Augusta & Summerville Railroad v. City Council

Lumpkin, Presiding Justice. The Augusta & Summerville Railroad Company was incorporated by an act of the General Assembly, approved — 704 — March 20th, 1866, “for the full term of thirty years.”' The charter declared that the company was incorporated for the purpose of 'building and using, with 'the consent of the City Council of Augusta, a horse railroad from a designated point within the limits of the city to a point, or points, outside of the same. The city council, both by ordinances- and by a special contract in writing, granted to the company, “'their successors and assigns, for and during the term, of their charter,” a right of way through and over the streets of the city.. There is nothing in the charter with, reference to any renewal or extension of the sanie beyond the period of thirty years. The ordinances and contract above referred to were subsequently ratified and confirmed by another -act of the General Assembly, which, among' other things, declared that they were “not liable to be repealed by the City Council” of Augusta. One of these-ordinances purported generally to authorize the construction of street railways in Augusta, but -an inspection of it shows that it was intended ¡to relate exclusively to this, particular company. The second section of this ordinance provided that “the cars and carriages of -this company, running on said railways, turnouts and switches and sidings [viz: those the company had been authorized to construct], shall be'entitled to the right of way over their said tracks,” and prohibited teams -and vehicles from obstructing ohe free passage of the company’s cars. In the special contract, between the city and the company, it was stipulated that the city would “forever” keep this section in force. Prior to the year 1868, the South Carolina Railroad' Company was in possession of and using a railway track which had been laid longitudinally in Washington street in the city of Augusta, claiming the right to do so under ordinances adopted by, and contracts made with, the city council. This track affords the only existing means by which a connection between some of the railroads running into Augusta can he made with other railroads en705 tering file city, So as ito facilitate tine transaction of through, business. On March l&tb, 1868, itihe city council adopted an ‘ordinance taiTtihorizing itihe Augusta & Summerville Railroad Company ito olbtiain from the Soulth Oarolina Railroad Company “a lease for thirty years” of the track above mentioned; and, in pursuance of this ordinance^ a contract was entered into between these -two companies,, by the'terms of which the Augusta & Summerville Rail road Company was to have the use of that track “for the term of their charter.”' In 1869, the Columbia & Augusta Railroad Company, when nearing the completion of its. road, petitioned the city council for leave to enter the city.. An ordinance was adopted on April 27th of that year, ra citing that if the street railroad tracks were sufficient, “then the said Columbia & Augusta Railroad must arrange with said street nailroad company [meaning the Augusta & Summerville Railroad Company] for this purpose.” This gave rise to a controversy between the South Carolina Railroad Company, on the one side, and the city council and the Columbia & Augusta Railroad Company, on the other, which was adjusted and settled by a tripartite agreement, by the terms of which the city council guaranteed to the two railroad companies “the free use in perpetuity of the track now on Washington street, in said city of Augusta, with steam or other power, at the option of each company.” Subsequently, .and in pursuance of the ordinance of April 27th, 1869, a contract was entered into between the Columbia & Augusta and the Augusta & Summerville Railroad Companies, under which the former gained the consent of the latter to use the Washington street track, the control of which the Augusta & Summerville Railroad Company claimed under its etoinlteiaelt with the city council and the lease from the South Carolina Railroad Company. The South Oarolina & Georgia Railroad Company and the Southern Railwlay Company, which arle .apparently the legal successors, respectively, of the South Carolina Rail — 706 — road Company and the Columbia & Augusta Railroad Company, are parties to the present litigation, insisting that the ordinances and contracts of the city council, under and by virtue of which the use of the "Washington street track for •transferring cars propelled by steam locomotives was acquired by their predecessors, are valid, lawful and binding upon .the city. On November 13th, 1889, the General Assembly passed an act to continue in force the charter of the Augusta & Summerville Railroad Company. This act recited that the •original 'act of 'inooaporiaitioin Would expire on the 20th day of March, 1896, and provided .that it “he continued of force from and after Itihe exptinaltilon (thereof for (the full term of fifty additional years, with all the powers and privileges given in said act not restricted hereby.” Among the restrictions thus indicated, it was declared that “nothing in tin's act contained shall have 'the effect ar he construed to extend or continue in force” the several acts .amending the company’s charter, which had .been previously enacted, nor the several ordinances which the City Council of Augusta had adopted with aiefetLieinee to this company, mlor the special contract between the council .and the company; and also, that “this act -is not intended, nor shall it be construed to extend to said corporation any exclusive rights or privileges to the use of the streets of the city of Augusta, but the right to use .any and all of said streets shall be subject to the consent of and on such conditions as may be prescribed by the city council of Augusta.” This act further declared that the company might, “at .any time, 'by a majority vote of -the stockholders, surrender their present charter before tbe expiration thereof and accept this new charter, with all its privileges and liabilities.” There was never any direct action by the stockholders accepting the act of 1889 as the company’s charter, but the company did formally apply to and obtain from the Oity Council of Augusta valuable privileges and franchises, the application, reciting that it — 707 — was made trader and by virtue of this act. Subsequently, the company sold out -to another corporation its various lines of railway, its rolling-stock, equipments of all kinds, and its •entire business as an active earner. It retained, however, .a nominal dominion over the track it had leased from the South Carolina Railroad Company, and, without running ■any trains or oars of its own 'thereon, derived a very large annual income therefrom by exacting tolls from the steam railroad companies. This the Augusta & Summerville Railroad Company continued to do until the day upon which its original charter expired. Before that day, it applied to and obtained from the secretary of State a certificate purporting to be a renewal -of that charter and the various acts amending the same, save only the act of 1889, which was not mentioned in the application, the company assiuning the position ithlaft ilt ihald never accepted the same amid was in no way affected by its enactment. Shortly before the 20th day of March, 1896, the Augusta & Summerville Railroad Company became aware that .after that day the city council intended to treat its contract with that company and the various ordinances which had been adopted in its favor as to the use of the streets of the city as having expired by limitation, and that it was the purpose of the municipal authorities to assume in behalf of the city the position 'of toll-gatherers from the steam railroad companies. Accordingly, the Augusta & Summer-ville Railroad Company filed an equitable petition against the city council, alleging, in substance, that all the rights, privileges and franchises it had obtained from the city would remain of full force and unimpaired after the day mentioned, and praying 'that the city be enjoined from interfering therewith or carrying into effect its proposed scheme •of substituting itself for the plaintiff as a gatherer of tribute from the steam railroad companies. These last, in their pleadings, coincided with the city in its defense to the petition, in so far as it sought to break up the monopoly which — 708 — ted been so long enjoyed by tihe plaintiff, trait ittbey agreed with tbe latter in 'tbe position tbat tbe city could, not lawfully make merchandise of tbe uise of its dtreerts for railroad purposes, and claimed tbe right to continue running trains, and cars over tbe Washington street track nnder tbe grants from tbe city mentioned above. The trial judge denied tbe injunction prayed for by tbe plaintiff, but held tbat the-grants just «referred to were void for Want of sufficient, authority on the part of tbe city to make them; and thus,, by bis judgment, left tbe city master of tbe situation. 1, 2, 8. Tbe original contract between -the city council' and tibe Augusta & Summerville Railroad Company and tbe ordinances adopted in its favor did expire on March 20th, 1896. Tbe company’s charter was for thirty years. Tbe grants were “for and during tbe term of their charter.” Plainly this meant tbat tbe grants were not to extend beyond tbe term of thirty years fixed by tbe charter. It makes no difference tihat tbe General Assembly ratified and confirmed this contract and these ordinances. This could.not, and did not, give them any more force than they bad in and. of themselves. That they were declared “not.liable to be' repealed by tbe city council,” simply meant tbat tbe latter’ could not cancel or annul its contracts as made. This declaration was certainly not intended to give these contracts a vitality they did not otherwise possess, or prolong tbe period'during which they should be effective. Tbe use of the-word “forever” in tbat portion of the special contract wherein tbe city undertook to keep in force an ordinance securing to tbe company tibe use of its tracks and prohibiting obstructions to tbe free passage of its cars, cannot be-given tbe significance claimed for it. In tbe light of all tbe facts, it would be very unreasonable to bold tbat tire employment of this word in this connection must necessarily operate to confer upon tbe company a grant in -per-pet-uam of exclusive and most valuable privileges, when everything else which occurred sboiws tihat nothing of the709 ..sort was ever contemplated or intended. This view is .strengthened by the fact that under one of the ordinances . authorizing this company to obtain “a lease for thirty years” from the South Carolina Railroad Company of the ’Wash.ington street track, it effected a lease good only “'for the term of [its] charter.” Ve hold, without serious difficulty, that the grants from the city and the lease just mentioned expired when the period of thirty years provided . for in the charter of the Augusta & Summerville Railroad ■Company was completed. "We are not now called upon to .discuss what would be the rights of such a company under .a renewal of its charter, or how its stockholders who had ■expended money in constructing tracks in the streets of a ■ city should be protected, if the city, upon the expiration of the original grant of franchises and privileges, capriciously withdrew the same from the new company so as to defeat, or seriously impair, the objects for which the corporation was chartered and kept in existence. There is a way to lawfully and satisfactorily solve such questions when they .arise, but suffice it to say they are not involved in the present case. 4, 5. It certainly can not be doubted that if the Augusta • & Summerville Railroad Company accepted the act of 1889, :it became the company’s charter. This proposition was not denied, but it was insisted that the company had not accepted this act, because it had not pursued the method ■for so doing pointed out in the act itself, viz: by surrendering tbe old charter before its expiration, and accepting tbe new one with all its privileges and liabilities. This was .not the exclusive manner in which the new charter could he accepted. The company, in its corporate capacity, made .an application to the City Council of Augusta for certain valuable privileges and franchises, which it obtained, used, ■enjoyed, and afterwards sold to .another corporation. As .-already remarked, this application recited .that it was made ¡under and by virtue of this very act. Haw, then,- can the — 710 — company uoav say it did not accept the act, or that the same is not binding upon it? Upon the plainest principles, it. is estopped from so doing. In this connection see the following authorities, which are directly in point: 1 Thompson on Corporations, §101; 1 Beach on Priv. Corporations,. §15; 1 Morawetz on Priv. Corporations, §23; Zabriskie v. C. C. & C. R. Co., 64 U. S. 381. 6. The act of December 20th, 1893, providing for the-renewal of charters previously granted to railroad and other-companies, manifestly could have no application except as to corporations whose charters had expired or were about to-expire. A company whose charter life was, in 1889, extended for a period of fifty years from March 20th, 1896,, as was the case here, had no right, in the latter year, to-apply to and obtain from the secretary of State any renewal of its charter. Of -course, the application with which we are now dealing was made upon the theory -that the Augusta & Summerville Railroad Company had not accepted the act of 1889, but it has been shown that -this theory was not well founded in fact. 7. It is clear that, under the provisions -of the act of 1889 which have already been set forth, the Augusta & Summerville Railroad Company could not continue to use-the streets of Augusta for t-he pur-poses specified in its original charter Avithou-t again obtaining the consent of the city council. The foregoing disposes of this case so far as relates to this, company. We will now discuss .the controversy between the City Council of Augusta and the steam -railroad companies, the nature of which has been stated. 8. The question involved is, did the legal predecessors of these -companies have the right to operate Avith steam, power a railway longitudinally located in -and along a public-street in the city of-Augusta? The record discloses beyond' controversy that', under contracts Avith the city council, they did have such right, if that body had sufficient legislative711 authority to grant it; and. the evidence strongly impresses us that, from a moral standpoint, the justice of the case is decidedly upon the side of these corporations. We cannot, however, in the teeth of what we believe to he the law, undertake to administer our own ideas of abstract justice. With a single exception, the legislative enactments cited and relied upon as conferring upon the City Council of Augusta authority to grant the right in question are not, in our judgment, sufficiently pertinent to require special notice. The exception is the act of February 15th, 1856, the 24th. section of which (Acts of 1855-6, p. 249) enacts: “That the City Council of Augusta shall be, and they are hereby, authorized to permit the connection by common depots, tracks or otherwise, of all railroads in said city, or any of them, upon such terms and conditions as may he fixed and agreed on between the city council and them.” Before discussing this section of the act upon its merits, we will first notice some decisions rendered by this court which are relied upon by the eminent counsel who appeared here for these companies. • In South Carolina Railroad Co. v. Ells, 40 Ga. 87, the question was whether or not justices of the peace had jurisdiction to abate a nuisance in the city of Augusta, the alleged nuisance being the running of trains in and along W adhiington street in rfhalt city. The railroad companies asserted their right to run these trains under a city ordinance which they, evidently referring to the above mentioned act of 1856, claimed had been mltfarized by ¡the General Assembly; but the question whether this act did or 'did not confer upon the municipal corporation authority to adopt the ordinance relied upon was not passed upon, nothing in fact being decided except that the justices of the peace had no jurisdiction in 'the premises. The decision in Vason v. South Carolina Railroad Co., 42 Ga. 631, apparently, we do not hesitate to say, sustains the contention that the act of 1856 authorized the City — 712 — Council of Augusta to permit ¡tibie legal predecessors of the steam railroad companies now before this court to use locomotives upon a track laid longitudinally in Washington street; but a close examination of this case in the light of the attendant facts and circumstances will, we think, lead to the conclusion that it is not absolute and binding authority for this position. We will now endeavor to show that it is not; and, if successful, will be left free to deal with this act, in so far as it bears upon the cases in hand, unembarrassed by 'anything said in 'the Yason case. Tasan petitioned the City Council of Augusta to abate as a nuisance the running of trains 'drawn by locomotives in Washington street. The railroad companies who were defendants to this proceeding set up as a defense, “that by acts of the General Assembly, the mayor and council of Augusta had a right to allow said street to be so used, and that it had contracted with said railroad companies so as to permit such use.” It is a very important fact, and one which must not be overlooked, that “the acts, ordinances of the city, and contracts alluded to, were put in evidence.” The city council denied the petition, and the superior court, on certiorari, affirmed the judgment of the municipal body. The Supreme Court decided that “the use of steam engines to draw trains of cars over the street railroad laid down by the Augusta & Summerville Railroad Company through Washington street in the city of Augusta [was] expressly authorized by acts of the legislature of this State, and by the contracts and ordinances of the city of Augusta; and being so authorized, the running of said trains [could] not be abated as a public nuisance.” In point of fact, the track in Washington street had not been laid down 'by the Augusta & Summerville Railroad Company; but, ‘as will be seen, it is a significant and important fact that this court treated it as a “street railroad,” and dealt with it as being under the dominion and control of the street railroad company. In the opinion, Judge McOay correctly observed: — 713 — “That the use of steam engines to draw trains ,of ear-through Washington street in the city of Augusta, thus connecting the various railroads entering the city at different points, is -authorized by the contracts and ordinances ■of the city, is not disputed. Indeed, it is too plain for dispute.” He then remarked: “The only question there can be on this point is ithe authority of the city to do this. It seems to us that this too is very plain. The act of February 15th, 1856, authorizes the city council to permit the connection of all railroads in the city, by common tracks, depots, or otherwise, on such terms and conditions as may 'be fixed by the city council.” Further on, he said: “And :the act of October 26 th, 1870, in express terms, ratifies and • confirms these several contracts and ordinances by which -the city council has, at various times and by various contracts and ordinances, permitted and sold this right to use the street railroad in the manner complained of.” If the above quoted statement of the judge with reference to- the act of 1856 is to be taken as meaning that it, proprio vigore .and without more, was sufficient to confer upon the city council authority to permit the use -of steam engines in Washington street, and if it was necessary to hold this in the Yason case, the decision therein would be controlling now upon this point. Perhaps the judge did think the .act of 1856 was, of itself alone, sufficient for the purpose stated. In perfect candor, this seems to have been his meaning; but it is equally fair to say that he -also relied for the correctness -of the general conclusion reached upon ■other acts of the General Assembly, and upon ■ the ordi-' .nances and contracts of -the city council. He -expressly mentioned the act of October .26th, 1870; and though this act had not been passed when Ymon’s proceeding was in.■stituted, its bearing upon the question at -issue will presently .appear. Whatever Judge McOay may have believed as to the effectiveness of the act of 1856 in the respect indicated, we are satisfied that it was by no means essential to — 714 — a proper decision of the Y ason case that this court should,, with reference to that act, go to the extent his language; apparently warrants, and we do not think it meant to do-so. If so, it was dealing unguardedly with a great public; question. The decision, as a whole,, was obviously based,, not upon a single acit, but upon legislative acts and municipal ordinances. As before observed, these were in evidence. And it is also clear that the case turned upon the then existing right of the Augusta & Summerville Railroad Company to use steam in Washington street. It was, at the time, a municipal pet, and as such held the key to the-railroad situation in Augusta. One of the acts referred to was an amendment to this* company’s charter, approved December 28 th, 1866, giving; it the right to use dummy cars or engines over the streets of Augusta. Then there was an ordinance adopted November 9th, 1867, granting this company “the right of using; locomotive power for the movement of passenger and baggage and freight cars, on their tracks” on various named streets, including Washington, “during the continuance of; their aforesaid contract,” 'the contract here referred to being; the special contract between the city and the company alluded to in the preliminary statement preceding this discussion. Following the ordinance just mentioned came that of March 13th, 1868, authorizing 'the Augusta & Summer-ville Railroad Company to lease the track in Washington, street from the S'outh Carolina Railroad Company, which i’t did, as above seen; and accordingly, it had control of this-track when Yason’s case was heard. At the trial of that, case, all these -acts and ordinances were under consideration,, and it cannot be doubted that they had great weight in its-determination. We entertain no reasonable doubt that the-rights and powers of the Augusta & Summerville Railroad. Company were the chief factors in bringing about the judgment rendered by the city council and its affirmance by the; superior court. The act of October 26th, 1870, was apr — 715 — proved after the decision of that court had been rendered, but before the same 'had been passed upon by the Supreme; Court. That act expressly ratifies -and confirms the ordinances of November 9th, 1867, and March 13th, 1868. Judge McOay must, therefore, have referred to it solely upon the idea that, by relation backwards, it made valid ab initio these ordinances and all that had been done under them. The foregoing is, we believe, a fair presentation of the Yason case, and in view thereof we feel safe in saying that: it would not do to make that case a basis for holding that the act of 1856 conferred upon the municipal government, of Augusta the large power claimed for it, as above indicated. In so far as the decision of this court in the case of South Carolina Railroad Co. v. Steiner, 44 Ga. 546, may bear upon this question, what is said above is applicable tO' it also. It only remains to show that upon principle and upon general authority the 24th section 'of the act of 1856 cannot, be given the scope contended for. The correctness of the. well settled proposition that there must be clear legislative; authority to construct and operate a steam railroad along a street of a city was very properly conceded; but it was, earnestly insisted 'that such authority was conferred by the; above cited enactment, and, in this connection, that a legislative grant of power to a municipal corporation to confer privileges or franchises upon railroad companies was not: subject to the rule of strict construction undoubtedly applicable to grants in derogation of the rights of the general public made directly (to the eiompiamies themselves. It was argued that the General Assembly, having complete control, of the streets of the city of Augusta, had made a general delegation of its sovereign authority in this regard to the-City 'Council of Augusta; that this body thus obtained a broad discretionary power in the matter of permitting railroad companies to connect their tracks within the corporate; — 716 — limits; that the maimer in which this was to be done was •exclusively for determination by the municipal government; .and that the -established canon of strict construction, which .renders doubt equivalent to denial and which is always resorted to in behalf of the general public in construing the -charters of private, or of such quasi public corporations as railroad companies, should not in this instance control. So the question in its last analysis resolves itself into this: Should the usual rule for construing legislative grants of •privileges and powers to corporations be relaxed when the ■corporation in question is a municipal one? The rule laid ■ clown in 15 Am. & Eng. Enc. of Law, p. 1041, for the con¡struction of municipal charters, is not, in our opinion, too ¡strongly stated, and is fully sustained by the numerous cases ■ cited in the note. It is as follows: “It is the policy of the law to require of municipal corporations a strict observance of their powers. Any doubt or ambiguity arising out of the terms used by the legislature in making a grant of power must be resolved in favor iof '.tibe public; 'and a power cannot be exercised where it is not clearly comprehended within the words of the act, or derived therefrom by necessary implication.” We have found no case in which this rule has ever been questioned or even criticised. It may be said to 'be universally recognized, and has been applied even in cases where the power conferred was coupled with a wide discre•tion as to the manner and extent of its exercise. In his .great work on Corporations (vol. 4, §5659) Judge Thomp.son lays d-o-wn the following as a general rule applicable to all corporations: “One of the leading canons for the eon•struotion of corporate charters is, that doubtful expressions in a charter or statute conferring franchises on a corporation, are to be construed in favor of the public, rather than :in favor -of the corporation, -and that the corporation will take nothing by mere implication, unless the implication •necessarily arises out of what is expressly granted.” The :real reason for strictly construing grants of power to corpo — 717 — rate bodies is, that a sound public policy requires that the interests of the general public shall not be injuriously affected by an undue exercise or abuse of powers thus conferred. The following extracts are from 1 Cook on Stockholders & Corporation Taw, §3: “The theory of a corporation is, thát it has no powers except those expressly given or necessarily implied. But this theory is no longer strictly applied to private corporations. A private corporation may exercise many extraordinary powers, provided all of its. stockholders assent and none of its creditors are injured. There is no one to complain except the State; and the business being entirely private, the State does not interfere. Thus, fifty years ago, the counts would summarily have declared it illegal for a business corporation to become an accommodation indorser of commercial paper. But to-day, if all the stockholders assent thereto and creditors are not injured, such an act is held to be legal.” “Again, the old theory of a corporation was, that it could not give away its assets. But the modern view is that a private 'corporation may do so if all the stockholders assent and if creditors are paid. Public policy does not require business corporations, to confine themselves strictly to their express and implied powers.” “In the case of railroad corporations, however, public policy does intervene and does limit the implied powers.” Judge Cooley says, that “the general disposition of the courts in this country has been to confine municipalities within the limits that a strict construction of the grants, of powers in their charters will assign to them; thus applying substantially the same rule that is applied to charters of private incorporation. The reasonable presumption is that the State has granted in clear and unmistakable terms; all it has designed to grant at all.” Cooley Const. Tim. (6th ed.) pp. 231-233. But in view of the foregoing from Mr. Cook, it would seem that there is really less reason for strictness in the case of private than of municipal corporations. As we understand the rule in question, the true tést. — 718 — jfor determining its application in any given instance is, not whether the corporation belongs to the one class or the •other, but whether the rights of the general public will be injuriously affected by a liberal rather than a strict construction of the corporation’s charter. We cannot, therefore, assent to the proposition — 'though it was presented ■with great force and plausibility — that a municipality can, under a particular grant of power, take more than would .a railroad company under the same words expressing the .grant. Only by a clear and radical departure from the rule governing municipal charters could a municipality be held to acquire more power under specific language used by the .legislature than would any other sort of corporation. All corporations — municipal, as well as 'those strictly private •or quasi public — are mere creatures of the legislative will. .Not only have they no inherent powers of their own, like ■ordinary persons, but not even life itself, independently of their charters. The rule of strict construction as applicable to municipal charters was recognized by this court as far back as 5th Ga. See Frederick v. City Council of Augusta, pp. 561, 567. The qualification immediately following the general rule above quoted from the Enclyclopasdia of Law 'has no application to the cases in hand. It is in these words: “Bu-t powers expressly granted, or nec•essarily implied, are not to be defeated or impaired by strict •construction.” The language giving the city authority “to permit the connection by common depots, tracks or •otherwise, of all railroads in said city, or any of them, upon ¡such terms as may be fixed and agreed on between the city council and them,” certainly did not expressly grant, nor •did it by any means necessarily imply, any right or power to use the streets of the city longitudinally for the purpose stated. The contemplated connections could have been made 'by crossing streets and condemning private property. It was not such a situation as that presented by “the Notch ■of the White Mountains.” — 719 — It was practically conceded that if the grant to the City Council of Augusta had heen made directly to the railroad companies, the right to use the streets longitudinally would not have followed. The public interests being involved, and the rule of strict construction being therefore proper, it does not seem logical to conclude that, simply because the General Assembly was addressing the city of Augusta, more was intended by the language employed in the grant than would have been the case had it been made to the railroad corporations 'themselves. What the city took under the act it could convey to these corporations, if it chose, hut certainly no more. Most probably the intention was to give the city the power of limiting, not extending, the franchise embraced in the words used. .There might, in 1856, have been gotod reasons for giving the municipial aidfarities of Augusta the large power which they undoubtedly assumed to exercise by virtue of its provisions; but we are quite sure that no such power was properly derivable from its terms. Whenever the General Assembly really means to confer such power, it should say so unequivocally; and it has done this, as to Augusta, by the act of December 23 d, 1896 (Acts of 1896, p. 120), which declares plainly enough what that city may thereafter do with reference to the use of its streets by railroad companies. Judgment in each case affirmed. All the Justices concurring.