect to the respective subjects of grant. His fealty to A. for Whiteacre in no way affected his fealty to B. for Blackacre. A simple and equitable rule was applied when these duties came in conflict. Si vero vasallus plures dominos habuerit inter se armis contendentes, qui cequiorem causam armorum habet, eum juvabit; si de esquítate non constiterit, dntiquiorem: Cragii Jus Feodale., Lib. 2, Drig. 2, § 17. Has it ever been suggested that the grantee of a patented invention from one country would by the general principles of law, independently of express legislative provision, forfeit his title by applying for and obtaining a patent for the same invention in another country ?

A citizen of Pennsylvania may doubtless hold a border farm, the title to part of which he derives from this state and part from Maryland. Though the conditions and terms of each grant may be widely different, there can be no conflict. They each refer to a different subject-matter. Quando duo jura in una persona concurrent esquum est ae si essent in diversis. We are of the opinion that this cause of forfeiture is not sustained.

II. Another ground upon which the Commonwealth demands judgment is, that the defendants, under cover of their Maryland chartér, have instituted proceedings in the Circuit Court of the United States for the Western District against another corporation created by this state and other persons, praying that an act of the legislature may be declared null and void. The premises for the purposes of this case may be safely admitted that a corporation which undertakes to drag its sovereign, ad forinsecué examen, before the bar of the tribunals of another sovereign, violates its first and paramount duty, and thereby subjects itself to the extremest consequences. But the next step in the argument fails. The Circuit Court of the United States is not the court of another sovereign. The Federal Constitution is the constitution of this state, having been ratified and adopted by the sovereign act of the people in convention, December 12th 1787. They made it irrevocably their own by their entering into a solemn compact with the peoples of their sister states — binding them for all time— unalterable in any other mode than that pointed out by its own terms. The able and eminent first chief justice of this court, in clear and emphatic language, declared, at a very early day, this fundamental truth of our political system: “ The government of the United States,” said McKean, C. J., “forms a part of the government of each state:” Respublica v. Cobbett, 3 Dall. 473. It follows that its courts are the courts of each state; they administer justice according to the laws of the state as construed and settled by its own supreme tribunal. This has been' more than once solemnly determined by the Supreme Court of the Union to be the rule of their decision, whenever the construction of the Constitution of the United States, treaties or Acts of Congress does not come in question: Shelby v. Guy, 11 Wheat. 361; United States v. Morrison, 4 Pet. 124; Green v. Neal, 6 Id. 291; Leffingwell v. Warren, 2 Black 599. In this last class of cases the Supreme Court of the United States is the tribunal of the last resort, in which the judgments and decrees of the highest courts of the respective states upon such questions are to be reviewed. Indeed, by being sued in an inferior court of the United States, upon a question involving the validity of an Act of Assembly, the grantees of the state have an advantage which in a state court they do not possess. In the Supreme Court of the state, if the decision pronounced is against the constitutionality of the Act of Assembly relied on, their judgment is final and conclusive : for, by the 25th section of the Judiciary Act of Congress, passed September 24th 1789, it is only “ where is drawn in question the validity of a statute of or an authority exercised under any state, on the ground of their being repugnant to the Constitution, treaties or laws of the United States, and the decision is in favor of such their validity,” that a final judgment or decree in any suit in the highest court of law or equity in a state can be carried for review to the Supreme Court of the United States. The Commonwealth has no right to complain that the Circuit Court in a case properly within its jurisdiction was invoked by the defendants to pass upon the constitutionality of her acts of legislation. Were those acts held to be valid in her own highest court, they could be carried by writ of error to the Supreme Court of the United States as the court of last resort, and to the final judgment of that tribunal she must submit. She may herself appeal from the decree of the Circuit Court, if adverse to her, which she cannot do from this court. The defendants violated no duty which they owed to Pennsylvania in commencing suit as a Maryland corporation in the Federal court having jurisdiction. A citizen of Pennsylvania, holding land under a grant from Maryland, is guilty of no breach of allegiance, express or implied, by the exercise of his right of resorting to the tribunals of the Union, even though the defendant against whom he sues the process is a grantee from Pennsylvania. We think that the Commonwealth has failed to sustain this ground.

III. A third cause of forfeiture averred is that the defendants intend to connect their road with a railroad in Maryland, and are engaged in constructing an extension with the purpose of connecting the same with the railroad of the Baltimore and Ohio Railroad Company. We might pass this point with the remark that no mere intention or purpose in a corporation to violate its duty can constitute a case of forfeiture. Its officers and managers have, like individuals, a locus penitentice. They may avail themselves of it. The design clearly evinced to do an unlawful act may justify the interposition of a court of equity by a process of injunction, but it would be unjust before the act was consummated to visit the corporate body itself with the extreme penalty of civil death and confiscation. We prefer, however, to rest our decision in this cause upon reasons which will make it final. Upon the proper construction of the various Acts of Assembly authorizing these defendants to extend their road south and east from Oonnellsville, we are of the opinion that they are licensed by the legislature to form a connection with the railroad of the Baltimore and Ohio Company. By the Act of April 18th 1843, they were authorized to extend their road to “ any point on the waters of the Youghiogheny, and within the limits of this Commonwealth,” and the fact stands admitted on these pleadings that the waters of the Youghiogheny extend to the boundary line between the states of Pennsylvania and Maryland.

So by the Act of April 18th 1853, the defendants were empowered “ to extend their road to any point they may select in Somerset or Bedford counties; so to form a connection with the Chambersburg and Allegheny Railroad, or any other railroad that may be constructedand also by the Act of April 14th 1863, the provisions of the act immediately preceding are extended to the counties of Fulton and Franklin for all the purposes therein mentioned — that is, for the purpose of connecting with any other railroad. All these counties are border counties — their southern boundary is Mason & Dixon’s line — and here is an express and unlimited power to connect with any other railroad not simply in the said counties, but so as to form such a connection which may as well be at the state line as in any other part of the counties named. Besides all which, it appears in fact by admission on this record that the only railroad projected or constructed in the counties of Fulton or Franklin is the railroad extending from Chambersburg to Hagerstown in the state of Maryland. We do not, therefore, doubt that the defendants were expressly licensed by the legislature to connect with a railroad in Maryland at the state line.

IY. The fourth and last position which has to be encountered is that by the Act of Assembly passed August 19th 1864, all the rights, powers, franchises and privileges conferred upon the defendants “ for and in respect to all that portion of the lines of railway southwardly and eastwardly from Oonnellsville were resumed, revoked, repealed and put an end to.” By the 20th section of the original act of incorporation of April 8d 1837, it was provided that “ if the said company shall at any time misuse or abuse any of the privileges herein granted the legislature may resume all and singular the rights and privileges hereby granted to the said corporation.” It might perhaps be plausibly argued that as this reservation is expressly confined to the rights and privileges thereby granted, it did not extend to those subsequently conferred absolutely and without any reference to such reservation. It will be better, however, to consider it as conceded by the pleadings, that it was intended to apply not only to the privileges granted by the original act, but to all which by supplements might subsequently be incorporated therein. The questions which naturally arise upon the construction of this provision are two. 1. Is the legislature constituted the sole and exclusive judge of the fact of misuse or abuse, upon which their power to revoke is conditioned? and 2. If not, what effect ought to be given to their act ?

As to the first question, upon the ordinary rules applied in the interpretation of language, no difficulty could arise. If this were a contract between man and man, it could not be pretended that when one party reserves the poAver to rescind in a certain event, he is thereby constituted the judge of whether the event has occurred. It is a condition precedent to the exercise of the power, and the party claiming it must prove affirmatively the existence of the fact. What difference does it make that the state is one of the parties ? She has entered into this contract through the legislature, and in the decision of all questions of fact which may arise upon it, the judiciary department must be invoked as in other cases. The power of the legislature in grants and contracts is not like the power of the English Parliament. It is limited and restrained by the provisions of the Federal and State Constitutions, so that it cannot impair contracts either made by itself or others. It corresponds more properly to the English CroAvn, as to which it is certainly the established law of that country that the king cannot derogate from his own grant, and when an express power is reserved in a certain event or upon certain conditions, it must be proved affirmatively that the event has occurred or the condition been fulfilled: The Eastern Archipelago Company v. The Queen, 2 E. & B. 856. The current of American authorities certainly sustains this doctrine: Crease v. Babcock, 23 Pick. 334; Commonwealth v. Essex Co., 13 Gray 239; The Delaware Railroad Company v. Tharp, 5 Harrington 454; The State et al. v. Curran, 7 English (Arkansas) 321: with one exception, Miners’ Bank v. The United States, 1 G. Greene’s Rep. (Iowa) 553. In The Erie and North East Railroad Company v. Casey, 2 Casey 287, at the close of the opinion of the court by C. J. Black, he gives what he terms a “ brief recapitulation of the main points in the case” to make the grounds of the judgment plainer: “ 1. This charter was granted with a reservation of the right to repeal it, if the franchise should be abused or misused; 2. We are satisfied that in point of fact those franchises were abused and misused; 3. After that event happened the General Assembly was invested with full power to repeal the charter, and the corporators held their franchises from the state merely as tenants at will, in the same manner as if there had been an unconditional reservation of the right to repeal.” After so clear an enunciation by the court itself of ..the conclusions at which they had arrived, it would be altogether a work of superogation to examine and analyze the reasons upon which they are based. That ease must be considered an authority in this state for the position that the legislature is not the final judge of whether the casus foederis, upon which the authority to repeal is based, has occurred. '

Such has been the doctrine upon which the legislature itself has acted — for which at least two memorable instances in its history may be cited. A company by the title of “ The President and Managers of the Harrisburg Ganal, Fire Insurance and Water Co.,” was incorporated by an Act of March 27th 1823, with a clause in the same words as that now before us. In 1826 a difficulty occurred between this company and the first board of canal commissioners in regard to the location of the Pennsylvania Canal. The matter was brought before the legislature by a message from the governor, and by them referred to a joint committee of both houses. The report of that committee is to be found in the Senate Journal, 1825-6, p. 524. After stating that upon an examination of the facts they had come deliberately to the conclusion that the company had abused its privileges, they say, “Your committee believe that such misuser has already taken place; but they are not disposed to recommend to the Senate an immediate and unqualified exercise of the power reserved to the legislature in such circumstances ; they prefer leaving the rights of the company to be adjusted in the form of law, and by the ordinary tribunals of the country. A bill is herewith submitted for effecting these objects by authorizing the Supreme Court to entertain proceedings to be instituted by the attorney-general for testing the original validity of the letters patent granted by the governor, and ascertaining whether the charter of the company has been forfeited by misuser or otherwise.” This bill became a law, Act of April 5th 1826, Pamph. L. 213. In the session of 1832-3 petitions were presented for the repeal of the charter of the Conestoga Navigation Company, which had been incorporated March 3d 1825 with the same. reservation of power as is contained in the charter of the defendants: Pamph. L. 1824-5, pp. 46, 56. These petitions were referred in the House to the Judiciary Committee, at the head of which was Mr. McCulloch, of Franklin, one of the foremost lawyers of his day in the state. His report (House Journal, 1832-3, vol. 2, 757) is an able and exhaustive argument in favor of the inviolability of charters; and upon the particular point now under consideration it is remarked: “ With these views of the subject, the committee are of opinion that measures should be taken to invest the courts with power to try and determine by due course of law all questions respecting the forfeiture of charters by misuser, nonuser or abuse of their privileges. The reservations in acts of incorporation of a power in the legislature to repeal the law ‘ if the corporation shall misuse or abuse its privileges,’ or ‘ if it should prove injurious to the Commonwealth,’ can be no objection to the proposed course; for still there ought to be a competent tribunal to try the facts of abuse or misuse of the privileges or the causes which have rendered them injurious.” I may also refer, as showing the same views in the legislature, to the preamble of the act to repeal the charter of the Erie and North East Railroad Company, approved October 6th 1855, Pamph. L. 1856, p. 705. These instances in our legislative annals are referred to as showing that the General Assembly has not been inattentive to this subject, and has been far from claiming an absolute right to decide conclusively upon the facts of misuser or abuse.

2. What effect then are we to give to the Act of August 19th 1864 ? It may be conceded that from that respect which is due by one co-ordinate branch of the government to another, this court ought to presume that the legislature did not exercise its reserved power of repeal without satisfying itself, after an impartial investigation of the facts, and an opportunity given to the defendants to be heard in their own defence, that the case had occurred upon which alone its interposition could be justifiable. We may assume for the purposes of this cause that the act is primá, facie valid, and that the burden of proving the negative is east by it upon the defendants. This is certainly, under the decisions, as rigorous a rule as ought to be applied. How then stands this question upon the record ?

To the Commonwealth’s replication to the third and fourth pleas alleging that defendants’ right to extend their road beyond Oonnellsville was revoked and annulled by the Act of August 19th 1864, the defendants have filed a rejoinder, setting forth the Act of April 11th 1856, by which it was provided that all defects or irregularities of the board of directors of said company, so far as they may have proceeded from the neglect or omission of the said board fully to comply with the requisitions of the acts of incorporation and their supplements, were, and should be thereby remedied and supplied — and that subsequently, on the faith of that act, they had procured a loan from the city of Baltimore of bonds of the said city, to the amount of $1,000,000, and had proceeded to take measures to fulfil the objects of the legislature, specifying particularly and affirmatively what they had done, and averring in conclusion, that during the entire period between the passage of the said Act of April 11th 1856, and the said Act of August 19th 1864, the said company had in no particular, and by no act of omission or commission, abused or misused their corporate functions and powers, but had in good faith endeavored, both by the resources in their possession and by efforts to procure additional resources by borrowing, to carry out and fulfil all the duties and avail themselves of all the privileges devolved upon them by their said act of incorporation and its supplements. To this rejoinder the Commonwealth has filed a general demurrer.

As this demurrer unquestionably admits the truth of all the facts averred in the rejoinder, it leaves but one question open for consideration, namely, whether upon the true construction of the Act of April llth 1856, called in the argument the condoning act, all misuse or abuse of its corporate privileges by the company before that date was pardoned and released. It was certainly competent to the legislature to do this. Its object evidently was to give security to those, who should thereafter advance their money to the corporation, and when it not only provided that any defect or irregularity proceeding from the neglect or omission of the directors fully to comply with the act of incorporation and its supplements should be remedied and supplied, but that the charter of incorporation of said company should not be affected or invalidated in consequence of such omission or neglect, — it is. impossible to resist the conclusion that all right on the part of the Commonwealth to insist on a forfeiture for anything done or-omitted to be done before that time was released. If this be so, then we have no difficulty in saying that upon these pleadings it is admitted that no misuse or abuse had taken place, which would give any constitutional right to the legislature under the 20th section of the original act of incorporation, to resume the rights- and privileges granted to the defendants.

It has been earnestly contended by the Attorney-General, that if the Act of August 19th 1864 was not within the power reserved, it ought nevertheless to be sustained as a constitutional assertion of the right of eminent domain. Admitting for* the purposes of the case that the franchises were within this high power, and admitting, what some general words in the preamble may seem to warrant, that the legislature meant to exert it, the question still remains, has it been constitutionally exercised in this instance.

If a franchise is property, it has value as such; and the 10th section of the 9th article of the Constitution of this Commonwealth has declared, “ nor shall any man’s property be taken or applied to public use, without the consent of his representatives, and without just compensation being made.” It has been held more than once by this court and may be regarded as firmly established, that though it is not necessary that the compensation should be actually ascertained and paid before the property is appropriated, it is requisite that an adequate, remedy should be provided by which the individual can obtain compensation without any unreasonable delay: Pittsburg v. Scott, 1 Barr 309; Com’rs of Kensington v. Wood, 10 Id. 93. Let us examine then the Act of August 19th 1864, to ascertain whether the constitution in this respect has been obeyed. It provides that “they (the defendants) shall, as and for full compensation for all damages and injury done, if to any they can or may be entitled by the provisions of this act, receive payment for expenditures made in respect to any work done or constructed upon any lines of the said railroad, southwardly or eastwardly from Connellsville ; and the Governor of the Commonwealth shall appoint three competent persons to appraise and value the expenditures so made, and the amount thereof, when so appraised and certified to him in writing by the parties so appointed, shall be paid to the said Pittsburg and Connellsville Railroad Company, by any corporation or corporations hereafter authorized to construct a line or lines of railway southwardly or eastwardly from Connellsville; and the company so paying shall be entitled, in their discretion, to use the work so paid for as part of the line of their railway.” These provisions are altogether insufficient, illusory and unconstitutional. There is no direction whatever for a valuation of the corporate franchises and privileges attempted to be resumed for the public use. Even in regard to the actual tangible property taken — the lines of railway — the rule of valuation and appraisement is inadequate and unjust. It would be no just compensation to an individual to pay him for his land and improvements merely what they had cost him. Their value may have been doubled in the lapse of time and by the change of circumstances. And finally, that the defendants should be turned over for their damages even thus inadequate to an action against some company thereafter to be incorporated, is an illusory remedy, and necessarily accompanied with unreasonable delay. It is clear, then, that the right of eminent domain has not in this instance been constitutionally exercised.

In regard to the replications, which set up as a ground of forfeiture, nonuser, or that more than a reasonable time has elapsed for the construction- and completion of the extension of the defendants’ road beyond Connellsville, the facts pleaded in the rejoinder negative such nonuser. We think these facts forming the inducement to the special traverse, • constitute a sufficient answer to the charge contained in the replications, and the demurrers admit their truth. This ground was not pressed in the concluding argument on behalf of the Commonwealth, and we do not deem it necessary to enter upon it now at large.

We have given to all the points presented by the Commonwealth the most careful consideration, and on the whole are of opinion that they have not been sustained.

Judgment for the defendants.