On appeal from order of the Superior Court, Law Division, Passaic County.
For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For reversal -- None. The opinion of the court was delivered by Burling, J.
This is an appeal by Martha K. Van Riper, hereinafter referred to as the appellant, from an order of the Superior Court, Law Division, confirming a report of appraisers filed in that court in proceedings instituted by The President and Directors of the Paterson and Hudson River Railroad Company, a New Jersey corporation (hereinafter referred to as the respondent) to determine the "full market value of * * * stock" (R.S. 14:12-6) of the respondent held by stockholders who objected to a proposed sale of the respondent's property and franchises to Erie Railroad Company.
Respondent was created by an act of the Legislature of this State, L. 1831, p. 24, etc., entitled "An Act to incorporate the Paterson and Hudson River Rail Road Company." The statute detailed the corporation's capital requirements, its powers and privileges, the method for election of its directors and officers and the location and scope of the railroad facilities it was authorized to construct and operate. Section 14 of the act provided "That the road or roads authorized by this act, be and the same are hereby declared a public highway, and free for the passage of any rail road carriage thereon, with passengers or property, upon payment of the tolls prescribed by this act. * * *" (L. 1831, at p. 31). Section 19 specifically enacted "That this act shall be deemed and taken as a public act, and shall at all times be recognized as such, in all courts and places whatsoever." There was no express power reserved by the Legislature to alter, amend or repeal the provisions of this act, nor was there an express relinquishment of such power. The Legislature, however, provided (sec. 17) that "at any time after the expiration of fifty years, from the completion of said road, the legislature
of this state may cause an appraisement of the said road" and acquire the same at a valuation not to exceed "the first cost" thereof (L. 1831, pp. 31, 32). The parties to this appeal have called to our attention no supplementary or amendatory legislation directly and specifically changing the pertinent provisions of the 1831 act although several later enactments increased the scope of the corporation's activities.
By virtue of various transactions and legislation subsequent to 1831 the Erie Railroad Company became the lessee of the respondent's property and franchise, and as such lessee it has been in possession thereof for many years. Erie at the time these proceedings began had acquired 12,232 shares of the 12,600 shares of capital stock of the respondent outstanding; of the remainder, 30 shares were owned by the appellant.
The respondent, by agreement dated March 24, 1952, agreed to sell to Erie all respondent's property, assets and franchises. The appellant declined to acquiesce in the transaction and notified the respondent of her objection thereto. The respondent thereupon filed a petition under the provisions of R.S. 48:12-15, as amended by L. 1941, c. 200, p. 590, sec. 1, and R.S. 14:12-6, in the Superior Court, Law Division, for the appointment of three disinterested appraisers to appraise the "full market value" of the stock of the appellant and the other nonconsenting stockholders (whose stock aggregated 166 shares).
The appraisers sought by respondent were appointed by order of the Superior Court, Law Division, filed May 22, 1952. The appraisers' report was filed in the Superior Court, Law Division on June 20, 1952. The respondent moved for confirmation thereof. This motion was resisted by the appellant, but after argument thereon the court entered an order dated June 20, 1952 confirming the appraisers' report. The order recited the fact that there remained outstanding at the time of the order only 35 shares of stock in the nonconsenting category (including appellant's shares), ordered respondent to pay therefor the sum of $80 per share, the
valuation found by the appraisers, and ordered the nonconsenting stockholders to surrender their certificates. The appellant appealed this order to the Superior Court, Appellate Division, but prior to hearing there certification was allowed upon our own motion.
The principal questions involved are: (a) whether the legislation providing for the appraisal procedure invoked in this matter constituted an unconstitutional interference with the obligation of appellant's contractual rights emanating from the respondent's charter (L. 1831, p. 24, etc., supra), and (b) whether the appellant's stock was appraised at its "full market value."
The keystone of the appellant's argument is that the Legislature, by the 1831 act under which the respondent was formed, granted the respondent a perpetual charter under and by virtue of which the appellant acquired contractual rights, the obligation of which is inviolable by the Legislature. This argument is premised upon the construction and application of Article I, Section X, clause 1, of the Constitution of the United States laid down in Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, 17 U.S. 518, 4 L. Ed. 629 (1819). Although there may be authority in support of the appellant's premise, see New Jersey v. Yard, 95 U.S. 104, 24 L. Ed. 352 (1877), there is no occasion in ...