Riley v. Charleston Union Station Co.

April 18, 1905. The opinion of the Court was delivered by This is an action for a perpetual injunction against condemnation proceedings instituted by the Charleston Union Station Co., under an alleged power contained in the act of the General Assembly incorporating the defendant company, approved February 20th, 1902, 23d Stat., 1168. The decree of the Circuit Court, reported herewith, refused injunction, and dismissed the complaint, after a full and able consideration of the questions presented. The plaintiffs appeal upon exceptions, reported in full herewith, which, without further statement, we proceed to consider.

The first, second, fourth and fifth exceptions make the point that the act under which the defendant seeks to condemn plaintiffs' property is unconstitutional in that no tribunal is provided for the determination of any question that may be made by the land owner as to the right and power of the defendant company to take plaintiffs' property. This contention cannot be sustained. While it is true, the condemnation statutes provide no special tribunal, except for the determination of the amount of compensation to be paid, nevertheless the regular machinery of the Courts is available for the determination of any issue with respect to the right and power to condemn.Riley v. Union Station Co., 67 S.C. 84, 45 S.E. 149. The remedy provided by the condemnation statute is exclusive only as to matters falling within its provisions. These statutes, in conjunction with the general law, provide for full hearing before a lawful tribunal after due notice, and thus answer every requirement of the Federal and State Constitutions, with reference to due process of law. A sufficient answer to appellants' contention in this regard is the fact that in these proceedings they have rightfully invoked the machinery of the court of equity to determine the issues which they have raised, have had full trial thereon, and now are having the same reviewed by this Court.

The second specification of the second exception objects to that portion of the decree of the Circuit Court wherein the Court said, "Nor are the provisions of the fourteenth amendment of the Constitution of the United States violated. One of the attributes of State sovereignty is the right of eminent domain, the right of providing for the taking of private property for public uses. Each State, by virtue of its Statehood, has the right to exercise the power of eminent domain. This is doubted nowhere, and the provisions of the Federal Constitution do not relate to the eminent domain of the State." Appellants' ground of objection is that the provisions of the Federal Constitution, and particularly the fourteenth amendment, do relate to and control the law of eminent domain of South Carolina. The exception puts an erroneous interpretation on the meaning of the Circuit Judge. The objectionable language was in the quotation from 10 Ency. Law, 2d ed., 1052, which was based upon Barron v. Baltimore, 7 Pet., 243. The case cited was decided in 1833, and related to the fifth amendment, declaring that private property shall not be taken for public use without just compensation, which the Court said was intended solely as a limitation on the exercise of the power of the Federal government, and was not applicable to legislation of the States. Judge Dantzler did not intend to say that the provisions of the fourteenth amendment had no relation to the exercise of eminent domain by the State, but that such amendment was not violated by the statutes in question, as he proceeds to show that the condemnation proposed was for a public use, and that the statutes made ample provision for the protection of property owners and for compensation for property so condemned.

The third exception imputes error in holding that the property sought to be condemned is for public use; whereas, the facts show that it is to be taken for private use, in violation of art. I., sec. 17, State Constitution. This exception cannot be sustained. The defendant company was incorporated for the purpose of constructing, maintaining and operating a union passenger station in the city of Charleston, and, to this end, was given the right to acquire, by purchase, lease or condemnation, all property necessary for the same, and to have the general powers and to be subject to the general restrictions imposed by law upon railroad corporations. By section 3, power was given to acquire such real estate as may be necessary to construct, maintain and operate a union passenger station, comprising passenger depots, office buildings, sheds, storage rooms and yards; also main and side tracks, switches, crossovers, turnouts, bridges and other terminal railroad facilities, appurtenances and accommodations suitable in size, location and manner of construction, to perform promptly and efficiently the work of receiving, delivering and transferring all passengers, baggage and mail and express matter of railroad companies using said station, etc., with power to condemn lands for such purpose, under sections 1743 to 1755, Revised Statutes, 1893, and amendatory statutes.

If defendant company is not, in fact, a railroad company, its main purposes are clearly within the objects of a regular railroad company, and it is so closely analogous thereto as to warrant the Court in applying to it the same rule that would be applied to a regular railroad corporation in determining whether the property sought to be condemned is for a public use.

If it should be conceded that the use of a union passenger station is private, appellant would have to reckon with the case of Boyd v. Granite Co., 66 S.C. 433, 440, 45 S.E., 10, which, construing art. I., sec. 17, art. XVII., with art. IX., secs., 2 and 20, holds: "That private property shall not be taken for private use without the consent of the owner, except in cases where this power is conferred upon corporations by the General Assembly, and then only in the manner prescribed in sec. 20, art. IX."

The first general principle which must control this question is, when the legislature, in effect, declares that the construction, maintenance and operation of the union passenger station in the city of Charleston is a public purpose so as to authorize the condemnation of property, this conclusion is binding on the Court if there be any reasonable ground to support it. Chicago Northwestern Ry. Co. v. Morehouse,112 Wis. 7; 88 Am. St. Rep., 918. But independent of the implication from the statute chartering the defendant company that the use is a public one, there is no room to doubt, from the testimony, that a union passenger station with appurtenant facilities in the city of Charleston would be a great and direct benefit to the traveling public. It is not easy to give a definition of public use which will be adequate to cover every case that may properly fall within the terms, and this case does not call for an attempt to define the terms. Some cases take the very broad view that "public use" is synonymous with "public benefit." A more restricted view, however, would seem to better comport with the due protection of private property against spoliation under the guise of eminent domain. Judge Cooley, in his Constitutional Limitations, 654, says: "The public use implies possession, occupation and enjoyment of the land by the public at large or by public agencies; and the due protection of the rights of private property will preclude the government from seizing it in the hands of the owner, and turning it over to another on vague grounds of public benefit, to spring from a more profitable use to which the latter will devote it." In Lewis on Eminent Domain, sec. 165, it is said that "public use" means the same as "use by the public." These definitions involve the idea that the public must have a definite and fixed use of the property to be condemned, independent of the will of the person or corporation taking title under condemnation, and that such use by the public is protected by law.Fallisburg Power Mfg. Co. v. Alexander, 101 Va., 98; 99 Am. St. Rep., 855. The case of Healy Lumber Co. v.Morris, 33 Wn., 490; 99 Am. St. Rep., 964, holds that "a public use must be either a use by the public or by somequasi public agency and not simply a use which may incidentally or indirectly promote the public interest or general prosperity." If we accept either of these views of the meaning of "public use," the defendant company is clearly chartered for a public purpose, and the condemnation of property for the construction, maintenance and operation of a union passenger station in the city of Charleston is for a public use. No one doubts now that the laying of railroad tracks and the erection of depots by a regularly chartered railroad company is for such public use as to justify the exercise of eminent domain under the condemnation statutes. This franchise is, in its nature, as public as a franchise to transport passengers for hire. The defendant company is designed to carry out the same public use by affecting such a public utility as a union passenger station, involving the necessary railroad tracks, depots and terminal facilities for accommodation of the public. The public, independent of the will of the defendant, and protected by law, has a fixed and definite right to use this station in dealing with the defendant company, or the railroad companies using the station in their business as common carriers of passengers.

The fact that the Southern Railway Co. and the Atlantic Coast Line Railroad Co. are the principal stockholders in the defendant company and the officers of the defendant company are officers in said railroad companies cannot affect this question, for the use is still a public use, whether considered with reference to the defendant company or with reference to the stockholding companies, as these railroad companies, as common carriers, are public agencies, and it is within the purpose of their organization to own or control depot facilities required for their business and the needs of the community. Nor is the question whether the use is a public use at all affected by the alleged fact that each of the railroad companies holding stock in the defendant company has one or more sites of its own said to be suitable for a union passenger station. The question whether the use is public depends upon the nature of the use and not upon the possessions of the particular individuals or corporations that may be interested in such use. Whether the last mentioned fact influences the question whether there is a necessity for condemning plaintiff's property belongs more properly to the consideration of other exceptions to be hereafter noticed.

The sixth exception raises the point that the act incorporating the defendant company violates sec. 7, art. III., of the State Constitution, in that it relates to more than one subject expressed in its title, since it not only incorporated the defendant company, but amended the existing charters of the Atlantic Coast Line Railroad and the Southern Railway by a special law and not by a general law, which is forbidden by art. IX., sec. 2, of the Constitution. The title of the act is to incorporate the "Charleston Union Station Company," but in sec. 5, the statute gives the power to subscribe for and hold the stock and to guarantee and hold the bonds of the defendant company. The case of Connor v. Railroad, 23 S.C. 427, holds that: "An act to incorporate the Green Pond, Walterboro and Branchville Railroad Company" does not relate to more than one subject expressed in its title, because of the fact that the act also authorized the county of Colleton to subscribe to the capital stock. The principle upon which the case rests is "that when an act of the legislature expresses in its title the object of the act, the title embraces and expresses any lawful means to achieve the object." San Antonio v. Mehaffy,96 U.S. 315. When the creation of a corporation is the subject, it necessarily includes the powers to be given it. Ex parteBacot, 36 S.C. 135, 15 S.E., 204. Among the powers granted was the right to sell its stock and bonds to the railroad companies entering the city of Charleston and using said station. But while the principle is admitted, it is contended that it does not apply here, because the act incorporating the defendant company was a special act containing an amendment to the charters of said railroad companies in the particulars mentioned, contrary to art. IX., sec. 2, of the Constitution, which provides: "The General Assembly shall provide by general law for the changing or amending existing charters;" and in view of this last named clause of the Constitution, adopted since Connor v. R.R. Co., supra, was decided, the said amendatory provisions constitute a subject not embraced in the title. This question will be necessarily involved in the consideration of the seventh and eighth exceptions, which raise the question that the act incorporating the defendant company violates art. IX., sec. 2, quoted above, and also art. III., sec. 34, which prohibits a special law when a general law can be made applicable.

The Circuit Court has disposed of this question very conclusively by construing these provisions of the Constitution together. Sec. 2, art IX., of the Constitution, quoted in full, is as follows: "No charter of incorporation shall be granted, changed or amended by special law except in the case of such charitable, educational, penal or reformatory corporations as may be under the control of the State or may be provided for in this Constitution, but the General Assembly shall provide, by general laws, for changing or amending existing charters, and for the organization of all corporations hereafter to be created, and any such law so passed. as well as all charters now existing or hereafter created, shall be subject to future repeal or alteration: Provided, That the General Assembly may, by a two-thirds vote of each house, on a concurrent resolution, allow a bill for a special charter to be introduced, and when so introduced may be passed the same as other bills." The above proviso clearly makes an exception to the general rule forbidding a special law when a general law can be made applicable, by providing that a special charter may be granted under the conditions named. In this case, the conditions exist, and the statute recites the fact that a concurrent resolution allowing the bill to be introduced has been passed by a two-thirds vote of each house, as required by statute.

The ninth and tenth exceptions allege error in not holding that defendant company is not duly incorporated, organized and authorized to commence business under the terms of the act of corporation, because the act authorized the company to organize and commence business when $50,000 had been subscribed to the capital stock, the evidence shows that nine-tenths thereof is invalid stock subscriptions of Southern Railway Co. and Atlantic Coast Line Railroad Co., such invalidity resting in the contention that the special act incorporating the company is void, under sec. 2, art. IX., of the Constitution. This contention has been overruled in the consideration of the seventh and eighth exceptions above.

The eleventh, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, seventeenth, eighteenth, nineteenth exceptions bring up the question of fact, whether the property sought to be condemned is necessary for the purposes of the corporation. The case of S.C.R.R. Co. v. Blake, 9th Rich., 228, shows that the grantee of the power to condemn lands is not the sole judge whether any particular parcel of land is required for the purposes of the road, and that the final determination of this question rests with the Courts. This is in accord with many authorities cited in 88 Am. St. Rep., 946, note. Nevertheless, it is right that weight should be given to the fact that the grantee to whom the statute has delegated the power to condemn has decided that the particular land in question is required. As said inSmith v. R.R. Co., 105 Ill., 511, and repeated in O'Hare v. Chicago etc. R.R. Co. (Ill.), 28 N.E. Rep., 923, 925: "Every company seeking to condemn land for public improvement must, in a modified degree, be permitted to judge for itself as to what amount is necessary for such purpose." This right, however, is subordinate to the right of the Courts to prevent an abuse of the power by restricting its exercise to the reasonable necessities of the case, since to take more than reasonable necessity requires is to appropriate private property to private use."

We have carefully considered the testimony in view of these principles and see no just ground for overruling the decision of the Circuit Court that such reasonable necessity exists. It is strenuously contended by appellant that no reasonable necessity exists, because the testimony shows that the Southern Railway Co. and the Atlantic Coast Line Railroad Co., holding the greater portion of the capital stock of the defendant company, each have lots suitable for the erection thereon of a union station, and that equity and good conscience would not allow these companies associated under the name of the Charleston Union Station Co. to condemn the property of plaintiff for said purposes.

In a proper case the court of equity would undoubtedly look beyond the corporate entity to its constituent stockholders as the real parties in interest, associated under the name of the corporation. But we find nothing in this case which calls upon this Court to ignore the rights of defendant as a corporation to condemn the lands of others for a public use, founded in reasonable necessity. So far as appears, the defendant company owns no property which it may use for the purpose named. It would be a bold and far-reaching doctrine to announce that no quasi corporation could condemn property of a non-stockholder for public use as long as any stockholder had property which might be used for the purpose. Such a rule would lead the Court into an impenetrable maze to ascertain and adjust the rights and claims of the various stockholders as to whose property should be taken and whose left. The safer rule is that the grantee of the power to condemn must not abuse the discretion confided by the legislature and spoliate private property by taking, for pretended public use, more than a reasonable necessity requires. We find no abuse of discretion or bad faith in defendant's proposal to condemn plaintiffs' property, and the general rule is that if there be no bad faith or abuse of discretion on the part of the grantee in the matter of location, his discretion will not be interfered with. 10 Ency. Law, 2 ed., 1057, and cases cited in note 1. A somewhat similar contention was made in Kansas and Texas Coal Ry. v. Northwestern Coal Mining Co., 161 Mo., 288, 84 Am. St. Rep., 722, and was overruled by the Court. We do not find in the case anything to warrant a conclusion that the organization of the defendant company is a scheme by the Southern Railway Co. and the Atlantic Coast Line Railroad to do something which they could not lawfully do under their own chartered powers. They have become stockholders in defendant company by authority of a valid act of the legislature, and the plan of organizing the defendant company for the purpose of securing an important public utility in the line of their own chartered purpose has legislative sanction. The case presented has no similarity to the Northern Securities case, 193 U.S. 358, and other cases on that line relied on by appellants, relating to combinations in restraint of trade, in violation of anti-trust legislation. These conclusions also require that the twentieth, twenty-first and twenty-second exceptions be overruled.

The twenty-third exception, relating to striking out all the testimony of Mr. John Riley in reference to the introduction of the bill to incorporate the defendant, is untenable. The purport of the testimony was that Mr. Riley received no personal notice of the introduction of the bill in the Senate, and thus had no opportunity to attempt to have the bill amended in the Senate, by striking out the condemnation clause, although he knew, from the newspapers, of the passage of the resolution authorizing the introduction of the bill, and as a matter of fact was heard by the house committee in opposition to the bill. The ruling of the Circuit Court was quite proper. The testimony was wholly irrelevant to any issue in the case, and even if it had been permitted to remain as a part of the record, it could be of no consequence in affecting the result of this case.

We find no error in refusing injunction sought and in dismissing the complaint.

The judgment of the Circuit Court is affirmed.