Commonwealth v. Buffalo & Susquehanna Railroad

Opinion by Mb. Justice Bbown, The Buffalo & Susquehanna Railroad Company was incorporated October 7,1891, under the Act of April 4,1868, P. L. 62. Several other companies, incorporated under the same act, became merged with it, the corporate title after the mergers continuing to be the Buffalo & Susquehanna Railroad Company. The capital stock of the company was increased from $2,000,000 to $3,518,000, and the claim of the commonwealth is for a bonus of one third of one per cent on the increase of $1,518,000. It is made under the Act of May 3, 1899, P. L. 189, which provides : “ That all corporations hereafter created under any general or special law of this commonwealth, except building and loan associations, and excepting all corporations named in the first class of section two of an act entitled ‘ An act to provide for the incorporation and regulation of certain corporations,’ approved the twenty-ninth day of April, Anno Domini one thousand eight hundred and seventy-four, shall pay to the state treasurer, for the use of the commonwealth, a bonus of one third of one per centum upon the amount of the capital stock which said company is authorized to have, and a like bonus on any subsequent authorized increase thereof, and a like bonus shall be paid by all such companies heretofore incorporated upon any increase of their capital stock hereafter authorized.” The capital stock of $2,000,000 had been authorized and issued prior to May 3, 1899, and the increase of $1,518,000 was made in February or March, 1901. Corporations from which the commonwealth can, under the act of May 3, 1899, exact a bonus on capital stock and an increase thereof are, first, those created after its passage, and, second, those incorporated prior to its passage, but authorized thereafter to increase their capital stock. The Buffalo & Susquehanna Railroad Company and some, if not all, of the companies that merged with it, were created prior to the passage of the act of May 3, 1899, and, under the Act of June 4, 1883, P. L. 67, which is a supplement to the act of 1868, the merging companies were authorized to increase their capital stock up to $150,000 per mile without the payment of any bonus. The act of 1868 provides for an increase to [158] $60,000 per mile, the 6th section being as follows : “ Whenever any railroad company created and incorporated under the provisions of this act, shall in the opinion of the directors thereof require an increased amount of capital stock in order to complete and equip their road and carry out the full intent and meaning of their charter, they shall, if authorized by a majority of the stockholders, at a meeting called for that purpose, file with the secretary of the commonwealth a certificate setting forth the amount of such desired increase, and thereafter such company shall be entitled to have such increased capital as is fixed by said certificate : Provided, That the original amount of stock and increased capital shall in no case exceed the sum of sixty thousand dollars per mile.” The increase of the capital stock of the appellee did not exceed the sum of $150,000 per mile, and, having been made in pursuance of express authority conferred by the act of 1888, was not one authorized after the passage of the act of 1899. The commonwealth contends, however, that the authority of the appellee to increase its capital stock is not to be found in the act of 1883, but in the Act of February 9,1901, P. L. 3, and the increase must, therefore, be regarded as authorized after the passage of the act of 1899. In support of this it is insisted that the act of 1883 was repealed by the act of 1901 as being “ inconsistent ” with its provisions. The answer to this is, that the acts are not inconsistent, but clearly stand together. By the first, all railroad companies created and incorporated under the provisions of the act of 1868 are given authority to increase their capital stock to the limited amount of $150,000 per mile, without paying any bonus, whenever in the opinion of the directors the increase is required “ to complete and equip their road and carry out the full intent and meaning of their charter, ” and is “authorized by a majority of the stockholders, at a meeting called for that purpose. ” By the later act the capital stock of any corporation can be increased to an unlimited amount whenever the consent of the “ persons or bodies corporate holding the larger amount in value ” of the stock is obtained in the mode specifically prescribed by the act. Under the first act the increase can be made by corporations of a single class, without the payment of any bonus, when it is not to exceed $150,000 per mile, as it does not in the present case. [159] Under the second, the increase can be made by corporations of all classes to an unlimited amount, if so determined by the stockholders in the mode prescribed by the act, but only upon the payment of a bonus, except by building and loan associations and the corporations named in the first clause of section two of the Act of April 29, 1874, P. L. 73. With authority expressly given to the appellee by the act of 1883 to make the increase up to $150,000 per mile, without the payment of any bonus, passed sixteen years prior to the act of 1899, the claim of the commonwealth, based upon the clause “ upon any increase of their capital stock hereafter authorized, ” cannot be sustained. Though the commonwealth alleges on this appeal that the appellee had taken advantage of the acts of 1899 and 1901, and had increased its capital stock in the mode prescribed by the latter, there is nothing in the record to justify such allegation. On the contrary, it rather appears from the appeal of the appellee from the account settled against it by the commonwealth that the increase of the stock had heen made in pursuance of the act of 1883. Whether the increase was made before or after the last merger of the companies is immaterial, for, whenever that merger took place, the merged companies, as one corporation, possessed “ all the rights, privileges and franchises theretofore vested in either of them: ” Act of May 16,1861, P. L. 702. The right and privilege of each merging company incorporated prior to the act of 1899 was to increase its capital stock to a limited amount without paying any bonus, and this right and privilege, by the express words of the act of 1861, became the right and privilege of all the combined companies which, though existing as a new corporation, were not a new one, created within the meaning of the act of 1899, even if the last merger did not take place until after its passage. The rights and franchises of the new corporation, composed of the merged companies, were those which had been conferred upon each of the component companies, and among them was the authority to increase its capital stock up to $150,000 per mile, conferred upon some, if not all, of them years before the passage of the acts of 1899 and 1901. The other questions raised need not be considered. Judgment affirmed.