Case ID: ny-st-rep_1/html/0512-01.html
Source: Caselaw Access Project
Author: {"author": "Dyoian, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Matter of the petition of the Kings County Elevated Railroad.
    
      (Supreme Court, General Term, Second Department,
    
    
      Filed July 23, 1886.)
    
    1. Railroads—Kings County Elevated Railroad—Laws oe 1875, chapter
    606—Eminent domain.
    The petitioning company was organized under the Rapid Transit Act of 1875, chapter 606, which contained a provision that the commission to be appointed should fix and determine the time in which the railway should be constructed and ready for operation, and prepare appropriate articles of association for the company, in which should be embodied the several conditions and requirements determined by them, and which should “ provide for the release and forfeiture to the supervisors of the county of all rights and franchises acquired by said corporation in case said railway, or railways, shall not be completéd within the time and upon the conditions therein provided.” The commission was appointed and provided for the completion of this railroad within one year from Augmt 1st, 1818. They also made this article: “In case the * * * railway shall not be completed within the time * * * provided for, the rights and franchise
    acquired by such corporation shall be released and forfeited to the supervisors of the county of Kings. The building of the road was not commenced until 1885. This is a petition for a commission to assess value of easement in street to be taken under the right of eminent domain. Held, that at the termination of the period of time limited, the conditions not having been complied with, the company’s franchises were released and forfeited to the supervisors of Kings county, and that they were lost by the company, and such forfeiture may be asserted, and would defeat their application for the acquisition of property by the exercise of the right of eminent domain. The petioner has sustained a loss of its corporate powers, and is resting under a disability and incapacity which destroys its right to institute these proceedings.
    2. Same.
    
      Held, That the statute executed itself, and when the period of limitation was reached, the conditions being unperformed, it is not merely a cause for forfeiture by judicial proceedings, but the forfeiture is wrought instantly by operation of law.
    3. Same.
    The legal existence of a corporation authorized to construct a railroad is at the foundation of the right to take property for its use under the right of eminent domain.
    
      4. Same.
    The saving clause in the resolution of the commission relied upon is that “ the time, if any, unavoidably consumed by the pendency of legal proceedings, or by the delay or interference of the public authorities in refusing to give their consent to the use of the streets and avenues, as required in Laws of 1875, or otherwise, shall not be deemed a part of any period of time witnin which the construction of the railway is to be made. Held, that its time is not extended by delays in legal proceed ngs instituí ed by itself beyond a reasonable time. That the clause cannot be construed to read, “time unavoidably consumed by the pendency of legal proceedings * * * or otherwise.”
    5. Same—Laws 1881, chapter 518.
    The Law of 1881, chapter 518, which authorizes the consent of the local authorities, required by the conditions to be made and given by the mayor and commissioners of the city works, is unconstitutional.
    
      Johnson & Lamb, for appellant, railroad company.
    
      Wingate & Cullen, for respondents, Duane & O’Brien.
   Dyoian, J.

This proceeding was inaugurated by the petitioners for the invasion of the easement of Mary Duane and John O’Brien, in Fulton street, in the city of Brooklyn, and for the acquisition of the right to construct and operate an elevated railroad over that street by the exercise of the right of eminent domain under the constitution and laws of the state of New York. The application to the court was for the appointment of commissioners of appraisal, and the property owners, in their resistance to the petition, among other things, interposed a denial of the vitality of the corporation, and claimed that it had lost its life by the expiration of its corporate powers and the termination of its corporate rights. The solution of the question thus presented will depend upon the construction to be received of certain statutory provisions and the proceedings conducted in pursuance of the same. This corporation was organized under the rapid transit act of 1875, chapter 606 Laws of 1875. In its application to the city of Brooklyn that law required the mayor of that city to appoint five commissioners, whose duty was to determine upon the necessity of the proposed railway, and if their decision was favorable, then to fix and determine and locate the route of the same. They were also to fix and determine the time in which such railway should be constructed and ready for operation, and prepare appropriate articles of association for the company, in which should be embodied the several conditions and requirements determined by them, and which should “provide for the release and forfeiture to the supervisors of the county of all rights and franchises acquired by said corporation, in case said railway or railways shall not be completed within the time and upon the conditions therein provided. ” Such commissioners were appointed, and in the legal and appropriate discharge of their duties they prescribed and located the routes for the railway to be erected by this company, and required the portion thereof to be completed from Fulton ferry along and through Fulton street to Nostrand avenue, with connections with the East river bridge at or near its terminus, within one year from the 1st day of August, 1878. They also made this article:

“Article IX. In case the several portions of such railway or railways shall not be completed each within the time and upon the conditions hereinbefore and as to such portion provided for, the rights and franchises acquired by such corporation shall be released and forfeited to the supervisors of the county of Kings.” So that the final result and effect of all these preliminary measures was to provide ■at the organization and creation of the corporation that the road it contemplated and proposed on Fulton street should be in operation to Nostrand avenue by the 1st day of August, 1879, under the penalty of forfeiture of its franchise, and it is conceded that the road is not even yet completed. The prevalent rule of law is that the legal existence of a railroad corporation armed with full power and authority to construct a railroad lies at the foundation of the right to condemn property for its use under the right of eminent domain. Matter of B., W. and N. Railway Co., 72 N. Y., 245. That requirement necessarily implies the continued _ existence of such corporation in the full possession of all its corporate powers and franchises without limitation or restriction. And if by non-performance of the conditions of its charter any of its corporate rights are forfeited or lost, the fact may be asserted to defeat an application for the acquisition of property by the exercise of the right of eminent domain. 72 N. Y., supra. In the last cited case the language of the statute was, if the road was not placed in operation in ten years, “its corporate existence and powers shall cease,” and the court held that by a failure to comply with that condition the corporation became extinct by the express hmitation upon the original grant of corporate powers, and that no judicial proceeding or action was necessary to declare a forfeiture of the charter and loss of corporate power. In the subsequent case of the Brooklyn Steam Transit Co. v. The City of Brooklyn (78 N. Y., 524) the statute under construction was “all the powers, rights and franchises herein and hereby granted shall be deemed forfeited and terminated,” and it was held in that case that the intention of the statute was to make the continued existence of the corporation depend upon a compliance with the condition in its charter, and that in case of failure so to do all the powers and rights granted were to be deemed forfeited, that such non-compliance was not merely a cause of forfeiture to be enforced by judicial proceeding but was itself to be taken as a forfeiture. Here the language employed is, “the rights and franchises acquired by it shall be released and forfeited to the supervisors of the county of Kings,” and it differs from the phraseology of the condition in the statutes under consideration in the two cases last mentioned. Yet it imports a limitation and indicates the legislative intention that a noncompliance with the condition shall absolutely terminate the corporate powers of the company. Even if its corporate existence be not at an end its powers are so restricted as to create a disability to exercise its functions, and all its powers were forfeited to the supervisors. It had alienated its rights and franchises by a failure to perform the con • dition upon which the continuance of its existence depended. They had passed from it, and with them departed all its powers of aggressive action. So that if the language employed imports a forfeiture to the supervisors it is equally fatal, for it is a forfeiture still and entails the same consequences upon the company.

It is unnecessary to determine the right or the extent of the power bestowed on the supervisors, or whether the franchise was released and reverted to them and they owned the same for ever, then the company is resting under disability and cannot wage an aggressive war upon private property or private rights. Let it be borne in mind steadily that these statutes all execute themselves, as it was distinctly held in the two cases referred to above. When the period of limitation is reached and the condition remains unperformed, the forfeiture is wrought eo instanti by operation of the law. Unless the language here was intended to operate as a limitation of power it has no scope or effect, and if it was so intended and is to be allowed such operation, then it falls easily within the doctrine of the two cases cited and circumscribes the corporate powers of the company. The corporation has omitted its duty and defaulted in the execution of the condition imposed upon it by the statute, and the articles of association and the legislative intention to make the continuation of its existence depend upon the performance of such condition is plainly manifested. At the termination of the period of time limited, its rights and franchises were released and forfeited, surrendered- and lost—to the supervisors, if you will have it so—but still departed and gone from the company, with no trace of power remaining. To escape the consequences of such conclusion the company advances two arguments:

First. That the delay has been unavoidable, and that by a saving clause in the resolution of the mayor’s commission the time unavoidably consumed does not run against it; and

Second. That its failure to perform the condition of itself does not terminate its rights but merely creates a cause of forfeiture which the supervisors alone can enforce, and that until they move the company remains in full possession of all its powers.

This second argument is - founded on the well recognized principle that corporations do not lose their existence ordinarily by a failure to perform any of the duties imposed by their charter, but simply incur the liability of deprivation of their franchises by the judgment of a court in proceedings' instituted for that purpose. But we have seen that the legislature here intended an absolute limitation, and not merely a cause of forfeiture (“at the end of the hmited time all corporate powers are ended”), as if that were the time hmited in its charter for its corporate existence. 78 N. Y., 530 ; 72 id., 245. The same contention was made-in both of these cases, and was not allowed prevalence, and it can be permitted no force in this case.

The saving clause in the resolution of the commissioners, rehed upon in the first argument, is as follows : “The time, if any, unavoidably consumed by the pendency of legal proceedings, or by the delay or interference of the pubhc authorities in refusing to give their consent to the use of the streets and avenues, as required in section 4, chapter 606 of the Laws of 1875, or otherwise, shah not be deemed a part of any period of time within which the construction of the railway or railways is to be made. But the time, if any, during which such unavoidable delay shall continue shah be added to the end of the periods hereby otherwise limited for the construction and completion of the railway or railways.”

That saving clause saves and reserves to the company the time consumed by the delay or interference of the pubhc authorities in any way, either by refusing consent to the use of the streets or otherwise, and also the time unavoidably consumed by the pendency of legal proceedings.

The appeal book contains a stipulation that prior to January, 1886, no legal proceedings had been instituted against the company in which any order had been procured restraining it from building or operating its road, unless such effect was to be allowed to the proceedings taken by the company to obtain consent from the court instead of the property owners', and that only extended down to September, 1880, and there was no restraint after October, 1879,. and no delay was experienced from hostile legal proceedings after that time, and it was not the intention of the legislature to permit the company to extend its time by delays in legal proceedings, instituted by itself, beyond a reasonable time. The common council gave the requisite consent to the company in June, 18J9, and after that date no time was consumed by the delay or interference of that body. But the counsel for the petitioner claims a more enlarged signification and operation for the word otherwise, and would have the clause in which it occurs construed as though it read “time unavoidably consumed by the pendency of legal proceedings * * * or otherwise.” This word otherwise, was introduced in a proviso, and was intended to attach a condition to the operation of the resolution, and not to render it inoperative or nugatory. But the construction contended for would introduce so many elements of uncertainty. It would excuse all delays from unavoidable failures, and would extend the time for the construction of the road to an indefinite period. It would neutralize the effect of the statute, which require the commissioners to fix and determine the time within which the road shall be constructed and ready for operation. Our conclusion is, that the petitioner has sustained a loss of its corporate powers, and is resting under a disability and incapacity which destroys its right to institute proceedings for the condemnation of private property for public use.

This result leads to the affirmance of the order appealed from without an examination of the numerous other questions involved in the appeal. But it is proper, and perhaps better, to say that we have examined the act of 1881, chapter "518, which authorizes the consent of the local authorities required by the conditions to be made and given by the mayor and commissioners of city work, and that we concur with the opinion delivered by the special term, that the law contravenes the constitution, and is void and ineffectual for that reason.

The order should be affirmed, with costs and disbursements.

Barnard, P. J., concurs.