124 F. 274 | U.S. Circuit Court for the District of Northern New York | 1903
The bill of complaint in this action has been before this court on a motion to vacate an order of Justice Wallace granting leave to file same, and also to strike such bill of complaint from the files of the court. The case is reported in 119 Fed. 634, where the facts alleged are quite fully stated, and reference will be had thereto without fully restating them here.
It is well to say, however, in brief, that the complaint alleges that the complainants own and are in the possession of certain premises on Washington avenue, in the city of Schenectady; that about February 24, 1886, the Schenectády Street Railway Company was incorporated as a street surface railway company, and, having obtained certain consents of the property owners, constructed a horse railway on State street and on Washington avenue in front of the premises of the complainants, and that until July 2, 1891, it operated the said railway with horse cars in the summer and sleighs in the winter; that thereafter, having consents, it changed to an overhead trolley, and operated its road on Washington avenue very irregularly with electric cars 'in the summer, and sleighs in, the winter, until it ceased the operation of its road. The complaint then alleges that on the 1st of September, 1891, the Schenectady Street Railway Company made a mortgage to the Central Trust Company of New York to secure certain bonds therein described, which was duly recorded, and which conveyed the railway franchises and other property of the defendant railway company, described in said mortgage, as follows (then follows a description of the property along which said railway ran, including Washington avenue); that about August 15, 1893, one Williams filed in this court, the Circuit Court of the Northern District of New York, a bill against the Schenectady Street Railway Company, which is set out in full, in which action one John Muir was appointed receiver of said company, and entered into the possession of all the property of said Schenectady Street Railway Company. The complaint then alleges that October 10, 1893, the common council of the city of Schenectady took into consideration a petition for the abandonment of the said railway on Washington avenue, and thereupon the common council adopted a resolution that the running of cars over that portion of the said railway lying between the easterly side of Church street and Washington avenue, and on Washington avenue from its intersection with State street to the Mohawk river bridge, might be dispensed with until the 1st of June, 1894. The mayor of the city approved such resolution.
The demurrer of the Schenectady Railway Company alleges that this court has no jurisdiction of the matters contained in the bill of complaint; that there is a defect of parties before the court to maintain this bill, as none of the parties to the original suit or decree are made parties herein; and that Kobbe, White, and Batchellor are necessary parties, they having purchased under said decree and sold to the present railway company. The Central Trust Company has been made a party. The demurrer also contends that the other owners of property on Washington avenue who signed the consents to the operation of the road on Washington avenue should be made parties. The demurrer also alleges and claims that the state of New York ought to be a party, and that this bill of complaint cannot be sustained, and does not state a cause of action, for the reason that the franchise of said company on Washington avenue granted by the state could not be abandoned without the consent of the state.
It seems clear to this court that it has jurisdiction of the matters contained in the bill. The foreclosure was had in this court, and the property was sold under and pursuant to a decree of this court. One contention is that too much was included in that decree of sale or in the description of property contained' therein, and the main purpose is to correct that decree by this action by striking out the description of property, etc., so far as it relates to the property on Washington avenue. Clearly, no other court has jurisdiction by supplemental bill or original bill, or supplemental bill in the nature of a bill of review,
The facts so far as applicable are as follows: The Schenectady Street Railway Company became insolvent in 1893, and thereafter a receiver, one John Muir, was appointed by a federal court. Later an action of foreclosure was brought by the Central Trust Company in behalf of the bondholders, and by virtue of a decree of the federal court all the property, including in terms “all the franchises” (Demurrer Book, report of George W. Jones, Receiver, fols. 288, 289), was sold to three persons, Kobbe, White, and Batchellor, who in turn sold to defendant the Schenectady Railway Company. They in fact organized this company. One Jones was receiver in this action. While still such receiver, and during the pendency of the foreclosure, upon a petition of the owners of the abutting property on Washington avenue (plaintiffs or plaintiffs’ predecessors in title in this suit), and with the consent of the common council of the city of Schenectady, a part of the tracks on Washington avenue were abandoned, and the company, or receiver, took up the rails and replaced the pavement as agreed.
Defendants contend that Kobbe, White, and Batchellor are parties in interest who must be joined in this equitable action. They argue that if it be decided that the right to run over the portion of Washington avenue in dispute be held to have been abandoned, according to complainants’ contention, these vendors will become liable to respond in damages to their vendee, and therefore are necessary parties. Unfortunately for this contention, nothing appears to show by what sort of conveyance Kobbe, White, and Batchellor sold to the Schenectady Railway Company. It is elementary that a demurrer lies only as to facts appearing on the face of the pleading, and there are no implied covenants of title in a deed of real estate. “In the conveyance of real estate, if no covenants are expressed in the deed, there is not * * * a warranty of title. If the deed contains no covenant, the purchaser is wholly without remedy.” 3 Washburn, R. P. p. 447, c. 5, § 5, note 1. “A covenant is not implied in a conveyance of real property, whether the' conveyance contains any special covenant or not.” 5 N. Y. Rev. St. p. 3579, “Real Property Law,” § 216.
Now, this transfer from Kobbe, White, and Batchellor was one of real property; for a .franchise, both at common law and by New York statute, is real estate, being classified as an incorporeal hereditament. 2 Wash. R. P. c. 1, p. 291, § 2, note 1, et seq.; 3 Kent’s Com. (12th Ed.) p. 458; Laws N. Y. 1899, p. 1589, c. 712.
So, also, the right of way over the property of abutting street owners is an easement, and thus real estate. Citations supra. The court can
The point that the right to run over a portion of Washington avenue could not be abandoned without the consent of the state is not well taken.
Counsel have fallen into error as to the meaning of the word “franchise.” It may be true that a corporation cannot abandon its franchise — cannot commit suicide — without the consent of its creator, the state. But “franchise,” i. e., the right to exist and perform certain acts, is a thing distinct from the property rights which the corporation when created may acquire from individuals. Assume this case: A corporation is chartered to construct and operate a railway between the cities of A. and B. That charter is its franchise, and, having been created, the railway company proceeds to acquire by purchase, or by exercise of the right of eminent domain, rights of way over the lands of individuals, one of whom is John Doe, located between A. and B. The company lays tracks and operates its trains over Doe’s land for several years, and then decides to change the location of its tracks for a mile or two for the purpose of reducing grade. It takes up its tracks from Doe’s land, uses it for no purpose, and in fact specifically notifies him that it has abandoned its right of way, and such abandonment is mutually agreed upon for a good consideration. Will it for a moment be contended that this proceeding is void because it involves the abandonment of a “franchise,” and that, therefore, the state must be a party ? Or, after the lapse of years, could the railway again lay rails over Doe’s land, ousting him from the user, without again purchasing or acquiring by condemnation the right of way, upon the cynical plea that the “abandonment” was void for lack of consent by the state ? If so, then no railroad company could take up a yard of its tracks, or change the location of the smallest of its buildings, without the consent of the state. But to state the proposition is to reduce the argument to an absurdity. In this'case the property owners who granted rights of way by consents which were subsequently mutually abandoned are seeking to have such abandonment adhered to.
The “franchise,” the charter granted by the state, is one thing; the property rights, including rights of way which the chartered body may acquire from private individuals, is quite another. These latter may be lost by acts of the corporation, and the approval of the state is not necessary.
There is no reason why the property owners who consented to the construction of the road on Washington avenue, and who do not complain of the action of the present company in constructing a road there,
It seems clear to this court that, assuming all the facts alleged in the complaint to be true, a cause of action is stated, and that the complainants are entitled substantially to the relief demanded, and that with the new parties brought in all necessary parties are now before the court-
The demurrer must be overruled, with costs. So ordered.