decided: March 5, 1894.
ERROR TO THE SUPREME COURT OF THE STATE OF ILLINOIS.
[ 152 U.S. Page 195]
MR. JUSTICE BREWER, after stating the case, delivered the opinion of the court.
By this writ of error we are called upon to review the decision of the Supreme Court of the State of Illinois, and it is insisted that that decision is in conflict with the clause of the first section of the Fourteenth Amendment to the national Constitution, which declares that "no State shall deprive any person of life, liberty, or property without due process of law," and of the tenth section of the first article of that Constitution,
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which prohibits a State from passing any law impairing the obligations of contracts.
It is the settled law of this court that to give it jurisdiction of a writ of error to a state court it must appear affirmatively not only that a Federal question was presented to that court for decision, but also that the decision of the question was necessary to the determination of the cause, and that it was actually decided adversely to the party claiming a right under the Federal laws or Constitution; or that the judgment as rendered could not have been given without such decision. Miller's Executors v. Swann, 150 U.S. 132; Eustis v. Bolles, 150 U.S. 361, and cases cited therein.
Guided by the rule thus laid down and long established, we turn to the record, including therein the opinion of the Supreme Court of the State, to see what in fact was decided. From such inspection it is obvious that there was no decision adverse to the rights vested in the Northwestern Plank Road Company by its charter. On the contrary, the clear concession in the opinion of the Supreme Court was that that company had by its charter a valid and exclusive franchise in respect to the toll-road, including therein the right to take tolls, and to erect and maintain a toll-gate therefor. All the contract rights which it can be claimed passed by the charter to the plank road company were conceded to have passed to it, and the matter which was determined by that court, and upon which its decision rested, was that the franchises, thus vested in the corporation, did not pass by the deed made under the authority of the act of 1865 to Snell and his heirs in perpetuity. It was not denied that those franchises passed to Snell by the deed of August 5, 1870, but the ruling was that such conveyance did not vest in the grantee the franchises as a matter of private property, to pass by inheritance to his heirs.
In order that there may be no misunderstanding of the rulings of the Supreme Court we quote at length from its opinion (pp. 430-432):
"By the act of 1854, Gray, Filkins, Richmond, and their associates became a corporate body, with the right of perpetual succession, etc. This was the franchise of the
[ 152 U.S. Page 197]
corporators. By the same act the corporate body received the right to construct and maintain a toll-road, and to build toll-houses, and collect tolls. These were the franchises of the corporation. The former franchise, that is to say, the franchise to be a corporation, cannot be transferred without express provision of law pointing out the mode in which the transfer is to be made. Coe v. The Columbus P. & I.R.R. Co., 10 Ohio St. 372; Memphis R.R. Co. v. Commissioners, 112 U.S. 609. The act of 1865 authorizes the sale of 'the franchise, the property, and immunities' of the plank road company, and specifies that such transfer is to be made by deed of the president. If the word 'franchise' as here used is broad enough to include the franchise to be a corporation, with the power of perpetual succession, even then, Snell was not thereby made a corporation under the old charter. He was merely vested with the 'right to organize as a corporation,' (Memphis R.R. Co. v. Com'rs, supra,) but such organization never took place. Neither he nor his heirs or representatives are claiming as the corporate successors of the plank road company. The appellants are claiming as the heirs of Snell the individual.
"'The franchise of becoming and being a corporation in its nature is incommunicable by the act of the parties and incapable of passing by assignment.' (Memphis R.R. Co. v. Com'rs, supra.) If Snell in his lifetime was the owner of such franchise by express legislative grant, he could not assign it and it could not descend to his heirs. He failed to use it for the purpose of effecting any corporate organization, and it died with him. Even if his were not so, his failure to effect said organization within ten days after the constitution of 1870 went into effect rendered it impossible, under section 2 of article 11 of that constitution, to give any validity to an organization made after the lapse of such period of ten days.
"If the franchises designated as those which belong to the corporation as distinguished from the corporators passed to Snell by the transfer, and if he had the right to maintain the toll-houses transferred to him and to collect the tolls therefrom, did such franchise and right pass to the appellants at his death? The second proviso of section 5 of the act of 1865
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is as follows: 'Provided further, that the purchaser or purchasers of said franchise and road shall be bound by all the obligations said Northwestern Plank Road Company is by its charter, and shall enjoy all the rights and privileges enjoyed by said company and no more.' This provision is to be strictly construed in favor of the public and against the grantee of the privileges in question. (Angell on Highways, section 357; 1 Morawetz on Priv. Corp. sec. 323; Stormfeltz v. The Manor Turnpike Co., 13 Penn. St. 555.) The person who is to 'enjoy all the rights and privileges enjoyed by said company' is stated to be the purchaser of the franchise and road. It is not stated that the purchaser and his heirs and assigns shall enjoy such rights and privileges. If it had been the intention of the legislature that the heirs of the purchaser should succeed to the privilege of collecting tolls and maintaining toll-gates, it would have been so specified.
"The dissolution of the corporation did away with the right of perpetual succession which attached to the corporate body. By neglecting to organize a corporation with such privilege of perpetual succession, if the power to do so passed to him, Snell failed to preserve the element of perpetuity. But if the right to collect tolls and maintain toll-houses descended to his heirs, and by consequence became inheritable by the heirs of such heirs, then there was a continuation of the perpetuity which has been abrogated by the dissolution of the corporation. It is true that the deed made by the president of the corporation to Snell conveys to him, 'his heirs, executors, administrators, and assigns,' but the question is not what the language of the deed was, but what the legislature authorized to be put into the deed."
There can be no mistake as to the scope of this decision. It is that the franchises vested in the plank road corporation, though passing to Snell by the deed, passed to him and not to him and his heirs, and that he took by such deed only a life estate. But in this is presented no question of a Federal nature, but only of the extent of an authority to dispose of its franchises given by a statute to a corporation. It is assumed that the charter was a valid and binding contract, and
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that by it certain franchises were vested in the Northwestern Plank Road Company as its absolute property, beyond the power of the State to arbitrarily retake. After the grant of this charter, and after the full investiture of the corporation with these franchises, an act was passed giving it authority to dispose of them, and the matter which was determined by the Supreme Court was as to the extent of the authority thus conferred. But in this there is no matter of contract. The State never contracted with the plank road company that it should have the power to transfer its franchises; nor with these plaintiffs that their intestate and ancestor should acquire an absolute title to these franchises with an indefeasible estate of inheritance. The mere grant of franchises to a corporation carries with it no power of alienation. On the contrary, the general rule is that, in the absence of express authority, they are incapable of alienation. And many cases have arisen in which an attempted alienation by the corporation has been declared by the courts to be void, as divesting it of the power to discharge the duties imposed by the charter. Thomas v. Railroad Co., 101 U.S. 71; Pennsylvania Railroad Co. v. St. Louis, Alton &c. Railroad Co., 118 U.S. 290; Oregon Railway v. Oregonian Railway, 130 U.S. 1; Central Transportation Co. v. Pullman Car Co., 139 U.S. 24. In the original act of incorporation no power of alienation was given to the plank road company. The only authority is found in the act of 1865, and that is a mere grant of a permission to sell. Determining the extent of that permission determines no question of contract, and presents no other matter of a Federal nature. If it be true, as decided by the Supreme Court, that only a life estate passed to Snell, then the plaintiffs have no interest in the franchises, and the demurrer to the bill was properly sustained. This, therefore, is a pivotal question, and having been decided adversely to the plaintiffs, and in it there being no matter of a Federal nature, it follows that this court has no jurisdiction, and the case must be
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