such rate. That the net earnings of said consolidated road for the next two years would not exceed 3 per cent. on the capital actually paid in, or on the amount actually expended on the consolidating lines; and that, if appellant is required to charge no more than 3 cents per mile for the carriage of passengers on said line of railway, its earnings will be so reduced that no profit whatever will inure to its owners, and such earnings will not pay reasonable interest on the fixed indebtedness actually incurred in constructing the road. That the formation of the original company, its consolidation with others, and the sale by the consolidated company, each and all constitute contracts between the state and said several companies, entered into upon the faith that each of said several companies should have the right to fix its rates for the carriage of passengers at any sum it might deem proper which would not produce an annual net profit on the capital actually paid in to exceed 15 per cent. That the act in question alters the said several contract, and is in violation of § 10, art. 1, of the federal constitution. That by § 6, art. 12, of the constitution of Arkansas, in force at the several dates aforesaid, it is provided that no charter of any corporation shall be altered, revoked, annulled, or repealed in such a manner as to do injustice to the corporations, and that the act is in violation of said provision. That the line on which the stations named are located contains heavy grades, many cuts and fills, bridges, trestles, embankments, and tunnels, the construction of which cost, and the maintenance of which does and will continue to cost, extraordinarily and unusually large sums of money; and that it is reasonable and just to charge five cents per mile for carrying passengers over said line. That to limit its passenger rate to three cents per mile takes its property without compensation, in violation of the fifth and fourteenth amendments to the federal constitution. That it is special legislation, and discriminates against the defendant, in this: that it permits a company operating 75 miles of road, or less, to charge five cents per mile passenger fare, but prohibits a company operating more than that length of road from charging that amount for a passage not exceeding that distance, in violation of article 11 of the state constitution, and of section 1 of the fourteenth amendment to the federal constitution. That the defendant's road is made up of roads that formerly belonged to different companies, and the stations named are situate on a line which, as formerly owned, was less than 75 miles in length. That therefore the former owner might have charged five cents per mile fare; and the appellant, as its successor, acquired the right to make the same charge. That, before the consolidation of the companies before named, the

47 A. & E. R. Cas.-30

St. Louis, Arkansas & Texas Railway Company in Arkansas, for the purpose of constructing its road, mortgaged its property to secure bonds which were placed on the market, and sold to purchasers who in good faith relied upon the observance on part of the state of its contract with the company relative to fixing its passenger rates. That said bonds are unpaid, and, if the appellant is permitted to charge no more than three cents per mile for carrying passengers, the earnings of the road of the original company will be insufficient to pay the interest on said bonds, and default will be made therein. That the act is therefore unconstitutional.

Constitution.

In the view that we have taken of the law, it will be unnecessary to go into the discussion of the act as affected by the provisions of the federal constitution relied al provisions. upon by the appellant. When the St. Louis, Arkansas & Texas Railway Company in Arkansas was organized, the constitution of the state contained the following provisions: "Sec. 6, art. 12. Corporations may be formed under general laws; which laws may, from time to time, be altered or repealed. The general assembly shall have the power to alter, revoke, or annul any charter of incorporation now existing and revocable at the adoption of this constitution, or any that may hereafter be created, whenever, in their opinion, it may be injurious to the citizens of this state; in such manner, however, that no injustice shall be done to the corporators." "Sec. 11, art. 12. Foreign corporations may be authorized to do business in this state, under such limitations and restrictions as may be prescribed by law: provided, that no such corporation shall do any business in this state, except while it maintains therein one or more known places of business, and an authorized agent or agents in the same upon whom process may be served; and, as to contracts made or business done in this state, they shall be subject to the same regulations, limitations, and liabilities as like corporations of this state, and shall exercise no other or greater powers, privileges, or franchises than may be exercised by like corporations of this state; nor shall they have power to condemn or appropriate private property."

Same

Foreign cor

poration

Those provisions have ever since been, and now are a part of the fundamental law of the state. They entered into and became a part of the contract between the state and the corporations concerned in this cause. By their terms the state was authorized to alter, revoke, annul, or repeal all charters of corporations thereafter created in this state, whenever in the opinion of the general assembly such charter is injurious to citizens of the state. The only limitation upon the power is that it

bound there

by.

shall not be so exercised as to do injustice to the corporators. It is provided that foreign corporations may be admitted to do business in the state upon certain conditions, and that upon compliance therewith they shall conduct their business subject to the same regulations, limitations, and liabilities as like corporations of this state, and shall exercise no other or greater powers, privileges, or franchises than may be exercised by like corporations of this state. The appellant purchased its line in this state subject to the provisions just mentioned. Though the statute then in force for the regulation of rates to be charged for the transportation of passengers permitted a higher rate to be charged than that allowed by the act in question, the appellant knew that all such acts were subject to legislative change. Thus warned, it elected to come into the state to operate a railroad. It thereby undertook and became bound to do it according to the terms and conditions imposed upon domestic corporations. It bound itself to the state by contract that it would conform to such rates of charges as the state might fix, provided they worked no injustice to its corporators. If the act in question violates that provision, the act must fail; otherwise, it must stand. To all other objections that may be urged against the act, it is sufficient to reply, concensus facit jus. We therefore pass without discussion the clauses relied upon in the federal constitution, and address ourselves to the single inquiry, do the allegations of the answer disclose that the act is unjust to the incorporators of the appellant?

charges.

For the purpose of this case, we have not felt called to decide whether the question of the justice or injustice of the act is political, and for the sole determination of the general assembly, or judicial, and subject to be Justice of act investigated in the courts. Nor have we consid- regulating ered how far the determination of that question is controlled by the recent decisions of the supreme court of the United States in what is known as the "Minnesota Railway Cases," 134 U. S. 418, 42 Am. & Eng. R. Cas. 285. We treat it as a question within the cognizance of the court, but reserve a decision thereon until a case is presented which calls for it. We are of opinion that the . answer and argument in its support rests upon erroneous conceptions of the law. It appears from the answer that the appellant operates a continuous line of railroad from Ft. Smith, in this state, to the city of St. Louis, in Missouri; that the line as owned and operated when the act in question passed comprises a road constructed by the appellants, and one purchased by it, which latter was made up by consolidating the roads of three different companies. The transportation for which the charges complained of were made was

over that part of appellant's road which was formerly a part of one of the consolidating roads. The answer seeks to test the justice of the act, not by its effect on the net earnings of the entire road of the appellants, but by its effect upon the net earnings of that portion of its road acquired by purchase, as well as of that part formerly owned by one of the consolidating companies. But that is not the correct test. The appellant cannot claim the right to earn a net profit from every mile, section, or other part into which its road might be divided, nor attack as unjust a regulation which fixed a rate at which some such part would be remunerative. It can only claim a profit from the operation of its entire line, and attack as unjust an act that denies it the right to fix such rates as will yield a profit upon its aggregate business. The corporations owning the several parts of the road as to which it is charged that the act operates unjustly were dissolved years before it was passed. As to them it could not operate unjustly, and in their behalf no cause of complaint can exist. The lines, though once independent, are now parts of a whole, and any division of it into its original parts for the purposes of the act in question is arbitrary. There is as much reason to divide the line according to sections or stations, or into divisions of a designated mileage, and demand the right to charge for service upon each part a rate sufficient to make the operation of that part alone, independently of other parts, remunerative. If an act were to be thus tested, it would be necessary in each case to ascertain what part of the line was included in the trip, and then determine what charge was necessary to make the business of that part profitable. That would involve the ascertainment of what expense was incurred in operating the particular division alone; but as there are other general expenses, not incurred in operating any other division more than the one in question, it would be necessary to compute them, and apportion a just part to the designated division. It would then be necessary to ascertain what the road could earn at the rate fixed, from receipts. arising exclusively from the business of the particular part, and its pro rata of receipts from business done in part over it, and in part over other divisions. It could then be seen whether the expense of operating the particular division exceeds the receipts under the rate proposed. In what proportion the several parts should share with others in the expenses and receipts in which they participated, it would be difficult. to determine. In fact, the problem proposed would be difficult, if it did not baffle solution. If, upon the examination, it was ascertained that if division A could earn a profit at a rate of three cents per mile for passengers, as to it the act

would be valid; but if it was ascertained that division B would sustain a loss unless permitted to charge five cents per mile, the act as to it would be invalid. If it could be conceived that, with such an issue to be submitted to a jury, a decision would ever be reached in two different causes, a remarkable result might be anticipated. It would then be judicially determined, that a law fixing three cents as the maximum would be constitutional as regulating rates from Fayetteville to the next station south, but unconstitutional as regulating the rates from Fayetteville to the next station north. Such a condition would be rendered improbable, only because it is exceedingly improbable that two cases would be prosecuted to a termination in the life of any one person. We think it must be evident that, to the extent that the question of injustice is to be determined by the effects of the act upon the earnings of the appellant, the earnings of its entire line must be estimated as against all its legitimate expenses, under the operation of the act. But we think that a more enlarged scope should be given the inquiry, to decide the question properly: and the justice of the act should be determined by its effects upon classes, and not by its effect upon single members of classes. The parent company was organized, and the appellant began its business in this state, after the adoption of a policy by the state with reference to corporations that marked a change in that regard. It has been usual to create corporations, grant privileges, and limit powers by special act of the legislature. It was then provided by the constitution that no special act of incorporation should be passed, and that all corporations should be formed under general laws. In pursuance of the changed policy, the act was passed. providing for the organization of railway companies. As the powers of corporations were conferred and defined by general laws, so the state indicated its policy to regulate their enjoyment and exercise, by laws likewise general. The provision relied upon by the appellant from the act of July 23, 1868, authorizing railway companies to regulate passenger fares, was general in its terms, and applied to all railroads in the state. The act in question, though it classifies roads for the purpose of regulation, is general, for it prescribes the same regulations as applicable to each member of a class. It would therefore be unreasonable to test the rate fixed for any class by its effect upon a single member of the class. One member might be so situated that at a given rate of fares its earnings would be large; while another member, at the same rate, but affected by different conditions, perhaps temporary, such as destructive competition, wasteful management, or limited business, could not earn expenses. Neither