New Central Coal Co. v. George's Creek Coal & Iron Co.

Alvey, J., delivered the opinion of the Court. The bill in this case was filed by tbe appellees to have the appellants restrained by injunction, from prosecuting proceedings of condemnation of a right of way for a railroad, through the lands of the appellees. The inquisition had been taken and returned into Court for ratification, before the bill was filed; and by the injunction that was granted, the appellants were restrained “from doing or causing or permitting to be done, any act, matter or thing, in or towards, or for the purpose of obtaining possession of any part of tbe lands of said company, and from, in any way, entering thereon, or on any part thereof, or in any way interfering with said company’s possession of said lands, and the said company’s free and uninterrupted use thereof,” until the further order of the Court. After the granting of this injunction the inquisition that had been returned to the Circuit Court for Allegany County was set aside for cause shewn; and, upon motion to dissolve the injunction, the Judges in the Court below-being divided in opinion, the motion was overruled; and it is from the order overruling the motion to dissolve, in consequence of the division in opinion of the Judges, that this appeal is taken.

There are several questions presented by the record, some of whieh are of considerable interest and importance; and, without unnecessary detail of fact, we shall take them up and consider them in their order. 1. The first among the questions seriously urged is, whether the appellants ever acquired corporate franchises from the State to enable them to do what they attempted to do, and which was restrained by the injunction? The appellants were chartered by the Act of 1865, chapter 206, by the name of the Lincoln Coal, Iron, Fire ⁵⁵⁴ Brick, and Oil Company, of Allegany -County. By the Act', it was declared that the three persons therein named, and such other persons as might be associated with them in the manner therein provided, should be and were thereby incorporated and made a body politic by the name jand style of, &c., “and the said company shall have all the privileges and rights necessary for carrying on the mining of coal and ores, and the manufacture of iron and fire-brick, and for transporting to market the produce of their mines, land, and manufactories, and shall also have power to lease or purchase lands, mines, and furnaces, with their appurtenances, and to hold all such property, personal, real and mixed, as they may require for the purposes aforesaid,” &c., and by the second section of the Act for the purpose of enabling the Company to transport the produce of their mines and manufactories to market, they are invested “with all and singular the rights, profits, powers, authorities, immunities and advantages for the surveying, locating and constructing a railroad, with the necessary appurtenances, from their mines or works to connect at any convenient point or points with other existing railroads in Allegany County, or with the Chesapeake and Ohio Canal, at Cumberland,” in the same manner as have been given and delegated to the Baltimore and Ohio Railroad Company, which includes the full and ample power of condemnation for right of way.

By the same section, it is made the duty of the appellants to carry “all persons and propert}’’ at the same rates of tolls and prices of transportation as the Baltimore and Ohio Railroad Company are, or shall be by law, allowed to charge and receive.” It is further provided, by the fourth section of the Act, that until the first election of directors should be held, as therein provided, the- three persons named in the first section as corporators, or a majority of them, should have full power and authority to exercise all the corporate power *of the Company. ⁵⁵⁵ There is no time limited for accepting the charter, or for organizing the corporation under it. The books for subscription to the capital stock were first opened on the 1st of September, 1871, and, upon subscriptions being taken, the stockholders, on-the same day, held a general meeting, and elected president and directors of the Company. Afterwards, by the Act of 1872, chapter 50, the name of the appellants was changed from their first corporate name to that of the “ISTew Central Coal Company,” and it is by the latter name that the appellants have answered the bill in this case. The Act authorizing the change of name also authorized an increase of capital stock from two and a half millions to five millions of dollars, and also provided for an additional number of directors to manage the affairs of the corporation.

The Act of incorporation in this case is almost identical in its provisions with that of the Frostburg Coal Company, also a Maryland Act of Incorporation, which came under consideration of the Supreme Court of the United States, in the case of Frost’s Lessee vs. Frostburg Coal Co., 24 How., 278 . In that case, in reference to the question of the corporate existence, the Court held that the persons named in the Act of incorporation constituted the corporate body, and were clothed with all the powers and privileges conferred by the charter, and that the latter took effect immediately on its acceptance by the persons named in the Act; and the subsequent steps, such as the subscription of the stock, procurement of the coal lands, election of the directors, of the president and secretary, passing by-laws, &c., were steps taken in perfecting the organization, and to enable it to use its powers and privileges for the purpose for which they were granted. The principle of this case in 24 Howard is unquestionably correct, and, as such, has been recognised by this Court, in the case of the Franklin Fire Ins. Co. vs. Hart, 31 Md., 59 . ⁵⁵⁶ In this case, however, it is alleged and contended, that before the charter was accepted by the corporators therein named, and before any rights had been acquired thereunder, the charter itself had become abrogated and annulled by force and effect of the 48th section of the 3rd Article of the Constitution, adopted in 1867.

What is sufficient evidence of acceptance of the charter by the corporators, is often a question depending upon the circumstances under which the charter itself was procured. It is not necessary that the Act of acceptance be evidenced by writing, nor even by the vote of the corpora-tors. Acceptance of the charter may generally be inferred from the exercise of the corporate powers granted. “If a peculiar charter is applied for, and it is given, there can be no reasonable ground to doubt of its immediate acceptance. It has, indeed, been held that grants beneficial to corporations, may be presumed to have been accepted, and an express acceptance is not necessary.” Ang. & Am. on Corp., sec. 83; Charles River Bridge vs. Warren Bridge, 7 Pick.

Rep., 344 . Here, there is express proof by one of the corporators, that the Act of incorporation was immediately accepted, though nothing appears to have been-done under it until September, 1871. But, apart from the question whether the charter had been accepted before the adoption of the Constitution of 1867, and conceding that it had not been, does the provision of the Constitution relied on by the appellees, apply to or affect this charter in the manner supposed ? The Constitution, by the 48th section of the 3rd Article, provides, that “corporations may be formed under general laws; but shall not be created by special Act, except for municipal purposes, and except in cases, where no general laws exist, providing for the creation of corporations of the same general character, as the corporation proposed to be created ; and any Act of incorporation, passed in violation of this section shall be void; ’ ’ and, by ⁵⁵⁷ the last clause of the same section, it is provided, that “all charters heretofore granted, subject to repeal or modification, may be altered, from time to time, or be repealed.” The Act of incorporation now before us was, as we have before stated, passed before the adoption of this constitutional provision, and at the time of its passage there was in existence a general law, which still exists, with some modifications, providing for the creation of corporations of the samo general character, as that created by the special Act.

This special Act was a competent exercise of legislative power and discretion at the time of its passage, and unless the present Constitution was intended to have a retrospective operation and to embrace prior acts of legislation as well as the future, there can be no question as to the validity of the appellants’ charter. The general rule for the construction of statutes is plain and well settled, and is founded in the most obvious principles of justice, and that is, that the law shall be taken to have a prospective operation, and never a retrospective effect, unless there is something on the face of the enactment putting it beyond doubt that the Legislature meant it to operate retrospectively. Moon vs. Durden, 2 Exch., 22. There can be no good reason suggested why this same general principle, so wise and just, should not also apply as a rule of interpretation of the Constitution.

It is stated as the rule upon the subject, by Judge Cooley, (Const. Lim,., 62,) and he is not only supported by the reason and justice of the thing, but by authority. In the case of Cass vs. Dillon, 2 Ohio, N. S., 607, a question arose as to the effect of a clause in the State Constitution, which declared that the Legislature “shall never authorize any county, town, or township, by vote of its citizens or otherwize, to become a stockholder in any joint stock company, corporation, or association,” and it was held that a law enacted before the adoption of the Constitution, authorizing such subscription, was not repealed by ⁵⁵⁸ implication, as the clause in the Constitution referred only to future laws. Other cases might be cited, if it were necessary, illustrative of the same general proposition.

The principle, however, is too well founded in reason and justice to require the support of authority. With this rule of construction in view, the terms of the constitutional provision relied on here, would seem to admit of no doubt. When it is declared that corporations shall not be created by special Act, except in particular cases, it is manifestly intended to create prohibition to future legislation of the character described, and not to repeal previous legislative Acts. And so, when it is declared that any Act of incorporation, passed in violation of the particular section of the Constitution, shall be void, it would seem to be plain, from the ordinary grammatical sense of the terms, that they refer to future Acts of the Legislature; as it is not easy to conceive how a previous Act could have been passed in violation of this particular constitutional provision, which at the time had no existence.

And it is not less clear, we think, that the Act of 1872, chapter 50, passed as an amendment of the appellants’ charter, is also a valid Act of the Legislature. The .power is expressly reserved to the Legislature, by the section of the Constitution already referred to, to alter or repeal all previous charters; and as the amendment here obtained was but an alteration, it was clearly competent to the Legislature to make it. In the course of the argument.for the appellees several cases were referred to as authorities for the position that the Constitution operated a repeal of the previous Act of incorporation; but, in reference to those cases, it is sufficient to say that in none of them, except those in 16 Ind. Rep., 40, and 17 Ind.

Rep., 243, were the questions decided at all analogous to that presented here; and as to the cases in the Indiana Reports, they would seem to be based upon a course .of reasoning that we could not apply ⁵⁵⁹ to this case. Besides, the language employed in the clause of the Indiana Constitution, with reference to which those cases were decided, is not the same as that in our Constitution. 2. The next question presented is, whether the use for which the appellees’ land is attempted to be condemned and appropriated by the appellants, is such a public use as is authorized by the 40th section of the 3d Article of the Constitution? The section of the Constitution just referred to declares that “The General Assembly shall enact no law authorizing private property to be taken for public use, without just compensation, as agreed upon between the parties, or awarded by a jury, being first paid, or tendered to the party entitled to such compensation.” By the plain and well acknowledged construction of this constitutional provision, which is found in nearly if not all American Constitutions, the Legislature is absolutely prohibited by implication from taking private property for any private use whatever, without the consent of the owner.

This is but declaratory of the previously existing universal law, which forbids the arbitrary and compulsory appropriation of one man’s property to the mere private use of another, even though compensation be tendered. For, as was very justly said by the Supreme Court of the United States, that government can scarcely be deemed to be free, where the rights of property are left solely dependent upon the will of a legislative body, without restraint. The fundamental maxims of a free government seem to require that the rights of personal liberty and private property should be held sacred. At least no Court of Justice in this country would be warranted in assuming that the power to violate and disregard them— a power so repugnant to the common principles of justice and civil liberty — lurked under any general grant of legislative authority, or ought to be implied from any general ⁵⁶⁰ expression of the will of the people.

Wilkinson vs. Leland, 2 Pet., 657 . With this restriction, however, the Legislature has, by virtue of the right or power of eminent domain, the right to authorize,