Opinion
12-20-1900
In re TRENTON ST. RT. CO.
John H. Backes and Robert S. Woodruff, for petitioner. Charles Gummere and Alan H. Strong, for respondent.
Petition by the Trenton Street-Railway Company for a determination of the manner in which it should cross the tracks of the Pennsylvania Railroad Company. See 44 Atl. 177.
John H. Backes and Robert S. Woodruff, for petitioner.
Charles Gummere and Alan H. Strong, for respondent.
REED, V. C. This is not the first time this matter has been before this court, but it is the first time the specific grounds for challenging the right of the petitioners to cross have been presented to this court. The Trenton Street-Railway Company is a corporation composed of several original companies. The first is the Trenton Horse-Railway Company, incorporated by special charter in 1859. P. L. 1859, p. 266. The next is the City Railway Company, formed under articles of incorporation filed December 9, 1875, under the general railroad law. The next is the Hamilton Township Street-Railway Company, formed under articles filed September 12, 1890, under the act of April 6, 1886. And the next is the South Clinton Avenue & Broad Street Railway Company, formed under articles filed October 28, 1890, under the same act. All these companies were consolidated under the terms of an agreement dated September 21, 1891, and filed September 30, 1891, under the name of the Trenton Passenger Railway Company, Consolidated, under acts of February 21, 1888, and April 16, 1891. After this the Pennington Avenue Passenger Railway Company was formed, under articles filed September 14, 1897; the Mulberry Street Railway, under articles-filed on the same day; and the Ewing Passenger Railway Company, under articles filed February 25, 1898,—all under the act of April 6, 1886. The consolidated company, viz. the Trenton Passenger Railway Company, Consolidated, formed a new consolidation with the three last-named corporations, by a new consolidated agreement, dated January 28th, and filed on the 29th, 1898, under the name of the Trenton Street-Railway Company, which is the present petitioner. It appears that at the time of the first consolidation agreement the tracks of the companies so consolidated, other than the City Railway Company, ran from the easterly side of Trenton through State street to Clinton street, through Clinton street to Staunton street, and through Staunton street to South Broad street. The line of the City Railway Company ran down Broad street and stopped at Division street, four blocks north of the point where Staunton street enters Broad street. Ordinances were passed and accepted authorizing the laying of tracks and the use of electricityas the motive power by each of the said roads. The first consolidated company built its road down Broad street, to the line dividing the city of Trenton from Hamilton township, and seems also to have connected by a short track the terminus of the old City road at Division street with the continuation of the roads from Staunton street. Then, under an ordinance of the township committee of Hamilton township passed May 12, 1893, the consolidated company extended its line to the tollhouse at Broad Street Park, on Broad street. Then, under an ordinance of the same township committee passed March 8, 1894, the same company extended its road from the tollhouse to the Whitehorse Hotel. Then the same committee on December 8, 1898, passed an ordinance authorizing the last-named consolidated company to extend its road from Whitehorse to Yardville. This ordinance was accepted December 23, 1898, and the acceptance filed January 3, 1899.
If the consolidated road was a corporation made up by the merger of the preceding existing roads, then the consolidated road possessed all the privileges of each company consolidated. 3 Gen. St. p. 3220, par. 79. Nor does it matter whether the corporation was de jure or de facto. A de facto corporation may exercise the power of eminent domain. 2 Wood, Ry. Law, p. 819. In National Docks R. Co. v. Central R. Co., 32 N. J. Eq. 755, the court of appeals held that this court could not inquire into the de jure existence of a corporation, and enjoin it from crossing land or tracks of another road because of its want of power as a de jure corporation, if it were a corporation in fact. The test to be applied in ascertaining whether a corporation has a de facto existence is: First, the existence of a law under which a corporation might be formed; second, an effort in good faith to organize a corporation under the law; and, third, the assumption and exercise of corporate functions as a result of such effort. Vanneman v. Young, 52 N. J. Law, 403, 20 Atl. 53. This test is applicable to corporations formed by consolidations. 7 Jones, Corp. par. 8251.
It is insisted that the one of the parties to the first consolidation agreement was neither a corporation de jure nor de facto, and therefore the attempted consolidation was null, it is admitted that the City Railway Company was incorporated under the general railway act. It is insisted that a street railroad cannot be incorporated under that act, and therefore the City Railway is not a de facto street railway, because there was no statute then under which a street railway could be incorporated. It is also insisted that, if it can be regarded as a de facto incorporation, it must be as a steam road, and that a steam road is not within the class covered by the consolidation acts of 1888 (3 Gen. St. p. 3225) and of 1891 (3 Gen. St. p. 3229). It is contended that the City Railway was incapable of becoming a party to the first consolidation agreement, and therefore that that agreement is void and vulnerable to collateral attack. It is further contended that, if the first consolidation was ineffectual to create a new corporation, it follows that the second consolidation, to which the pretended new corporation is a party, must, upon the same reasoning, be regarded as a nullity. It is true that it was decided in Railway Co. v. Flanagan, 57 N. J. Law, 236, 30 Atl. 476, on error, 57 N. J, Law, 690, 32 Atl. 216, that a supplement to the general railroad and canal act limiting the time in which actions for injuries could be brought did not apply to street railways. The street railways in question in that case were, as I understand it, organized as such, and the question is whether the legislation applied to a class of corporations not organized under the general railroad law. The question now presented seems to me to be quite different from that. The query here is whether a corporation formed under the general railroad act, to do most of the things which a railroad does, but some that it does not, can be regarded as a corporation at all. The functions of the two railroads are so similar that it has been held in the state of New York that a street railroad could be formed under their general railroad act. In re Washington St., A. & P. R. Co., 115 N. Y. 442, 22 N. E. 356. Where the purposes of a corporation are partly within and partly without the law, it may have a de facto or de jure existence, as the case may be, and it will simply be incapable of exercising the unauthorized powers. Heck v. McEwan, 12 Lea, 97. Many street railroads in this state have been organized under the general railroad act. These, in my judgment, after years of use as such must be regarded as corporations in fact. But, if so, are they included within the consolidation acts which the petitioner invokes? I am inclined to think they are. The City Railway was in fact a street railroad. It operated its cars in the streets with the usual motive power, and in the manner which distinguishes a street railroad from a steam railroad. It will be observable, also, that the supplement of 1893 to the act of 1891 includes "any company owning or operating a railroad, operated as a street railway." Without deciding this point, but assuming that the City Railway Company was incapable of consolidating with another street railway, it does not follow that a new corporation did not spring from the first consolidation agreement. Two of the parties to the agreement, namely, the Hamilton Township Street-Railway Company and the South Clinton Avenue & Broad Street Railway Company, both organized under the act of April 6, 1886, were admittedly empowered to consolidate with each other. Suppose that they were not empowered to treat for the property of the City Railway Company, and so far their contract was ultra vires; yet I do not see how this fact would impair the effortby the two companies to consolidate under a valid general law, and form a new corporation, the franchise of which they have since used. It may well be that the stockholders of either company could have stopped the execution of the contract for consolidation, but I am unable to see how a third party can question the existence of the new corporation. It follows that, if the new corporation had even a de facto existence, the second consolidation agreement was valid, and from it sprung another corporation, having the power of each of the constituent members of both consolidations, including the power to extend tracks.
In regard to the point that the consolidation acts do not provide for the creation of a new and distinct corporation, it is admitted that the act of 1888 (P. L. 1888, p. 74) in express terms so provides. But it is insisted that this act empowers horse, but not electric, roads to consolidate; and it is further insisted that the act of 1891, which applies to street railroads generally, contains no provision for the creation of a new corporation. The act of 1891 authorizes a street-railway company to merge and consolidate its corporate franchises and other property with that of any other horse or street railway company. It provides that the merger may be effected in the same manner provided by statute for the merger and consolidation of horse-railway companies. The last provision is attacked upon the ground that it makes an already existing law a part of it by reference. The reference to the method of procedure in effecting a consolidation was not objectionable. Campbell v. Board, 47 N. J. Law, 347; De Camp v. Railroad Co., Id. 43, 49. The method of procedure prescribed by the act of 1888 implies the erection of a new corporation. The agreement which is to be submitted to the stockholders of each of the companies contains the name of the new corporation, the number of shares of the new company, and the manner of converting the stock of the old Into the stock of the new corporation. Without stopping to consider whether the act of 1888 applied to all street railways, I am of the opinion that the act of 1891 was a perfect act. it put all street railroads within the class of roads included within the general act of 1888, and the reference to the provisions of the last act was sufficient, without a re-enactment of nearly the whole body of that statute. I will advise a decree in the same form as the one last advised.