State v. Baltimore & Ohio Rail-road

On (he 14th February, 1848, before the final decision of the case, the following opinion and suggestion was filed by the court:— “We are of opinion that power is conferred on the President and Directors of the Baltimore and Ohio Rail-road Company, by its charter, to apply the revenues of the Company to the extension of the road to its terminus on the Ohio River, and that it has power to apply its revenues to the re-construction of any part of the road; that it has power, in its discretion, to declare dividends on the net profits of the road, or it may apply said net profits to construction or re-construction, or generally, to the prosecution of the objects of the charter. That such determination does not affect the guarantee of the State on her [373] $3,000,000 loan to said Company, provided for by the act of 1835, ch. 395, because, by a proper construction of the acts of Assembly in relation thereto, that guarantee is to be satisfied out of the gross profits of the Company, before any portion of the profits can be applied to the extension, or re-construction of the road, or its repair. That the Company, as is conceded, in making a dividend, has no power to discriminate between its stockholders. “ That if the State could recover her claim of $15,000 in this suit, no demand on the Company, previous to the suit, was necessary to enable it to maintain this suit. That if the claim of the State should be limited to $5,000, then the State could not, in this action, recover the said sum of $5,000, without a previous demand. “ For the present, the court do not propose to decide whether the State can recover the whole sum of $15,000 claimed in. this suit. We propose to postpone the consideration of this question, so important to the public, the bondholders, and the corporation, in the hope that the legislature may, by its action on the part of the State, consent to accept these bonds, and that they may by law declare such dividends on bonds in future, illegal, which if accepted by the Company, would be binding upon it. “ Should nothing be done by the General Assembly in reference to this recommendation, which the court respectfully make, we shall, at the next term of this court, proceed to decide this question, and in the opinion we shall pronounce, we shall give the reasons which shall govern us upon this and upon all the points in the record. “ The clerk of the court is directed to transmit a copy of the above to the President of the Senate, the Speaker of the House of Delegates, and the President of the Baltimore and Ohio Rail-road Company.” A duly certified copy of the following resolutions of the General Assembly in reply to the above, passed February 23d, 1848, was sent to the court, and filed in the cause on the 1st March, 1848:— [374] “Whereas, by resolution No. 65 of December session, 1846, the Attorney General was directed to institute suit against the Baltimore and Ohio Rail-road Company, to recover the dividend of $15,000 which had been declared by that Company, payable, in part, in the bonds of said Company; and whereas, it is understood, that said suit was brought, as directed by said resolution, and that the same has been fully argued in the Court of Appeals at the present term, and inasmuch as the State has incurred the whole expense incident to the decision of this question, it is therefore “Resolved, That it would be unjust to the State to take the bonds of this Company for the dividend declared, provided, the State should be entitled to receive said dividend in money. “And whereas, in the view that the legislature will not;again assemble for two years, it is important that the legislature should decide at the present session upon the course which the interest of the State will make advisable in reference to said dividend,—therefore, “Be it further resolved, by the General Assembly of Maryland, That the Court of Appeals be respectfully requested to decide fully, all the questions which are presented for their decision in said case, in time to enable this legislature to act upon the subject of said dividend, after the delivery of such opinion by the court. “Resolved, That a certified copy of the aforegoing preamble and resolutions be sent to the judges of the Court of Appeals, immediately after the passage hereof.” On the 4th March, the following opinion and order of the court was filed:— “We are of opinion that if the State had accepted the bonds, they would have been valid in her hands; but the State having refused to accept its quota of the dividend declared, in the manner it was declared, has a remedy commensurate with the injury she may have sustained in consequence of such a declaration of dividend. But what shall be the remedy of the State, as the question has not been discussed, and is not before us, we forbear to decide. [375] “ In this action of general indebitatus assumpsit, there can be no recovery of the $15,000, because there was not money in hand to divide that sum, and the dividend declared did not profess to be a dividend to that extent in money.” JUDGMENT AFFIRMED. The opinion of the court was afterwards delivered at length, as follows:—