Opinion
May, 1904.
Frank Stewart, for the appellant Common Council of the City of Binghamton.
Charles A. Collin, G.B. Curtiss, T.L. Arms and T.J. Keenan, for the appellant railroad company.
D.H. Carver and I.T. Deyo, for the respondent.
After the reversal of the first judgment the defendants materially changed their contention, and after the reversal of the second judgment they materially amended their answers, and any apparent confusion in the opinions of this court is attributable thereto.
This court on the second appeal, referring to the first appeal, said: "When this case was before us on the former appeal, the question presented was whether this defendant was relieved by the provisions of the contract of April 26, 1892, from paving between the rails, etc., as is required by the provisions of the General Railroad Law. (Laws of 1890, chap. 565, § 98, as amd. by Laws of 1892, chap. 676.) The argument of the defendant the Binghamton Railroad Company, then was that it was a company with which the parties of the first part to that contract had become merged and consolidated, and that, therefore, by its express terms, the contract inured to its benefit; and further, that the tracks over which this controversy arises, viz., those then operated by the `Court Street and East End Railroad Company,' were an `addition or extension' of the tracks of such contracting companies, and that, therefore, the terms and conditions of such contract, by its express provisions, applied to them. We then held that the benefits which were to inure to the successors and assigns of the contracting companies, or to one with which they might thereafter consolidate, were no broader than were thereby given to such companies themselves, and that, very clearly, the exemption or modification of the statutory liability so given did not extend beyond the track then being operated by them, or to such additions or extensions of those tracks as might thereafter be made; and that, conceding that such exemption would inure to the benefit of this defendant railroad company, as a company with which those contracting companies had consolidated, nevertheless, inasmuch as the tracks in question had subsequently to the contract been acquired from a separate and independent company by such defendant, and were, therefore, tracks not then used by such contracting companies nor ones as to which either of them had any interest or owed any duties, that they could not be deemed extensions or additions to the tracks referred to in the contract, and hence none of the provisions of such contract should be deemed applicable thereto. That conclusion resulted in depriving the defendant railroad company of any advantage under such contract as to the tracks in question, and required a new trial. No suggestion was then made that either of the contracting companies had any interest in the tracks then operated by the `Court Street and East End Railroad Company' or in its line, or any rights under its own charter to extend its tracks over any part of that line; and all of the rights which this defendant company then claimed over the tracks in question were claimed in its answer to have been derived by consolidation with the `Court Street and East End Railroad Company.'"
The Binghamton and Port Dickinson Railroad Company was incorporated by chapter 501 of the Laws of 1868, and by such act it was "authorized and empowered to lay, construct, operate and use a railroad with a double or single track at their option or as the public convenience may require and to convey passengers or freight thereon for compensation through, upon and along" certain streets of the city and town of Binghamton, which included Court street. Said act provides that said road shall be commenced within one year from the passage of the act and shall be completed within five years from the time of the commencement of the building of the same. The time for the commencement of said road was expressly extended to May 1, 1872, by subsequent acts of the Legislature. (Laws of 1869, chap. 447; Laws of 1871, chap. 379.)
Said Binghamton and Port Dickinson Railroad Company built and operated a railroad upon certain of the streets named in said act of incorporation, but did not build a road through that part of Court street in question prior to its consolidation in August, 1892, with the Binghamton Street Railroad Company, by which a new corporation, the Binghamton Railroad Company, was formed, nor prior to the consolidation in April, 1894, of such consolidated company with the Court Street and East End Railroad Company under the name of the Binghamton Railroad Company, which is the defendant of that name in this action.
In 1886 the Court Street and East End Railroad Company organized under the General Street Surface Railroad Law (Laws of 1884, chap. 252). In the certificate of incorporation of said Court Street and East End Railroad Company the streets and highways in which the road is to be constructed are enumerated, and included in the streets and highways so enumerated is said Court street. Said certificate of incorporation does not state whether a single or double-track road is to be built upon said street.
After the incorporation of the Court Street and East End Railroad Company it built in the center of said Court street a single-track street railroad for use with animal power. It was so continued and used with horse power until after its consolidation with the defendant railroad company, and it was so in use at the time of the execution of the contract of April 26, 1892.
Subsequent to 1894 and the consolidation of said Court Street and East End Railroad Company with said other railroad companies a large number of the property owners on said Court street petitioned said common council to authorize the defendant company to construct and maintain a double-track road on said Court street and said common council passed a resolution as follows:
"WHEREAS, The abutting property owners of Court street, east of its intersection with Exchange street, almost unanimously petition this body to grant the Binghamton Railroad Company permission to lay double track from the point above mentioned through Court street east to the city limits; believing as the petition states, `that public interest demands increased street car facilities for the eastern portion of the city, and that a double track system from the extreme western limit to the extreme eastern limit of the city through the principal thoroughfare is a necessity and improvement benefiting the city at large,' therefore, be it
" Resolved, That the Binghamton Railroad Company are hereby granted the right and privilege to construct and maintain a double track from the eastern terminus of the present double track near the intersection of Exchange street along and through Court street in an easterly direction to the city limits, except underneath the railroad bridges over said street."
Thereafter the track formerly owned and used by the Court Street and East End Railroad Company was removed and two tracks, one on either side of the center of said street, were laid by the defendant company with girder rails and they have since been maintained as a part of the defendant company's electric railway system.
On the hearing of the second appeal the defendants claimed that the defendant company maintained said road on Court street under the original charter of the Binghamton and Port Dickinson Railroad Company and that as the Binghamton and Port Dickinson Railroad Company was one of the parties to the contract of April 26, 1892, it was by the express terms of said contract exempt from paying for any part of said paving except as provided for by said contract.
By the answers of the defendants as they remained until after the decision of the appeal from the second judgment, it was claimed that the rights of the defendant company over the street in question were derived from its consolidation with the Court Street and East End Railroad Company.
The original contention of the defendants was limited to showing (1) that the contract of April 26, 1892, was a valid contract, and (2) that such contract applied to streets where roads had been built by companies that had subsequently consolidated with the contracting companies.
The claim of the defendants on the second trial and appeal, that the defendant company was maintaining its road on that part of Court street in question by virtue of the original charter of the Binghamton and Port Dickinson Railroad Company, was wholly inconsistent with the answer as they then stood. This court then held that upon the pleadings in the case it stood admitted that the right to maintain tracks on Court street belonged to the defendant company by reason of the same passing to it from the Court Street and East End Railroad Company and that the facts presented on the trial were not sufficient to overcome the express admission in the answers.
After the decision of the second appeal an application was made to the court by the defendant railroad company to amend its answer which application was opposed. It was granted by the court on terms, which terms were complied with, and thereafter an amended answer was served by both defendants in which amended answers it is expressly alleged that by the consent of the common council of the city of Binghamton the Court Street and East End Railroad Company had a right to build only a single-track road on Court street and it is also therein further expressly alleged that the double-track railroad on that part of Court street in question was not constructed under nor by virtue of the franchise of the Court Street and East End Railroad Company but solely and only by virtue of the franchise of the Binghamton and Port Dickinson Railroad Company.
On the second appeal this court, after holding the defendants to the admissions contained in their answers, said: "Under this view it does not become necessary to determine whether the Binghamton and Port Dickinson Railroad Company had at the time of the contract any rights left over the street in question nor whether under the conditions as they then existed the contract should be construed to include the possible right of such company to oust the Court Street and East End Railroad Company and extend its own tracks over a street so occupied by such other company." Now, however, with the answers amended as stated it is necessary to determine such question.
The charter of the Binghamton and Port Dickinson Railroad Company came directly from the Legislature, and it is exclusive and wholly unconditional except so far as it provides that the road shall be commenced and completed within the time in the act mentioned. The option mentioned in the act does not in any way relate to the streets upon which the company is authorized and empowered to construct and operate a railroad, but it refers to the determination of the question as to whether a double or single-track road is to be so constructed and operated. The act does not provide a penalty or forfeiture of any kind in case of the failure of the company to commence or complete the building of said road within the time in the act mentioned.
Where a franchise is granted to build a railroad it imposes upon the company to which it is granted an obligation to build the road as well as confers upon it the right to so build the same. The failure to commence to build the road or to complete the same within the time provided by the act of incorporation does not work an actual forfeiture or loss of its corporate powers, rights or privileges unless such forfeiture and loss is declared by the act of incorporation in unmistakable language ( Matter of New York Long Island Bridge Co., 148 N.Y. 540) or by a subsequent act of the Legislature or by a court of competent jurisdiction.
The Court of Appeals, in People v. Albany Vermont Railroad Company ( 24 N.Y. 261), say: "A corporation is under a legal obligation to exercise its franchises and * * * it has not the option to discontinue a part of its road and forfeit its franchises."
In Matter of Brooklyn Elevated R.R. Co. ( 125 N.Y. 434) the court say: "By such non-performance a corporation is not, ipso facto, dissolved or deprived of its corporate existence or corporate rights, but it is simply exposed to proceedings, on behalf of the State, to establish and enforce the forfeiture. The State which gave the corporate life may take it away. The State which imposed the conditions may waive their performance and the corporate life may run on until the State, by proper proceeding, intervenes and enforces the forfeiture. Until the State does thus intervene, a private individual cannot set up the forfeiture or in any way challenge the corporate existence with its full vitality. The authorities for these views are numerous and uniform both in this country and England." (See Coney Island, F.H. B.R.R. Co. v. Kennedy, 15 App. Div. 588; Suburban Rapid Transit Co. v. Mayor, etc., of New York, 128 N.Y. 510.)
In the recent case of Paige v. Schenectady Railway Company ( 178 N.Y. 102) it was claimed by the plaintiff that a consent previously given by her to the building of a street railroad in the street adjoining her property had been forfeited and nullified by reason of the fact that the receiver of the corporation whose rights and franchises had been purchased by the defendant had, while such receiver, abandoned that portion of said railroad adjoining the plaintiff's property, and that the common council of the city of Schenectady had on petition of abutting owners, by resolution, expressly authorized the permanent abandonment of such portion of said street railroad. Such abandonment was acquiesced in for a period of about eight years, and then the defendant attempted to rebuild said street railway thereon, and commenced proceedings de novo for the purpose of obtaining the right so do to. In an action by the plaintiff, an abutting owner, to restrain the rebuilding of such road, the court say: "We can discover no principle upon which the receiver had a right to abandon any of the property belonging to such railway company without the consent of the company, of its stockholders, and the consent of the Legislature of the State. Nor was the common council clothed with any authority to compel or to authorize an abandonment of any portion of such street railway. While its consent might possibly waive any right the city possessed to enforce or compel the enforcement of a continued operation of the road, still it certainly could not by any action upon its part deprive the railway company of its rights, affect the rights of the stockholders or the rights of the State and general public to require the company to continue the maintenance and operation of its road as originally constructed. * * * Nor did the removal of the tracks by the receiver determine or forfeit the franchise of the original company over Washington avenue so as to prevent the defendant, who had succeeded to its rights, from relaying its tracks thereon. Such abandonment only operated as a cause of forfeiture of which the public alone could take advantage. * * * A railroad corporation owes a duty to the public to exercise the franchise granted to it and it cannot abandon a portion of its road and incur a forfeiture at its mere pleasure. A charter must be accepted or rejected in toto. If accepted it must be taken as offered and the company has no right to accept in part and reject in part."
The franchise of the Binghamton and Port Dickinson Railroad Company has never been forfeited or canceled in whole or in part by a decree of the court or by an act of the Legislature. Not only have the People refrained from taking any action in the courts or by legislative enactment to forfeit and annul the franchises so given to the Binghamton and Port Dickinson Railroad Company, but by chapter 145 of the Laws of 1900 it is provided that "the time within which the * * * and the Binghamton Railroad Company shall finish their respective roads and put them in operation beyond their present construction and operation is hereby extended until the year nineteen hundred and five and no prejudice to the corporate existence and powers of the respective companies under their respective charters or articles of association shall arise on account of their non-completion or operation of the said roads within the time prescribed by law."
All of the rights and franchises of the Binghamton and Port Dickinson Railroad Company became vested in the defendant railroad company pursuant to the consolidation agreements. The defendant railroad company had the right, therefore, under said franchise of the Binghamton and Port Dickinson Railroad Company and said agreement and consent, to construct and maintain a single or double-track railroad on Court street. The Court Street and East End Railroad Company was not in terms incorporated for the purpose of maintaining a double-track railroad on said street and there is not in this record any evidence that it ever obtained the consent of abutting owners necessary for the erection and maintenance of either a single or double-track road on said street. The road actually constructed by it on Court street was in the center thereof with a flat rail laid, not upon girders, but upon pieces of wood running lengthwise under the same, and the construction of said road on said street by the Court Street and East End Railroad Company was in direct violation of the terms of the act incorporating the Binghamton and Port Dickinson Railroad Company.
The double tracks on that part of Court street in question commenced at the former terminus of the double tracks on Court street opposite Exchange street as they had previously been maintained by the Binghamton and Port Dickinson Railroad Company. All of the evidence now before us tends to sustain the new or modified and amended allegations of the defendants' answers. We are of the opinion that the defendant railroad company has the right under the original charter of the Binghamton and Port Dickinson Railroad Company to maintain a double-track railroad on that part of Court street in question, and that under the pleadings as they now exist, and the record now before us, it should be held that it is maintaining its double-track railroad on said street by virtue of said original franchise. Assuming that we are right in holding that said original franchise still exists, and that the present railroad on Court street is maintained under the said original franchise, we do not understand that there is any serious dispute about the contract of April 26, 1892, being applicable to the railroad in said street.
The judgment, therefore, should be reversed on the law and facts and a new trial granted, with costs to the appellant to abide the event.
All concurred.
Judgment reversed on law and facts and new trial granted, with costs to appellant to abide event.