People v. New York Central Rail Road

By the Court, Emott, J.

The magnitude of the interests and the importance of the principles involved in this cause, forbid our giving a formal or even a silent judgment. At the same time, the announcement that the parties will litigate the question to the last tribunal of appeal renders it unnecessary, and in our opinion inexpedient, that we should do more than briefly to indicate the grounds on which our judgment rests.

The action is brought to recover from the Hew York Central Bail Boad Company tolls upon the freight which has been transported over its road since December 1st, 1851. Previous to that day the rail road companies to which the de-. fendant succeeded, paid into the treasury of the state tolls at rates fixed by law, upon all the freight which it carried. Since that day no such tolls have been received from the large quantities of merchandise which have passed over these avenues of trade. The amount of the claim now made for these taxes or tolls is obviously very large ; it is put by the plaintiffs at f>5,000,000.

*130The defense to this claim is, that the legislature, by an act passed July 10th, 1851, released all rail road corporations within the. state from any liability to pay tolls upon freight, and repealed the existing statutes imposing such obligations upon them. The reply to this defense is, that this act of the legislature transcended their constitutional powers, and is void; and the question thus presented is of great importance in the legislation of the state.

The defendant is a corporation formed by the consolidation, under an act passed in 1853, of several existing rail road corporations. We assume, for the purposes of the present discussion, that the new corporation thus formed succeeded to all the rights and is subject to all the restrictions and obligations which are found in the charters of the companies from which it was composed, or in the various acts affecting them. At least, we assume that the Hew York Central Rail Road Company was bound to pay tolls in the same manner and to the same extent as were these companies, and stands in the same relation to the statute now in question as they would if they had continued separately to exist.

The right to carry freight from Buffalo to Albany, or over all the separate rail roads then composing the continuous line of railway from the lakes to the Hudson river, was conferred by an act passed May 7th, 1844. Some of these companies were indeed previous to that time authorized to carry freight, but others were not; and therefore no freight could before that time have been earned by rail road from Lake Erie to tide-water, so as to compete with the canals of the state. The right to carry freight upon these rail roads in competition with the canals was therefore in effect conferred by the act of May 7th, 1844, and by that act the rail road companies were required to pay to the state tolls on all the freight thus transported. These tolls were fixed by the statute at the same rates as the tolls upon the freight carried on the canals; and were directed to be paid to the commissioners of the canal fund.

*131This act was in force, and these tolls were thus required and received, in the year 1846, when the present constitution of the state was framed and adopted, and on the 1st of January, 1847, when it went into effect. It may be observed, however, that it was not until May 12th, 1847, that a distinct appropriation of these rail road tolls was made to the canal fund, or that they were expressly declared to belong to that fund, and directed to be applied in the same manner as the canal tolls. The act releasing the then existing rail roads, and consequently the defendant, from the payment of these tolls, was passed as already stated July 10th, 1851, and went into operation December 1st, 1851.

The argument for the plaintiffs may be summed up thus: The act releasing the rail road companies, afterwards consolidated into the defendant’s, from the payment of tolls, is unconstitutional; because, 1st, the constitution pledges to certain purposes all the revenues of the state canals; these rail road tolls were a part of the revenues of the canals, and to release them or discharge the rail roads from the obligation to pay them, was a violation of this pledge; 2d, because the constitution forbids the sale or disposal of the canals of the state, the rail road tolls were a part of the “canals of the state,” and the release of them, or of the liability to pay them, was a disposal of a part of the canals.

With respect to the latter argument, it is sufficient to say that we perceive no reason or rule of construction which would authorize or require us to hold that the tolls payable by rail roads to the commissioners of the canal fund, constituted a part of the canals. If they are a part of the revenues of the canals, which is the fundamental proposition upon which the main argument for the plaintiffs rests, they are not a part of the canals. The revenues of a person, natural or artificial, are not the person, nor in any proper use of language a part of the person. It is not as one appellation including all which the canals may earn or produce, as well as what they are, that the word “ canals ” is used in the constitution. The *132phrase must be understood in-its ordinary sense, meaning the material structures. Their ownership and possession will involve of course the right to their use, and any profit or income to be derived from such use. ' Biit these would pass with or belong to the canals from the necessity of the thing, because they are consequent upon their possession, and not because the revenue thus to be earned is a part of the canals themselves. The language of the constitutional provision cited (art. 7, § 6) is this: The legislature shall not sell, lease or otherwise dispose of any of the canals of the state; but they shall remain the property of the state and under its management for ever.” It appears to us very plain that this language refers to the structures of the canals. Its object is to preserve to the state in perpetuity the control as well as the profits and advantages to be derived from the transportation of property upon these great artificial avenues, so that these profits and advantages should enure to the benefit of the whole people. The alienation of the canals themselves, and not the disposition of any part of their revenues or of any funds' appropriated to that support, is what is forbidden. For my own part I see no reason to suppose that if the pledges of the revenues of the canals which are contained in the preceding sections of this article do not forbid, the legislature may not make any disposition whatever of the revenue obtained from tolls imposed on freight transported on the canals themselves, without contravening in any respect this prohibition of the constitution. I suppose, farther, that a reduction of the tolls on freight carried on the canals, or of any of their direct and proper revenues to the minimum, or even to nothing, whatever might be the policy or the propriety of such a course, could not be successfully assailed as an unconstitutional sale oy disposal of the property which this constitutional provision makes inalienable. Still less can such a reduction, or a relinquishment of charges upon other modes of transport, which had been imposed and applied to protect or to yield an income to the canals, be con*133sidered in such, a light. Such acts are rather acts of management of the canals, and this is expressly reserved to the state, to he exercised hy its agents; and into the wisdom or expediency of this management, the courts are not to inquire. The counsel for the people invoked against the constitutionality of this statute the analogy of a mill, the title to which should be held by á trustee with a right to exact suit to the mill, or the exclusive right to grind for certain persons or property attached to it. It is said that a court of equity, at the instance of the cestuis que trust, would restrain a release of an adjoining mill from a toll which had been imposed as a condition of allowing its owner to deal with those who were thus bound. But we are not upon a question of trust, or of equity. Here are no cestuis que trust, ana we have to determine, not what was equitable for the state of Hew York to do, but what its legislature—otherwise supreme—was forbidden to do, by its organic law.

The principal argument of the attorney general was made upon the other branch of the case. His reasoning rests upon two propositions: 1st. That the tolls required in 1846 by the then existing statutes to be paid to the commissioners of the canal fund, upon all property transported by these rail roads, were a part of the “revenues of the state canals,” or the “surplus revenues of the canals,” mentioned in sections 1, 2 and 3 of the 7th article of the constitution. 2d. That releasing or relinquishing these tolls, and allowing the rail roads to transport property without paying them, violated the provisions of these sections, which pledged or appropriated certain amounts of these revenues, first for a sinking fund to pay the interest and redeem the principal of the canal debt; next for a like sinking fund to pay the general fund debt, and then to defray the expenses of the state, and to complete the canals.

The first of these propositions presents a question of the meaning of words, or of the sense in which a particular phrase is used in the constitution of the state. The plain and *134natural import of the phrase “revenues of the canals,” construed without reference to any extrinsic facts, would certainly be the revenues earned by or upon the canals. If it could be construed to mean any thing else, taken in connection with the fact that the canal fund, that is, the fund established for the support of the canals, is replenished from other sources of income, yet this is clearly its primary meaning.

Looking at the meaning of the phrase more narrowly, however, and looking at the instrument in which it occurs, we think that in this article of the constitution the words “revenues of the canals,” wherever they occur, mean only the tolls received for the use of the canals, for transportation, and the rents received for the use of their surplus waters. Eevenue is the yearly income of a government, or a person natural or artificial, from the property belonging to such government or person. Thus we speak of the revenues of the state of Hew York, of the Hew York Central Eail Eoad Corñpany, and the like; and we may also speak of the revenues of any individual, although the word is not so often applied to individuals. The canals of this state, however, are not the state, nor are they a corporation, or a natural or artificial being, or possessed as such of property or income. The canals are simply public works, material structures, made and used for travel and transportation, and capable of yielding an income to their owners from such use. In a strict sense they have no revenues, because they have no recognized individual legal existence. Strictly speaking, the canals only yield a revenue; but it is the revenue of their owners, the state, or the people. In the part of the constitution now under consideration they are personified, as was observed by one of the counsel, and the revenues derived from the property which constitutes the canals, are spoken of as the revenues of the canals. It will be observed, however, that it is not the canal fund which is thus spoken of and personified, but the canals. In the 5th section of this article the revenues of the sinking funds are spoken of, and in such *135a manner and connection as to make it apparent that taxes laid to replenish these funds, are considered and intended as a part of their revenues. A fund is merely a name for a collection or an appropriation of money. It may be nothing but a designation of one branch of the accounts of the state, or of a certain amount of money when collected to be applied to a particular purpose. It may have no property and represent no investments, and what are called its revenues may include all the moneys appropriated or directed to be paid to it, or for its benefit, or that of the objects it represents. If the constitution had spoken of the revenues of the canal fund, its meaning and effect might have been different. But the canals themselves yield an income from their use, and that is their revenue, although the canal fund may have other sources of supply. But these sources of income or supply, and among them rail road tolls, when these are appropriated to the canal fund, do not become a part of the canals, nor are they the property of- the canals ; and therefore the revenue thence derived in any year is not a part of the revenues of the canals, even if it might, in a qualified sense, be spoken of as part of the revenues of the canal fund.

If it was otherwise, and the next position of the attorney general were correct, that these supplies of income are sacredly and perpetually pledged and protected, not only against the abstraction or the diversion of their proceeds, but against their diminution, any tax or toll which may be levied at any time by the legislature for the benefit of the canal fund would become at once irrepealable and altogether beyond legislative control.

We do not find in the facts and documents adduced to explain the meaning which has been given to this phrase, enough to shake our conclusion that the phrase, “revenues of the canals,” does not include the tolls levied upon rail roads for the transportation of freight, under the statutes existing January 1st, 1847, and by the act of May 12th, in that year, expressly appropriated to the canal fund.

*136But if we had come to a contrary conclusion on this point, we should he unahle to agree to the doctrine which the attorney general deduces from the effect of the 7th article of the constitution upon these revenues. In the most favorable view which can be taken of this question for the plaintiffs, the tolls which were imposed upon freight carried by the rail roads can only be regarded as assimilated to tolls laid upon freight transported on the canals. It is conceding all which can be claimed, to consider these rail road tolls in the same class or category as canal tolls, as the tolls upon a particular class of freight, or the tolls upon a particular canal. If the rail road tolls are “ revenues of the canals,” they are certainly only a part of those revenues. There has never been any question, so far as I am aware, of the power of the legislature to regulate and graduate the canal tolls. Such a power has been repeatedly exercised or conferred upon the canal board. The tolls have been so graduated as to promote trade, or to increase the revenue, or both. It has indeed been suggested that the legislature would have no power to reduce the tolls, so that they would reduce the amount necessary to make the annual payments to the sinking funds. It is unnecessary to determine whether an exercise.of legislative power which would have that consequence or effect, would be set aside ; becáuse it is not alleged nor proved that taking away or releasing the tolls from freight carried on this rail road, would so diminish the revenues that these payments could not be made.

But the,doctrine contended for goes far beyond this. It is announced in the brief for the People, as a pledge of all the revenues of the canals, at their highest revenue standard, to the payment of the public debt, and the completion of the canals; and this means, in the argument against this law, a pledge that every class of tolls or revenue shall be kept at the highest standard. I find no such pledge in the constitution. All that its terms express by way of promise or pledge is that these revenues shall be applied in a certain way. It *137may be that this involves a pledge that these revenues shall be made to produce a sufficiént amount to make the payments called for by the constitution if possible; for even a constitution cannot compel an impossibility, though it may demand a resort to taxation to repair the consequences of a course of action or a state of circumstances which has defeated its intention. I neither affirm nor deny that proposition: it is not what we are considering. The argument for the present prosecution demands more than this; it demands that all these tolls or taxes should be kept at the highest revenue standard. What is to be the measure of the highest revenue standard, and who is to apply it ? Leaving out of the case the alleged obligation to raise an amount necessary to meet the payments fo the sinking funds, because that is not involved in the present’ issue, it is very clear, at least to our minds, that'the whole subject of the regulation of the tolls belongs to legislative discretion. This discretion must involve the complete control of the subject. It must include the right to modify, to increase, to diminish or to abolish any class of charges. It is for the legislature, and not the courts, to fix a tariff of tolls, to determine what articles may be transported free of toll, and what shall be charged upon others; what avenues of transportation shall be open at law, and what shall require heavy charges for their use, and whether the interests of the state require that freight shall be allowed to pass without charge over any of its public works, either those owned by the state or those competing with them. In the exercise of this discretion the legislature can consider all the interests of the state, commercial as well as financial, and in any particular statute or ordinance we are bound to presume that they have acted upon such considerations.

Where the constitution expressly, or by necessary consequence from its express provisions, either requires or forbids an act, there can be no hesitation in enforcing its mandate. But for myself, at least, I cannot agree to the doctrine which *138was urged, upon us, of an implied prohibition of legislative action. I am not prepared to declare an act of the legislature void, because it is in conflict with what I may be led to suppose is the intent or the spirit of the constitution. Such a doctrine would be more dangerous than the most latitudinarian construction of express grants of power. The language of an express power, or an express prohibition, in a constitutional instrument, is comparatively plain, and presents a narrow question. Eor does it widen the field of discussion very much, to consider what powers are absolutely necessary to execute any express duty enjoined or authority conferred upon the legislature. But to permit the courts to control and annul legislative action according to their speculations upon the spirit or the intent of the constitution, would be at variance with all sound, not to say strict, principles of construction, and would invest judicial tribunals with new and dangerous powers. The people of the state in their sovereign capacity possess an absolute and uncontrolled power of legislation. By the constitution this legislative power of the people is conferred upon and vested in the legislature. There is no constituent body between the people and the legislature to whom power is reserved; nor are there any reservations in the grant of power to the legislature, except the express prohibitions of the constitution. When an act of the legislature plainly conflicts with the express requirements or the express prohibitions of the organic law, it is the duty of the courts to arrest its • execution. But it is only repeating what has been said by every judge who has ever considered the question of the constitutionality of an act of the legislature, even in cases where the question arises upon express provisions of the fundamental law, that their infraction must he plain and palpable.

This article of the constitution contains an express pledge of the application of the canal revenues, and any diversion of them to other purposes would undoubtedly be a violation of that pledge. But the law in question makes no diversion *139of these revenues, or of the tolls upon which it operates. It does not direct their use or application for other purposes than those specified in the constitution. It releases and relinquishes railway tolls altogether, and it is to our minds a pure question of legislative discretion, whether this should have been done or not. It is not even apparent that the abolition of these tolls will cause a deficiency in the revenues of the canal fund, or whether, if such a deficiency exist, it has been or can be supplied by increased tolls on property transported on the canals. However the facts may be in these particulars, the wisdom, and policy of such legislation as that now under consideration, and its effect upon the public credit, and the public interests, are questions for the legislature and the people, and not for the courts. If we could interpose to prevent a misapplication of the revenues of the state, or of any of its works or funds, it does not follow that we can prevent the diminution or the destruction of any part of those revenues, even if we should think the latter course as much at variance with the spirit of the constitution as the former would be with its letter.

[Dutchess General Term, May 13, 1861.

We have considered all the grounds upon which the act of July 10th, 1851, is attacked, and have thus briefly noticed such parts of the argument upon them as was necessary to explain our judgment. We are not convinced that the act in question is in violation of any part of the constitution, and therefore the defendant must have judgment in this case.

Judgment for defendant.

Emott, Brown and Scrugham, Justices.]