23 Wend. 193 | N.Y. Sup. Ct. | 1840
Lead Opinion
By the Court, It is contended that the matters set forth in the several replications of the attorney-general, are not causes of forfeiture of the corporate privileges of the defendants, and that, therefore, the replications are no answers to the plea. The first 24, contain matters which, if true, shew a failure to perform six separate and distinct conditions annexed to the grant, specifying particularly the nature of each. The remain, ing replications will be noticed hereafter. The question for the present
The statute, 2 R. S. 483 § 39, provides for the filing of an information against a corporate body, whenever it shall, 1. Offend against any of the provisions of the act or acts, creating, altering or renewing such corporation ; or 2. Violate the provisions of any law, by which such corporation shall have forfeited its charter by misuser; or 3. Whenever it shall have forfeited its privileges and franchises by nonuser ; or 4. Whenever it shall have done, or omitted any acts which amount to a surrender of its corporate rights, privileges and franchises, or 5. Whenever it shall exercise any franchise or privilege, not conferred upon it by law.
It has been strongly urged for the defendants, that the two first clauses, though apparently declaratory of two separate grounds of forfeiture, should be read together; and that the offences against the provisions of the act, creating the corporation, as' specified in the first, the same, as the violation of any of the provisions of law, as specified in the second, must be such as will work a forfeiture by misuser in terms, in order to justify the filing of the information. This is supposed by the defendants’ counsel to have been the substance of the act of 1825, Sess. Laws, p. 450, § 7, from which these provisions were taken. But on a reference to that act, it will be found otherwise : the two separate grounds are as distinctly marked there as here. The seventh section provides, that in case the president, directors and company of any corporation, shall at any time offend against any of the provisions of the act or acts of incorporation, or against the provisions of any laiu by which such company shall have forfeited its charter by misuser, &c., it shall be the duty of the attorney-general, to prosecute, &c. and obtain judgment that such corporation be dissolved. Both statutes obviously intended, that corporations should fulfil the conditions, and perform the duties enjoined by the fundamental law of their creation, as the terms upon which to enjoy their privileges. The principle is not new; it has been always so held at common law as fundamental. Lord Holt said, in London * City v. Vanacre, 1 Ld. Raym. 498, all franchises which are [ *205 ] granted, are upon condition, that they shall be duly executed, according to the charter that settles their constitution : and that being a condition annexed to the grant, the citizens cannot make an alteration: but if they neglect to perform the terms of the patent, it may be repealed by scire facias.” The principle is so thoroughly, and firmly fixed in the law of coporate bodies, that I need do no more than refer to some of the authorities. A non-performance, therefore, of the conditions of the act of incorporation, is deemed per se a misuser, 'that will forfeit the grant even at common law; and hence, if the reading of the statute claimed, be conceded, it would not change the legal effect. 12 Mod. 271. Cruise, tit. Franchise, § 79. J. in Heane v. Rogers, 9 Barn. & Cress. 577. Being pleaded, however, Willcocks on Corp. p. 334, Angel & Ames on Corp. 510, and cases there cited.
Placing corporate grants upon this footing, there can be no [ *206 ] great difficulty in ascertaining the principles that should *govern conditions annexed to them. The analogous cases of individual conditional grants will give the rule. In these a reasonable and substantial performance according to the intent of the grantor is required. Shep. Touch. 133.15 Wendell, 291. In cases of conditions subsequent, if impossible to be performed, or rendered impossible by the act of God, the grantee is excused and the estate is absolute. 2 Bacon, 676, tit. Condition. Shep. Touch. 133. 157. So if waste be committed by a stranger, it shall not be a breach of the condition of the lease. 2 Bacon, 652. The whole law on the subject will be found reasonable; and nothing is required but what is within the means and ability of the party to comply with. It is emphatically so with respect to corporators: for we all know the nature of the conditions in their charters depend very much upon themselves: they usually settle the terms of the grant, and therein consult their own as well as the public interests. The acceptance also, is voluntary, and must be unconditional. Willcocks on Corp. 31, and cases there cited. This view of the case of conditions subsequent in acts of incorporation, is confirmed by the settled doctrine in respect to those which are precedent. There, as in the case of individual grants, the condition must be first performed before the franchise vests. 18 Johns. R. 137. 9 Cowen, 194. 9 Wendell, 378, 9. 15 id. 127. Angel & Ames, 379. Even where the corporation undertakes to enforce a contested claim or title in a court of justice, performance of a condition precedent, if any exists, must be either admitted or proved: because being essential to its existence, the proof must be given before a suit can be maintained in the corporate name.
Now I am noj; etware of any ground that cap warrant us in distinguishing
*One strong ground for regarding the conditions in these grants [ *207 ] in the same light as in cases of private individuals is, that they are mainly obtained with a view to private interests. I admit the public in. terests are often thereby promoted ; and that this is the chief inducement to the grant on the part of the legislature. But most of them are sought for, from considerations of private gain, and which more or less enter into the grant of every private company. In this respect, they differ from public corporations, which are but the investment of a body of citizens with municipal authority for the better government of a place. The corporators have no private interest in the matter. The former are but individuals stipulating for and accepting the grant upon certain terms for their own benefit. The acceptance implies an undertaking to perform them ; and to neglect or refuse, is a fraud upon the legislature.
In further illustration of the sort of neglect of duties, which are imposed by the grant of a franchise, or, in other words, the misuser that will work a forfeiture, we may refer to a class of cases arising out of the forfeiture of offices. These cases are not all strictly analogous, because the duties enjoined are not so definite and accurately prescribed as in cases of corporations; but they will serve as illustrations. It is laid down as a general principle that if an officer acts contrary to the nature and duty of his office, or refuses to act at all, he forfeits it; and if granted by patent, he may be turned out by scire facias. 5 Bacon, 210, 212, tit. Offices and Officers. 9 Coke, 50, 98. For in every grant of an office, there is an implied condition that the grantee will diligently and faithfully execute the duties of it. Lord Coke says, in the Earl of Shrewsbury’s Case, 9 Coke, 50, that there are three causes of forfeiture : 1. Abuser ; 2. Nonuser; and 3. Refusal. The first, is where the sheriff or gaoler permits a voluntary escape, or abuses the prisoners, &c. ; or a forester or parker cuts wood, unless for necessary brush. The second, where the officer is concerned in the administration of justice, or of the commonwealth, and neglects to attend upon his duties; and the third, where he is bound to attend upon request, and refuses ; in either case *the office is forfeited. Sickness is an excuse ; but in [ *208 ] the case of a searcher of a port, voluntary absence when search should be made, is not. Cro. Car. 491. And Lord Holt, held that the voluntary absence of a recorder of Ipswich, he holding a public office, was .cause of forfeiture, though no inconvenience ensues. 2 Ld. Raym. 1237.
The hardship of exacting from corporations a fulfilment of all the requirements of the charter, has been urged upon us; but the appeal is made to the wrong forum. That is a question to be settled with the legislature that prescribed them. It is not for courts to say one condition is material, and must be performed on pain of forfeiture ; and another is unimportant and may be dispensed with, or enforced by indictment or pecuniary penalty. Where shall we draw the line ? The statute makes no such distinction ; if corporations offend against “ any of the provisions of the act or acts creating^ them, the information may be filed, and judgment of ouster rendered. 2 R. S. 483, § 39. Id. 485, § 49. Besides, the hardship is no greater than in the case of individual grants, where in a court of law nothing short of performance, or the act of God, or of the grantor, will excuse [ *209 ] *the forfeiture. While this rule is steadily enforced against them, I do not perceive how we can deny its application to the case of a private association of individuals. If the condition is onerous, and unessential to the purposes of the charter, relief is plain, and at” hand ; the legislature will repeal it. While it remains on the statute book we are to presume it was deemed material by those who had a right to judge of the matter, and should be enforced. I speak now of express conditions; where they are implied, and of course undefined, except by construction of law, a more indulgent consideration may well be given; we are not then tied down to the letter of the statute. Their materiality to the great end of the institution may be regarded, and enter into the judgment of the court.
The remedy by repeal being thus plain and easy, I am unable to appreciate the force of the appeal on the ground of hardship, even if properly made to us. I desire to treat these institutions with all reasonable indulgence, consistent with the express injunctions of the law. Under proper-regulations, they are often eminently useful instruments in the hands of citi
For the above reasons, I am of opinion that the true construction of the statute authorizing proceedings against ’‘corporations [ *210 ] by information, imposes the penalty of forfeiture on failure to perform any express condition annexed in the act of incorporation : that it is a misuser' within the meaning of the 49th section, and would be so regarded even at common law, as a fundamental rule in respect to corporate bodies ; and applying this principle to the issue upon the first twenty- four replications, it follows that the people are entitled to judgment, unless concluded by the license of the governor.
The 32d section of the General Turnpike Act, 2 R. S. 587, provides, that as soon as the company shall have completed their road, or any ten miles thereof, they shall give notice to the governor, who shall appoint three discreet freeholders not interested, to view the road and report to him, in writing, whether the same is completed in a workmanlike manner, according to the requisitions of the law. § 33. If they report in the affirmative, he shall grant a licence to permit the erection of so many gates on the road as shall be sufficient to collect the tolls authorized by law. It is insisted that this report and license are conclusive upon the people, (even in this direct proceeding to inquire into the matter;) that the road has been made agreeably to the terms of the charter ; that the question is res judicata, and that the only ground for setting up a misuser to work a forfeiture, is a subsequent default as to repairs, &c.
After the best consideration I have been able to bestow upon the question, I am inclined to think the construction insisted on would give to the clause an effect beyond the intent of the legislature. It appears to me the object was simply to afford reasonable evidence of the completion of the work, before the exaction of toll should be allowed : for this purpose, the license is conclusive in favor of the company, but not equivalent to a general judgment on the writ of quo warranto. The proceeding is ex parte in respect to the people ; it does not contemplate a contested trial, where the whole matter would be brought out for discussion and adjudication. True, the
I have said that the whole law on the subject of performance of conditions precedent or subsequent is reasonable, and within the ability of the company to perform. A substantial performance according to the intent of the charter is all that is required. Under the issues presented, this will be a question on the trial. If such a performance is shown, the defendants will be entitled to the verdict. The law in respect to individual grants on condition will afford familiar principles to guide the court and jury. Slight departures are overlooked. The leaning of the law is against the party claiming the forfeiture ; and if the failure is such as cannot be disregarded in a court of law upon settled principles, and has arisen from mistake or accident, the legislature will apply the remedy. They, and not the court, possess the dispensing power.
The demurrer to the remaining six replications I am of opinion is also not well taken. The first replication alleges, that the company erected gates and collected toll before the license of the governor was procured, and the others, that after the license more toll was demanded and received than was allowed by law. Either is an infraction of an express provision of the act of incorporation, and therefore within the mischief of the statute authorizing the information as already expounded. It was argued, that admitting the toll had been taken in violation of the charter, still it would only forfeit that franchise, and not all the franchises conferred. The rule at the common law is, that if the franchises are not dependent upon each other, the mis- [ *212 ] user of one does not ‘forfeit all; Cruise, 305, tit. Franchise, § 86 ; Finch, 165 ; and our statute may, I think, admit of a construction to a similar effect. 2 R. S. 483, § 39, 48. But the distinction is not worth contending for here ; the charter would be worse than useless to the company without this privilege. The right is so vital, and connected with the enjoyment of the grant, that a severance ought not to be permitted. It would be unreasonable to enforce the burthen imposed upon the company, after ousting them of the only countervailing benefit; they would
It was urged that the time for completing the road, as extended by the act of 1836, had not expired when the information was filed, and therefore this proceeding is premature. But the plea avers the construction and finishing of twenty-five miles of the line, as a part of the defendant’s title to' the franchises claimed. This is therefore a very material averment, and must be maintained. It is properly met and overthrown by the replications. It is too late for the defendants now to say they have a longer time to comply with the requirements of the charter. The franchises claimed and exercised, according to the plea, depend upon the completion of the twenty-five miles.
It is further urged that the legislature confirmed the road as constructed, by the act of 1836, (the act of 1834 passed before any part of it was made,) extending the time to complete it. They have not done so in express terms, and I am unable to perceive any such implied intent, in any of its provisions. 9 Wendell, 382, 3, 4.
It is made a point, that the six last replications should have concluded to the country ; but as they set up new matter in answer to the plea, and which went to overthrow it, they properly concluded with a verification. The defendants were entitled to an opportunity to answer by rejoinder if they could.
It was also said that the demurrer to the five last replications was mainly intended to raise and settle the construction of the act, whether the rate of tolls shall be in proportion to the distance actually travelled, or shall be determined *by the distance between the gates as located. [ *213 ] The latter, I am of opinion, is clearly the rule intended by the act. Statutes of 1831, p. 49, § 5. By the section referred to, the company may erect the gates at such places as they see fit; but they can demand only “ the following rates of toll for every ten miles, and in the same proportion for a shorter distance,” &c. This clause refers to the distance between the gates; if that be five miles, the corporation may demand half toll; if it be two and a half miles, they may demand a quarter toll, and so in proportion. 1 Caines, 182. There may be some ground for doubt whether the gates can be placed more than ten miles apart; but as the places for the erection of gates are left at the discretion of the company, I am inclined to think the subsequent clause does not necessarily restrict the power' conferred in this respect.
I am accordingly of opinion that the plaintiffs are entitled to judgment on the demurrer to all the replications except the fifth, eleventh, seventeenth and twenty-third, and as to those that the defendants are entitled to judgment ; and that leave to amend on the Usual terms should be given.
Mr. Justice Bronson concurred.
Dissenting Opinion
dissented and delivered the following opinion :
I had occasion to examine the principle on which the first 24 of these replications are founded, in The People v. The Bristol and Rensselaerville Turnpike Company.
[ *214 ] *1 also thought, in the case cited, that according to the true construction of the general act, after the road is accepted by the state as complete, the company are not required to continue it, on pain of forfeiting their charter, in the exact condition by measure and shape, &c. required in the original construction; and that, if the road be afterwards kept in a reasonable state of repair, their duty is discharged; though I do not mean to say that the directions of the statute, in respect to the mode of construction, are to be entirely disregarded, in estimating what shall be deemed a proper state of repair. I think the replications, when they speak of a time after the company began lawfully to take toll, should, like an indictment for a nuisance, state either that the road had not been kept in repair according to the duty of the company, or that it was suffered to be out of repair, or had become inconvenient in some particular, contrary to that duty, stating wherein. It cannot be denied that, as it is their duty to construct, so they should continue mile-stones or posts, also guide-posts as required by the 21st and 22d sections of the statute, and, no doubt, negligence in this respect may be insisted on, as a ground for dissolving the corporation; but it can not be, that they are absolutely bound, at all times, and against all hazards,-to keep the road thus furnished. Should they decline to replace or repair sqch convenient things, in a reasonable time, after having notice that they were destroyed or defaced, that might be set down as a violation of duty. But an issue on the naked allegation, that the company had not, during all or any part of a given period, kept up a certain condition of things, must be found against them, if it skmld appear that, at any moment, or in any small particular, they had come short o'f it. To be full, the answer must be affirmatively : “ We have, during the whole and every part of the time, maintained such and suctf erections, or kept the facing of gravel at such'a depth,’-’ &e. and all this irrespective of neglect. Whereas if the state bfe put to charge that the omission was wilful or negligent, or contrary to duty, an issue would be formed as well upon the legal quality of the omis
But all this is, just now, no way material, if I am right with regard to the effect of the award, &c. The replications admit these awards, and by claiming to go behind them are bad. Being ill in this respect, can they be sustained for any part ? They may be if divisible, as against a demurrer to the whole. Douglass v. Satterlee, 11 Johns. R. 16.
Thu fifth replication here is also defective for the same reason that the tenth is so in The People v. The Bristol and Rensselaerville Turnpike Company. The 5 th avers that where the road was not of full width, it was not furnished with a fender, &c. without stating that a fender, &c. was in fact any where required by the circumstance of the road being narrow.
Several other replications are, I think, in part or in whole, open to simikr objections. To instance one, the sixth: it cannot be complained that guide boards were omitted at intersecting roads, without a distinct averment that there were, in fact, places of intersection. The facts which go to make up the condition of which the supposed duty arises, should be set out with all the exactness of pleading required in an action for a penalty. Sutherland, J. in The People v. The Manhattan Co., 9 Wendell, 378, 5.
The eleventh, seventeenth and tiventy-ihird replications are obnoxious to the same objections with the fifth.
But a general answer to the whole twenty-four replications is, I think, to be found in the statute of May 13, 1836, which provides that the time for completing the road “ is hereby extended to the first day of November, A. D. 1839.” This information was filed before that day, viz. in January, 1839. The information and the twenty-four replications, therefore, do no more than complain of the road being incomplete at a time when the company were in no wise bound to have it completed. The act does more than merely to recognize their existence as a corporation; it, in effect, declares that they shall continue such and be excused from *com- [ *216 ] pleting their road, for several months after the information was filed. Any failure in this respect is certainly not a substantive ground of forfeiture, however it might be when connected with the fact of receiving toll; but no such complex ground is taken by any replication. Each must contain a perfect ground of forfeiture,in itself. It relates to, and is but an essential incident of, the information; but it is an essential incident for the purpose of explaining and fortifying the information and overturning the plea. If it present, whether alone or in connection with the plea, a case showing the information to have been premature, it is bad; and both the replication and informationmust fall together.
The effect of the amendatory statute is, I think, the same with regard to the matter alleged in the twenty-fifth replication, which complains of taking
This replication (the 26th) is also substantially defective for extreme generality and uncertainty in setting out the matter on which it relies. The averment is that the company took from A. B. C. more toll than they were legally entitled to, viz. more than after the rate of six cents for every score of sheep, &c. (literally copying the whole tariff of tolls from the statute,) for every ten miles, and in the same proportion for a shorter distance and less number of miles, and this the attorney-general is ready to verify, &c. The replication does no more than if it had referred to § 5 of the act of 1831, (the section prescribing the amount of tolls,) and then had said the company took from certain persons more toll than the section allowed. The whole is, in short, saying that the defendants took more toll from certain persons named than was allowed by law; whereas the replication should'have pleaded facts, viz. that a certain amount of toll was taken, going on and stating such specific act or acts of taking excessive toll, as were claimed to be a violation of the statute rate, A declaration upon a statute cannot stop with say
I have taken it, that, on the reason of the thing, the act of 1836, forgave all previous offences, and virtually declared the defendants a sound corpora, tion from that time. Much less was held sufficient to work this consequence as to a bank, in The People v. Manhattan Company, 9 Wendell, 351, 381. There statutes directing the public funds to be deposited in the defendants’ bank, and to be continued by the comptroller, on payment of interest, were held to be sufficient. It is not competent for the state to answer that it did not know of previous forfeitures. If that were so, it should at least have been added in the replication, by way of avoiding the statute. But I deny that the state can avoid the effect of a statute waiver or pardon of this kind, by setting up ignorance or fraud. The very object is to waive, at all events, every flaw which may be supposed to have intervened by reason of any omission or irregularity. Such a statute should be holden equivalent to a judgment against the state, on verdict, or confession by the attorney general; and I take it the legislature always mean that this kind of statute should have that effect. See per Sutherland, J. in The People v. Manhattan Company, 9 Wendell, 381, 2. The remarks of the learned judge, it is true, are, in that case, founded upon the circumstance of the state itself being a stockholder, voting for officers, and thus indirectly participating in the direction of the bank, during all the time when the offences complained of were committed. For these reasons, he thought the state should be es-topped. But who ever heard of a legislative amnesty or pardon being avoided for ignorance or fraud, and the consequences of the crime being visited on the offender in the face of it ? Such a plea was, I believe, sometimes set up and acted upon in avoidance of general pardons, by weak and wicked princes, in the dark times of English history. Men were thus brought to the block, with a royal amnesty in their pockets, under pretence that the monarch had been surprised into forgiveness, by his subjects concealing from him the number or enormity of their, transgressions; and, for aught I know, * Great Britain may still retain such a head of bar [ *219 ] barous policy in her code, though I imagine she would be very cautious in exercising it, unless upon her distant and depressed colonies. But even there a legislative amnesty could, I suspect, hardly be impeached under such a pretence. The objection may be predicable against state patents, grants or contracts, but to allow it against a statute passed for the pur
The remaining four replications allege certain acts of taking toll, which may perhaps be taken as showing by express averment to have been done after the time, as fixed in the plea, when the last of the governor’s licenses was granted. That time was after the passing of the statute of 1836. These replications set forth various specific instances in which the company demanded and received, as the replications insist, more than at and after the rate of toll allowed by their charter ; e. g. in the 27th replication, as to four wheeled waggons, more than at and after the rate of twelve and a half cents for every ten miles, or in the same proportion for a shorter distance or less number of miles, viz. six cents for every three and three-fourth miles, whereas they were not, for this, entitled to more than four and eleven-sixteenths cents. Again in the 28th ; the complaint is that they took, for one horse waggons six cents for five miles, whereas they were entitled to only six cents for ten miles ; and so of the 29th and 30th, in respect to toll for other vehicles. In short, these four last replications insist, in effect, that the passenger is bound, to pay, at whatever gate he passes, the toll allowed by the charter, only at the rate of his actual travel, after entering upon it, not according to the general rate of toll imposed for each gate according to its'distance from another gate.
By the general turnpike act, 1 R. S. 587, 2d ed. § 33, the governor is to permit the erection of so many gates on the road reported to him as shall be sufficient for the collection thereon of the tolls authorized by law. This is but a repetition of the powers, conferred by the statute of 1807, [ *220 ] § 6, Continued in the revisal of 1813, § 6. The gates may of course be distant from each other more or less than ten miles. Then comes the charter in question, Sess. Laws of 1821, p. 49, § 5, which provides that this company may erect gates, &c. and demand and receive certain rates of toll for every ten miles, and in the same proportion for a shorter distance or less number of miles. The replications leave it to be taken as admitted that this proportion was fixed according to the distance of the gates, and merely find fault that it was not limited to the distance of actual travel, as five, three, one mile or half a mile. Such a construction would leave every traveller to estimate his own toll and make it utterly impracticable for the toll-gatherer to perform his duty. It would lay him open to continual imposition. On a clause similarly framed, therefore, in Stuart v. Rich, 1 Caines, 182, it was held that the words, and so in proportion for [any greater or ] lesser distance, should be applied to the distance of the gates, not of actual travel. There is no pretence that the defendants have not been'governed by that construction ; having established gates with proper general rates of toll at each, accordingly as their distance may be ten miles or less from each other.
A similar question was examined by Sutherland, J. in The People v. The Manhattan Company, 9 Wendell, 373; and his conclusion was, that in order to show a ground of forfeiture for non-feasance, the attorney general was bound to state all such facts as were material to pul the corporation in default ; and he cites cases on pleading justifications in actions for libel, as illustrating the degree of strictness required. In the case before him, the fault alleged was that the defendants had not complied with a condition subsequent, by which they were bound to furnish water to the city of New-York, for the use of such citizens as were willing to agree for and take the same. It was held necessary to show that some one, at least, was willing and desirous, and gave notice that he was so, and made a request to be supplied with water; and that the company disregarded such notice and request. He said the case was of a penal character, in which the forfeiture of most valuable and important franchises was sought to be established; and added
But it is unnecessary to pursue the inquiry on the form of the [ *222 ] replications; for I think there cannot be a serious doubt *that the case of Stuart v. Rich, applies. I concede that a corporation wilfully and knowingly taking a toll not due, or more than it ought, under pretence of its corporate powers, incurs a forfeiture of its charter, whatever other remedies may lie for the offence ; but such a case has not been made out by the replications in question.
On the whole, I am of opinion that there should be judgment for the defendants on the demurrers, to all the .replications. But my brethren differing from me except as to the fifth, eleventh, seventeenth and twenty-third replications, there must be judgment for the people on the demurrers to all the others.
Judgment accordingly.
See next case in this volume.
