People ex rel. McConvill v. Hills

46 Barb. 340 | N.Y. Sup. Ct. | 1866

By the Court, Welles, J.

The only question involved in this case is the constitutional validity of the act of the legislature passed March 24,1865, entitled “An act to amend' chapter three hundred and eighty-nine of the Laws of 1851." (Sess. Laws of 1851, ch. 181, pp. 303, 304.)

Chapter 389 of'the Laws of 1851 is entitled “An act to amend an act entitled ‘an act to amend and consolidate the several acts relating to the city of Eochester/ passed April 10, 1850." (Bess. L. of 1851, pp. 757 to 770.) Sections . 285 to 292 inclusive, of the act of 1851, provide for enabling the city of Eochester to subscribe for and hold stock in the Eochester and Genesee Valley. Bailrod Company to an amount not exceeding $>300,000. The 290th section is as follows:

“The 'common council of the city of Rochester, in dase the said ‘the Rochester and Genesee Valley Railroad Company’ elect to receive their subscription, shall have power to nominate and appoint one director of said company for every seventy-five thousand dollars of capital stock held by said city at the time of each election of directors of said company, but said city shall have no voice in the election of the remaining directors.”

The' act of 1865 referred to, amends the last mentioned and recited section of the act of 1851, so as to make it read as follows : “The common council of the city of Rochester shall have the power to nominate and appoint one director of the Rochester and Genesee Valley Railroad Company for every forty-two thousand eight hundred and fifty-five dollars and five sevenths of a dollar of capital stock of the said railroad company held by the said city' at the time of each election of directors of the said railroad company.”

The railroad company was incorporated and organized in June, 1851, Under the general railroad act of April 2, 1850, (Sess. Laws of that year, ch. 140, 211.) By the first section óf that act, associations formed in accordance with its provisions, are declared to be corporations, possessing the powers and privileges granted to corporations, and to be subject to ■ the provisions contained in title three of chapter eighteen of the first part of the Revised Statutes, excepting the provisions contained in the seventh section of said title, The eighth section of the title of the Revised Statutes referred to is as follows, “The charter of every corporation that shall hereafter be granted by the legislature, shall be subject to alteration^ suspension and repeal in the discretion of the legislature.” (1 R. S. 600. 1 N. Y. Stat. at Large, 557.)

The validity of the act of 1865 above quoted, and under which the relator claims to have beeh chosen to the offices of secretary and treasurer of the' Rochester and Genesee Valley Railroad Company, is challenged as being intended to modify and impair the contract between the city of Rochester and the railroad company, hy which the former became a stockholder in the company upon the acceptance of its subscription by the latter, and therefore was included in the prohibition of section 10 of article 1 of the constitution of the United States, which, among other things, prohibits any state from passing any law impairing the obligation of contracts.

The corporation of the city of Rochester, under the authority of sections 285 to 292 inclusive, of chapter 389 of the Laws of 1851, by subscribing to the stock of the railroad company, and the acceptance of such subscription by the company, became co-corporators in the corporation of the railroad company, upon equal terms, in all respects, with the other stockholders, with the exception that it had the absolute right to choose, by its common council, one of the directors of the railroad company for every $75,000 of the stock of the company held by the city at the time of each election of directors of the company, and without the right to participate in the choice of any of' the other directors. The city subscribed and paid for $300,000 of stock and still hold the same, and thus became entitled to choose four of the directors of the company, Without the authority of the legislature, the city would not have had the right to become such stockholder. Upon the acceptance by the company of the subscription by the city, all the stockholders, including the city, were the corporators of the railroad company,' with equal powers and liabilities, with the exception mentioned. The provisions of sections 285 to 292 of chapter 389 of the Laws of 1851, also became a part of the articles of association of the railroad company, for the reason that the city had no rightful power to make, or the company to receive, the subscription of the former, (which, as the facts show, now constitute a majority of the stock of the company, which has been paid up and for which certificates have been issued by the company,) excepting for the provisions of those sections. Then came the act of 1865, before referred to, the effect of which was to give to the city of Rochester the right to choose seven,, instead of four, directors of the railroad company; and the question is, did that impair, or would it, if enforced, impair the obligation of any contract? The legislature had already authorized one important change in the charter of the railroad company by changing the mode of choosing its directors. Had they the power to make another change ? Most clearly they had. The 8th section of the title of the Eevised Statutes referred to, declares that the charters of corporations shall be subject to alteration, &c. in the discretion of the legislature. It is evident, under this general language, that the power thus reserved was intended to be continuous, and not limited to a single or any number of occasions of its exercise when the power shall become or be deemed exhausted. Our volumes of session laws abound with acts showing the repeated exercise of this power in individual cases. The Eevised Statutes, as already stated, provide that the charter of every corporation granted by the legislature shall «be subject to alteration) suspension and repeal in the discretion of the legislature ¡ and the general railroad act declares, as also stated, that corporations formed under and in accordance with its provisions, shall be subject to that among other provisions of the Eevised Statutes, namely: that the corporations formed under the general railroad act shall be subject to alteration, suspension and repeal in the discretion of the legislature. The franchises of every railroad corporation under the general railroad act, derive their existence and all their vigor from the enabling provisions of that' act, and the corporation receives them subject to all its provisions, whether specified in the act itself or referred to as contained elsewhere. That is a part of the contract of the corporators, whether original or those who come into the corporation after it has acquired its complete legal entity and gone into operation.

The franchises are granted 'and received, to be held and enjoyed subject to the right of the grantors, in their discretion to alter, suspend or take them back entirely. The legislature, in enacting the law of 1865 under consideration, altered the charter of the railroad company, hy enlarging the powers of the city of Rochester, one of its stockholders, in the choice of the directors of the company. In doing this, no contract was impaired^—only a reserved right u?as exercised, to which right the company must be deemed to have yielded its assent by accepting the franchises granted. It is plainly distinguishable from the case of a contract between the railroad company and a stranger, in relation to a matter having no connection with, or reference to, the organisation of the company—for example, a contract between it and an individual for the purchase of a locomotive engine. In such a " case there is a legal contract between two persons, an artificial and a natural one, the obligations of which, no state legislation could impair. But the case under consideration is where the legislature undertakes, in the exercise of its reserved powers, to alter fundamentally the articles of association or charter of the railroad corporation. This power I have shown, I think, it possesses. To regard the transaction in any other light would be, as it seems to me, to deny to the legislature any control over any and every railroad corporation organized under the general railroad "act.

It is further insisted on behalf of the defendant, that the act in question is void for non-compliance with section 16 of article 3 of the constitution of this state, which declares that “no private or local bill, which may be passed by the legislature, shall embrace more than one subject, and that shall be expressed in the title/’

This objection we think Can not prevail. Assuming that the act is either private or local, it embraces only one subject. This is not controverted by the defendant. The point of the objection taken is, that the subject is not expressed in the title. The title, as before stated, is-—“An act to amend chapter 389 of the Laws of 1851.” The subject of the act in question is therefore expressed in the title, namely: to amend chapter 389 .of the Laws of 1851, and comes within the letter of the constitutional requirement, But it is said the statement in the title fails to indicate the nature of the amendment intended to be made, or what section .or portion of the act to be amended is to be affected, We think such particularity was not contemplated by the, section of the constitution referred to. Such has not- been the practical construction by the legislature óf that instrument, since its adoption, as by reference to the volumes of the session laws since that time will abundantly appear. In the Laws of 1848 there will'be found between fifty and sixty, and in those 1858 some eighty chapters of acts, quite as local or private as the one under consideration, all of which would be obnoxious to the same objection as the one we are- considering. The laws of the two years mentioned are referred to as affording fair specimens of-the whole series of the volumes of the session laws since the adoption of the present constitution, and it is not believed that any one of these have met with judicial condemnation upon the ground now urged. All that is urged against the act in question in this respect is that the title is not sufficiently definite in expressing the subject. On that question the constitution is silent, evidently intending it to be left to the courts to determine, and to give such a construction to such private or local acts "coming under review as shall prevent the mischiefs which the provision in question Was intended to remedy. It clearly does not require that the titles of such acts should contain the substance of their enactments. A majority of the local or private acts of the legislature referred to, are entitled as acts- amending other acts, without stating or indicating in what such amendments consist, or what section or provision of the amended acts are to be affected, or in what respect they are to be amended. The title of the act under consideration is of the same character. They are all sufficient to put -the legislature and persons interested upon inquiry, which is all the constitution requires. Any thing beyond this would require a statement in the title of the substance of the enactment.

[Monroe General Term, June 4, 1866,

For the foregoing reasons we are of the opinion that the judgment should be reversed, and a new trial granted, with costs to abide to event,

Ordered accordingly.

Welles, JS, JDarwin Smith and Johnson, Justices.]

Case Details

Case Name: People ex rel. McConvill v. Hills

Court Name: New York Supreme Court

Date Published: Jun 4, 1866

Citation: 46 Barb. 340

Court Abbreviation: N.Y. Sup. Ct.