Georgia Penitentiary Companies Nos. 2 & 3 v. Nelms

Stewart, Judge. Complainants, Penitentiary Companies Nos. 2 and 3, filed their bill in Eulton superior court, against defendants, the Marietta & North Georgia Railroad Company, of Cobb county, and John W. Nelms, principal keeper of the penitentiary, of Eulton county; in which bill complainants alleged that, under the act approved February 25th, 1876, the governor was authorized to lease out the convicts of the state for the term of twenty years: that on the 21st of June, 1876, the governor, in pursuance of said act, entered into a contract with the Dade Coal Company and complainants, by which he did lease the said convicts to said three companies for the term of twenty years, from April 1st, 1879; that by the provisions of said act, before the lessees of said convicts were entitled to any of said convicts, two hundred and fifty of them should be assigned to the Marietta & North Georgia Railroad Company for the space of three years. That the governor, in pursuance of said act, did assign said railroad company the number to which it was entitled, and that since that time said company was claiming more of said convicts; and that said Nelms, well knowing that said company had received all it was entitled to under said act, was assigning to it more convicts, and threatened to continue to assign convicts to it. All this, they allege, was contrary to law, and in disregard of the rights of complainants. To this bill an answer was filed by Nelms and the railroad company, in which they insisted that the railroad company had not received the number of convicts allowed under the act of 1876. They also insisted that the superior court of Eulton county had no jurisdiction of said case. A hearing was had before Hon. George Hillyer, Judge of the Atlanta circuit; his decision was brought to this court for review. (See case reported in 67 Ga. Rep., page 565.) This court then held that the superior court of Eul — 346 — ton county had jurisdiction of said case. Nelms, as principal keeper of the penitentiary, was enjoined from turning over the convicts, as prayed for. It was provided that the injunction might be dissolved by giving bond. It appears, from the record in the case, that bond was given by the railroad company. It further appears that on the 16th of October, 1883, complainants amended their bill, repeating the charges in the original bill and amendments, and further alleged that the contracts made by the state of Georgia with Georgia Penitentiary Companies One, Two, and Three, were still of force. That complainants had complied with their part of said contracts. They further allege that, since the date of said contracts, the Marietta & North Georgia Railroad Company has received largely more than two hundred and fifty convicts for three years. Complainants charge, that on the 26th day of September, 1883, the legislature of Georgia passed the following resolution : “Resolved by the Senate, the House concurring, that the governor be, and he is hereby instructed to direct the keeper of the penitentiary to turn over to the Marietta & North Georgia Railroad Company two hundred and fifty able bodied convicts, to be worked for the benefit of said railroad company for the full space of three years, or until the main line of said railroad is completed to the North Carolina line, and the Duck Town branch is completed to the Tennessee line, and the Dahlonega branch is finished to its intersection with the Gainesville and Dahlonega Railroad. “Resolved, further, that no more women convicts, nor old and infirm convicts be furnished said company.” Complainants further allege that the convicts mentioned are part of those included in their contract, and for which they pay hire. They insist that said resolution impairs the obligation of the contracts they have made with the state, and is, therefore, null and void. They charge that John W. Nelms, principal keeper of the penitentiary, will deliver the convicts to the defendants, unless restrained, and enjoined by the courts. They claim that their damages are irrepara — 347 — ble; and, therefore, pray that an injunction issue, restaaining Nelms from delivering, and the railroad company from receiving, the convicts. To this bill, as amended, defendants filed a demurrer and answer, by. which they insist that said resolution does not impair the obligation of any contract; and they also claim, that there are no such corporations as Georgia Peniten • tiary Companies Nos. 2 and 3. A hearing was had before Hon. W. R. Hammond, judge of the Atlanta circuit. Much testimony was introduced, and after considering the case, Judge Hammond held that most of the questions made in the bill, as amended, had been decided by this court, in the case reported in 65 Ga., Rep., page 70. He held that so much of the resolution of 1883 as provided that “no mor women convicts, nor old and infirm convicts be furnished to the railroad company,” was null and void; and John W. Nelms was restrained by injunction from carrying into effect this part of said resolution. He refused to grant an injunction, restraining Nelms, as principal keeper, from delivering convicts under the resolution (except as before stated), holding that the other questions made had already been decided by this court. To this ruling and decision of Judge Hammond both complainants and defendants sued out bills of exceptions, and said decision is now here for review. Pending the argument here, defendants in error withdrew their bill of exceptions. 1. The act of the legislature of this state, passed in 1876,. authorizing the governor to lease the convicts of the state to certain penitentiary companies, is constitutional and valid. There is no provision of the conttitution of this state which prohibits the legislature from authorizing the governor to enter into contracts disposing of the labor of the convicts of the state; provided that, in making such contracts of lease, the state reserves the police power over the convicts, and this was done, both under the acts of — 348 — 1874 and 1876. The validity and legality of the contracts between the state and complainants was fully recognized by this court in the decision of the court reported m 65 Ga., page 504. 2. A contract of lease made by the governor with Georgia Penitentiary Companies Numbers One, Two and Three, are valid and binding both upon the state and said companies. From the record in the case, it appears that his excellency, James M.. Smith, governor of Georgia, under the ■provisions of the act of 1876, advertised for bids from those who desired to lease the convicts of the state, and .■after considering the same, declined to' accept the bids as in said contracts stated; but did enter into the following -contracts with said parties, to-wit: “ Whereas, in. the opinion of the governor, none of s-dd bids ought tto be accepted (they being the only bids offered for any considerable ■number of convicts), as they are so in conflict as to the amounts for the whole, or for half, as to make it doubtful which would be the best .for the state; and “ Whereas, all of said bids are too low, in the opinion of the gov■ernor, and he has informed said bidders that-he cannot accept their 'bids upon the terms and for the prices therein specified, but that the said three companies may take the whole of said convicts- for the sum of five hundred thousand dollars, to be paid in twenty equal, ■ annual installments, commencing at the end of the first year after the termination of the present lease,—the Dade Goal Company taking the three hundred long-term men bid for by it, to be kept up con- ■ stantly to that number of able-bodied men, if there be, and so long • as there shall be, so many in the penitentiary, to be used in mining, ;as provided for by the statute; and the other two companies dividing the remainder into two equal parts, and the number that each of the ■¡two last mentioned companies has, shall be kept equal during the .period of the-lease ;• the convicts held by each-company to be employed in the labor specified in the statute. The annual installments to be paid into the.treasury of the state at the end of each year during the period of twenty years; such installments being the sum of twenty-five thousand dollars. Each of said companies to nay its pro rata share of said sum. The principal keeper of 'the penitentiary, under the direction of the-governor, shall adjust pro rata shares of said sums between said companies in -proportion ¡to the number of convicts held by each during the year; but in no case shall adjust* — 349 — ment operate so as to reduce the annual rental of said convicts below the sum of twenty-five thousand dollars. Each company shall pay the amount of annual hire fixed by such adjustment promptly on the last day of each year. “And the said three companies, each acting for itself as a separate and distinct company, and each assuming its own proportion of the obligations above mentioned, and no more, having accepted the foregoing modifications of their respective bids suggested by the governor; it is agreed by said companies, each one acting separately for itself, and by James M. Smith, governor of 'said state, that the said convicts be leased to said three companies above named, in the proportion as to the number of convicts and upon the terms herein-before specified; each company to give bond, with approved security, for its own part of the obligation devolved upon it by the acceptance of the bid, modified as aforesaid, in the following sums, to-wit: “ The Georgia Penitentiary Company No. 1, composed of the Dade Coal Company, in the sum of twenty-five thousand dollars. “The Georgia Penitentiary Company No. 2, composed of B. G. Lockett, L. A. Jordan, W. B. Lowe and J. B. Gordon, in the sum of thirty-seven thousand five hundred dollars; and “ The Georgia Penitentiary Company No. 3, whose stockholders are Thomas Alexander, W. D. Grant, W. W. Simpson, John W. Murphey and William H. Howell, the sum of thirty-seven thousand dollars, each of said bonds to have proper conditions for the management, control and safe keeping of said convicts according to law and to the rules and regulations prescribed for the government of the penitentiary, and in view of the fact that existing contracts of lease may be canceled before the first day of April, 1879, (the time when all the present leases expire) it is further agreed that in all such cases the lessees under this contract shall take possession of all convicts which may thus fall upon the hands of the state, and shall hold, manage and control the same according to the provisions of this contract, and of their bonds given under the same, and shall be respectively bound to pay for said convicts until the first day of April, 1879, at the rate of eleven dollars per capita per annum.” This contract of lease was signed by the governor and by the officers of the penitentiary companies named. And in pursuance with said contract bonds were given, and on the 22d day of June, 1876, an executive order was made by the governor, accepting the bonds and contracts j and by said order the companies were declared' to be corporations, and the names of the officers of said companies were entered on the minutes of the executive department. — 350 — Under the contracts thus made by the lessees, should they fail at the end of any year, to pay the amount agreed upon for the hire of the convicts, by an act passed in 1876, the comptroller general could issue an, execution for said amount not paid. Under the contract, as herein set forth, Penitentiary Companies Nos. 1, 2 and 3 contend that they are entitled to the services of all the convicts (except 250 to Marietta <fc North Georgia Railroad for .three years,) for a period of twenty years from April 1,1879, the date at which leases under the act of 1871 expired. Defendants insist that the Marietta & North Georgia Railroad Company was an incorporated railroad company working convicts when the act of 1876 was passed, and as such, insist that they are entitled not only to 250 for three years, but are entitled to a re-lease of convicts under the act of 1876, in preference to the rights of complainants. And defendants further insist that the state of Georgia, notwithstanding lease contracts have been entered into by it, has the right to withdraw from such contracts at its pleasure. The constitution of the United States provides that no state shall pass any law impairing the obligation of contracts (See Sec. 9, Const.). This court holds that the inhibition in the constitution that prevents a state from passing a law impairing the obligations of contracts, applies to contracts made by the state, as well as to contracts made between citizens of the state. Cooley on Constitutional Limitations very pertinently submits the following inquiry: “Is a grant from a state excluded from the operation of the provision ? Is the clause to be considered as inhibiting the state from impairing the obligations of contracts between two individuals; but has excluded from that inhibition contracts made with the state itself? The words themselves contain no such distinction • they are general, and are applicable to contracts of every description.” Story, in his Commentaries on the Constitution of the United States, insists that a grant by the state, as well as executed contracts, comes within the prohibition of — 351 — that clause which prohibits a state from passing laws which impair the obligations of contracts, and this he holds, would be true, whether the contract be made by direct legislative act, or by an agent of the state in pursuance of law. We hold that the obligation of a contract made by the state with one of its citizens cannot be impaired by legislative act any more than if the contract was made between two of the citizens of the state; that contracts made by the state with a citizen of the state come within the inhibition of the constitution of the United States upon the subject of a state’s violating the obligations of contracts by legislative act. A state being sovereign in the eye of the law, is presumed to be the embodiment of all the wisdom, honor, justice and virtue of its citizens; and how could this great commonwealth lay claim to such a high standard of excellence, if she should break her contracts with impunity? If there be reason and justice in the rule that the obligations of contracts between citizens should not be impaired by legislative act, when the state is a party to the contract, is it not a stronger reason why the rule should be maintained and upheld ? Contracts are the springs of trade, commerce and business ; they determine the confidence of man in the conduct of his fellow; the virtue of the citizen, as well as national life, can rest on no safer foundation than the faithful fulfillment of contracts. That contracts are to be maintained in a republican form of government, is a rule that is fundamental. We find that the state, through its chief executive, has leased its convicts for twenty years, and is to receive $25,000 per annum. Whether the contract thus made was proper, or whether now one more remunerative to the state could be made, are considerations by which this court cannot afford to be influenced; it is the mission of the courts to enforce, and not to make, contracts. The state can change its penitentiary systemcan change its modes of punishmént, may reduce felonies to misdemeanors or make, pros' — 352 — pectively, misdemeanors felonies, but as long as the state continues its present system and modes of punishment, contracts made, in having the samé enforced, are binding on the state. If this were not so, with what claim of right or degree of propriety could the state insist that the lessees should perform their part of the contracts, as hereinbefore set forth ? 3. The legislature, in 1883, passed a joint resolution instructing the principal keeper of the penitentiary to turn over to the Marietta & North Georgia Railroad Company two hundred and fifty able bodied convicts, to be worked for the benefit of the company, until the line of said road, together with certain branch roads, shall have been completed. And complainants, by their amended bill, allege that, in pursuance with the resolution, Nelms, as principal keeper of the penitentiary, unless enjoined, will deliver the convicts therein mentioned to the railroad company. This resolution upon its face purports to be, and is, a new grant by the state to the railroad company. It was passed at a time when, by contract between the governor of the state and the penitentiary companies, the labor of all the convicts, for twenty years, had been leased for the sum of twenty-five thousand dollars per annum. This resolution, if carried into effect, will withdraw from the penitentiary companies the labor of two hundred and fifty convicts, which they would be entitled to under their contracts made with the state; and there is no offer or tender of compensation by the state. This court holds that the resolution is unconstitutional and void, as it violates the obligations of contracts entered into by the state in leasing its convicts. We fully appreciate the rule th it the courts should not hold an act of the legislature unconstitutional, unless its unconstitutionality is clear and manifest, but in view of that provision of the constitution of the United States which prohibits a state from passing laws which impair the obligations of contracts, as well as provisions of our own state constitution which — 353 — provides that private property shall not he taken for public use without just compensation, and that no grant of special privilege or immunity shall be revoked, except in such manner as to work no injustice; and again, that legislative acts in violation of the constitution of the state, or of the constitution of the United States, are void, and the j udiciary shall so declare them ; under these constitutional provisions, we feel constrained to hold said resolution null and void. The resolution of 1883 does not reserve the police power of the state over the convicts, and while the state may contract away the labor of the convicts, it has no power to part with the police regulations over the convicts; for this reason the resolution is void, and should not be enforced. We deem it scarcely necessary to say further, that, by legislative act to take the property of A. and give it to B. is not only a violation of constitutional law, but a violation of the broadest principles of justice and right. It will be remembered that neither in the resolution, evidence, or argument of counsel has it been shown that it is necessary for the protection of the lives, comfort or safe keeping of the convicts, or for the protection of society, that said resolution should be enforced, but the same, without more, directs the principal keeper of the penitentiary to turn over two hundred and fifty convicts to the railroad, the labor of whom, by contract, had been disposed of to the penitentiary companies. We therefore hold that Nelms, as principal keeper of the penitentiary, be enjoined from delivering to the railroad company any convicts under said resolution, and that the railroad be enjoined from receiving any under said resolution. 4. Under the act of 1876, the Marietta & North Georgia Railroad Company was entitled to the service of two hundred and fifty convicts for three years, and after said railroad company has had the service of said convicts for three years, the companies known as penitentiary companies are entitled to the same, unless the railroad company — 354 — can bring itself within the proviso of the act of 1876 by showing that, as an incorporated railroad company, by authority of the state, when the act of 1876 was passed, it was working the convicts of the state, and that it made application for a re-lease of convicts, as required by law, before the state leased the convicts to the penitentiary companies. This question of fact, we hold, should be submitted to, and passed upon by, a jury; that the same should be established by competent legal evidence, not the vague recollection or supposition of witnesses, but evidence showing that the officers of the railroad company applied for and received and worked the convicts of the state as an incorporated railroad company. Should the railroad company establish the fact that it has a superior right to convicts to that of the penitentiary companies, then such a decree should' be framed as would authorize the railroad company to have such number of convicts, and for such length of time, .and for the purpose as set forth in the proviso to the act of 1876. But, on the contrary, should the railroad company fail to establish any right to convicts, other than the two hundred and fifty for three years in that event, we hold that a court of equity has the power to. decree that the convicts held now by the railroad company be delivered up, so that the same can be turned over to the penitentiary companies. In looking through the evidence contained in the record in this case, we hold that the injunction granted in this case should be so modified as to enjoin the principal keener, Nelms, from delivering, and the railroad company from receiving, any more convicts, until the right of the railroad company to receive more shall have been established by law; and as this direction will require the principal keeper, Nelms, to turn over convicts which will hereafter be received by him, we direct that the Penitentiary Companies Nos. 2 and 3 file with the clerk of Fulton superior cour bond, with good security, conditioned to pay the railroad company any damages which it may sustain on ac — 355 — count of the service of convicts turned over to the penitentiary companies which should have been received by the railroad company. We find that this is the fifth (fourth ?) time this subject-matter of litigation, first in one form and then in another, has been before this court for consideration. It is the desire of this court, and doubtless is of all parties to the case, that the rights of complainants and defendants should be finally adjudicated and settled. We therefore direct that complainants, on the trial of the case, have leave to so amend their bill as to have any claim for damages which they have already sustained, or which they may hereafter sustain, on account of the loss of service of convicts received by the railroad company to which it was not entitled, submitted to the court and jury, and the same adjudicated, on the trial of this case. 5. Under the contracts between the state and the penitentiary lessees, the lessees have a vested right to the labor of the convicts so leased, and the legislature has no power, under the constitution and laws of this state, and of the United States, to deprive the lessees of this right to the labor of the convicts thus leased. In a bill brought by complainants against defendants in Cobb superior court, and which case was brought to this court for review, this court then held tnat it was competent for the state to relieve itself of the burden incident to the feeding, clothing, guarding and other expenses of the convicts, by an arrangement with any person to take charge of them and to confine them during their terms of sentences against them. See 65 Ga., page 504. The decision, as then: rendered, in effect, decided the question that the lessees had a vested right in the labor of the convicts, the state reserving the police power over the convicts. If the lessees have a vested right in the labor of the convicts, then that right cannot be taken away without tendering just compensation. We hold that the labor of the convicts, as contracted for, was not a mere expectancy, but was such a property right as to support a valid contract. — 356 — 6. The police power of the state over the convicts leased to the penitentiary companies is reserved and secured by the contracts of lease to the state, so that the state has entire control of the moral and physical condition of the convicts, and can make all needful and necessary regulations as regards the safe keeping, feeding, clothing and medical treatment of the convicts. The state, in the exercise of its sovereign rights for the protection of society in the enforcement of the judgments and sentences of the courts, as well as for the humane treatment of its convicts, should reserve to itself the police power over its convicts. This right was reserved by the acts of 1874 and 1876, and the same was made a condition in the lease contracts, as therein stated. 7. Under the act of 1876, persons leasing convicts are called corporations in the manner and for the purpose as specified in the act. Defendants insist that complainants are not corporations. We hold that the state has the right to create an agency .of one or many persons, to aid the state in the enforcement of the criminal laws of the state, by having the convicts of the state guarded and kept at labor in accordance with the judgments of the courts, by which the convicts are required to be imprisoned and worked. The fact, that such an association of persons is loosely called corporations, does not render invalid contracts made by the state with such persons ; and the state having in this manner, and for the benefit of the state, contracted with such persons, calling or denominating them corporations, would not authorize the state to take advantage of that fact; and the railroad company claiming rights subordinate to the rights of the state, can take no advantage of the same. Judgment reversed. Cited for plaintiffs in error: Lease contracts, 65 Ga., 68. Vested right, Code, §§4995, 5025, 5274; 8 Wheat., 92; 4 Pet., 594; 15 Cal. Rep. 429. — 357 — Cited for defendants in error: Principal keeper not enjoined, 55 N. Y., 390 ; 46 Ga., 315; Code, §5015 ; 4 Wal., 475; 46 Ga., 350; 43 Ib., 471; High on Inj., 1326 ; 9 Wheat., 738 ; 16 Wall., 203 ; 4 Ib., 475; 43 Ga.7, 474; 45 Ib., 365. Police power, Code, §§4993, 5029 ; 56 Ga., 67; Cooley on Con. Lim., 149, 339, 345, 475, 706, 710, 712 ; 97 U. S. Rep., 25; 94 Ib., 645 ; 33 Ga. supplement, 166; 17 Ib., 56; 65 75., 500. No vested right in labor of convicts, Cooley Con. Lim., 149, 345, 439, 440, 366 ; 10 Howard, 511; 101 Ill., 278; 43 N. J., 571; 1 N. H., 199, 304. No proper parties, Code, §5068 ; Abb. T. E., 20 ; 16 Wend., 605; 24 Howard, 283; 55 Ga., 639; 63 Ib., 679; 57 Ib., 231; 16 John., 34; 11 Maine, 54; 16 Ala., 448; 48 Cal., 494; 54 Ala., 471.