Commissioners of Buncombe Company v. Tommey/Opinion of the Court

The first question to be considered is whether the act of 1870 gives a lien to mechanics or contractors upon the property of a railroad corporation, for work performed or materials furnished in and about the construction of its road, or of its bridges constituting a part of its line. We are of opinion that no such statutory lien exists in North Carolina, or was intended to be given by the act of 1870. In reaching this conclusion, we are not aided by any direct decision of the question by the supreme court of North Carolina. Reference was made by counsel to Whitaker v. Smith, 81 N. C. 340, where it was held that an overseer is not entitled, under that act, to a lien, for his wages, upon the employe's crop or land over which he has superintendence. After alluding to the constitutional requirement that laws be enacted to give to mechanics and laborers an adequate lien on the subject-matter of their labor, the court said: 'A very large proportion of the laboring population of the state had just recently been released from thraldom, and thrown upon their own resources, perfectly ignorant of the common business transactions of social life, and this provision of the constitution, and the acts passed to carry it into effect, were intended to give protection to that class of persons who were totally dependent upon their manual labor for subsistence. The law was designed exclusively for mechanics and laborers.' If such be the effect of the act of 1870, there is strong reason to hold that a mere contractor for the construction of a railroad, or of railroad bridges, is not entitled to the lien given by it. But, without accepting as conclusive an opin on delivered after the rights of the parties had become fixed, (Burgess v. Seligman, 107 U.S. 33; S.C.. 2 SUP. CT. REP. 10,) we rest our interpretation of the statute upon the ground that it has no reference to work done or materials furnished in the construction of railroads. The words of the act are scarcely adequate to express a purpose to give a lien upon a public improvement of that character. The words 'building,' 'lot,' 'farm,' and 'any kind of property not herein enumerated,' are too limited in their scope to justify the conclusion that the legislature had any intention, by that act, to give a lien upon railroad property. This view is strengthened by the circumstance that, by the subsequent act providing for the organization of railroad companies and regulating their affairs, no saving is made of liens in behalf of mechanics and laborers, and express power is given to such corporations to borrow, from time to time, any sums necessary for completing and furnishing or operating their railroads upon bonds secured by mortgage upon their corporate property and franchises. Indeed, the idea of a lien in favor of laborers actually performing work in the construction of a railroad seems to have been intentionally excluded; for when the railroad contractor fails to pay such laborers, the company, upon notice, may become bound to do so; but no lien is given therefor upon the property of the corporation.

Apart, however, from these considerations, we are of opinion that a law giving to mechanics and laborers a lien on buildings, including the lot or ground upon which they stand, or a lien upon a lot or farm, or other property, for work done thereon, or for materials furnished in the construction or repair of buildings, should not be interpreted as giving a lien upon the roadway, bridges, or other property of a railroad company that may be essential in the operation and maintenance of its road. In North Carolina, as in most, if not in all the states, railroads, although constructed for the private emolument of those engaged in such enterprises, are highways which have been established, under the authority of of law, primarily for the convenience and benefit of the public. The general statute of February 8, 1872, authorized the formation of corporations to construct, maintain, and operate railroads 'for public use in the conveyance of persons and property, or for the purpose of maintaining and operating any unincorporated railroad already constructed for the like public use.' Battle's Revisal, c. 99, § 1. The pecuniary profit derived by those who project and operate them is the reward which they receive for maintaining a public highway. Municipal taxation to aid in their construction has been maintained only upon the ground that they are, in a large sense, instrumentalities or agencies for the purpose of accomplishing public ends. Upon that ground rests the authority of the state to invest them with the right of eminent domain in the condemnation of private property, and to prescribe, from time to time, in the interest of the public, reasonable regulations for their control and management. Taylor v. Ypsilanti, 105 U.S. 68, 69. Such being the relations existing in North Carolina between these corporations and the public, it should not be presumed that the legislature intended to subject them to the operation of ordinary lien laws, enacted for the benefit of those performing labor and furnishing materials in the construction, repair, or improvement of what the statute of 1870 designates as buildings, or who perform labor upon lots, farms, and other property belonging to private persons, and having no connection with public objects. A different construction of the statute would enable parties having liens for amounts within the jurisdiction of justices of the peace to destroy a public highway, and defeat the important objects which the state intended to subserve by its construction. No such intention should be imputed to the legislature, unless the words of the statute clearly require it to be done.

There is nothing, it may be observed in this connection, in Brooks v. Railway Co. 101 U.S. 443, in conflict with the views here expressed. The decision in that case rests upon the construction given to the mechanics' lien law of Iowa by the supreme court of that state. Besides, the Iowa statute, in terms, included, among those entitled to the lien it gave, 'contractors, subcontractors, material furnishers, mechanics, and laborers engaged in the construction of any railroad or other work of internal improvement.' Rev. St. Iowa, 1860, § 1846. The legislative will was there expressed so clearly as to leave no room for interpretation of the statute.

It is, however, contended that the proviso of the third section of the act of March 1, 1873, is sufficient to sustain the lien asserted by such of the appellants as were contractors and mechanics. That act, as we have seen, regulates sales under deeds of trust or mortgages 'executed by any company on all its works and property,' and provides for the purchaser becoming a corporation, with all the franchises, rights, and conveyances of, and subject to the duties imposed upon, the original corporation. In connection with a general provision for the disposition of the assets of corporations which shall expire or be dissolved, or whose corporate rights and privileges shall cease, it is declared 'that all debts and contracts of any corporation, prior to or at the time of the execution of any mortgage or deed of trust by such corporation, shall have a first lien upon the property, rights, and franchises of said corporation, and shall be paid off or secured before such mortgage or deed of trust shall be registered.'

It must be admitted that the broad language of this act gives some support to the proposition that it was intended to apply to all corporations, including those formed for the construction and operation of railroads. But there are reasons of great weight that have brought us to the conclusion that such is not its proper interpretation. The language of the proviso in question is fully may be formed by three or more persons. to merely private corporations, which may be formed by three or more persons. And to this may be added the important consideration, that any other interpretation might defeat the express power given to railroad corporations to raise money for completing and finishing, or operating their roads, upon bonds to be secured by mortgage upon their property and franchises; for such bonds, in the very nature of things, could not be readily, if at all, disposed of, if the lien given by the railroad mortgage is subordinate to a lien for 'all debts and contracts,' of whatever nature, 'existing prior to and at the time of the execution' of such mortgage. Did the legislature intend that the power of a railroad corporation to mortgage all of its property and franchises for money with which to complete or operate a road for public use should be exercised, subject to the condition that every creditor it had at the time of the mortgage, no matter how his debt originated, nor whether there was an agreement for a lien, should have a first lien upon the corporate property and franchises? If this construction should be adopted, it would follow that mechanics and laborers would acquire, as between them and the holders of mortgage bonds, a first lien for work done or materials furnished to the railroad company without filing a claim therefor, as required by the act of 1870; and this, although the legislature had in that act refrained from using language that necessarily gives them a lien upon railroad property and franchises. We are of opinion that the proviso of the third section of the act of 1873 has no application to deeds of trust or mortgage given by railroad coprorations.

This view is strengthened by the history of the compilation of the statutes of North Carolina, known as 'Battle's Revisal.' At the same session of the legislature at which the railroad act of 1872 and the private corporation act of the same year were passed, another statute was enacted providing for the publication of the public statutes under the supervision of William H. Battle, who was directed 'to collate, digest, and compile all the public statute laws of the state,' distributing them under such titles, divisions, and sections as he deemed most convenient and proper to render them 'more plain and easy to be understood.' Acts N. C. 1871-72, p. 373. His revision was reported to the legislature in 1873, and was formally approved, to take effect January 1, 1874. Upon looking into that revision we find that the act of 1872, relating to private corporations, and that of 1873, in reference to sales of property under deeds of trust, or mortgages executed by 'any company on all its works and property,' are consolidated in one chapter under the title of 'Corporations,' simply; the former constituting sections 1 to 44, inclusive, of that title, and the latter act constituting sections 45 to 49, inclusive; while the act of 1872, in reference to railroad corporations organized for public use, is placed under the separate title of 'Railroad Companies.' We have thus what may not unreasonably be regarded as a legislative indication of the original purpose of the act of 1873, viz., to make provisions for sales of property covered by deeds of trust or mortgages exected by merely private corporations, formed by three or more persons, leaving the rights of parties, in respect of like instruments executed by railroad companies organized for public purposes, subject to the terms of those instruments and the general principles of law. While Mr. Battle had no powers, by any mode of revision, to change the words, or to modify the meaning of the statutes themselves, (Sikes v. Bladen Co., 72 N. C. 34; State v. Cunningham, Id. 469; State v. Taylor, 76 N. C. 64,) he had no authority to arrange them under their appropriate titles; and, when the legislature approved his placing the act of 1873 in direct connection with that of 1872, relating exclusively to private corporations, that fact is not without weight in determining the scope and effect of the original act of 1873. This circumstance would be entitled to very little weight, if the language of the last-named act necessarily embraced all corporations, public and private, and was not, as we have said, fully satisfied by restricting its operation to private corporations, as indicated by the revision in question.

In view of what has been said, the issue made by the county of Buncombe, as a stockholder of the company, in reference to Inman's conduct as trustee, need not be examined. Upon the facts disclosed, the county does not seem to be in any position to question the decree in favor of the appellees. There is no error in the record, and the decree is affirmed.

[Petition for Rehearing from pages 132-134 intentionally omitted]

HARLAN, J.

In the opinion in this case it was stated that in North Carolina, as in most, if not in all, the states, railroads, although constructed by private persons or corporations for their own emolument, are highways, established under the authority of law, primarily for the benefit of the public. For that reason, in the absence of an express statutory declaration to the contrary, we were not willing to presume that the legislature of that state intended to subject railroads within her limits, and established by her authority, to the operation of ordinary lien laws; for such a construction of her statutes would enable creditors to enforce their liens upon distinct portions of a railroad, and thereby easily destroy a highway and defeat the important public objects intended to be subserved by its construction. The petition for rehearing suggests that the court is in error as to the policy of the state with reference to the seizure of railroad property by execution or other process, and we are referred, upon this point, to State v. Rives, 5 Ired. Law, 297, and Gooch v. McGee, 83 N. C. 59, authorities not heretofore cited by counsel.

In the first of these cases it was decided that, under the law of North Carolina as it then was, the writ of fieri facias lay against the land on which a railroad is laid out. In support of that view reference was made to an act passed in 1820. But, from the decision in Gooch v. McGee, determined in 1880, it is apparent that the court was not satisfied with the correctness of that decision; for it said that, 'so far as the opinion, except by force of the statute, extends the liability to the estates of corporations for public purposes, indispensable to the exercise of the conferred franchise and to the performance of correlative duties, it is not in harmony with adjudications elsewhere of the highest authority, and we are not disposed to enlarge the sphere of its authority.' After citing several adjudged cases, including Gue v. Tide-water Canal Co. 24 How. 257, the court proceeds: 'In our researches we have met with a single case (Arthur v. Bank, 9 Smedes & M. 394) recognizing the authority and approving the decision in State v. Rives, and in opposition to the current of judicial opinion. The general words of the statute, which to some extent influenced that decision, may, without violence to their meaning, admit of a narrower scope, and be restricted to the property of private corporations, and to that of public corporations which may be replaced, and is not indispensable to the exercise of their necessary functions, and the discharge of public duties, upon the distinction taken in the cases cited.' It is difficult to resist the conclusion that the supreme court of North Carolina intended, by their opinion in Gooch v. McGee, to intimate that State v. Rives was wrongly decided, even with reference to the statutes in force when (1844) the latter case was determined.

It is suggested that section 9, c. 26, of the Revised Code of North Carolina, adopted in 1855, indicated a public policy in that state in harmony with the decision in State v. Rives; for it is claimed by that section the franchises and property of railroad corporations having the right to receive fare or tolls may be taken on execution. Upon this point it is sufficient to say that we are not satisfied that the statutory provision referred to, as being a part of the Code of 1855, was in force after Battle's Revisal was adopted. By express enactment, 'all acts and parts of acts passed before' the session of the legislature which directed the publication of Battle's Revisal, 'the subjects whereof are digested and compiled' in that revisal, or which were 'repugnant to the provisions thereof,' were declared to be repealed and of no force or effect from and after the first of January next thereafter, with certain exceptions and limitations, not embracing the present case. Battle's Revisal, 861. Independent, however, of this question, and even if section 9, c. 26, of the Code of 1855, be in force, we adhere to the opinion that there was no purpose, by the act of 1870, to give a lien upon the property of a railroad corporation for work performed or materials furnished in and about the construction of its road, or of its bridges constituting a part of its line.

In the original opinion we were in error in supposing that the act of 1873 was passed at a session previous to that at which the act was passed approving Battle's Revisal, and directing its publication under the supervision of the compiler. Both acts, it seems, were passed at the same session. The incorporation of the act of 1873 into that part of the Revisal which related to private corporations was, therefore, the work of Mr. Battle and not in pursuance of any previous express direction by the legislature. Making this correction in the statement of a fact to which we attached but little weight in our interpretation of the act of 1873, we perceive no sufficient ground for extending its provisions to the property of corporations operating a public highway.

The rehearing is denied.