Williamson v. Gordon Heights Railway Co.

| New York Court of Chancery | Mar 15, 1898

The Chancellor:—

The respondent operates a street railway by electricity under what is known as the “Trolley System,” from a point near the boundary line of the City of Wilmington to a point on the Delaware river near the Gordon Heights Station, on the Philadelphia, Wilmington & Baltimore Railroad; and, for the purpose of constructing, operating, and maintaining a branch line, it proposes to use and occupy the lands of the complainant situated in New Castle County, near the City of Wilmington, on both sides of the Wilmington and Philadelphia turnpike road, for a right of way for the said branch line, first acquiring the right by regular condemnation proceedings.

The complainants filed a bill in equity, April 28, 1898, to restrain the proposed entry upon their lands.

Upon the presentation of complainants’ bill, I granted a rule to show cause why the preliminary injunction prayed for in said bill should not be granted.

^The respondent has filed its answer, and the questions involved have been argued by the counsel for the respective parties upon the motion for a preliminary injunction. There are no questions of fact at issue, and the decision depends entirely upon the construction to be placed upon the two acts of the Legislature, from which, taken together, the respondent derives all its franchises, including the right to condemn and enter upon the lands of the complainant.

The original charter of the respondent granted May 2, 1893, 19 Del. Laws, chapter 713, authorized it to locate and construct its railway from “a point on the Delaware River at or near the Gordon Heights Station, on the P., W. & B. Railroad, to the northerly and northeasterly line of the City of. Wilmington, or to any intermediate point or points within Brandywine hundred.” It also provided that it might use and occupy, for a right of way, lands other than a public road, the right to use which had previously been acquired by gift, lease, or purchase, or by condemnation proceedings in the manner set forth and described in the charter. The charter contained also the following clause: ‘‘Provided, however, that the construction of the railway herein authorized shall be commenced within six months after the passage of this act, and it shall be completed, equipped and in operation within two years thereafter, otherwise this act shall become void, and all the rights, privileges and franchises herein granted shall wholly cease and determine.” The construction was completed within the time limited.

The supplement to this charter, passed May 6, 1895, 20, Del. Laws, chapter 91, . is as follows: “Section 1. That the Gordon Heights Railway Co. shall be, and it is hereby authorized to locate, extend, construct, operate and maintain a branch line of railway from any point on its present line to any point selected by its board of directors in the Delaware and Pennsylvania state line, by such route as said board shall select after a careful survey, and shall have power to increase its capital stock to such amount, from time to time, as may be determined on, by issuing such amounts of common or preferred stock, or both, as may be deemed proper; provided, that said increase of capital stock shall not exceed the sum of seven hundred thousand dollars; and with respect to the said branch hereby authorized to be located and constructed, the said corporation shall have and exercise all the rights and privileges and be subject to all the duties and responsibilities which did or shall belong to or devolve upon said corporation, with respect to the railway originally located, constructed and maintained under the provisions of the act to which this is a supplement.”

It is claimed by the complainants that the last mentioned act from which the respondent seeks to derive its right to condemn and enter upon the complainants’ lands, has become void, and that all the rights, privileges, and franchises therein granted have wholly ceased and determined, because the branch line of railway for which it provides was not completed, equipped, and in operation within two years from the date of its enactment, which was May 2, 1895; and they assert that the intent of the legislature is plain that the additional privileges granted to the Gordon Heights Railway Company, by this supplementary act must be fully exercised within a period of two years from its passage. Respondent admits that the branch line of railway has not been completed within two years from the passage of the above mentioned act, but denies that the time for construction was limited.

There is no rule of construction more fixed and unyielding than that requiring strict construction of grants to corporations. Based upon sound considerations of public policy, and upon reasoning, which has never been questioned, it would be mere waste of words for me to discuss it at this late date, or to comment upon the many cases cited by the counsel for the complainants in support and illustration of the rule. It seems to be none too strongly expressed by Chief Justice Black, when he says: “In the construction of a charter, to be in doubt is to be resolved; and every resolution which springs from doubt is against the corporation. This is the rule sustained by all the courts in this country and in England.” Pennsylvania R. Co. v. Canal Com’rs, 21 Pa. St. 9, 22.

Indeed, the learned counsel for the respondent does not seek to question or qualify the rule, but in hs remarkably able and ingenious argument seeks to show by subtle definition and analysis of the words “rights and privileges, duties and responsibilities,” as used in the act of May 6, 1895, that they cannot be intended to include that provision in the original act which requires the railway to be completed, etc., in two years from its passage. The learned counsel also see'ks to strengthen his position by citing a number of acts of the Delaware Legislature incorporating branch lines of railroad which provided no limitation as to the time of construction, although such limitation was contained in the act incorporating the main line, thus indicating a general legislative policy in this respect.

Can such reasoning lead legitimately to the conclusion that the act of May 6, 1895, had the effect of granting to the Gordon Heights Railway Company, the respondent in this suit, the right to build the branch line which it proposes to construct across the lands of the complainants, absolutely and without the limitation as to time of construction which was contained in the original charter to which the supplementary act refers ? The answer can be found only in the language of the acts themselves. “All the rights and privileges” granted in the original charter were granted upon the condition which we have already cited. It was expressed' as follows: “Provided, however, that the construction of the railway herein authorized shall be commenced within six months after the passage of this act, and it shall be completed, equipped and in operation within two years thereafter, otherwise this act shall become void, and all the rights, privileges and franchises herein granted shall wholly cease and determine.” Is not this grant of rights, privileges, and franchises a. grant “on condition expressed in the grant itself”? Does not Blackstone’s definition of an estate upon condition serve as its definition? that is, “when an estate is granted, either in fee simple or otherwise, with an express qualification annexed, whereby the estate granted shall either commence, be enlarged, or be defeated, upon performance or breach of such qualification or condition.” 1 Bl. Comm. 154. If such be the case, what construction should be placed upon the grant of rights and privileges expressed in the supplementary act (chapter 91, vol. 20) ? It says: “And with respect to the said branch hereby authorized to be located and constructed the said corporation shall have and exercise all the rights and privileges, and be subject to all the duties and responsibilities which did or shall belong to or devolve upon said corporation with respect to the railway originally located, constructed and maintained, under the provisions of the act to which this is a supplement.” Under the rule of strict construction of corporate grants to which we have referred, can this be construed to enlarge the original grant so as to operate as an unconditional grant of rights and privileges, when the rights and privileges which were granted in the original act were conditioned in the manner we have seen, and that too, when the condition attached to the original grant is a most important one, it being obvious that an unconditional grant of the power to build a railway at any time in the future, that the grantee of the power might see fit, is a very much more valuable grant than one conditioned upon its construction within two years ?

I am clearly of opinion that it cannot be so construed; that the respondent possesses in this respect only the power it possessed under the original act; and that it would be impossible to put any other construction upon the grant of powers contained in the supplementary act without unsettling all the rules of construction governing the interpretation of legislative grants of franchises. In other words, the rights and privileges possessed by the corporation respondent, under the terms of the original act, and the duties and responsibilities to which it was made subject by that act, being neither altered nor enlarged by the supplementary act, it must be held that it rested under the obligation to complete, equip, and put in operation the branch line within two years after the passage of such supplementary act, in the same manner as it had rested under the obligation to complete the main line within that period after the passage of the original act. It being admitted that this was not done, it follows that the respondent has forfeited the right to condemn and enter upon complainants’ lands; and I will therefore grant the motion for a preliminary injunction as prayed for in the bill.

And it was accordingly so ordered.