Louisiana & Northwest Railroad v. State

Hile, C. J., (after stating the facts.) 1. It is insisted that the State has not the power to provide for the forfeiture of a lease made by a foreign corporation, and that the terms of the act providing for a forfeiture, under the conditions stated, of ”vthe franchise and charter rights” cannot be held applicable to a foreign corporation operating in this State under lease. A foreign railroad corporation can only lease and operate m this State by virtue of express statutes permitting it to do so, and the right to enter the State is conferred for the welfare of the State; and when that right is not exercised for the welfare of the State, it is within the power of the’sovereignty which conferred it to withdraw it. The terms employed may not be technically accurate, but they are substantially so. This court held in Russel v. St. Louis S. W. Ry Co., 71 Ark. 451, that a foreign railroad corporation complying with the laws of this State becomes a domestic corporation, and capable of exercising eminent domain, which can only be exercised by domestic corporations. Hence it is not inappropriate to describe the rights acquired, on the corporation becoming domesticated by conforming to the laws of this State, as the “franchise and charter rights.” The fact that its right in this State authorizes a contract — a lease — cannot alter its status. The lease is acquired and held only in virtue of the franchise to operate its road in that way, and is subject to the law requiring it to perform its duty to the public. A contract made under a franchise cannot reach beyond the rights acquired by the franchise itself and afford immunity from public duties. Both franchise and lease have written in them the law requiring the performance of the duty to the public’or the sufferance of a forfeiture of rights for dereliction in this respect. The action of the State is not against property rights acquired through the lease, and it seeks no confiscation of property, but merely a surrender of the right to further enjoy its privileges because it has failed in its duties to the public. The suit can be maintained. 2. The act is not retrospective. Duke v. State, 56 Ark. 485; Choctaw & M. Rd. Co. v. Sullivan, 70 Ark. 262; Choctaw & M. Rd. Co. v. Speer Hardware Co., 71 Ark. 126. The a'ct provides, among other grounds of forfeitures, “if such lease shall not have been made in conformity with the statute governing the making of such leases.” Clearly, it is competent for the State to provide that a foreign railroad corporation shall not enjoy a lease in this State until it acquires it in conformity to the statute, and a failure to conform to the statute on the subject shall be subject of forfeiture. 2 Spelling, Inj. & Ex. Legal Rem. § 1807. In this case the lease was made long prior to the enactment of this statute rendering such failure a ground of forfeiture of charter rights. The court found that the lease in question had not been made with the approval of twb-thirds of the stockholders, nor had such lease been ratified at a meeting of the stockholders — two-thirds present or represented — specially called for that purpose, as provided in section 6742, Kirby’s Digest. That the lease was approved by formal action of the stockholders is not questioned; that it was approved by acquiescence and receiving the benefits of it is apparent. It was by conduct so clearly ratified that neither party could recede from it on the ground of informality in its origin. It only lacked a literal compliance with this statute. Such lack of literal compliance was not a ground of forfeiture of the lease when it was made, and cannot be retrospectively made such when-rights are build^d upon it which were enforceable between the parties, and then valid. This is a statutory, not a common-law, right of forfeiture at the instance of the State. Therefore the court erred in forfeiting the lease upon this ground. 3. The next ground of forfeiture which the court sustained was a failure to furnish the patrons of the road reasonable shipping accommodations for freight. The evidence was insufficient to work a forfeiture on this ground. There was not much evidence on this issue, most of it being directed to the passenger facilities, and what there was on the subject did not show sufficient failure in public duty to forfeit the franchise on this ground, and doubtless it would not have been forfeited upon it alone. 4. On the alleged failure to “maintain said property in good repair, so as to afford safe and reasonably prompt facilities of travel to the public,” there is substantial evidence justifying the court in finding that the appellant had failed in its duty to the public in this regard. Although error was committed in adjudging the forfeiture on the other grounds, the judgment must be affirmed, unless this question of fact was one upon which the appellant had a constitutional right to trial by jury. The question in the first trial was submitted to a jury which disagreed, and on the second trial the court held that the appellant was not entitled to a jury trial, and heard the case before the court. The appellant demanded a trial by jury, and has preserved proper exceptions to the action of the court in denying it. There was much ancient learning on the subject of writs of quo warranto and informations in the nature of quo warranto. A reference to the subject may be found in the recent case of Moody v. Lowrimore, 74 Ark. 421, and cases there cited. Those questions are academic now. While this court is clothed with jurisdiction to issue, hear and determine the writ in aid of its appellate jurisdiction, the writ and information, as original proceedings, are abolished by the Code. “Actions by proceedings at law may be brought to vacate or repeal charters and prevent the usurpation of an office or franchise.” And actions to repeal or vacate a charter shall be in the name of the State, and brought and prosecuted by the Attorney General, or under his sanction and direction. Kirby’s Digest, § § 7981, 7982. In considering these Code changes, the court said, through Chief Justice Cockrill: “But the constitutional right to trial by jury is confined to cases which by the common law were so triable (citing authorities), and it was decided in State v. Johnson, 26 Ark. 281, that the right did not extend at common law to a civil proceeding in the nature of quo warranto against a public officer. The statute does not enlarge the right, nor attempt to extend it to cases of this or like nature (an usurpation of office case), as was held in Williams v. Citizens, 40 Ark. 290. * * * No claim for fees or emoluments was made by the plaintiff.” Wheat v. Smith, 50 Ark. 266. State v. Johnson, 26 Ark. 281, is one of the leading American authorities to sustain the view that trial by jury was not a right at common law on quo warranto proceedings to oust an alleged usurper from office. There is much conflict of authority on that question. It seems that the weight of authority is against that view, but the same rule is adhered to in Wheat v. State, since the adoption of the Code, when no fees or emoluments are claimed, and merely the title to the office is in question. Whether State v. Johnson is authority for the nature of the writ as an original proceeding under the present Constitution is not a question in this case. In the case of Taylor v. Beckham, 178 U. S. 548, the Supreme Court of the United States held that a public office was not property, and this view will unquestionably lend great weight to the line of authorities like State v. Johnson, and Wheat v. Smith, denying trial by jury in usurpation of office proceedings. Chief Justice Coclcrill evidently had that distinction in mind in Wheat v. Smith when he called attention to the fact that fees and emoluments were not' involved in that suit. ' When a franchise or charter is in issue, and the manifold contractual rights growing out of them, property in its highest sense'is involved. In quo warranto proceedings at common law brought to vacate charters, trial by jury seems universally to have been accorded to determine the facts. In People v. Albany & S. R. Co., 57 N. Y. 161, an action by the Attorney General in the nature of quo warranto to try the title 'of directors controlling a corporation, the court said: “This issue, being strictly a legal issue in its character,- is one in the trial of which, in the language of the Constitution, the trial by jury has been heretofore used. Such a trial was therefore the constitutional right of the parties.” The Supreme Court of Florida said: “Our examination into the matter has conducted us to the conclusion that at the time of the Revolution the trial of pure questions of fact in such proceedings was by jury.” The court then proceeds to cite and quote from the common-law authorities showing that issues of fact were uniformly triable by jury. The court proceeded: “In Rex v. Bennett, all the judges of England were equally divided, the division being over the question whether a new trial could be granted after a verdict in favor of the defendant in such proceeding. The view that the suit was criminal then widely'prevailed, but this point was finally settled in favor of the view above announced — that the action, though criminal in form, was regarded as a civil suit for the purpose of trying the right to the franchise.” Buckman v. State, 34 Fla. 48. In Attorney General v. Sullivan, 163 Mass. 446, the Massachusetts court said: “Without considering whether a suit or information to declare forfeited the charter of a private corporation would not be held tó be a controversy concerning property within the meaning of this article, we are of the opinion that a public office, such as that of president of the common council of the city of Lowell, is not property within the meaning of this article.” The common-law authorities, showing that issues of fact in quo warranto were triable by jury, are collected in this case. The Indiana court said that the decided weight of authority was that issues of fact in quo warranto proceedings were triable by jury at the time the common law was inherited by the colonies, and cites the authorities on both sides of the question. Reynolds v. State, 61 Ind. 393. In Com. v. Delaware & Hudson Canal Co., 43 Pa. St. 295, a proceeding by quo warranto to control the improper exercise of corporate powers, and oust the corporation from the excessive exercise of them, the court said: “It is a matter of no importance to the parties whether this authority is exercised in the common law or in equity form, provided the right of trial by jury is not interfered with, as it cannot be in this case.” ’See, further, People v. Doesberg, 16 Mich. 133; State v. Burnett, 2 Ala. 140; State v. Allen, 5 Kan. 213. While some of the cases referred to and many reviewed in those cases are dealing with the question of public office, and their conclusions are different from the rulings of this court on the subject, yet it is thought that a consideration of them show beyond question that, so far as franchises and corporate interests and property rights are concerned, it was thoroughly settled at common law that issues of fact were triable by jury. That being true, then that right is preserved to litigants by the Constitution. Therefore, the court is of opinion that in quo waranto proceedings in courts of original jurisdiction brought under the Code and statutory provisions to annul, vacate and cancel a charter or franchise or any other property right (not including title to public office) the right of trial by jury of issues of fact is a constitutional .right. The case is reversed, and the cause remanded, with directions to try the issues of fact by jury.