University of California Berkeley f OF THE STATE OF CALIFORNIA THE STOCKTON & VISALIA RAILROAD CO. Petitioner, vs. The Common Council of the City of Stockton, Respondent. Brief on behalf of the Southern Pacific Railroad Com- pany, filed by leave of the Court granted upon the consent of Counsel of record for both parties, S. W. TOR S. P. R. R. CO. H. S. SACRAMENTO : CROCKER & CO., PRINTERS, 42 AND 44 J STREET. 1870. OF THE STATE OF CALIFORNIA THE STOCKTON AND YISALIA RAIL- ROAD COMPANY, Petitioner, vs. THE COMMON COUNCIL OF THE CITY OF STOCKTON, Respondent. Brief on behalf of the Southern Pacific Railroad Company, filed by leave of the Court granted upon the consent of Counsel of record for both parties, The limited time which has been allowed for the preparation of this brief, renders it impossible to do more than touch upon what appear to be the principal points in the case. I shall there- fore not undertake to answer in detail the very able briefs which have been filed on behalf of the Respondent; nor shall I undertake to review cases for two reasons first, I have not the time, and second, that duty has already been per- formed by other Counsel. The question, which the case presents, is whe- ther legislation which authorizes counties and cities to aid in the construction of railroads, which are to pass through their borders, by do- nations, in the form of county or city bonds, to the corporations proposing to construct them, is valid under the Constitution of this State. Those who claim that such legislation is uncon- stitutional, do so upon the following grounds: First. That such legislation is not an exercise of the power of eminent domain, because it takes the property of the citizen u without just com- pensation," which compensation is made a condi- tion, by the Constitution, to the exercise of that power. Second. That such legislation can be upheld under no legislative power unless it be the power of taxation. Third. That such legislation cannot be sus- tained as an exercise of the taxing power, be- cause that power is a power " to take from the citizen a certain proportion of his property to be expended for public purposes," while the legislation in question takes a portion of his property to be expended for & private purpose. Fourth. That whether a given tax is for a public or private use, is a judicial and not a legis- lative question. Fifth. That, in addition to the foregoing con- siderations, there are certain express provisions of the Constitution to which this legislation is repugnant, viz: The clause which provides that " no person shall be deprived of life, liberty or property without due process of law" the clause in the Bill of Rights, which enumerates the in- alienable rights of persons in relation to life, lib- erty, property, safety and happiness the clause in relation to the formation of incorporations, other than municipal, under general laws and not by special Acts the clause in relation to the or- ganization of cities and incorporated villages, and restricting their power of taxation, assessments, etc., so as to prevent abuses the clause provi- ding that the credit of the State shall not be loaned to or in aid of any individual, association or corporation and lastly, the clause which re- quires that taxation shall be equal and uniform. I think the foregoing is a fair statement of the positions which have been assumed by the ene- mies of this legislation, and the reasons by which their alleged soundness has been attempted to be maintained. The soundness of some of these propositions is admitted, and that of others de- nied. First. It is admitted that such legislation is not an exercise of the power of eminent domain. Second. It is admitted that it can be sustained only upon the ground that it is an exercise of the power of taxation. Third. It is admitted for the sake of the argu- ment, but denied as an abstract proposition, that the power of taxation is a power to take a per- centage of the property of the citizen for public purposes only. It is denied, First: That such legislation takes a percentage of the property of the citizen for pri- vate purposes. Second. It is denied that whether a given tax is for a public or private purpose is a judicial, not a legislative question, and the contrary affirmed. Third. It is denied that either of the clauses of the Constitution specially referred to above? prohibits such legislation. As it is not deemed necessary to dwell at length upon the question whether this kind of legislation is repugnant to the several express clauses of the Constitution specially referred to above, they will be first considered. I. The idea that this legislation is repugnant to that clause of the Constitution which provides that no person shall be deprived of life, liberty or property, without due process of law, is founded upon an utter misapprehension of the object which that provision was intended to secure. It is to be found in all American Constitutions. It was bor- rowed, or inherited, from Magna Charta. It is the provision of that instrument by which the Barons of England extorted from King John a royal pledge that the right of trial by jury should remain forever inviolate. The language of Magna Cliarta is: "Nee super eum ibimus, nee super mitti- mus, nisi pet' legale judidum parimn sucrum, VEL PER LEGEM TERR^E" (neither will we pass upon him, or condemn him, but by the lawfnl judgment of his peers, or by the law of the land). Lord Coke says that these latter words, "per legem terrce" (by the law of the land) mean by due process of law; that is, without due presentment or indictment, and being brought in to answer thereto, by due process of the common law. " So that," says Judge Story, " this clause in effect affirms the right of trial according to the process and pro- ceedings of the common law." (2 Story on the Constitution, 1789.) Instead of the phrase, u by the law of the land," which was used in Magna Charta, the phrase employed by Lord Coke in defining its meaning has been substituted in American Constitutions. The clause relates to judicial and not legislative functions. The idea that this clause of Magna Oharta had anything to do with the exercise of the taxing power, would have astonished the Kings and Barons of Eng- land. Taxes were not then, nor are they now, assessed, apportioned, or collected by or accord- ing to common law methods, but by Acts passed by the Commons of Great Britain in Parliament assembled, who first fixed the amount to be raised and then prescribed the ways and means by which it was to be collected. (1 Biackstone, 308.) But concede, for the sake of the argument, that this clause of the Constitution is broad enough and was intended to include the exercise of the power of taxation, what pretense is there for say- ing that this tax, if collected, will be collected without due process of law? It will have been le- vied, apportioned, and collected according to ex- press laws passed by the law-making p'ower. The property of the citizen will have been taken, then, according to law; that is to say, by due process of law. When the citizen has been deprived of his life, liberty, or property by the operation of. and according to. a valid law, how can it be said that he has been so deprived ''without due pro- cess of law?" If there be any repugnancy between this legislation and that clause of the Bill of Rights which enumerates the inalienable rights of per- sons, it must be because it proposes to take the property of A and give it to B, or in other words, to tax the citizen fora private purpose (as claimed by the opponents of this legislation), which I deny, and will endeavor to establish when I come to consider what is & public use, and by whom the question of puUic or private use is to be deter- mined. If, as I claim, this legislation is a Con- stitutional exercise of the taxing power, it is ob- vious that it cannot be repugnant to the Bill of Rights, for the acquisition, possession and enjoy- ment of property there mentioned does not in- clude exemption from taxation. (&) It is not perceived what bearing the clause of the Constitution, in relation to the formation of corporations, other than municipal, has upon the question now before the Court. The language of that clause is as follows : u Corporations may be formed under general laws, but shall not be cre- ated by special Act, except for municipal purpo- ses." There can be no doubt about the object, and the only object intended to be secured by this provision. It was considered that the crea- tion of corporations, other than municipal, by special Acts, would be troublesome and mis- dhievous, for such had proved to be the case in older States. It was therefore provided that there should be but one rule for their creation, which should be declared in a general law. It was further considered, however, that for obvi- ous reasons, a general rule would be impractica- ble in respect to the creation of municipal cor- porations. Hence they were excepted from this limitation and left to stand, in relation to the Legislature, upon precisely the same ground upon which they would have stood had no such clause been inserted in the Constitution upon pre- cisely the same ground upon which they now stand in States where no such constitutional re- striction exists. The whole purpose and effect of this clause has been, and is, to prohibit the crea- tion of any corporations, other than municipal, by special statute. It spends its whole force upon the former class of corporations. It places no restrictions upon the power of the Legislature in respect to the latter class, but on the contrary leaves them where they were before to be cre- ated by general or special laws in the discretion of the Legislature, without any restriction what- 4 9 ever, either as to the mode of their creation, or the extent or character of the franchises and powers to be granted to them. If there be any constitutional reason why municipal corporations cannot be authorized to aid in the construction of a railroad under the provisions of the statute now before the Court, it must be sought for in some other place. The idea that the word " mu- nicipal," which is obviously used solely for the purpose of classification, was used to limit the powers to be conferred by the Legislature upon that class of corporations, with all due deference to the opinion of the Attorney General and those who think with him, is simply absurd. There is nothing in the Constitution of this State which provides what powers shall or shall not be con- ferred upon municipal corporations. Such a clause in a Constitutor* would be most anomalous, and it has been wisely left to the Legislature to confer such powers upon them as circumstances may seem to demand at the time of their crea- tion. " So far as municipal corporations are in- vested with subordinate legislative powers for lo- cal purposes, they are mere instrumentalities of the State for the convenient administration of the Government, and their powers are under the en- tire control of the Legislature; they may be qual- ified, enlarged, restricted, or withdrawn at its dis- cretion." (Grogan vs. San Francisco, 8 Cal. 613.) 10 The only clause of the Constitution which has even a cognate relation, in this connection, to the question involved in this case, is the thirty-seventh section of the fourth Article, which reads as follows : "It shall be the duty of the Legislature to provide for the organization of cities and incorporated villages, and to restrict their power of taxation, assessment, borrowing money, contracting debts, and loaning their credit, so as to prevent abuses in assessments and in contracting debts by such municipal corporations." This obviously belongs to that class of consti- tutional provisions which are advisory or directory. Instead of restricting the powers to be conferred upon municipal corporations, in the matters of taxation, assessments, borrowing money, con- tracting debts, and loaning their credit, it as- sumes that such powers are indispensable to cor- porations of that class, and that they must and will be conferred by the Legislature, and simply enjoins upon the Legislature the duty of guarding the exercise of such powers in such a manner as to prevent abuses, thus leaving the whole matter entirely in the discretion of the Legislature. As to the purposes or objects for which the powers enumerated may be exercised, not a word is said, but they, too, are left to the discretion of the Legislature. In all respects municipal corpora- 11 tions are left in the hands of the Legislature with the mere injunction to see that they do not abuse their powers, but leaving that body to de- termine for itself what will and what will not amount to an abuse. Finally, instead of prohib- iting what the statute now before the Court per- mits, this clause of the Constitution directly sanctions the act, if in the opinion of the Legis- lature it does not amount to an abuse. That the act does not amount to an abuse in the judg- ment of that body, the statute now before the Court is conclusive evidence. That the tenth section of the eleventh Article of the Constitution which provides that ''The credit of the State shall not, in any man- ner. be given or loaned to, or in aid of an}^ indi- vidual, association, or corporation; nor shall the State directly or indirectly become a stockholder in any association or corporation," does not pro- hibit this legislation, has been demonstrated by one who once sat upon the Bench of this Court; therefore no more need be done than to refer this Court to what he said. In Pattison vs. The Board of Supervisors of Tuba County, IS.Cal. 175, it was argued, as it has been in this case, that a restric- tion upon the State was also a restriction upon each political subdivision of the State, and there- 9* 12 fore that the Legislature could not enable coun- ties or cities to do what it was itself prohibited from doing in behalf of the State. Replying to this argument Judge Baldwin said : " But the radical error of the argument is, this provision only applies to the State as a corporation as a political sovereign represented by her law-making power. As such corporation, or sovereign being, she has no subdivisions, for sovereignty is not divisible. She may have political sub- divisions that is, she may permit a portion of her powers of government to be exercised by local agents, who, of course, are her subordinates. But politically considered, geographical or political departments are no more the State or a part of the State, than a man's land, or his agent is a part of himself. The intent of this clause of the Constitution is plain enough; it was designed as a check on legislation, and such legislation as might create a charge upon the property of the entire State. But it is not only unwarranted by the words of the Constitution to suppose that counties weie included in this inhibition, but it might well have been foreseen that the provision would prove extremely embarrassing. .* * * The general powers of Government being vested in the Legislature, the power to pass this law must be conceded, unless some constitu- tional restriction is imposed. We see no restriction in this case. The fact that the State could not take stock in this road does not show that the Legislature could not author- ize the county of Yuba to take stock for the reason that the Constitution says the State shall not subscribe, and does not say that the county of Yuba shall not. The restriction goes no further than the language carries it. It comprehends the particular act and party interdicted none other." (Page 183 .^ To hold that this interdiction upon the State is also an interdiction upon counties and cities, is to put words in the Constitution which its fram- 13 ers omitted, and to overturn a well settled rule of Constitutional and statutory construction Ex- pressio wiius exclusio aMerius est. That such is the proper construction ma}^ be further illustrated by reference to another and cognate provision of the Constitution, viz: The eighth Article, which restricts the creation of an indebtedness exceeding the sum of three hundred thousand dollars, except in certain cases there specified. If the reasoning of the adversaries of this legislation proves that counties and cities cannot loan their credit, in aid of a corporation, because the State cannot, it must inevitably fol- low that this restriction upon State indebtedness also includes counties and cities, and that the in- debtedness of the State, counties and cities, com- bined, can never be allowed to exceed the sum of three hundred thousand dollars, except in the cases otherwise provided for, without a violation of the Constitution. Speaking of this provision, in the case of Pattison vs. The Board of Supervis- ors of Tula county, already referred to, Justice Baldwin said: " It is not only unwarranted by the words of the Con- stitution to suppose that counties were included in this inhibition, but it might well have been foreseen that the provision would prove extremely embarrassing, if it did not entirely stop the operations of those local governments. All of them, or nearly all, we believe, have been obliged to go in debt to support themselves; and, besides, the res- 14 triction would bo wholly impracticable, for how ascertain from time to time, whether the aggregate of this indebted- ness pa.ssed the limit, and when, or whether, by payments or otherwise, returned within it again? For the question of the validity of any contract or debt would depend upon the general balance of State *md county debts or credits. Many cases have come before this court involving the validity of these debts, but the point has never before been taken ; and we think there is not enough plausibility in it to justify a more detailed exposition of its fallacy" To overturn this construction would block the wheels of government; yet, it is respectfully sub- mitted, that this Court cannot give, to the clause prohibiting the State from loaning her credit, the construction for which the Attorney General con- tends, without doing so. THE WORD MUNICIPAL NOT AN INTERDICTION UPON THE POWER. As being german to the foregoing, it is deemed best, at this stage of the argument, to examine the proposition advanced by the Attorney Gene- ral, that the word " municipal," by itself consid- ered, contains an interdiction upon the power un- der consideration. It is said that the power to build railroads or to aid in their construction by the exercise of the local power of taxation^ is no legitimate part of a municipal government. A complete answer to this argument is found in the circumstance that the Constitution nowhere defines a municipal govern- ment nowhere provides what kind, or how 15 much power a municipal government shall have, but leaves the whole matter to the Legislature. But assuming, as the argument undertakes to show, that the word "municipal" operates in some way as a restriction upon the power of such governments, and creates in them an incapacity to take certain powers, it remains to determine whether the power under consideration belongs to that class. The same point was made in the case of The City of Aurora vs. West (9 Ind. 74), and I cannot do better than quote what the Supreme Court of Indiana said in reply: " The question therefore presents itself, can such power be given to a city ? Of the policy of conferring it, we have said all that becomes us to say, in The City of Lafayette vs. Cox, 5 Ind. E. 38, to which we refer. Of the capacity to confer it, we have not heretofore expressed an opinion. That is now the question. We have seen that no express Constitutional provision stands in the way of granting such power to a city, as we hold that the prohi- bition in the Constitution upon the Legislature to create a State debt, does not prohibit that body from authorizing cities to create debts. This is our construction of the lan- guage of the Constitution. But it is insisted that the power is not a legitimate part of the authority of a muni- cipal corporation that it is outside of the purpose for which such corporations are created and that this is a sufficient reason for holding them incompetent to receive a grant of such power. But is not this begging the very question to be decided ? For what precise purpose are municipal corporations created ? How much power, and no more nor no less, is embraced by the idea of a munici- pal corporation ? We have not been satisfactorily enlight- 16 ened on this point. If the Legislature can confer a little legislative power upon a city for local objects, can it not confer a greater amount for the same objects? It would hardly be said that cities were created simply to establish and enforce police regulations to maintain order amongst the citizens. BJ T common custom they establish sanitary regulations, rules governing markets, etc.; and on what principle do they exercise these powers? They go further They construct streets, side-walks, bridges, eto.^ within their limits. They do more. They build wharves to accommodate their trade and commerce, coming to them from a distance ; they construct water works going for the purpose miles beyond corporate limits. They construct works for lighting, etc. These, and other like powers, though not existing in every one, yet, we believe, all con- cede, may be conferred upon municipal corporations as legitimate, as Constitutional, though in their exercise the citizens are not severally equally benefited in proportion to taxes paid. Now if a city may build wharves, or take stock in companies created to build them, to foster com- merce may take stock in companies chartered to furnish the people with water, light, etc. why, as a question of power, may it not take stock in companies for the making of highways to facilitate the bringing in of bread, and meat and fuel to the citizens ? Are not these of nearly as much importance to them as water, light, etc ? And are not such works, in a special manner, locally advantageous to the city ? And when the citizens of a place have seen fit to ask, and the Legislature to grant such power, and the citizens have subsequently, ? n the prescribed mode, exercised it, no Constitutional provision forbidding, a court, whose province is simply to decide what the law is, not what it should be, cannot annul such exercise of power. How much local benefit must an improvement confer to bring it within the spirit of a local one ? If a city may build a wharf to accommodate its commerce, may it not, also, a depot ? May it not build the track of a road through its corporate limits? May it not, then,put in that amount of stock or bonds to pay the company the sum the depot and track would cost ? " * * * 17 The further position, taken by counsel in this case, to the effect that conceding the power to cities of aiding, by the exercise of the taxing power, the construction of such local improve- ments as expend their benefits upon their citizens, and no one else, still the power does not extend to improvements which may also benefit other persons, did not escape the eye of the Court in the above case. Speaking to this point the Court further said: " It is true, the water-works may benefit nobody but the citizens of the city, while the railroad may benefit the surrounding country, to some extent^ at the same time it confers a great local benefit on the city one, perhaps, greater than the water works. But, where such is the case, should the city be deprived of the right to benefit itself locally, because it cannot do so without also benefiting others? And if the argument is a good one, that cities are necessarily incapable of aiding any im provement that may extend beyond the corporate limits, will it not apply with equal force to States ? May it not be said that a State is created to govern within its terri- torial limits ; and, hence, that it is unconstitutional for it to aid any work extending beyond those limits? That In- diana, therefore, could not aid in the construction of the Wabash and Erie Canal, because it extended into Ohio ? That she could not, with the consent of Ohio, construct that portion of the Whitewater Canal, lying in that State because it was without her territorial limits ? That South Carolina could not aid in the construction of a railroad to Memphis, in Tennessee, or to New Orleans, in Louisiana? But is this the doctrine ? A State can do what its Constitu- tion does not, by positive provision, or reasonable implication^ prohibit. The United States, and city corporations, can do only what their Constitutions permit. If the Consti- 3 18 tution of the United States expressly authorized the Gov ernment to construct, with the consent of the States, road within their limits, would there be any doubt of their power to do so ? If a State, then, can construct, by per- mission if South Carolina can, with the consent of Ten" nessee, construct a road in that State cannot a city of a State be authorized by the State to take stock in a road extending beyond her corporate limits? We think the proposition may be asserted, that one Government may act within the territorial limits of another with the consent of the latter." This reasoning, which has received the approval of this Court, in the case already cited, 1 submit, leaves nothing to be said in answer to the propo- sition that there is some undefined prohibitory force inherent in a municipal corporation which incapacitates it to receive the power in question, if the Corporation asks it and the Legislature sees proper to confer it. If by 'taxation the city' of San Francisco can bring in the waters of Tahoe, a distance of two hundred and fifty miles, and make them tributary to the necessities of her citizens, which no stickler for a strict construction of mu- nicipal power can deny, with any show of reason, may she not, instead of incurring the whole cost, donate a part of it to the corporation which pro- poses to do the same thing ? If, in the judgment of her citizens, a bridge across the Bay of Sari Francisco would facilitate her trade, travel and commerce, does any one doubt her power to build it by taxation, if the Legislature grants the pow- 19 cr? And, if she may, can she not, instead of building it. contribute to the means of a corpora- tion which proposes to build it ? The mere word 'municipal" can no more limit the powers of a municipal government than it can limit the neces- sities and wants of its people. The former must keep pace with the latter, and the latter will be found to keep pace with invention and discovery or human progress in all the departments of social and material life. It has been so often held by this Court that the clause of the Constitution which directs that "taxation shall be equal and uniform throughout the State," applies only to imposi- tions upon property for the purposes of revenue (merely exacting, even in such cases, equality and uniformity in assessments), and has no appli- cation whatever to taxes levied for other pur- poses, that to dwell upon this point is considered a waste of time. (1 Cal. 232; 2 Cal. 590; 4 Cal. 46; 12 Cal. 76; 13 Cal. 343.) My conclusion upon the points thus far consid- ered is, that there is nothing in the express or implied limitations of the Constitution which prohibits this kind of legislation, unless such legislation can be shown to be a misuse or abuse of the taxing power, by itself considered, for the 20 reason, as alleged by its enemies, that its purpose and object is private and not public, which is the only question in the case about which there can be any rational controversy. All other points are but make-weights. II. The Attorney General has quoted in his brief various definitions of the power of taxation. So far as they go they are doubtless unobjectionable. They are doubtless comprehensive enough to an- swer all the calls of ordinary occasions, but it is manifest that they are but blind guides in the present case, for to say that it is a power which can be exercised only to subserve a public pur- pose, or use, and there stop, is to give but a very vague and unsatisfactory idea of its nature. The reason is unsatisfied and at once inquires: " But what is a public use ?" And until that question is answered, no very clear conception of the na- ture and extent of the taxing power can be reached. The words " public use " occur in that clause of the Constitution which puts a limita- tion upon the exercise of the power of eminent domain " Nor shall private property be taken for public use without just compensation." Under the head of eminent domain unnumbered cases are to be found in which the term " public use " has received definitions at the hands of both Leg- 21 islative and Judicial bodies, not only in an ab- stract way, but by examples. It has been defined by this court to be u a use which concerns the whole community, as distinguished from a partic- ular individual or a particular number of individ- uals. It is not necessary, however, that each and ev- ery individual member of society should have the same degree of interest in this use or be personally, or directly affected by it, in order to make it pub- lic." * * " If the use * * be to satisfy a great public want or pub- lic exingency, it is a public use. But no definition is given of public uses" (in the Constitution). "We have seen however that this public use need not be a use general or common to all the people of the State alike. It may be a use in which but a small por- tion of the public will be directly benefited, as a street in a town, a bridge or a railroad, necessarily local in its benefits and advantages, though it must be of such a character as that the general public may, if they choose, avail themselves of it. It has also been seen that it is not essential to meet the requirement, that the use or benefit should be exclusively for the people of the State or even a portion of those people. This was held in a case in New York, and we can see no answer to the proposition that the people of California have no right to complain that the people of Ore- 22 gon are also benefited by a public improvement, or that such improvement would be any the less a public use in California because it was also use- ful elsewhere." (Gilmer vs. Lime Point, 18 Cal. 251.) Said this f'ourt, on another occasion: "Wheth- er a way be public or private does not depend upon the number of people who use it. but upon the fact that every one may lawfully use it who has occasion." (Sherman vs. Buick, 32 Cal. 252.) It is true these definitions were given in cases involving the power of eminent domain, but whatever can be held to be a public use, in res- pect to the power of eminent domain, must be held to be a public u*e in repect to the power of taxation. For the two powers, so far as the pur- pose for which they can be exercised is concerned are, by definition, identical. Either may be exer- cised for a public purpose, and neither can be ex- ercised for a private purpose. The only differ- ence between them lies in the circumstance that one takes the specific property, and the whole of it, of a particular individual, and the other takes equal parts of the property of all the members of the community. To take the entire specific prop- erty of one person, and not of the other mem- bers of the community, would be unequal, unjust and oppressive ; hence the restriction upon the 23 act which requires that just compensation shall be made. But where an equal part of the prop- erty of each member of the body politic is taken, there is. theoretically at least, no inequality, no in- justice, no oppression; hence there is no such re- striction or limitation upon the taxing power. Said Chief Justice Marshall, in McCuttough vs. The State of Maryland (4 Wheaton, 316), " the power of taxation is a power to destroy it has no limit except the will of the sovereign by whom it is exercised." RAILROADS A PUBLIC USE. It is too late to doubt the public character of railroads. It has been definitively settled with scarcely a dissenting voice, by both Legislative and Judicial action, as well as the common con- sent of all civilized nations, that railroads are im- proved highways, which afford vastly increased facilities for travel and transportation, and, as such, have become so necessary to the conve- nience and accommodation of the public as to justify Legislative bodies, throughout the civilized world, in putting them, in relation to the taxing power, upon a level with ordinary highways, or wagon -roads, which, as every one knows, are con- structed and kept in repair at the public expense through the exercise of the taxing power. 24 Said Bacon: "There be three things which make a nation great and prosperous: a fertile soil, busy workshops, and easy conveyance of men and things from one place to another." Said Eaynal: u Let us travel over all the countries of the earth, and wherever we shall find no facility of passing from a city to a town, or from a village to a ham- let, there we rna}^ pronounce the people to be bar- barians." In Sherman vs. Buich (32 Cal. 252), this Court has said : " To lay out and establish roads or highways is ex- clusively within the power and control of the Government. To do so is one of its most important and onerous duties. * * * Whether a given road will subserve the public need or convenience is a question for the Govern- ment alone to determine." Accordingly in the performance of this duty, the Government may determine what kind, or character, of road is demanded by the public need or convenience ; and may accordingly pro- vide that an ordinary mud road, or mud turn- pike, or a plank, or a McAdam road, or a rail- road shall be built, according to its opinion of what the public exigencies may require. Gov- ernments have the same power to build railroads and operate them by taxation that they have to build ordinary roads, or other ways for transpor- tation and travel. It was by the exercise of this power of taxation that New York constructed and still owns and operates the Erie and other canals, aggregating in length eight hundred and eighty-six miles. That Pennsylvania constructed a canal from Columbia to Hollidaysburg, a dis- tance of one hundred and eighty-one miles a canal from Johnstown to Pittsburg, a distance of one hundred and one miles a double track rail- road from Philadelphia to Harrisburg, a distance of eighty-one miles a railroad between Johns- town and Hollidaysburg, a distance of thirty- seven miles; all of which were sold by the State to the Pennsylvania Central Railroad Co. in 1858 for seven and a half millions of dollars; also five other canals forming a continuous line from the Juniata river to the New York State line, a dis- tance of one hundred and sixty miles; also the Delaware division jpf the State canals from Bris- tol to Easton, a distance of sixty miles, which were also sold by the State to the Sudbury and Erie Railroad Company, in 1858, for the sum of three and a half millions of dollars. It was also by the exercise of this power of taxation that the State of Maryland constructed the Chesapeake and Ohio Canal, some two hun- dred miles in length, at a cost of five millions of dollars; also the Chesapeake and Delaware Canal, and also the Susquehanna Canal. 4 26 By virtue of the same power Ohio constructed the Ohio Canal, from the Ohio river to Lake Erie, a distance of three hundred and seven miles, and other canals too numerous to mention, ag- gregating a total length of eight hundred and twenty-seven miles, costing over fifteen millions of dollars. To the same use has the power of taxation been put by the State of Michigan in the commence- ment and partial completion of the Michigan Central Railroad and the Michigan Southern Railroad, both having been sold to private par- ties before their completion. The same is true of Illinois. In 1839 that State built and opened as a State road the San- gamon and Morgan Railroad, extending from Springfield to Naples, a distance of fifty-six miles; also a part of the Chicago, Alton and St. Louis Railroad; also the Illinois and Michigan Canal, extending from Chicago to La Salle, a distance of one hundred miles. Under the same power the Kingdom of Bel- gium has constructed and still owns and operates all the railroads in her borders, aggregating about four hundred miles in length; and other conti- nental governments have built railroads and either operate them directly or lease them for a term of years to private parties. 27 And, lastly, it was by the exercise of this power that the Government of the United States has done, what otherwise might not have been done during the present century, secured the completion of the greatest work of the age the Pacific Railroad, by which the East and West have been made to come together. It has been said, however, that it may be ad- mitted that Governments may construct rail- roads and operate them through the exercise of the taxing power; and that such railroads, while they remain in the ownership of the Government, are public uses, but that roads not constructed directly by the Government, or which, as in Pennsylvania and other States, have been so con- structed and afterwards sold to individuals or corporations, are not, or have ceased to be public uses in the sense of the taxing power. The utter fallacy of this view should be appa- rent to every one. It ignores a legal relation and a legal maxim with which every lawyer is famil- iar that the title to a thing may be in one, and the right to use it in another, and qui facit per alium, facit per se. In constructing, managing and controlling roads of any kind or character, the Government may act by itself or by agents. If in the former mode, the road is constructed by levying a tax upon the property of persons resi- 28 ding in the road district through which it is to pass; and after it has been constructed, it is to be maintained and kept in repair by a further annual tax to be paid by the tax-payers of the district. If the latter mode is adopted, and in later times it has generally been the case, in respect to all improved highways, a franchise or right to con- struct the road is granted by the Government to private individuals or corporations, not for their use or benefit, but for the use and 'benefit of the public. Such individuals or corporations become the agents, or instrumentalities, of the Govern- ment for the purpose of performing a duty to the public which the Government would otherwise have to perform through itself. To compensate these agents for their services in constructing these roads, the Government delegates to them a part of its sovereignty, and vests them with power to collect such tolls as the Government may determine to be adequate compensation. Roads of this latter character are not less public highways than the former, nor are they any the less constructed for public and not private use. Both are the acts of the Government, acting under the power of taxation. The only difference is one of mode and manner. In the one case the public is taxed directly, and at stated seasons, to enable the State to construct and maintain the road ; in the other, the public is taxed only when 29 they use the road, in the form of tolls. To this latter class, railroads belong, and in no respect touching the power of the Government to con- struct, or to cause them to be constructed, do they differ. They are constructed and main- tained by the Government through the agency of corporations which are compensated for doing so by the franchise which enables them to demand and receive fares and freights. Every one has the same righf to use them which he has to use a mud turnpike. It is true that he cannot use them in the same way, but this difference is not due to the object for which they arc constructed, but to the nature of such roads, which does not admit of such a mode of use. From the introduction of railroads to the pres- ent time, the Legislatures, it is believed, of every State in the Union, have delegated the power of eminent domain, which can be exercised only to subserve some public necessity, to railroad cor- porations, and the Courts have held, without a dissenting voice, that such legislation is constitu- tional. As that power can be exercised only to subserve a public use, we have the combined tes- timony of all the legislative and judicial bodies in the country, that railroads are highways, and that their construction is therefore an object for which the Government may provide may either con- 30 struct them directly, or cause them to be con- structed, by granting a franchise to that effect to private parties, with a right to collect tolls (which is a form of taxation) by way of compensation, the same as in the case of toll-bridges, ferries, turnpikes and plank roads. Said Chancellor Wai worth, in Beekman vs. Sa- ratoga and Schenectady Railroad Co. (3 Paige, 75) : "The privilege of making a road and taking tolls there- on is a franchise, as much as the establishment of a ferry or a public wharf, and taking tolls for the use of the same. The public have an interest in the use of the railroad, and the owners may be prosecuted for damages sustained, if they should refuse to transport an individual, or his property, without any reasonable excuse, upon being paid the usual rate of fare." Again in Bloodgood vs. M. and H. Railroad Co. (18 Wend. 16), speaking upon the same subject, he said: 41 It might us well be objected that a canal, made by an incorporated company, wad not a public improvement, be- cause each individual could not navigate it with a canal boat, or travel thereon with a steam engine, or that a turn- pike road was of no public utility, because each citizen could not conveniently transport produce and passengers thereon with his wagon and horses." Said Senator Edwards, in the same case : u It is entirely immaterial who constructs the road, or defrays the expense of the construction. The object for 31 Avhich it is constructed must determine the nature of the grant, whether for public or private use. What object have the Legislature in view, in authorizing this Company to construct the road in question on the plaintiff's land ? It was not the private emolument the Company was to re- ceive for the use of the road. For such a purpose the right would never have been conferred. The Legislature, who are constituted the judges of the expediency of taking private .property for public use, came to the conclusion that the public required the use of a railroad between the cities of Albany and Schenectady. It deemed it expedient to con- struct it, at the public expense, and adopted the policy of having a company construct it, at its own expense and risk, having the money refunded by way of tolls or fares from the individuals who should travel upon it. * * * Because the Legislature permitted the Company to remu- nerate itself for the expense <>f constructing the road, from those who should travel upon it, its private character is not established ; it does not destroy the public nature of the road, or convert it from a public to a private use." In the case of the Lexington and Ohio Railroad Company vs. Appkgate (8 Dana, 295), the Supreme Court of Kentucky said: "Public roads, of all sorts, may be constructed wherever the sovereign shall be pleased to have them ; and if the public choose to avail itself of the capital and. liberal spirit of select persons for insuring the construction of an important highway, the persons who may agree to thus appropriate their own funds, may surely be permitted to en- joy, as some equivalent for the expenditure, the profits of tolls prescribed by law for using the road, and may be au- thorized to construct and preserve it by all the means which the Commonwealth could constitutionally employ. The sovereign will can be effecuated only by the instru- mentality of agents. And in the case just supposed, the private association should bo deemed the agent of the public, although, as to its conventional privileges and profits, it 32 may be only a private corporation, ; and the road also should be considered, in the popular sense, a public highway. In 4 East, second edition, page 21, it was held that though the lord of the fee was entitled to the profits arising from the use of an established road, yet it was a public highway l le haul chemin du Roy.' When the Legislature incorpo- rates an association <*f private persons for the'purpose of making a turnpike road, or a railroad, i\\Q public welfare should be presumed to be the legislative object of the enact- ment; and though the interest of the corporators be pri- vate and exclusive, yet the construction of the road should be deemed to have been authorized for the public good, AS THE CHIEF AND PRIMARY OBJECT; and the Act of incorporation* and the privileges granted to the corporators, should be considered only as means for effecting the public end, and as secondary and incidental only. And, to accomplish such an end by such means, the sovereign power may undoubt- edly, as we think, exert, through such an instrumentality, all the constitutional authority which it might employ for the effectuation of a similar object by any other agency, or in any other mode. The railroad is applied to l public use, 1 though the profits are applied to private use. 1 ' Iii the case of Raleigh and Gaston Railroad Company vs. Davis (2 Dev. & Batt. 468), the Su- preme Court of North Carolina said: " Upon the supposition that the Legislature may take the property to the public use, it is next said, that this taking is not legitimate, because the property is bestowed on private persons. It is true that this is a private corpora- tion; its outlays and emoluments being individual proper- ty ; but it is constituted to effect public benefit by means of a road, and that is publici juris. In earlier times, there seems to have been a necessity upon Governments, or at least it was settled policy with them, to effect everything of this sort by the direct and sole agency of the Government. The high- ways were made by the public, and the use was nccord- 33 ingly free to the public. The Government assumed ex* elusive direction as well as authority, as if they chose to be seen and felt in everything, and would avoid even a re- mote connection between private interest and public institu- tions. An immense and beneficial revolution has been, brought about in modern times, by engaging individual enterprise, industry and economy, in the execution of public works of internal improvement. The general management has been left to individuals whose private interests prompt them to conduct it beneficially to the public; but it is not entirely confided to them. From the na- ture of their undertaking and the character of the work, they are under sufficient responsibilities to insure the con- struction and preservation of the work, which is the great object of the Government. The public interest and control are neither destroyed nor suspended. The control continues as far as it is consistent with the interests granted, and in all cases as far as may be necessary to the public use. The road is a highway, although the tolls may be private property. * * * As to the corporation, it is a franchise, like a ferry or any other. As to the public, it is a highway, and in the strictest sense, publici juris," So in the case of Osborn vs. The United States Bank (9 Wheaton, 860). The question was whether the Bank was a public or private insti- tution. If the latter, its business could be taxed by the States, but if the former, its business could not be taxed by the States. It was argued that the Bank was a private institution, because four-fifths of its capital stock was owned by pri- vate individuals, and it was engaged in part in the banking business on private account from which private profit and gain were made. But Chief Justice Marshall said : 5 34 " The Bank is not considered as a private corporation whose principal object is individual trade and individual profit; but as a public corporation, created for public and national purposes. That the mere business of banking is, in its own nature, a private business, and may be carried on by individuals and companies, having no political con- nection with the Government, is admitted; but the Bunk is not such an individual or company. It was not created for its own sake or for private purposes. It has never been supposed that Congress could create such a corporation' * * * It is not an instrument which the Government found ready made, and has supposed to be adapted to its purposes, but one which was created in the form in which it now appears, for national purposes only. It is, undoubt- edly, capable of transacting private as well as public busi- ness. While it is the great instrument by which the fiscal operations of the Government are effected, it is also trad- ing with individuals for its own advantage. The appellant endeavors to distinguish between this trade and its agency for the public, between its banking operations and those qualities which it possesses in common with every corpo. ration such as individuality, immortality, etc." The Chief Justice then proceeded to show at length, the fallacy of the attempted distinction, and ruled that the circumstance that private indi- viduals were interested in the operations of the bank, and were employing its franchises for the purposes of private trade and private profit, DID NOT DETRACT AT ALL FROM THE PUBLIC CHARACTER OF THAT INSTITUTION. In a late case in Pennsylvania (Foster vs. Fow- ler & Co. 61 P. S. R. 27) the question was whether a mechanic's lien was valid in law against the property of a corporation chartered for the purpose of introducing water into certain towns 35 in that State, which property was essential to the operations of the corporation; and that question turned upon the further question whether the corporation was to be considered as of a public or private character. In discussing that question the Court said: " Most people acquainted at all with corporate action, understand that corporations, other than municipal, which are purely public, naturally divide into public and private corporations; that is, into those that are agencies of the public directly affecting it, and those which only affect it in- directly, by adding to its prosperity in developing its natu- ral resources, or improving its mental or moral qualities. Of the former, are corporations for the building of bridges, turnpike roads, railroads, canals, and the like. The public is directly interested in the results to be produced by such cor- porations, in the facilities afforded to travel and the movements of trade and commerce. * * * This direct benefit to, and accommodation to the public clearly distinguish this class of corporations from the second class, viz : private corporations, or those in which the public is but indirectly interested, such as mining and manufacturing, or coal and iron companies, etc., or libraries, literary societies, schools, and the like. Whether they progress or cease, the public is not directly affected. * * * It is something, also, that the Legislature regarded this as a public corporation by giving it the power of eminent domain. Still, if it were not essentially so in its nature, the power would not make it so. The power itself would fall. Private property cannot be taken on any terms by legislative authority for private purposes. This is effectually prohibited by tho tenth section of Article first of the Constitution of the United States. But we think the power was properly conceded to the purpose in this case, it being public in its nature and design." This division of corporations into purely pub- lic, purely private, and mixed, that is to say, 36 partly public and partly private, has been recog- nized and declared by this Court. In the case of the Miners' Ditch Company vs. Zellerbach, 37 Cal., 577, Chief Justice Sawyer says : " There are several classes of corporations, such as pub- lic municipal corporations, the leading object of which is to promote the public interest; corporations technically private, but yet of a quasi public character, having in view some great public enterprise, in which the public interests are directly involved to such an extent as to justify conferring upon them important Government powers, such as an exer- cise of the right of eminent domain ; of this class are railroad, turnpike and canal companies; and corporations strictly private, the direct object of which is to promote private interests, and in which the public has no concern, except the indirect benefits resulting from the promotion of travel, and the development of the general resources of the country." These cases furnish a conclusive answer to the theory of the Attorney General, and those who think with him, that railroad corporations are purely private corporations, and stand in all re- spects, except the mere right to be a corpora- tion, upon the level of natural persons. If such be the case, it may be pertinently asked whence comes the power, continually exercised by legis- lative bodies, of regulating fares and freights ; of putting a price upon services rendered by such corporations ? No such power is ever exercised over the business of purely private corporations, formed for trading and commercial purposes. Such an interference in their casewould be an 37 unjustifiable meddling with the natural rights of persons which are possessed by them in the same degree that such rights are possessed by individ- uals. It is undoubtedly true, that some text writers, in classifying corporations, have placed railroad, canal, turnpike and bridge corporations in the class of private corporations. It is also undoubt- edly true that the Courts sometime speak of them as belonging to that class, but writers and Judges thus speaking must be understood in a qualified sense. Chief Justice Marshall and the Supreme Courts of North Carolina, Kentucky, Pennsylva- nia and California have not overlooked in the cases above referred to, the circumstance that there is between the two classes of corporations purely public and purely private a middle class, which possesses some of the characteristics of each ; and in respect to them have drawn a very ob- vious and just distinction, and one, too, which puts them, in relation to the powers of eminent domain and taxation, upon the same level with corporations classed as purely public. When Judge Cooley and the Attorney General declare railroads to be upon the same level with purely trading or commercial corporations, they ignore or fail to note this most obvious distinction, and therein lies the principal vice in their argument. oo