BOOK FIRST. CONSTITUTIONAL AND POLITICAL LAW. CHAPTER II. LIMITATIONS HAVING FEDERAL (SANCTION. SEC. 8. Sacredness of Legislative Charters. SEC. 9. Contracts other than Legislative Charters. SEC. 11. Ex Post Facto Laws and Bills of Attainder. SECTION 8. SACREDNESS OF LEGISLATIVE CHARTERS. Those limitations which both the National and the Kentucky Constitution impose on the law-making body, in the same or in equivalent words, are ultimately construed by the Supreme Court of the United States, at least where the highest State court does not carry them far enough. Such are the restrictions against laws impairing the obligations of contracts (the words "obligation of" are omitted in the Kentucky Constitution), ex post facto laws, bills of attainder, and statutes depriving any one of life, liberty, or property "without due course of law," or, in the Kentucky phrase, borrowed from Magna Charta, otherwise than "by the law of the land." But should the highest Kentucky court give to the restrictive clause greater force than the Supreme Court at Washington, there can be no appeal. Thus, the Court of Appeals, in 1860, as to the Shelby College lottery grant, held incidentally that the franchise granted by the legislature to draw a lottery for the benefit of that college could not be repealed in so far as its existence was needed to repay certain advances of money made on the faith of it; because, if such a repeal was allowed to affect the rights of a third party thus acquired, this would be a law impairing the obligations of contracts, within the meaning of the Dartmouth College Case.' The Supreme Court (U.S.) has since held on the contrary, that laws dealing with moral questions are an exercise of that police power which the State can not abdicate, and of which it can not divest itself by its own contract, nor through contracts made by others on the faith of a statute. Yet the Kentucky court might (though it is to be hoped would not), in the next case of a repealed lottery franchise under which contracts had been made, stand on the opinion rendered by their predecessors in 1860. It was incidentally said by the Court of Appeals in 1855, in the case of a lottery grant, that where a bonus has been paid for a franchise granted by the legislature no tax can be levied upon it afterward. The guarantee of the State Constitution against "laws impairing contracts" was referred to in 1869 when the court refused to sustain an act lowering railroad fares fixed by charter.* 6 The chartering of a turnpike company with the usual powers does not prevent the legislature from afterward increasing its liability for negligence in common with all other persons and corporations, nor from passing an act authorizing the sale of its franchise for debt; nor does a clause in an insurance company's charter, directing that all suits on policies must be brought in the home county, debar the legislature from directing thereafter, by a general law, that suits growing out of the contracts of any agency may be brought in the county of such agency, as a fair control of remedies must 1 Gregory v. Trustees of Shelby College, 2 Metc. 589. 'Stone v. Mississippi, 101 U. S. 801. * Wendover v. Lexington, 15 B. M. 234, relying upon Gordon v. Tax Appeal Court, 3 How. 133. Hamilton v. Keith, 5 Bush, 458. 5 Board Int. Impr., Shelby County, v. Scearce, 2 Duv. 576. 6 Louisville & Oldham T. P. Co. v. Ballard, 2 Metc. 165. Howard v. Ky. & Lou. Mut. Ins. Co., 13 B. M. 282. always be considered as reserved. The special remedies given to a corporation, such as the methods by which a railroad company may condemn lands, are not a part of the State's contract, and are subject to repeal.8 On the 14th of February, 1856, a law was enacted which is deemed to be still in force, and which provides “that all charters and grants of or to corporations, or amendments thereof, and all other statutes, shall be subject to amendment or repeal, at the will of the legislature, unless a contrary effect be therein plainly expressed: Provided, That whilst privileges or franchises so granted may be changed or repealed, no amendment or repeal shall impair other rights previously vested." This law becomes a part of every subsequent charter or charter amendment.10 But another section of the act says that it "shall only apply to charters and acts of incorporation to be granted hereafter," and it was said " that an extension of a bank charter granted after 1856 does not come under this head; that the old charter remains with its irrepealable privileges; and, when a charter granted before 1856 reserved to the legislature the right of appeal, that of modifying was implied." But though the charter of a turnpike company was expressly open to modification and repeal, it was held in a very late case that the legislature could not, without the consent of the corporation, take the property out of the hands of the stockholders who were then controlling it, by changing the basis of voting so as to give one vote for each share, while until then the larger stockholders had been restricted to fewer votes than one for each share. 13 As the amendatory act gave to the majority in value of the owners the control of their property, it seems somewhat strained to 8 Chattaroi R. R. Co. v. Kinner, 81 Ky. 223; Tracy v. Elizabethtown, etc. R. R. C., 86 K y. 270, 276. 9 Stant. Rev. Stat., Ch. 62, II. 121. 10 Griffin v. Ky. Ins. Co., 3 Bush, 592. "Franklin County Court v. Deposit Bank of Frankfort, and cases heard with it, 87 Ky. 370, 387. 12County Judge of Shelby v. Shelby R. R. Co., 5 Bush, 227. 13 Orr v. Bracken County, 81 Ky. 593. It appears to us from the tone of the opinion that the large stockholders were suspected by the court of the intention to wreck the turnpike with a view to gain in some other enterprise. say that such an act," deprived the corporation of its property." Here the court carried to the utmost the principle of a decision made in 1854. In that case the charter of a Baptist seminary reserved the right to "alter, amend, or repeal,” and corporate affairs were ruled by a board of trustees filling its own vacancies. An act was passed in 1848, which the board refused to accept, adding sixteen new trustees named in the act to the old board. "The power to destroy is not the power to maim and cripple," said the court, and, notwithstanding the reservation, held the act unconstitutional. The old trustees represented the donors, and the new ones did not, and their intrusion was simple spoliation." When do chartered rights become complete? Amendments to the charter of a railroad company authorized the County Courts of certain counties to subscribe stock, not exceeding named amounts, upon a previous vote of the people in approval. The vote was taken, and resulted in the affirmative, but the County Court refused to subscribe. The legislature thereafter repealed the authority of one of the counties to subscribe. This repeal was held permissible, even on the assumption that the vote had been given in proper form, and that it was an absolute direction to the County Judge to subscribe, and he a mere agent; for as long as he had not actually subscribed there was no contract.15 As the Constitution guarantees the chartered rights of private corporations only, not of those that are public or municipal, it becomes important to draw the line correctly between the former and the latter. The city of Louisville had endowed the Medical Institute with a valuable lot and buildings. The Institute was incorporated in 1840, with the right to hold the real estate, etc., which it then possessed, and such other estate as might be proper, and the "right was reserved to repeal, alter, and amend the charter." The Institute received but trifling donations from private sources. In 1846 the University of Louisville was incorporated, and in compliance with a certain 14 Sage v. Dillard, 15 B. M. 340, 359. 15 Cov. and Lex. R. R. Co. v. Kenton Co. Court, 12 B. M. 144. plan formed in 1837, and with resolutions now passed by the Mayor and Council, the square of land previously granted by the city to the Institute was conveyed to the University. The charter of 1846 names eleven trustees; one of them to be president, the others to be divided into five classes, going out in two, four, and six years, etc.; vacancies arising by lapse of time to be filled by the Mayor and Council, and if not so filled, then by the other trustees. The other sections give the ordinary collegiate powers, and each department (law, medical, and academic) should, if required, receive from the public schools of Louisville a number of pupils, not exceeding six, on certain conditions. The "University" received, before 1851, a few donations of books. The new charter of Louisville, enacted in 1851, sought to place the "University" under the management of the school trustees who would, from year to year, be elected by the people. It was held that the "University" was not a department of the city government, but a private corporation, and the attempt to abolish the old trustees unconstitutional.16 SEC. 9. CONTRACTS OTHER THAN LEGISLATIVE CHARTERS. The Kentucky courts have equitably enlarged the constitutional rule against the impairment of contracts by not allowing the legislature to make a contract for a party, or validating a grant which was void when made, as otherwise the party would be deprived of property held under executed contracts, which are as sacred as executory ones. Hence, a section in an act about conveyances, passed in 1831, providing "that in all cases where a deed of conveyance has been heretofore made by a baron and feme, and the same has been duly executed, but with this defect only, that a dedimus protestatem did not issue, etc.," the grantee may, after seven years' possession, quiet the title against such defect by bill in chancery, was, as to antecedent deeds, in agreement with the doctrine recognized in Ohio, held unconstitu 16 City of Louisville v. Pres. and Trustees University of Louisville, 15 B. Mon. 642. |