Case ID: ny-super-ct_58/html/0502-01.html
Source: Caselaw Access Project
Author: {"author": "By the Coubt.—Fbeedman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM PALM, Respondent v. THE NEW YORK, NEW HAVEN AND HARTFORD RAILROAD COMPANY, Appellant.
    
      Action for the recovery of a penalty of fifty dollars, under chapter 185 of the Laws of 1887, entitled ‘ ‘ An Act to prevent extortion by railroad companies. ”
    The plaintiff claimed that on the 20th of August, 1889, he took passage on a passenger train of the defendant to be carried on the defendant’s road from 134th street, in the city of New York, to Morris Park, in the state of New York, and thence back to said 134th street. That he was charged and compelled to pay, contrary to the laws of the state of New York, fourteen cents in excess of the sum that the defendant had the right to ask. and receive, whereby defendant became liable to pay to the plaintiff under and by virtue of the statute of the state of New York, entitled “ An Act to prevent extortion by railroad companies,” passed March 27th, 1857, the sum of fifty dollars, together with the sum of fourteen cents so asked and received as aforesaid, in excess of the legal fee.
    The defendant is a foreign corporation chartered by the state of Connecticut in the year 1844, and in 1846, by chapter 195 of the laws of the state of New York, it was granted permission to extend its railroad from the state line of Connecticut to thé New York and Harlem Bailroad, connecting therewith at Williams Bridge, upon certain conditions, one of which provided that the charge for transportation of any passenger Shall not exceed three cents per mile in the state of New York. This condition is not applicable to the case at bar, because it is expressly limited to that part of the road specified in the act, and defendant was not a passenger over that part of the road. The passage of the plaintiff, from which plaintiff’s claim arose, was on a railroad known as the Harlem Elver and Port Chester Bailroad, used and operated by the defendant under a lease, and the liability of the defendant rests upon the legal status of the last named company, and the rate of fare it had a right to charge. This company was shown to have been organized under chapter 763 of the Laws of 1866, as amended by chapter 722 of the laws of 1869. Neither of these laws fixes or limits the rate of transportation over the road, and taken together authorize the construction, maintenance and operation of the road in a certain manner, which includes a lease by certain persons, specifically named, and their associates “when duly formed into a corporation under and pursuant to an act to authorize the formation of railroad corporations and to regulate the same, passed ” April 2,1850. This is the general railroad act of New York. Subdivision 9 of section 28 of this act confers upon railroad corporations organized and formed under its provisions, the power to regulate the compensation to be paid to them for the transportation of passengers, providing, however, that such compensation shall not exceed three cents a mile, and it was upon this subdivision and the amendments to said act in 1857 and 1886, that the trial judge rested when he held the defendant liable for the penalty.
    
      Held, that it was essential and necessary that the actual and due formation of a corporation, under this general railroad act, as provided in the Acts of 1866 and 1869, should be shown before the prohibition contained in the said general railroad act can be enforced by the infliction of a penalty under it or the pets amendatory thereof, for the general railroad act in terms applies only to corporations formed under it. Under the assumption that the defendant, as a foreign corporation, under its lease of the Harlem Elver and Port Chester Railroad, had no right to charge a higher rate than the Harlem Biver and Port Chester Railroad Company, when legally organized, could have charged under the general railroad act, and that the defendant, as lessee, is liable for the penalty in every case in which its lessor would have been liable, yet it still remained incumbent upon the plaintiff to establish at the trial and as a part of his case, that the special acts authorizing the formation of the Harlem Biver and Port Chester Bailroad Co. were followed up, and carried out, by an actual and due formation of a corporation under and pursuant to the general railroad act. There being no evidence on this point, its absence is a fatal defect and error, for the judgment rests upon the provisions of a penal statute. The claim is that defendant- is guilty of extortion. In such a- ease the rule is well settled, that all doubtful points are to be construed in favor of the defendant, and the plaintiff must show a clear right to the penalty, and that he must bring himself strictly and literally within the operation of the statute, which he failed to do.
    Before Sedgwick, Ch. J., Feeedman and Ingbaham, JJ.
    
      Decided January 5, 1891.
    Appeal from a judgment entered upon the decision of a judge after a trial before him without a jury.
    
      Page & Taft, attorneys, and John E. Parsons of counsel, for appellant, on the questions considered, argued :—
    I. The defendant is a foreign corporation, organized under the laws of the state of Connecticut. It is operating a railroad in this state from Williams Bridge to the Connecticut state line, under a permissive act of the New York legislature, passed May 11, 1846. The application of the restriction contained in section 4 of that act, as to the rate of fare allowed for each passenger, is expressly limited to the line of the road mentioned in the act, and is not applicable to the Harlem River and Port Chester Railroad, an entirely distinct line. The plaintiffs counsel stated that he relied on section 4 of the Act of 1846. The court, however, refused to charge, as a matter of law, that there was no violation in this case of that section. This was error. The only other statutory regulation of the compensation railroad companies in this state may receive for transporting passengers is contained in subdivision 9 of section 28 of the general railroad act (Laws of 1850, ch. 140). The section provides : “ Every corporation formed under this act shall * * * have power * * * 9. To regulate the time and manner in which passengers and property shall be transported, and the compensation to be paid therefor. But such compensation for any passenger and his ordinary baggage shall not exeeed three cents per mile.” * * * This provision does not apply to the defendant company, because it is not a corporation formed under the Act of 1850. There being no other act in this state limiting the compensation a railroad company may receive, the defendant, being a foreign corporation, is subject to no restriction whatever.
    II. Assuming, however, that the defendant is subject to the provisions of the general railroad act, yet subdivision 9 of that act is not applicable under the circumstances of the present case. Subdivision 9 provides for “ the time and manner in which passengers and property shall be transported, and the-compensation to be paid therefor,” and restricts such compensation to three cents a mile for each passenger. Compensation is to be received under subdivision 7 for transportation “ on their railroad” The compensation received by the defendant for carrying the plaintiff from the Harlem River to Morris Park was not received for the transportation of the plaintiff on the defendant’s railroad within the meaning of the statute. The main features of the service furnished by the defendant to the plaintiff were as follows: The trains were furnished for the exclusive use of himself and others who purchased the special service tickets. The train made no stops on the defendant’s railroad except at the Harlem River station. When it had arrived" at a point below Van Nest station it went off on to the spur track and conveyed the passengers over land owned by its lessor and not acquired for railroad purposes, to a place easily accessible t.o the racecourse grounds, and about one-half mile from the nearest station of the defendant’s railroad. The spur track was used for the sole purpose of accommodating the special trains to the race-course and only at the time when race' metings were held in Morris Park. Tickets were sold from the Harlem River station to Morris Park and return for fifty cents for the special service. No stops were made between Harlem River and Morris Park. The statute refers only to “ transportation on their railroad.” This obviously has reference to transportation from station to station on the road itself, and Morris Park is not within the meaning of the statute a station on the road. It is no more so than a restaurant maintained on land of the defendant, separate and dis-. tinct from its railroad service, in the strict meaning of that term. Suppose that a grand stand stood on the line of the spur. Can there be doubt that the company would be permitted to charge for transportation with the right to use the grand stand, at a rate in excess of three cents a mile ? In principle there is no difference between the use of the grand stand placed upon the spur and the use of the other advantages which the spur provides. It means to the public the prevention of confusion, great saving of time, and greatly increased facility for visiting the races. All of these conditions are outside of transportation. To determine that for them compensation may not be received is to forbid a railroad company to furnish for the convenience of its passengers anything beyond mere transportation. It would prohibit the ownership of a hotel, or a restaurant, etc. It is neither within the policy nor within the letter of the law that this should be done. The extra charge is distinct - from the charge for transportation. Every passenger is given the option of traveling on the road at the legal rate or purchasing for a consideration additional facilities or conveniences in addition to the ordinary transportation. The nature of these conveniences, as distinguished from the ordinary transportation, clearly appears from the facts of this case : The land upon which the spur track was built to Morris Park is not a portion of defendant’s right of way ; at no time during the eighteen years it had been owned by the defendant’s lessor had it been used for railroad purposes ; in 1889 the defendant built six tracks upon the said land, about one-half mile long, for the sole purpose of carrying special trains to Morris Park, and furnished extensive terminal facilities at the park end of the tracks ; these tracks and terminal facilities are not used, except at the time when race meetings are held at Morris Park ; all passengers who applied for transportation to Van Nest station were accommodated at a fare within the legal rate. The transportation of passengers over a half-mile of private track off the line of the defendant’s railroad is therefore as foreign to the ordinary transportation business of the company as the furnishing of meals or Seats in a grand stand, or the carrying in elevators or carriages. The land on which the six tracks were built might have been converted into a private road on which to carry passengers from Van Nest station to the race course. The defendant preferred the more convenient arrangement of building a spur track. To do this they needed no statutory authority.
    III. This is a penal action. Its object is to enforce a penalty. The claim is that the defendant has been guilty of extortion. As between the plaintiff who asks to recover the fifty dollars for himself individually, and the defendant, the legislation upon the subject is to be construed as a penal statute, most strongly in favor of the defendant. The plaintiff must show a clear right to the penalty; he must bring himself strictly and literally within the operation of the statute. He may not argue that the use of the spur is not warranted by law, and that' for the convenience which its use affords he is, therefore, not compelled to pay. As between him and the defendant that is not the question. His right, in any event, depends upon the question whether for transportation oyer the defendant’s road he has been charged more than three cents a mile. Clearly there is no limit to the rate which a person may be permitted to pay for facilities, conveniences and transportation off the road. The case comes down to the suggestion made by Judge Teuax : A New York State railroad can only charge at the rate of three cents a mile for transportation between stations, whatever may be the facilities, conveniences and advantages provided by the company on the route; but the defendant maintains that it is not against the policy or letter of the law, and is certainly not against the interest of the public, that facilities and conveniences off the road shall be provided and that a suitable charge shall be made for them. The established rule of construction is, that penal statutes are to be construed strictly. Van Valkenburgh v. Torrey, 7 Cow. 252. The statute declared that the owner of every house used for racing, with his priority or permission on bet, should forfeit the value of the horse. Held, that keeping a horse for and allowing him to be used in trotting on a bet, was not within the section of the statute. Hall v. Sigel, 13 Abb. N. S. 178. An action can be maintained to make trustees individually liable for debts of a social organization when brought within a year after ' debt is due and payable. In the case below the original claim was put in suit, and the judgment recovered was assigned to plaintiff, who brought suit against defendants, but after the expiration of a year. The court held that plaintiff could not recover. “ The statute- is in the nature of a penal one, and this construction is in accordance with the maxim that the general words of a penal statute shall be restrained for the benefit of him against whom it is inflicted.” Seward v. Beach, 29 Barb. 239; affirmed, 53 N. Y. 607. No opinion. The legislature passed a law imposing certain restrictions on the transportation of certain classes of articles over highways, imposing a penalty of twenty dollars for offenses against it; “ one half to the complainant, and the other half to the county treasurer of Dutchess, for the benefit of the poor fund,” * * * without saying who should sue and bring the action for the penalty. The court said : “ James A. Seward, the plaintiff, brings this action to recover five of the penalties imposed by the act, and he is bound to show some authority for bringing the action. Concede that the act has been broken, and the penalties incurred. By what right does James A. Seward institute and maintain this suit ? The law must be so construed as to give it effect, if possible, and at the same time it must be construed strictly, for it is a penal statute.” Judge Tbuax refused to make this, conclusion of law: “ Those statutes in this suit are to be regarded as penal in their character. They are to be construed most strongly in favor of the defendant. For the plaintiff to recover requires that he shall be brought strictly within the terms of the statute,” This was error.
    
      R. J. Shadbolt, attorney, and E. M. Wight of counsel, for respondent, on the questions considered, argued :—
    I. The defendant had no right to charge for the transportation of any passenger and his ordinary baggage more than three cents a mile. See the act under which (it is alleged and not denied) the defendant does business in this State as a common carrier; chap. 195, Laws of 1846; See charter Harlem River & Portchester Railroad Co; chap. 763, Laws 1866; as amended chap. 722, Laws 1869; chap. 140, Laws of 1850. sec. 28. sub. 9.
    II. The power to demand fare i. e., compensation for transportation of passengers on a railroad is not an implied or incidental power, but is derived from statute and can be exercised only under authority of the statutes. The right to carry passengers at all comes from the statute, and the right to the price comes from the same source. The legislature has seen fit to emphasize this and to say that except the powers enumerated “ no corporation shall possess or exercise any corporate power except such as shall be necessary to the exercise of the powers so enumerated and given.” 1 R. S. 600, § 3; 2 Kent Com. 298; Halsted v. Mayor of N. Y., 3 N. Y. 430 ; Dickinson v. City Poughkeepsie, 75 lb. 73. So jealously does the legislature guard the charges of railroad corporations that special acts have been sought and granted by the legislature to enable railroads to charge for special privileges or extraordinary burdens. Sleeping cars. chap. 123, Laws of 1858; Elevations, chap. 536, Laws of 1887. .
    III. The defendant claims that it was necessitated to build sidings in order to handle the people and not interfere with the regular traffic. “ They could not do it at all, we haven’t the facilities,” says the superintendent, and these sidings, built at Van Nest, at a cost of $42,000 and some additional terminal facilities at Harlem River at a cost of $3,000 are the excuse or justification offered by defendant for charging passengers fifty cents, this being thirty cents more than the regular charge of twenty cents to Van Nest and return—ten cents each way—and no greater number of miles. On August 31st defendant handled 12,000 passengers from which it received $6,000, the extra charge for this day being $3,600, and the unlawful or extortionate charge at fourteen cents being $1,680. The receipts for the twenty race days at an averageof 10,000 passengers would be $100,000, of which $60,000 represented the extra charge and $28,000 the unlawful or extortionate charge.
    IV. The defendant had the right to take real estate by voluntary grant or acquire it by purchase to aid in the construction, maintenance and accommodation of its railroad. It had the right to furnish all necessary and convenient buildings, stations, fixtures and machinery for the accommodation and use of their passengers and business. And it had the further right to regulate the time and manner in which passengers shall be transported aiyl the compensation to be paid therefor ; but such compensation for any passenger and his ordinary baggage shall not exceed three cents per mile. Chap. 140, Laws of 1850, § 28.
    V. The evidence offered by the defendant for the purpose of excusing its extra charge, including the stipulation in which the right to object was reserved, was inadmissible under the pleadings in this case. But even if the plea had been properly made, the evidence shows the contrary of defendant’s claim. The defendant asked and received compensation for nothing except transportation. Defendant, for 50 cents, delivered to the passenger a ticket in two parts, one part having printed on it the figure 1 and the words “Special Service, August, 1889, R. C.” The other part having the figure 2 and the words “ Special Service, August, 1889, H. R.” The initial letters are explained by the superintendent to mean race course and Harlem river respectively, and the ticket “ is a right of passage between those points.” There is no ground for this contention. The claim is absurd, the facilities furnished were absolutely necessary to enable defendant to handle the passengers quickly and safely, and the defendant was bound to furnish them.
    VI. The defendant had acquired title to certain property near the Van Nest station under its chartered rights as a railroad corporation. Having no use for all of it for tracks or stations the company let the rest for pasturage. When use was found for it, spur tracks and sidings with platforms were built, and at the same time other additional terminal facilities were arranged at Harlem river, all for the purpose of enabling the company to handle the extraordinary traffic expected on its road on race days. Defendant furnished ordinary passenger cars and engines for the passenger’s transportation. It regulated the time and manner of his transportation. All this was done under the law and in accordance with the law. But when tickets, were sold entitling the passenger to a ride from Harlem river to the race course and return no reference was had to the charter or the law, but the price was evolved from the greed of a soulless corporation.
   By the Coubt.—Fbeedman, J.

This action was brought for the recovery of a penalty given by statute. The claim of the plaintiff is that on a certain day on which he took passage on a passenger train of the defendant to be carried on the defendant’s road from 134th street, in the city of New York, to Morris Park, in the state of New York, and thence back to said 134th street, he was charged and compelled to pay, contrary to the laws of the state of New York, fourteen cents in excess of the sum which the defendant had the right to ask and to receive, by means whereof the defendant became liable to pay to the plaintiff under and by virtue of the statutes of the state of New York to prevent extortion by railroad companies, the. sum of fifty dollars, together with the sum of fourteen cents so asked and received as aforesaid in excess of the legal fare.

The defendant is a foreign corporation, having been originally chartered by the state of Connecticut in the year 1844 under the name of the New York and New Haven Railroad Co. In the year 1846 it applied to the legislature of the state of New York for permission to extend its road from the Connecticut state line to the line of the New York and Harlem Railroad, and to unite or connect with the last mentioned railroad at or near Williams Bridge. Such permission was granted by chapter 195 of the Laws of 1846 upon certain conditions, and one of said conditions was that the charge for the transportation of any passenger and his ordinary baggage shall not exceed in the aggregate the sum of three cents per mile on that part of said road within this state. This condition is not applicable to the case at bar, because it is expressly limited to the part of the road specified, and because the plaintiff was not a passenger over that part of the road.

The occurrences out of which plaintiff’s claim arose, took place on a railroad known as the Harlem River & Port Chester Railroad and operated by the defendant under a lease, and the liability of the defendant for the penalty was held by the trial judge to rest upon subdivision 9 of section 28 of chapter 145 of the Laws of 1850, and the amendments of said chapter by chapter 185 of the Laws of 1857 and chapter 415 of the Laws of 1886. These provisions constitute parts of what is commonly known as the general railroad act, and they confer upon railroad corporations formed under the said act the power to regulate the compensation to be paid to them for the transportation of passengers, but at the same time they provide that such compensation for any passenger and his ordinary baggage shall not exceed three cents a mile.

It therefore becomes necessary to consider the legal status of the Harlem River & Port Chester Railroad Co. and to determine what rate of fare it had a right to charge. This company was shown to have been organized under chapter 76B of the Laws of 1866 as- amended by chapter 722 of the Laws of 1869. Neither of these acts fixes or limits the rate of transportation over the road, and taken together they only authorize the construction, maintenance and operation of the road in a certain manner prescribed, which includes a lease, by certain persons specifically named, and their associates. “ When duly formed into a corporation •under and pursuant to an act to authorize the formation of railroad corporations and to regulate the same,” passed April 2, 1850. Under the peculiar provisions of these acts it is therefore essential that the actual and due formation of a corporation under the general railroad act should be shown, before the prohibition contained in the general railroad act can be enforced by the infliction of a penalty under the -acts amendatory thereof, for the general railroad act in terms applies only to corporations formed under it.

Even upon the assumption, therefore, the validity of which need not be discussed at present, that the defendant as a foreign corporation, under its lease, had no right to charge a higher rate of fare than the Harlem River & Port Chester R. R. Co., when legally organized, could have charged under the general railroad act, and that the defendant as lessee is liable for the penalty in every case in which its lessor would have been liable, it still remained incumbent upon the plaintiff to establish at the trial, and as part of his case, that the special acts authorizing the formation of the Harlem River & Port Chester R. R. Coi were followed up by actual and due formation of a corporation under and pursuant to the general railroad act.

The case contains no finding nor any evidence upon this point, and consequently there is a fatal defect.

This is a penal action. It rests upon the provisions of a penal statute. The claim is that the defendant has been guilty of extortion. In such a case the rule is well settled that all doubtful points are to be construed in favor of the defendant; that the plaintiff must show a clear right to the penalty and that he must bring himself strictly and literally within the operation of the statute. This the plaintiff failed to do.

The judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Sedgwick, Ch. J., and Ingraham, J., concurred.