ORDER OF THE COURT.

State of Wisconsin-Supreme Court.

THE STATE OF WISCONSIN VS. THE CHICAGO, MILWAUKEE AND ST. PAUL RAILWAY COMPANY.

On reading and filing the petition of A. Scott Sloan, Attorney General of the state of Wisconsin, It is ordered that leave be and the same is hereby granted to the Attorney General to bring an action in the nature of a quo warranto, in the supreme court, in the name of the state of Wisconsin, against the Chicago, Milwaukee and St. Paul railway Company, a corporation, other than municipal, created and existing under and by virtue of the laws of the state of Wisconsin, for the purpose of vacating the charter and annulling the existance of said corporation as prayed for in said petition.

PETITION OF THE ATTORNEY GENERAL.

In Supreme Court.

THE STATE OF WISCONSIN V. THE CHICAGO, MILWAUKEE AND ST. PAUL RAILWAY COMPANY.

The above named plaintiff, the State of Wisconsin, by A. Scott Sloan, Attorney General of the said state of Wisconsin, by leave of the court for that purpose, first duly had and obtained complains of the above named defendant, the Chicago, Milwaukee and St. Paul Railway Company, and informs the court and shows and alleges that the said Chicago, Milwaukee and St. Paul Railway Company is a corporation duly created, organized and existing by the laws of the state of Wisconsin.

That the said Chicago, Milwaukee and St. Paul Railway Company was incorporated under the statute laws of the state of Wisconsin under the name of the Milwaukee and St. Paul Railway Company, by filing articles of associa tion in the office of Secretary of State of the State of Wisconsin, on the 5th day of May, A. D. 1863, which said articles of association were amended by an act of the legislature of the state of Wisconsin, entitled "an act to amend the articles of association of the Milwaukee and St. Paul Railway Company," approved April 2, A. D., 1864.

That said articles of association were ratified and confirmed, and said company was among other things declared to be a corporation by an act of the legislature of the state of Wisconsin, entitled "an act ratifying the organization of a corporation therein named," approved April 10, 1865.

That at a meeting of the said Milwaukee & St. Paul Railway Company, held in the city of Milwaukee on the 7th day of February, 1874, at which were present, personally or by proxy, a majority of all its shareholders, the name of said company was changed to the "Chicago, Milwaukee & St. Paul Railway Company" by a resolution unanimously adopted, which resolution was duly recorded in the office of the Secretary of State of the state of Wisconsin, on the 11th day of February, 1874.

And the plaintiff further shows, that the said defendant, on the first day of" January, 1874, owned and operated about six hundred miles of railroad within the said state of Wisconsin, and ever since that time has used, managed and operated the same in the transportation of freights and passengers upon its said railroad.

And the plaintiff further shows, that the legislature of the state of Wisconsin, at its annual session in the year 1874, passed an act entitled "an act relating to railroads, express and telegraph companies in the state of Wisconsin," approved March 11, 1874, being chapter 273 of the laws of said year 1874. That said act was duly published on the 28th day of April, 1874, and took effect or said last mentioned day.

That in and by the provisions of said act, among other things, all the railroads of the state were divided into classes; all freights thereafter to be transported upon said railroads or any part thereof were classified and the compensation to be charged and received by the railroad companies owning, managing and operating said railroads for the transportation of freights and passengers over their respective roads fixed and limited as therein prescribed, and that the said defendant is mentioned and described in said chapter 273, as the Milwaukee and St. Paul Railway Company. That there is no corporation in the state by the name of the Milwaukee and St. Paul Railway Company, and has not been since the change in the name of said corporation as aforesaid, and whenever the Milwaukee and St. Paul Railway Company is mentioned in said chapter 273, the defendant is meant and intended to be referred to and described.

And the plaintiff further shows upon information and belief, that the said defendant, the Chicago, Milwaukee and St. Paul Railroad Company on the 29th day of April, 1874, filed in the office of governor of the state of Wisconsin, a communication in writing, signed by Alexander Mitchell, its president, in which, among other things, it announced its purpose to disregard the provis ions of said chapter 273, so far as the same attempts to fix the rates of com pensation for freights and passengers, and to manage and operate its railroad within the state of Wisconsin without regard to its requirements.

And the plaintiff further shows that the defendant, on or about the 6th day of May, 1874, adopted and issued a tariff of rates for freights to be transported between local stations within the state, to take effect on the 8th day of May, 1874, and has also adopted a tariff of rates for freights and passengers transported over their railroads within the state of Wisconsin, and a classification of freights, all of which are in disregard of the rates and classification fixed by said chapter 273, and contrary to the requirements of said chapter.

That the said defendant has also issued to its agents and servants instructions to charge, demand and receive of all persons passing over its railroad or shipping freight thereon, the rates and compensations set forth and adopted in the several tariffs and schedules so issued by said defendant as aforesaid. And the plaintiff further shows that the classification, rates and compensations so adopted by the said defendant are higher and greater than those fixed and authorized by said chapter 273.

And the plaintiff further shows, upon information and belief, and so alleges the fact to be, that the said defendant has, ever since the 29th day of April, 1874, used and operated its railroad within the state of Wisconsin, in entire disregard of the provisions of said chapter 273, and is, and has been daily and habitually charging and receiving greater and higher rates and compensation for the transportation of freights and passengers upon its said railroad, within this state, than are fixed and established or allowed by said chapter 273, and that said rates and compensation are so charged and received by said defendant as aforesaid, for carrying freight which does not come from beyond the boundaries of the state to be carried across or through the same. And the plaintiff further shows, upon information and belief, that on the 12th day of May, 1874, the defendant charged and received of one David Stephenson of the city of Madison, the sum of eighteen dollars for carrying and transporting five thousand brick from the city of Watertown to the city of Madison in said state of Wisconsin, the same being one car load, and was transported by said defendant over its railroad since the said 6th day of May, 1874, in car No. 1497; that the distance between said city of Watertown and the said city of Madison, on and by the said defendant's railroad, does not exceed thirty-eight miles, and the sum so demanded and received by said defendant for carrying and transporting said car load of brick as aforesaid, was two dollars in excess of the sum charged and received by the said defendant for the same service during the year 1873, and was a higher and greater rate than that fixed and allowed by said chapter 273.

And the plaintiff further shows, upon information and belief, that on the 11th day of May, 1874, the said defendant charged and received of S. Cadwallader, of the city of Madison, the sum of ninety cents for a ticket upon its railroad, from the city of Madison to Mazomanie, a station on its road, distant twenty-three miles from Madison, and did demand and receive of and from the said Cadwallader the said sum of ninety cents for carrying him as a passenger on its said railroad said distance of twenty-three miles between the places last aforesaid, which said last mentioned sum was higher and greater than the sum and rate fixed therefor by said chapter 273.

And the plaintiff further shows and alleges that the said defendant, the Chicago, Milwaukee and St. Paul Railway Company has, by the several acts, omissions and matters herein alleged and set forth, violated the provisions of the said act of the legislature, and has offended against the provisions of the same and of the several articles of association, and acts creating, confirming and altering said corporation, and has exercised franchises and privileges not conferred upon it by law, and has thereby forfeited its privileges, franchises and charter as a corporation. Wherefore the plaintiff prays and demands that the article of association and charter of the said defendant, the Chicago, Milwaukee and St. Paul Railway Company, be vacated, the existence of said corporation annulled, and that all the rights, franchises, powers and privileges conferred upon the said defendant, the Chicago, Milwaukee and St. Paul Railway Company by the laws of this state, may be adjudged and declared to be forfeited, and that the said defendant be excluded from all corporate rights and privileges, and that said corporation, the Chicago, Milwaukee and St. Paul Railway Company be dissolved, and for the costs of this action. A. SCOTT SLOAN, Attorney General.

STATE OF WISCONSIN-Dane County-ss.

A. Scott Sloan being duly sworn, says that he is Attorney General of the state of Wisconsin, and that the foregoing complaint is true to his knowledge, except as to the matters therein stated on information and belief, and as to those matters he believes them to be true.

A. SCOTT SLOAN.

DECISION OF THE CIRCUIT COURT.

Of the United States for the Western District of Wisconsin; in the case of—

WILHELM FREDRICK PICK, HENRY R. PERSON, THE FARMER'S LOAN & TRUST CO., AND THE UNION TRUST Co., vs. THE CHICAGO & NORTHWESTERN RAILWAY COMPANY, GEO. H. PAUL, JOSEPH H. OSBORN, JOHN W. HOYT AND A. SCOTT SLOAN.

OPINION BY JUSTICE DRUMMOND.

We have not had time to prepare any opinion in the case, but, as it was thought desirable that there should be an immediate decision upon the motion for an injunction, I am instructed by the court to present the following as its conclusions upon the points made upon the motion for a preliminary injunction :

1. On the assumption that the act of the 11th of March, 1874, "relating to railroads, express and telegraph companies in the state of Wisconsin" is invalid, we think the court has jurisdiction of the case. The bill is filed by the bondholders, citizens of Europe and of other states, to enforce equitable rights, and to prevent action by the Railroad Commissioners which may

result as alleged, in serious injury to those rights. It was not necessary to wait until the commissioners had put the law in full operation, and its effects upon the railway company had become complete, before the application against them was made to a court of equity. A very important function of that court is to prevent threatened wrongs to the rights of property.

2. We are of opinion that the act of the 11th of March, mentioned above, was not repealed by the act of the 12th of March, 1874, the second section of which declares "all existing corporations within this state shall have and possess all the powers and privileges contained * * * in their respective charters;" and the act of the 12th of March, 1874, the ninth section of which imposes a penalty for exorbitant charges. There are apparent inconsistencies between these last two named acts and that of the 11th of March; but it becomes a question of intendment on the part of the legislature. And on the same day a joint resolution was passed (March 12th) directing the secretary of state not to publish the act of the 11th of March until the 28th of April, (acts of 1874, pages 599, 693, 758, 773). In this state no general law is in force till after publication. We think we may consider the joint resolution, in order to determine whether the legislature intended that two acts passed on the same day should repeal the act of the 11th of March, and from that it is manifest such was not the intention of the legislature.

3. The charters of the railroad corporations under the constitution of Wisconsin "may be altered or repealed by the legislature at any time after their passage." In legal effect, therefore, there was incorporated in all the numerous grants under which the Northwestern Railway Company now claims its rights of franchise and property in this state, the foregoing conditions, contained in the constitution. It became a part, by operation of law, of every contract or mortgage made by the company, or by any of its numerous predecessors, under which it claims. All share and bondholders took their stock or their securities subject to this paramount condition, and of which they, in law, had notice. If the corporation, by making a contract or deed of trust on its property, could clothe its creditors with an absolute, unchangeable right, it would enable the corporation, by its own act, to abrogate one of the provisions of the fundamental law of the state.

4. This principle is not changed by authority from the legislature of the state to a corporation to consolidate with a corporation of another state. The corporation of this state is still subject to the constitution of Wisconsin, and there is no power anywhere to remove it beyond the reach of its authority.

5. As to the rates for the transit of persons and property exclusively within the limits of this state, the legislature had the right to alter the terms of the charter of the Northwestern Railway Company, and the fact that such alteration might affect the value of its property or franchises, cannot touch the question of power in the legislature. The repeal of its franchises would have well nigh destroyed the value of its tangible property; and while the latter, as such, could not be taken, still, its essential value for use on the railroad would be gone.

6. The fact that grants of land were made by congress to the state cannot change the rights of the corporators or of the creditors. If the state has not performed the trust it must answer to the United States.

7. The act of the 11th of March, 1874, while not interfering with the rates of freight on property transported entirely through the state to and from other states, includes within its terms property and persons transported on railroads from other states into Wisconsin, from Wisconsin into other states. This act either establishes or authorizes the commissioners to establish fixed rates of freight and fare on such persons and property. The case of "The State Freight Tax," reported in the 15th Wallace, p. 232, decides that this last described traffic constitutes "commerce between the several states," and that the regulation thereof belongs exclusively to congress. It becomes, therefore, a very grave question whether it is competent for a state arbitrarily to fix certain rates for the transportation of persons and property of this interstate commerce, as the right to lower rates implies also the right to raise them. There may be serious doubts whether this can be done. This point was not fully argued by the counsel, and scarcely at all by the counsel of the defendants; and, under the circumstances, we do not at present feel warranted, on this ground alone, to order the issue of an injunction. If desired

by the plaintiffs, it may be further considered at a future time, either on demurrer to the bill or in such other form as may fairly present the question for our consideration.

The motion for an injuction is overruled.

SUGGESTIONS BY JUSTICE DAVIS.

In view of the decision just rendered, we trust it will not be considered out of the line of our duty to make a suggestion concerning this litigation to the counsel for the defendants. It is manifest that the questions involved are grave ones, and that the courts of last resort will ultimately have to pass upon them. It is equally manifest that a speedy decision, in which all parties are vitally interested, cannot be obtained unless there is harmony of action on the part of both the complainants and defendants. In the meantime, while this litigation is in progress, would it not be better for the defendants, as far as lies in their power, to have prosecutions for penalties suspended? These prosecutions are not required to settle rights. They are attended with great expense, and if enforced while an effort is making in good faith, to test the validity of this legislation, must cause serious irritation, and cannot be, as it seems to us, productive of any good results.

PETITION OF THE ATTORNEY GENERAL FOR AN INJUNCTION.

In Supreme Court.

THE STATE OF WISCONSIN VS. THE CHICAGO AND NORTHWESTERN RAILWAY COMPANY.

A. Scott Sloan, Attorney General of the state of Wisconsin, who sues for the said state in this behalf, and in its name, comes here into the supreme court judicature of said state, before the justice thereof, at the capítol, in the city of Madison, on the eighth day of July, in the June term of said court in the year one thousand eight hundred and seventy-four, and for and in the name of the said state, gives the court here to understand and be informed, and shows and alleges that the above named defendant in this action, the Chicago and Northwestern Railway Company is a corporation duly created, organized and existing under and by virtue of the laws of the said state of Wisconsin. And the said Attorney General, in the name and in behalf of the said state, further gives the said court here to understand and be informed, and charges and alleges the truth to be that the said defendant, the Chicago and Northwestern Railway Company was incorporated by an act of the legislature of the state of Wisconsin, entitled "an act to incorporate the Madison and Beloit Railroad Company, approved August 19, 1848, and an act of the legislature of the state of Wisconsin, entitled "an act to amend an act, entitled 'an act to incorporate the Madison and Beloit Railway Company," approved February 19, 1850, and the acts amendatory of the aforesaid acts, and supplementary thereto.

And the said Attorney General further gives the court to understand and be informed and avers that by an act of the legislature of the state of Wisconsin, entitled an act to authorize the railroad companies therein named to consolidate their capital stock, approved March 10, 1855, the said railroad company was authorized by its board of directors to select, choose and adopt for itself any name that a majority of the directors might see fit, and that subsequently a majority of said directors did duly select, choose and adopt the name of the Chicago and Northwestern Railway for said company.