Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-01-02
LEASE FIGHT
is APPEALED
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Continued from First Page.)
mortgage, merge or consolidate in the
discretion of their boards of direct
ors," the brief reads. in the abb
sence of clear language the power
given to the commission to approve
or disapprove. is not to be construed
as conflicting or interfering with the
lawful exercise of the discretion
vested in the boards of directors. The
language of section IS does not neces-
sarily require that the Board of Pub
lie Utility Commissioners should have
or exercise such a power. There is
room for the exercise of power of
approval or disapproval without
trenching upon the powers of the
corporation"
Usurpation Is Alleged.
Further, the relator argues that il
the statute should be construed to
confer such authority as the board
assumed to exercise in this case, it
would be unconstitutional as IN at
tempt to delegate legislative power.
Also that construction which would
confer a discretion upon the board
would bring the statute in conflict
also with the provision of the con-
porate powers. Another point the
railroad raises is that the grounds
upon which the board based their
disapproval were as a matter of law
insufficient.
Counselor Sommer holds that the
board is within its rights in with
holding its approval of the proposed
lease He argues the statute is
broader than shown in the position
taken by the relator.s He goes on:
I'm justification of the boards with
holding its approval of the proposed
instrument, the following considera-
lions may be advanced in amplifi-
cation of and in addition to those set
out in the memorandum filed by the
board:
1.-THE statute authorizes the lessor
to lease its roads. Taken as a whole,
the proposed instrument indicates
the real intent of the parties to be to
adhere to the form of lease, but in
fact to effect conveyance. The
statute confers no power upon the
lessor to convey it's roads.
1.-THE statute authorizes the lessor
to lease its roads. The proposed in
strument seeks to create a term of
years in the roads, and in branches
and extensions that may later be
made or acquired. The statute con-
fers no power upon the lessor to lease
that which is not now in existence in
it's ownership
tThe statute upon the making of
the lease passes the franchises to use
and operate the roads and collect
fares and freights' only. 1t is not
clear that the proposed instrument
does not attempt to bring within its
operation every franchise. except the
franchise to be corporation. The
statute confers no such power upon
the lessor.
Restricts the Lessor.
1.-The common law restricts the les
sor to the sale of such of its property
as may not be necessary in the per-
Torrance of its franchise and public
duties. The statute general railroad
act, section 8, part I'D specifically
limits it's power to sell land to land
not necessary for the purposes and
objects therein stated.
1.-The statute makes the approval of
the board requisite to the exercise OF
this power.
In such approval the board has
it not only the common law
and statutory limitations upon the
power of sale. but also the statutory
that the utility furnish
safe, adequate and proper service and
keep it's property in condition to fur
nish such service and provide reason
able extensions of facilities.
LAS the proposed instrument isl
framed it affects a present sale of
certain property, contracts for a fur
Their sale and confers on the lessee
power to sell property which is not
in the opinion of the lessee necessary
for the then or prospective use of the
lessons railroads or for the protection
of the interests of the lessor therein.
ct in nowise recognizes the neces-
sity of obtaining the boards approval
and substitutes the opinion of the
lessee for the fact upon which, under
the common law and the statutes,
the power of sale is dependent.
1.-THE statute general railroad act,
section g. limits the power to borrow
money to certain purposes and to an
amount not exceeding the whole of
the paid up capital stock. and so
limits the power to issue bonds, Sc
cured by mortgage.
Approval Is Necessary.
THE statute makes the approval
Of the board requisite to the exer-
else of the powers to mortgage.
1.-THE proposed instrument contains
no recognition of the necessity for
such approval. II obtains an I'M
qualified undertaking by the lessor to
secure its bonds to be issued under
article sixth by a mortgage upon the
railroads, property and franchises of
he lessor when requi,td by the les
see.
1.-The statute limits, as before indi-
,ated, the power of the lessor to issue
is bonds secured by mortgage. The
public utility act makes The approval
If the board requisite TO the issue of
bonds and capital stock. 1t requires
hat the board shall approve when
that the law has been COM
)lied with and when satisfied with
he purposes of the proposed issue.
"As framed the proposed instru-
llent fails to recognize the necessity |
IF obtaining the approval Of the !
Doard.'