The general assembly of Kentucky, by an act approved May 24, 1890, made it unlawful to demand, charge, collect, or receive tolls in excess of the rates specified in that act for travel on that portion of the Covington & Lexington Turnpike Road which was then maintained.
The company announced its purpose to disregard the provisions of the act and to charge such tolls as were prescribed by the prior statutes. Thereupon the appellees living on or near the line of the turnpike road, and accustomed to travel on it daily with animals and vehicles, brought this suit for an injunction restraining the appellant from exacting tolls in excess of those fixed by the act of 1890.
A temporary injunction, in accordance with the prayer of the petition, was granted, and the company filed its answer. A demurrer to the answer was sustained. An amended answer was then tendered by the defendant, but the court would not allow it to be filed, and by final order made the injunction perpetual. That judgment was affirmed by the court of appeals of Kentucky. 20 S. W. 1031.
The principal questions are: (1) Whether the act of 1890 impairs the obligation of any contract that the turnpike company had with the state touching the matter of tolls. (2) Whether, independently of any question of contract, the act made such a reduction in tolls as to amount to a deprivation of the company's property without due process of law, in violation of the fourteenth amendment to the constitution of the United States. (3) Whether the act is repugnant to the clause of the federal constitution forbidding the denial by the state to any person within its jurisdiction of the equal protection of the law.
As these questions were properly raised by the pleadings, and were decided adversely to the company, the jurisdiction of this court to review the final judgment of the court of appeals of Kentucky cannot be doubted.
It is necessary to a clear understanding of the issues presented that reference be made to the enactments preceding the statute of 1890.
The Covington & Lexington Turnpike Road Company was incorporated by an act approved February 22, 1834, with authority to construct and permanently maintain a turnpike road from Covington, Ky., through Williamstown and Georgetown, to Lexington, in that state.
By the nineteenth section of that act the company was authorized to collect certain specified tolls. It is contended that the twenty-sixth section is a part of the defendants' contract with the state. That section provided: 'That if at the expiration of five years after the said road has been completed, it shall appear that the annual net dividends for the two years next preceding of said company upon the capital stock expended upon said road and its repairs, shall have exceeded the average of fourteen per cent. per annum thereof, then and in that case, the legislature reserves to itself the right, upon the fact being made known, to reduce the rates of toll, so that it shall give that amount of dividends per annum, and no more.' Acts Ky. 1833, pp. 544, 548.
By an act approved February 23, 1839, amendatory of the act of 1834,-the road then having been constructed from Covington to Williamstown,-it was provided:
'Section 1. That the stockholders is the Covington and Lexington Turnpike Road Company, residing south of Williamstown, in Grant county, and anywhere between that place and Georgetown, may elect a separate board of directors, to consist of the same number as authorized by the original charter; and the directors chosen by them shall have the control and shall superintend the construction of that part of the road to be located and constructed between Georgetown and Williamstown.
'Sec. 2. That the stockholders in said road, residing north of Williamstown, shall have power, also, to elect a separate board of directors, for the purpose of controlling and superintending that portion of the road extending from Williamstown to Covington; and each board so chosen shall exercise separate control over its own portion of the road; but nothing herein shall be construed to divide and separate the stock in said road, but the same shall continue joint and common to all the stockholders, after the completion of said road.' Acts Ky. 1838-1839, p. 371.
This amendment, it is admitted, was accepted by the turnpike company.
Subsequently, by the second section of an act approved March 22, 1851, it was provided: