Harris v. Mississippi Valley & Ship Island Railroad

Simrall, J.,

delivered the opinion of the court.

An information, by quo warranto, was brought by the attorney general against the defendant, a railroad corporation, to obtain a judicial forfeiture, on assumption by the state of the franchises and corporate privileges granted to the defendant. Several grounds are stated:

First. That by the second amendatory act of the original charter, approved the 18th April, 1873, the defendant was required within twelve months thereafter, to cause to be prepared, and file *604 in the office of the secretary of state, a map of the proposed line of railroad, certified by the chief engineer, “ which shall be taken as prima facie evidence of the location of its line,” and thereupon said company was to be entitled to all rights and franchises upon said line, etc. “ Yet the company have utterly failed and refused to comply with the requirements of said section, and have not prepared and filed the map.”

The defendant’s franchises are contained in its original charter, granted by the legislature, in the act of the 8th March, 1871, and the subsequent amendments thereto. The general purposes are declared in the second section, to build, equip and operate a railroad from a point at or near Yicksburg, through the state, in a southeasterly direction, in the direction of Pensacola, Florida, with a branch to Ship Island, or such other point on the gulf coast as may be preferred. The fourth section gives the use of the state lands for timber, gravel and other material, and also a width of 200 feet for a road bed.

The amendatory act of the 18th April, 1873 changed the corporate name of the defendant to that of the Mississippi Yalley & Ship Island Railroad Company, and among other things, repealed so much of the original charter as located the road in the direction of Pensacola, and defines a new line, from a point at or near Ship Island, or such other point on the gulf coast as may be deemed most eligible, in a northerly or northwesterly direction to Yicksburg. Immediately follows in the same section, the matter upon which is founded the first specification in the information. The change made in the line of the road is in dispensing altogether with Pensacola as the suggested terminus of the main trunk, and that point as the direction from Yicksburg, and substituting as the terminal point on the gulf, Ship Island, or any other point on the coast line in this state, that may be thought more eligible. The original act takes Yicksburg as the starting point; in describing the general direction, the amended charter begins on the coast, and points out the bearing and direction towards Yicksburg as the western point of termination. Ye *605 can discover no importance or significance suggested by tbe change in the starting point, for purposes of description of the route adopted in the last act. That portion of the statute to which the first specification points is as follows :

“ And said company is hereby required, within twelve months after the passage of this act, to cause to be prepared and file in the office of the secretary of state, a map of said proposed line, * * * and (it) shall be taken and held as grima fade evidence of the location and termini of said line ; and said railroad company shall be entitled to all the rights and franchises upon said line, the same as if the location and termini of said line * * had been definitely and specifically set forth in the original act of incorporation of said company.” 2d section, p. 562.

In the Commercial Bank of Natchez v. State, 6 S. & M., 617, a distinction is enforced (which is just and reasonable) between those ¡ provisions of the charter, which are intended to apply merely to the internal government of the. corporation, and those which impose positive conditions, restrictions or duties, in which the public \ interest is involved. For a violation of the latter a forfeiture oc- * curs, but not so with regard to the former.” It is not every excess of power, nor every omission of duty, that produces that effect. The public must have an interest in the act done, or , omitted to be done. If it is confined- exclusively to the corporation, and in nowise affects the community, it should not be con- ■ sidered as of those conditions upon which the grant is made.

The injunction of the legislature to the courts is to construe the charter favorably and liberally for the corporation, so as to carry out its purposes. In order that the corporation may be visited with a forfeiture of its franchises, there must be something wrong done, arising from willful' abuse or improper neglect. 4 Grill & Johns., 106, 107. The same idea is expressed in 23 Wend., in this wise: “ There must be something more than mistake and accident.” In State v. Real Estate Bank, 5 Ark, 601, in respect of misuser, it was said: “ There must be such neglect or disregard of the trust, or such perversion to private purposes, as in some *606 manner to lessen its utility to those for whose interest it was granted, or else to work some public injury. “It must be in some sense or other a misdemeanor in violation of the trust.”

Since the information must state a case, which, if admitted to be true or proved, will support a judgment of ouster and forfeiture, it was held in State v. C. & H. T. P. Co., 2 Sneed, 255, that the information was fatally defective, which did not allege the misfeasance, malfeasance or nonfeasance to have been willful. The same principle is contained in State v. M. Ins. & Trust Co., 8 Humph., 254.

This information does not aver that the defendant has done or omitted to do any of the acts set forth in the several specifications, willfully or negligently, and for that reason the circuit court might properly have sustained the demurrer. There ought to have been an allegation to the effect that the defendant was willfully in default; that failure to file the map, in contempt of its duty and obligation, must be the gravamen of the charge.

What was the motive of requiring this map ? It is placed in the same section in the amended charter, and in immediate connection with that portion of it relating to the change of the line and the sea coast terminus. Yicksburg is fixed as one end of the line, the other terminus is Ship Island, or such other point on the gulf coast in this state as the corporation may select. Any point in a distance of one hundred miles or more, could be under the charter, designated as the terminal point. It might have been in either Hancock, Harrison or Jackson counties.

The line to be designated on the map is called the “ proposed line.” It shall be taken and held as “prima facie evidence” of the location and termini. Would the map line be irrevocably fixed upon the corporation? If, after surveys should prove another line to be cheaper and better, or as inviting more local aid in subscription, or as promising more business, would the company have a right to abandon the map line and adopt this more feasible one ? The use of the words “ proposed line ” and “prima facie,” would seem to indicate that the company were not intended to be concluded by it.

*607 If the proposed route might be changed, it is not perceived, how any consequences detrimental to the public ensued from the failure to make and file the map.

The act of April 5, 1872, gave to the defendant the privilege of purchasing from the state all the public lands within ten miles of the main line, and authorized branches, at the nominal price of two cents per acre. The company had also the privilege of getting lumber, gravel, or other material from the state lands. Construing the charter by the liberal rule, which it enjoins, we may find in this statute the reason for the map.

If filed within the twelve months, it might have the effect of notice to the state authorities that the privilege of purchase attached according to that line, and thus the sales of public lands in that strip of twenty miles breadth would be withdrawn. Until the state was thus notified, the right to sell would' be continued. In this view of it, the defendant was the only party interested in the map, the sole beneficiary.

When the charter speaks of franchises resting on this line, it refers to the privilege of the purchase of the lands, and the use of lumber, gravel, and other material from the public lands.

The legislature did not propose to confine the corporation to any particular line. The charter submits the selection to the corporation, with a very broad discretion. If it did not like Ship Island as a terminal point, it might adopt any other on the Mississippi sound which, within the privilege of the charter, might be fifty miles or more east or west of that point. The charter does not fix a time within which a definite survey and line shall be established. The corporation was not compelled to begin the work within one or two years — three is the limit. The state was indifferent to any particular line, so it maintained the general direction from the initial point adopted on the gulf coast towards Yicksburg.

If the corporation has not concluded to adhere to the “proposed line” that might be laid down on the map that might be filed, but might abandon it, in part or altogether, the filing of the map *608 could have no other effect than notice to the state that the company would insist on its privilege of land purchase within, the prescribed area. If the map was not filed, the privilege did not attach, and the state could continue to sell.

2. The second specification is, in substance, that the defendant has, without color or authority of law, and contrary to its charter, located a pretended line of road from Yicksburg towards the town of Warrenton. The authorities teach the doctrine that courts proceed with extreme caution in proceedings which have for their object the forfeiture of corporate franchises, nor will it be visited except for a plain abuse of power, by which the corporation fails to fulfill the design and purpose of its organization. High on Ex. Rem., § 649; State v. Commercial Bank, 10 Ohio, 535. The acts of misuser or nonuser must be touching matters which are of the essence of the contract between the sovereign and the corporation, and they must be willful and repeated. High, § 648; Commonwealth v. Commercial Bank, 28 Penn. St., 383. In order that the courts shall proceed with requisite caution and circumspection, it is required that the information shall state with precision every fact which constitutes the abuse of the franchises complained of.

This allegation is vague, indefinite, if not evasive. It is difficult to see upon what predicate of law it rests. Does it mean to affirm that the surveys and location of the line must begin on the gulf and be prosecuted from that point towards Yicksburg, and that the defendant has broken his charter by starting at the wrong end of the line? If that is the idea, it arises out of a misconception of the charter. If the intent be to aver the location of the line, materially variant from the discretion of the charter, the allegation is quite uncertain and defective. It is not alleged that the entire route has been surveyed and located definitely, which deviates from that laid down in the charter; nor is it shown how much of the line has been located in a southern direction towards 'Warrenton; nor that it was done willfully to evade the charter. If deviation from the charter line be complained of, it must be pointed out in the information that it is a material departure, and *609 how, so that the court may be able, on the facts stated, to pronounce, as a matter of law, that the charter has been violated and the penalty incurred.

It is not every deflection from the line laid down in the charter that is condemned. The departure must be so important as to show that the line established is different from the line authorized. The legislature, in general terms, gives the course from the initial point on the Grulf to Vicksburg. That does not mean in a straight or air line. The defendant is left to its judgment. The matters to be considered are the hills, valleys, water courses and general topography of the country. These must be subject to the examination of scientific skill and instruments. Natural obstructions may be evaded by going around them. To avoid such obstructions, a sharp departure for a short distance from the general ■course is necessary and proper, and plainly not a deviation. In such a case, the motive was not to evade the charter, but to do what is allowed this defendant, and generally all such corporations, viz: To make choice of what it considers the best and most practicable lines between terminal points, observing the general course indicated in the charter.

3. The third specification is to the effect that the defendant failed to elect a board of directors, as provided by the charter and by-laws, and that there is not now a lawfully constituted board.

The fifth section of the original charter provides that vacancies in the directory shall be filled by a vote of two-thirds of the directors remaining. If the election is not had on the day appointed, “the said company shall not, for that cause be dissolved,” but the election may be holden on any subsequent day which the then existing directors may appoint. Directors continue in office until their successors are elected and qualified. It may be true, therefore, as stated in the information, that the corporation has not elected directors since the passage of the amended charter of 1873, yet there may be directors, chosen before that time, competent to do business, and who would hold over until their successors were elected.

*610 This allegation assumes that by reason of the nonelection of the board of directors (within the time stated), the corporation has been dissolved. The legislature, in the particulars of the charter referred to, has very carefully guarded against that consequence. The rule is that a corporation is dissolved when it has lost the power of perpetuating itself; when (according to its nature), from the loss of its chief officer, or an integral part, and in its imperfect state, it has not the capacity to recuscitate or restore itself by a, new election. So long as there remains the capacity of reviving restoration, it is not dead. Ang. & Ames, Corp., §§ 768, 769. No loss of members destroys a corporation so long as a sufficient number remain to continue the succession and fill up vacancies. Nor does the mere failure of the trustees or directors to meet dissolve the body. State v. Trustees Vincennes University, 5 Ind., 80, 81. That case, both in the questions of law and fact, is very similar to this. The point ruled was, if enough trustees remained to fill up vacancies, and restore the corporation to vitality, although the board may not have kept up its regular meetings, the corporation was not dissolved, and that it was incumbent on the state to show the condition of facts which produce a dissolution.

Assuming everything to be true that is alleged in the information, it is clear that this corporation has not been dissolved.

4. The fourth and last specification is, in effect, “that the defendant has misappropriated and misapplied the money received from the state,” etc.

This refers to the fund loaned by the state, as set forth in the third section of the amended charter. The section is preceded by a preamble which recites that the legislature recognizes the importance to the state of said railroad, and desires to extend to said company such material aid as will secure the early construction thereof. The enactment, giving effect to this motive, makes the loan “to be used in aid of the construction of the defendant’s railroad,” the fund to be paid over on the conditions and in the sums named in the fourth section. See acts, pp. 568-4.

This allegation is especially obnoxious to the criticism which *611 has been applied to the others. It is a general statement; more of opinion than of fact. The facts are kept back. Whether they would in law amount to misapplication or not can not be known until they are disclosed. The loan was authorized to be made to aid in the construction of the road. If not so used the information should have stated so specifically, and pointed out the misappropriation.

It may be proper to observe that this and the two preceding specifications were not as much relied upon at the argument and briefs as the first one.

We are of opinion that there is no error in the judgment. It is affirmed.