Yazoo & Mississippi Valley Railroad v. Southern Railway Co.

| Miss. | Oct 15, 1903

Cali-iooN, J.,

delivered the opinion of the court.

The Southern Railway Company in Mississippi was chartered since the constitution of 1890 took effect. Its railroad runs east and west entirely across this state. One of its stations is Greenwood, and another lis Itta Bena, a point seven or eight miles west of Greenwood. It owns a branch railway, running at right angles with its main line from Itta Bena, nearly due north, to Webb, at which point the branch terminates; and it owns the rights, franchises, rights of way, turnouts, branches, main and side tracks, and improvements pertaining to it. The existence of this corporation is limited to 99 years. Constitution, sec. 178. Its charter is under general laws, Code 1892, § 3572 el seq. Section 3587 forbids consolidation with a “parallel or competing road.” Section 3588 forbids it ever to lease “parallel or competing lines.” The Yazoo & Mississippi Valley Railroad Company owns a line of railroad starting at Jackson, Miss., where it has connection with trains to New Orleans, La., and running northerly through nine or ten counties to Clarks-dale, where it connects with trains to Memphis, Tenn. In its course it crosses the main line of the Southern Railway Company at Greenwood; and Webb, the terminal of the branch road referred to, is also a station on its line. Both roads run around Swan Lake; the branch of the Southern referred to on the western, and the Mississippi Yalley on the eastern, margin. Clearly, there is competition between the two companies for the 33 miles between Webb, the terminal point of the branch, and the main line of* the Southern. It is not open to rational discussion that as to this 33-mile branch the two roads are both competing and parallel in view of the law. The Yazoo & Mississippi Yalley Railroad Company was chartered February 17, 1882 (Laws 1892, p. 838), long before our present constitution was ordained, and its charter is perpetual, and gives it powers and privileges of various sorts at war with the present constitution, and not enjoyed or obtainable by any railroad company which has come into existence since that constitution, or ever will come into existence while it remains in force. These two companies desired to effect a sale of the 33-mile branch, by which the ownership should be transferred to the Yazoo & Mississippi Yalley. Both knew that this could not lawfully be done, and so the following legislation was procured:

Chapter 89, p. 141, Acts 1902, is as follows:

“Section 1. That the Yazoo & Mississippi Valley Railroad Company be and is hereby authorized and empowered to lease or purchase and to maintain and operate the trades, rights of way and other property of that certain branch of the Southern Railway Company in and between the stations of Itta Bena, in Leflore county, and of Webb, in Tallahatchie county, Mississippi, and all the rights and franchises to such branch appertaining, and the said Southern Railway Company is also hereby empowered to lease or sell the same, to the said Yazoo & Mississippi Yalley Railroad Company.

“Sec. 2. ’Whenever the said lease or purchase shall be made, the said Yazoo & Mississippi Valiev Rairoad Company is hereby authorized and empowered to connect its present line or lines with the branch so leased or purchased at Black Bayou or at Glendora, in Tallahatchie county; and also said company is authorized and empowered, if it shall so desire, to tear up and abandon all or any part of such branch lying north of said connecting point; and also if it shall so desire, to tear up and abandon all that portion of the present line of said Yazoo & Mississippi Valey Railroad Company lying between said comecting point and Minter City, and all that other portion of the present line of said Yazoo & Mississippi Valley Railroad Company lying between Phillips Junction and Mill Bayou Junction, in Leflore county. '

’ “Sec. 3. Whenever the said lease or purchase shall have been made, and the said parts of said branch end-of said'present line of the Yazoo & Mississippi Valley Railroad Company shall have been torn up and abandoned, the said Yazoo & Mississippi Valley Railroad Company shall, within two years thereafter, construct under its present charter, and shall thereafter maintain and operate-in connection with its. present lines, a- new- line of railroad extending from Itta Bena southward to a connection at or near Belzona. But if said extension from Itta -Bena southward is not finished and in full operation within two years from such purchase or lease, the power to purchase or lease is hereby rescinded, and this act shall be of no effect.”

Upon the passage of this act the. bargain, at $225,000, was agreed on, .conveyance tendered, and the purchase price demanded. But both doubted, manifestly, the constitutionality of the legislative act above quoted, or at least what the courts might hold on that question, and so the Southern filed itsi bill for specific performance of the contract of sale and purchase, and the case is here from the sustaining of the Southern’s exceptions to the answer of the Yazoo & Mississippi Valley, which answer sets up that question.

Divers points are made on clauses of the constitution and acts, and it is convenient first to set these clauses and acts before the profession with the language of them which is precisely pertinent italicized to catch the eye, and then dispose of such as we decide upon:

Section 87 of the constitution is as follows:

“Sec. 87. No special local law shall be enacted for the benefit of individuals or corporations in cases which are, or can be. provided for by a general law, or where the relief sought can be .given'by any court of this state; nor shall the operation of any general law be suspended by the legislature, for the benefit of any individual or private corporation or association, and in all cases where a general law can be made applicable no special law shall be enacted.”

A railroad corporation is a “private corporation” in the purview of the second clause of this section.

Section 88 of the constitution is this :

“Sec. 88. The legislature shall pass general laws, under which local and private interests shall be provided for and protected, .and under which cities and towns may be chartered and their charters amended, and under which corporations may be chartered, organized, and their acts of incorporation altered; and •all'such laws shall be subject to repeal or amendment.”

Accordingly the legislature did enact a general law pertinent to the matter in hand. It appears in Code 1892, § 3560, and the amendment to it on pages 95 and 96, ch. 80, of the acts of 1898, as follows:

“Section 1. Be it enacted by the legislature of the state of ’Mississippi, that section 3560 of the annotated code of 1892 be -amended so as to read as follows: It shall be unlawful for any railroad company to consolidate with a parallel or competing railroad company, or to allow its affairs to be in any manner .•managed, regulated, or controlled by any such parallel or com--peiting railroad company, or permit its affairs to be so managed1, regulated or controlled by the same person or persons who manage, regulate or control tbe affairs of such competing or parallel railroad company tinder penalty of the forfeiture of the charters and franchises of such company or companies, and all persons, agents, or companies so offending shall be liable to the penalty of ten thousand dollars. And it shall further be unlawful for competing railroad companies operating parallel lines of road within twenty miles of each other to lease or purchase directly or indirectly, the opposing line or any part thereof or any interest therein. Such contracts, no matter dn whose name made, are hereby prohibited under the penalties in this section provided.”

Section 178 of the constitution provides as follows: “Sec. 178. Corporations shall be formed under general laws only. The legislature shall have full power to alter, amend or repeal any charter of incorporation noiu existing and revocable,, and 'any that may hereafter be created, whenever, in lits opinion, it may be for the public interest to do so; provided, however, that no injustice shall be done to the stockholders. No’ ¿barter for any private corporation for pecuniary gain shall be granted for a longer period than ninety-nine years. In assessing for taxation the property and franchises of corporations having charters for a longer period than ninety-nine years, the increased value of such property and franchises arising from such longer duration of their charters shall be considered and assessed; but any such corporation shall have the right to surrender the. excess over ninety-nine years of its charter.”

' Section 179 is this: “Sec. 179. The legisature shall never remit the forfeiture of the franchise of any corporation now existing, nor alter nor amend the charter thereof, nor pass any general nor specific law for the benefit of such corporation, except upon the condition that such corporation shall thereafter hold its charter and franchises subject to the, provisions of this constitution; and the reception by any corporation of any provision of any such laws, or any taking of any benefit or advantage from the same, shall be conclusively held an agreement by such corporation to bold thereafter its charter and franchises under the provisions hereof.”

Section 198 is this: “Sec. 198. The legislature shall enact laws to prevent all trusts, combinations, or contracts, and agreements inimical to the public welfare.”

Section 89 is this: “Sec. 89. There shall be appointed in each house of the legislature a standing committee on local and private, legislation, the house committee to consist of seven representatives and the senate committee of five senators. No local or private bill shall be passed by either house until it shall have been referred to said committee thereof, and shall have been reported bach with a recommendation in writing that it do pass, stating affirmatively the reasons thereof, and why the end to be accomplished should not be reached by a general law, or by a proceeding in court; or, if the recommendation of the committee be that the bill do not pass, then it shall not pass the house to which it is so reported unless it be voted for by a majority of all the members elected thereto. If a bill is passed in conformity to the requirements hereof, other than such as are prohibited in the next section. the courts shall not, because of its local, special or private nature, refuse to enforce it.”

The next section (90) forbids the passage of any “local, private or special laws” under 21 different headings, one of which is: (r) Conferring the power to exercise the right of eminent domain, or granting to any person, corporation or association the right to lay down railroad tracks or street car tracks in any other manner than that prescribed by general law.”

Section 190 is this: “The exericise of the right of eminent domain shall never be abridged, or so construed as to- prevent the legislature from taking the property and franchises of incorporated companies and subjecting them to public use; and the exercise of the police powers of the state shall never be abridged or so construed as to permit corporations to conduct their business in such manner as to infringe upon the rights of individuals or the general well-being of the state.”

Section. 184 makes all railroads carrying persons or property for bire “public highways.”

Section 5, cb. 88, p. 127, Laws 1900, in reference to trusts and combines, is as follows: “No corporation shall directly or indirectly purchase or oim the capital stock or any part thereof of any other corporation, nor directly or indirectly purchase, or in any manner acquire the franchise, plant or equipments of any other corporation, if such other corporation be engaged in the same kind of business and be a competitor therein. Any corporation offending against this provision shall forfeit its charter, if a domestic corporation, and, if a foreign corporation, ■shall forfeit its right to do business in this state, and shall be proceeded against by the attorney general in the manner and form provided in section 4 of this act.”

The contract of sale before us can be valid only if the Southern Railway and Yazoo & Mississippi Valley Railroad both had the power to make it under the constitution and laws of the state. If the former is powerless to sell, or if the latter is powerless to buy, the bargain is invalid, of course, and will not be enforced by the courts. The two roads are nowhere more than 7 or 8 to 10 miles apart, and for the first 12 or 15 miles coming south from Webb, except where they run on opposite sides of Swan Lake, are very close together, indeed, in some places being separated only a few yards. (We compute distances from the map in the record.)

Counsel for citizens living along the line of the road proposed to be abandoned were admitted by courtesy to file a brief for- appellant in the cause, and they make points not presented in the other brief. We will indicate some of the contentions made in both as if made together in one.

1. It is contended that decreeing specific performance is a matter of judicial discretion, and should not be exercised in this case; and Hester v. Hooker, 7 Smed. & M., 768, and Daniel v. Frazier, 40 Miss., 507" court="Miss." date_filed="1866-04-15" href="https://app.midpage.ai/document/daniel-v-frazer-8257718?utm_source=webapp" opinion_id="8257718">40 Miss., 507, are cited in support of this view. These cases are not applicable to that at bar. We do not see here any room for judicial discretion if the contract of the sale was valid, there being no question of fraudulent or improper action on either side.

2. It is contended that, inasmuch as the Yazoo & Mississippi-Valley Railroad Company had a charter granted before the constitution of 1890, giving it special privileges, such as fixing its own rates within fixed limits, perpetual succession, etc., the sale is violative of section 178, constitution 1890, requiring that corporations should be formed under general laws only; and of section 190, which provides that the exercise of the right of eminent domain shall never be abridged, and that the exercise of the police powers of the state shall never be abridged, or construed to permit corporations to conduct their business in such manner as to infringe upon the rights of individuals: and section 184, making railroads public highways; and of section;-179, forbidding the amending of old charters except on condition of being subject to the new constitution.

3. It is insisted that the sale is also violative of section 17 of the constitution, which provides that private property shall not be taken or damaged for public use except on due compensation being first made to the owner. And the proposition is that the citizens along the line proposed to be torn up have nights arising out of the fact that property values have become adjusted to- the convenience of transportation on that line, and improvements have been made in reference to it.

4. It is insisted that the sale is violative of section 87, constitution 1890, 'which forbids the suspension of the operation of any general law for the benefit of any individual or private corporation or association; and violative of section 88, which requires the legislature to pass general laws under which local and private interests shall be provided for, and under which corporations may be created, organized, and their acts of incorporation altered; and violative of section 89, forbidding the passage of any local or private bill until it has been referred to a standing committee on local and private legislation, and reported back “that it do pass,” stating affirmatively the reasons therefor, and why the matter could not be accomplished by general law or a proceeding in court; and violative of clause “r,” sec. 90, as to eminent domain and laying down railroad tracks. ' .

Chapter 89, p, 141, Acts 1902, attempting to authorize this sale, and to empower the purchaser to' tear up and abandon one of the lines, cannot be upheld under section 179 of the constitution. If the Tazoo & Mississippi Valley Railroad Company had'applied for such power, very clearly, by that section, it could nlot have received it by “any general or special law, except upon the condition that it thereafter hold its charter and franchises subject to the provisions of this constitution.” This is what the Yazoo & Mississippi Valley Railroad Company desired to avoid, and was what that act designed to enable it to avoid. The organic law cannot be violated, or its true in-tendment emasculated, by direction or indirection. The whole of society is vitally interested in the maintenance, in its full integrity, of the constitution which it promulgated, as a whole and in its every part, until amended in- the very manner it points out.

We cannot concur with learned counsel for appellee, that this bargain, and the act of 1902, which seeks to authorize it, can be held to consist with section S7 of the constitution and the general law of 1898, passed in pursuance of it. The act seems to have been framed with special purpose to avoid any question arising from the authorities they cite in inserting the words “or any part thereof or any interest therein.” The general law on the subject (Code 1892, § 3560) was silent as to this. In fact the law of 1898 (page 95, ch. 80) amended that section by adding the following clause: “And it shall further be'unlawful for competing railroad companies operating parallel lines of road within twenty miles of each other to lease or purchase; directly indirectly, the opposing line, or any part thereof or any interest therein. Such contracts, no matter in whose name made, are hereby prohibited under the penalties of this section provided.” It is very certain that the contract in this record is in flagrant disregard of this general law which was passed in pursuance of section 88 of the constitution. Section 87 of the section absolutely prohibits the suspension of any general law for the benefit of any private corporation, and this follows a prohibition of laws for corporate benefit where they are provided for by general law, or where relief can. be had from the courts, and is followed' by a prohibition of any special law where a general one .can be made so applicable. On this question we adopt the views of Judge J. A. P. Campbell in his opinion given to the legislature, as follows: “As to the competence of the legislature to enact a law suspending the operation of § 3560 of the code in favor of a railroad corporation. That § 3560 of the code, amended in 1898 (chapter 80 of the acts of 1898) is a general law is indisputable, and that railroad corporations are private corporations, is clear beyond dispute. I think nothing to the contrary can be found in the books. Section 87 of the constitution contains this provision, viz.: ‘Nor shall the operation of any general law be suspended by the legislature for the benefit of any individual .or private corporation or association.’ This is an independent, substantive clause prohibiting the legislature from suspending the operation of a general law for the benefit of an individual or private corporation or association. It is in the section which prohibits special or local laws where they can be provided for by general law, or relief be given by a court, and where a general law can be made applicable; but it distinctly declares that ‘the operation of a general law shall not be suspended for the benefit of any individual or private corporation or association,’ and thus specifies the sort of special law prohibited absolutely, and not conditioned on whether a general law can be applicable. This absolute and unconditional prohibition of such a law is not affected by section 89 of the constitution,- and is not subject to it. That section relates to local or private bills, and does not embrace the suspension of a general law for the benefit of an individual or private corporation or association, which particular kind of law is absolutely forbidden by section 87, and therefore cannot be lawfully passed by any sort of procedure. My view is that section 87 declares that special or local laws, such as the legislature may pass, shall not be enacted where a general law would meet the case, or relief can be obtained in court; but a law to suspend the operation of a general law for the benefit of an individual or private corporation or association is absolutely and unconditionally prohibited, and passing it in strict conformity to section 89 would not make it valid, because that section has reference to local and private bills other than those specifically and by name prohibited. In other words, the local or private bills meant by section 89 are those other than to suspend the operation of a general law for the benefit of an individual or private corporation or association, for such a law is not to be passed at all in any way. It is placed by section 87 beyond legislative power. Like the tree of knowledge of good and evil, it is forbidden fruit. Section 87 contains three distinct clauses. The first is that ‘no special or local laws shall be enlacted for the benefit of individuals or corporations in oases which are or can be provided by a general law, and where the relief sought can be given by any court of the state.’ The second is, ‘Nor shall the operation of any general law be suspended by the legislature for the benefit of any individual or private corporation or association.’ The third is, ‘And in all cases where a general law can be made applicable and would be advantageous, no special law shall be enacted.’ The'first and third clauses are conditional. The second is absolute and unconditional, and postively ihhibits the legislation mentioned in it. Section 89 prescribes the mode of procedure in reference to bills mentioned in the first and third clauses of section 87. A reference to page 212 of official journal of the constitutional convention of 1890, where section 87, as reported by the committee as section 49 of its report, will be found, will remove all doubt of the correctness of my analysis of it. It was adopted by the convention as reported. My opinion is that any act of the legislature to suspend the operation of a general law for the benefit of any individual or private corporation or association will be void, as being directly in the face of the constitution. The la'st clause of section 89 prohibits the courts from annulling an act of the legislature passed in conformity to that section (other than certain excepted cases) because of its local, special, or private nature, but there is no restriction on the courts as to an act to suspend the operation of a general law for the benefit of an individual or private corporation or association. That is left to condemnation because of its unconditional prohibition by the second clause of section 87.”

We are not impressed that there is conclusive force in the- argument so well presented that, because it was always pronounced by text-writers unwise legislation to suspend the operation of general laws for private advantage, before the constitution of 1890, and under,constitutions not containing specific prohibitions of it, therefore long custom is an argument of interpretation in favor of legislation of that sort. The fact that it distinctly appears in the present constitution, and especially in the connection in which it appears, is conclusive on the courts. The concluding clause of section 89 can, by no fair rule of construction, be held to modify the express prohibition of section 87, or the class embraced in section 9.0- The acts of every session illustrate this.

From the consideration of the constitution as a whole and the particular sections discussed, the evils existing and sought to be corrected, and committing ourselves to nothing except as herein decided, we are thoroughly satisfied to reverse the decree below and enter one here dismissing the bill at appellee’s costs in both courts.

Reversed^ and till dismissed here, with costs as stated.