Opinion
(June Term, 1857.)
A charter of incorporation creating a company for the purpose of effecting a communication by a plank road between designated points with the privilege of taking tolls, does not authorize the company to establish a stage line upon their road, nor to contract for carrying the United States mail.
CAUSE sent from the Court of Equity of Beaufort County.
Donnell, for the plaintiffs.
Rodman, for the defendants.
The bill in this case set forth that the plaintiffs are stockholders in the Greenville and Raleigh plank-road company, which was chartered by the General Assembly at its session of 1850, and was duly organized by complying with the terms of the said Act; that the said company was incorporated for "the purpose of effecting a communication by means of a plank road from within the limits of the town of Greenville in Pitt County, to the city of Raleigh;" that in accordance with the said charter a plank road has been built from the said town of Greenville to the town of Wilson in Wilson county, which is in the most direct and practical line towards the city of Raleigh, but that the same has not been extended further, for the want of the necessary funds. The bill goes on to recite the various clauses of the act of incorporation, prescribing the nature and extent of the duties of the company, the extent of its powers and privileges, and the object of its incorporation, which clauses are fully set forth in the opinion of the court, and therefore need not be stated here. It further sets forth that the said company has been for several years in operation, and has, from the tolls received, accumulated a fund of about $4000; that the individuals named in the bill are the president and directors of the said road for the time being, and as such have the control and management of the affairs of the said company; that the said president and directors, or a majority of them, with the sanction and approbation of a majority of the stockholders, have adopted a resolution to purchase with the said funds a line of stages with the necessary appurtenances, to be run as their property upon the said road, and further to procure a contract from the U.S. government for carrying the public mail by such stage line upon the said road; and that they have appointed one of their number, the defendant Johnston, an agent, to effectuate these purposes, and that the said president and directors, through their agent, the said Johnston, are taking measures to accomplish both these purposes. They insist in their bill that this would be a misapplication of the funds which are needed for the repair of the road, which is in a worn and dilapidated condition, or should be divided amongst the stockholders; that such enterprises are foreign to the purpose for which the company was instituted, and not authorized by their charter; that besides exposing the company to the risk of loss from the undertaking, these measures will expose them to the danger of a forfeiture of their corporate privileges; they, therefore, pray for an injunction.
To this bill the defendants demurred. There was a joinder in demurrer; and the cause being set down for argument, was sent to this Court.
It was conceded in the argument that a corporation has a right to restrain by injunction the corporators from doing any act which is not embraced within the scope and purpose for which the corporate body was created, and which would be a violation of the charter; not only on the ground that such act would operate injuriously upon the rights and interests of the corporators, but on the further ground that a forfeiture of the charter would be thereby incurred.
So, the only question made by the demurrer is this: Has the company power to purchase stages and horses to be run upon the said road? — and has it likewise power to enter into a contract to carry the United States mail on the road by means of such stages?
This question must be decided by a construction of the charter. We have examined it, and declare our opinion to be, that no such power is given to the company.
The first section sets out the object of the incorporation, to wit, "for the purpose of effecting a communication by means of a plank road from Greenville to Raleigh."
The third section grants the franchise of incorporation, and gives all the powers, rights and privileges necessary "for the purposes mentioned in this act."
The ninth section invests the president and directors of the company "with all the rights and powers necessary for the construction, repairs and maintaining of a plank road to be located as aforesaid."
The fourteenth section provides for the erection of toll-houses and gates.
The fifteenth section provides for the collection of toll to be "demanded and received from all persons using the said plank road," with a proviso that the tolls shall be so regulated that the profits shall not exceed twenty-five per cent on the capital in any one year.
These sections contain the substantive provisions; the others merely embrace the details necessary for the formation of the company, c.
The mere statement makes the question too plain for observation. If, under the power to construct, repair and maintain a plank road, a power can be implied to buy stages and horses and become a mail contractor, the company, by a parity of reasoning, has an implied power to set up establishments at convenient points along the road for the purchase of produce to be carried over its road. Besides, how are tolls to be demanded and received, and how are the profits of this enlarged operation to be regulated? How are losses from such speculations to be guarded against?
It may as well be contended that a turn-pike company, from its power to construct, repair and maintain the road, has, by implication, power to embark in the business of mail contractor, or in buying and selling horses, cattle, or produce, under the suggestion that the road would be subservient to these purposes.
Let the demurrer be overruled.
PER CURIAM, Decree accordingly.