Baltimore & Drum Point Railroad v. Pumphrey

Alvey, C. J., delivered the opinion of the Court. The hill in this case was filed by a considerable number of the taxpayers of Anne Arundel County, for the purpose of having declared inoperative and without continued effect, the Act of the General Assembly of 1872, ch. 245,- and the confirmatory Act of 1874, ch. 225; and also to have declared nugatory and void all the proceedings under those Acts taken by the board of County Oominissioners of that county, for the purpose of effecting a subscription to the capital stock of the Baltimore and Drum Point Railroad Company, for and on behalf of the county, to the extent of $200,000. The railroad company was incorporated by the Act of the General Assembly of 1868, ch. 364, to construct and operate a railroad from the City of Baltimore to Drum Point at the mouth of the Patuxent River, in Calvert County; nearly all of the location of the route of such road being" within the limits of Anne Arundel and Calvert Counties. By the 19th section of the Act of incorporation, it was provided that if the said road should not be commenced within six years from the passage of the Act of incorporation, and should not be finished within four years from the time of the commencement thereof, then the Act should be null and void.

The bill charges several grounds for impeaching the . validity and continued operation of the proceedings and resolutions of the board of County Commissioners, taken professedly under the Acts of Assembly above mentioned, and charges the same to be void and without binding ¹⁰⁴ effect; and the plaintiffs, by proof introduced into the-case, impeach the constitutional validity of the Confirmatory Act of 1874, ch. 225, itself. An injunction is-prayed to restrain all proceedings under the Acts, or the resolutions of the Commissioners, and also for general relief. The County Commissioners and the Railroad Company were made defendants. The Commissioners failed to-appear and answer, and an interlocutory decree was taken as against them.

They left the questions raised by the bill to be contested by the railroad company alone. The railroad company appeared and answered; and by its answer it denies and controverts all the most material allegations and conclusions of the plaintiffs. Upon proofs taken the case was brought to final hearing; and the Court below decreed in favor of the plaintiffs, and enjoined all further proceedings of the Commissioners-under the Acts of Assembly. There is no question made, and none could be, as to-the right of the plaintiffs, as taxpayers of the county, to maintain the bill; that has been decided in several cases in this Court.

Mayor, &c. of Baltimore vs. Gill, et al., 31 Md., 395 ; St. Mary’s Industrial School for Boys vs. Brown, et al., 45 Md., 310 . The Act of 1872, ch. 245, by its first section, authorised the County Commissioners of Anne Arundel County, in the name of and for said county, to subscribe for and hold shares of the capital stock of the Baltimore and Drum Point Railroad Company, to an amount not to-exceed $200,000 at the par value of said shares. And by the second section of the Act, the Commissioners are authorised, for the purpose of meeting said subscription, to issue bonds of the county, with interest coupons attached, to the amount of $200,000; and by the eighth section of the Act, it is provided that said bonds, so to he issued, shall be received by the railroad company at the par ¹⁰⁵ value thereof, in payment of the shares of stock so to be subscribed for. By the ninth section of the Act, certain conditions are prescribed upon which the bonds may be delivered to the railroad company; all depending upon the progress of the work within the limits of the county.

And in regard to the last instalment of the bonds to be issued, being the one-fourth of the whole amount authorised, it is provided that they shall be delivered to the railroad company, “when the whole of the line of the said railroad, within the limits of said county, shall have been fully built and constructed, and in running order; and that the said bonds shall not he issued or delivered to the said company in any greater instalments, nor at any earlier periods, than as above specified; and, provided, that no bonds shall be issued under this Act, unless the said company shall, by an amendment of its charter, agree and bind itself to run daily at least two through trains of passenger cars, without change of cars, between the Oity of Baltimore and Annapolis, either over its own road, or in connection with the Annapolis and Elk Eidge Eailroad, if its road shall not be extended to Annapolis. ” Section twelve of the Act directs that the question of the approval or disapproval of the Act should be submitted to the legally qualified vqters of the county, at an election to be held on the fourth Monday of April then next; and as the Act declared that it should take effect from the date of its passage, and it was approved by the Governor on the first day of April, 1872, it spoke from that date, and the election provided for should have been held on the fourth Monday of April, 1873. But, according to the proclamation of the clerk made as required by the provision of the 12th section of the Act, the election was held on the fourth Monday of April, 1872, a year in advance of the proper time. The confirmatory Act of 1874, ch. 225, which professed by ¹⁰⁶ its title to be passed in pursuance of section 54 of Article 3 of the Constitution, was passed, doubtlessly, upon the assumption that the popular election required by the Act of 1872 had been regularly held, and that the Act of 1872 had been duly published as required by the constitutional provision referred to, in the newspapers of the county, “for two months before the election for members of the House of Delegates,” which was held on the 4th day of November, 1873. But it now appears, by the production of the county newspapers in Court, under an agreement, that in neither of the two news* papers so produced^was the Act of 1872, ch. 245, published for the full period of two months before the day of election of members to the then next House of Delegates.

In the one paper the first insertion of the Act was on. the 6th day of September, 1873, and in the other the first insertion was on the 9th of September, 1873. It is therefore clear, that the Act of 1872 was not duly published for two months before the election held on the 4th day of November, 1873. It is proper to notice in passing that the railroad company applied to and procured from the Legislature of 1876, an Act amendatory of its charter, (Act, 1876, ch. 337,) by which the time for the completion of the road was extended for the period of five years from the first of January, 1877. This Act was approved on the 8th of April, 1876, and it took effect from the date of its passage.

It was therefore in operation, as part of the charter of the company, on the 6th of June, 1876, when the County Commissioners first attempted to exercise the power that was supposed to have been delegated to them by the Acts of the General Assembly of 1872, ch. 245', and of 1874, ch. 225. It is also proper to notice the Act of 1874, ch. 433, whereby the City of Baltimore was authorised to subscribe to the capital stock of this railroad' company, or ¹⁰⁷ to indorse its first mortgage bonds, to an amount not exceeding $500,000, upon such terms and conditions as the Mayor and City Council might by ordinance prescribe. That Act was also in force at the time when the County Commissioners attempted to make the subscription on the 6th of June, 1816; but the authority conferred by this Act of 1814 has never been exercised by the city authorities. ■ ^ As we have just stated, the first proceeding taken by the County Commissioners, under the Act of 1812, to make the subscription on behalf of the county, was on the 6th of June, 1816. Rut it appears that before that time the railroad company, by its president and directors, had become anxious and active in the matter, and proceeded so far as to consider and determine upon the terms and conditions of the subscription that they sought to obtain from the county, and actually formulated, in the shape of a resolution, the subscription, with the exact terms and conditions therein, as those'subsequently adopted by the County Commissioners.

This resolution of the board of directors was passed on the 10th of March, 1816, and it was declared, by the same resolution, that the railroad company would, and did theréby agree, to accept the subscription for the county, on the terms and conditions thus formulated and set forth in the resolution; and which resolution was transmitted to the County Commissioners, and became the basis of the subscription made by them on the 6th of June, 1816. The terms and conditions thus proposed were adopted, and the subscription ordered to be made accordingly. The order directing the subscription was made matter of record; and it was thereby resolved that the subscription of $200,000 be made in the name of and for Anne Arundel County; “and that the said subscription be made upon the books of the said company, and signed by the president and other members of this board, or ¹⁰⁸ by a majority thereof, and attested by the clerk of the hoard, with the corporate seal of the board affixed; and that the said subscription' be made upon the following-terms and conditions, to wit: “The County Commissioners of Anne Arundel County agree to subscribe to the capital stock of the Baltimore and Drum Point Railroad Company to the amount of two hundred thousand dollars, tipon the following terms and conditions, to wit: First, upon the terms and conditions prescribed by the said Act of 1872, ch. 245, authorising such subscription to be made; and, second, upon the further condition that the said company shall comply in all respects with the requirements of its charter and every amendment thereto in reference to the construction of said road, and that the said company shall locate and construct its railroad through the town of Brooklyn,, in Anne Arundel County; and provided further, that no part of the said bonds shall be issued or delivered to the said company until the Mayor and City Council of Bal7 timore shall have, by ordinance, provided for an endorsement of the bonds of the said company to the amount of five hundred thousand dollars; and that no part of •said bonds shall be delivered to the said company until the said railroad shall be built and equipped from the City of Baltimore to the Annapolis and Elkridge Railroad; and that the said subscription shall not taJce effect until these terms and conditions are accepted by the president and directors of said company; and unless these several terms and conditions shall be complied with, the said subscription shall be null and void; otherwise to be and remain in full force and virtue in law.” This resolution was duly signed and attested; and it was the final resolve of the board upon the subject of the subscription, and what remained to be done was simply of a clerical or ministerial character. We must take the whole proceeding together; and when we consider ¹⁰⁹ the action of the railroad company that jmeceded and formed the basis, and indeed a principal inducement, of the resolution of the County Commissioners, there would seem to be no room for question that the subscription was made by the Commissioners and accepted by the railroad company, upon the terms and conditions particularly set forth in the resolutions passed by the board of directors and the board of County Commissioners, respectively; and it does not matter in what form the entry of subscription was afterwards made in the books of the railroad company.

Bates County vs. Winters, 112 U. S., 325, 327 . All the terms and conditions embodied in the resolution of subscription formed parts of the contract; and non constat that the contract of subscription would ever have been made without such conditions. Indeed, it is expressly declared that the subscription should not talce effect until those terms and conditions were accepted by the railroad company. And there would seem to be no ground to question the competency of the railroad company to bind itself by the acceptance of such subscription. 1 Moraw.

Corp., secs. 78 to 86. At the time this subscription was made, the railroad company, by an amendment to its charter, had until the first of January, 1882, within which .to complete its road. But at the expiration of that time not one of the conditions mentioned in the resolution of subscription,