Case Name: Thomas Hastings vs. Amherst and Belchertown Railroad Company
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1852-09
Citations: 9 Cush. 596
Docket Number: 
Parties: Thomas Hastings vs. Amherst and Belchertown Railroad Company.
Judges: 
Reporter: Massachusetts Reports
Volume: 63
Pages: 596–603

Head Matter:
Thomas Hastings vs. Amherst and Belchertown Railroad Company.
An information in the nature of a quo warranto, under St. 1852, c. 312, § 42, wiil not lie against a railroad company in behalf of a stockholder, merely because they issued stock below the par value, and began to construct their road before the requisite amount of stock was subscribed; it not appearing that the petitioner's private right or interest was thereby put in hazard.
The charter of the Amherst and Belchertown Railroad Company, St. 1851, c. 277, does not require the northern terminus of the southern section of the road to be in the “ village ” of Amherst; and taking land in said town, for a route not terminating in either village of that town, is not the exercise of a franchise not granted the company, within the prohibition of St. 1852, c. 312, § 42.
Petition for leave to file an information under St. 1852, c. 312, § 42, and for an injunction against the further exercise, by the respondents, of certain franchises and privileges not granted them by their charter, St. 1851, c. 277.
The petitioner being a stockholder in the corporation, and having had his land taken for the construction of their road, complained that said railroad company was by their charter authorized to construct a railroad, from the depot of the New London, Willimantic and Palmer Railroad, in the town of Palmer, crossing the Western Railroad at or near the depot of said Western Railroad in Palmer, by the most convenient route, northerly through the town of Palmer, in the county of Hampden, and the towns of Belchertown and Amherst, in the county of Hampshire, and of Leverett, Sun-derland, and Montague, in the county of Franklin, to the Vermont and Massachusetts Railroad, at a point the most convenient to intersect the same in said town of Montague; That the capital stock of said company should by law consist of not more than six thousand shares, the number to be determined by the directors of said company; and that no shares should be issued for a less sum or amount to be actually paid in on each, than the par value of the shares first issued: That for the purposes of construction, the road should by law be divided into two sections, one section extending from Palmer to the village of Amherst, and the other from Amherst to Montague; that a moiety of the capital stock should be appropriated and set apart for the construction of each section; that the construction of neither section should be commenced until a certificate should have been filed in the office of the secretary of the commonwealth, subscribed and sworn to by the president of said company, and a majority of directors thereof, stating that all of the stock appropriated and set apart for the construction of said section had been subscribed for by responsible parties; and that twenty per cent, of the par value of each and every share, so appropriated and set apart, had been actually paid into the treasury of said company.
The petition averred that the capital stock of said corporation had been fixed by the directors at four thousand shares, of the par value of one hundred dollars each, of which two thousand shares had been duly appropriated and set apart for the construction of the section aforesaid, which extends from Palmer to the village in Amherst; and that said two thousand shares so appropriated and set apart have not been subscribed for, but only sixteen hundred shares; and that twenty per cent, of the par value of each share so appropriated and set apart had not been actually paid into the treasury of said company: And that the subscription for a part of the said two thousand shares, to wit, two hundred shares, was obtained by said company in the following manner, viz: a contract for the construction of the section aforesaid, or a part thereof, had been entered into by said company and Willis Phelps and George Phelps, for a certain price, to wit, the sum of $100,000, and that after the making of said contract, and for the purpose of a fraudulent and illegal evasion of the provisions and requirements of said act, it was agreed between said company and the said Willis and George, and sundry other persons, that $5,000 should be added by said company to said contract price, and that said Willis and George should subscribe two hundred shares, part of said two thousand shares, and that other persons should purchase of said Willis and George shares so subscribed for. as aforesaid, at a sum less than the par value, to wit, the sum of twenty-five dollars per share. In pursuance of which corrupt, illegal, and fraudulent agreement, so made as aforesaid, the said Willis and George became, and were subscribers for two hundred shares, part of the said two thousand shares so set apart and appropriated as aforesaid: And that sundry other persons offered to give certain sums of money, to wit, twenty dollars each, for the construction of said section of said road, but were unwilling to subscribe and pay for one share each; and that for the purpose of evading the provisions of said act, and to make it appear on their subscription lists and books that a larger number of shares, part of said two thousand shares, had been subscribed, than in truth and reality had been done, it was illegally and for the purpose of deception, agreed between the said company and the said last mentioned persons, that each of said persons should subscribe for one share in said company’s stock, part of said two thousand shares, and that neither of said persons so subscribing should ever be called upon to pay the par value of said shares so subscribed for, but that upon the payment of twenty dollars on the share, each of said subscribers should be released from the payment of the balance of the par value of said share; and that no certificate for such share should be issued by said company: And that said shares so subscribed for by said Willis and George, and by said last-mentioned persons, have been considered, treated and counted by the president and directors of said company, as part of said two thousand shares required by the provisions of law to be subscribed for, before the construction of said section of said railroad should be commenced; and that without including said shares, said two thousand shares have never been subscribed for: And that previously to the commencement of the construction of said railroad, the subscribers for a number of shares, part of the said two thousand shares, gave their promissory notes for the amount of twenty per cent, on a share, and that the same were received by said company as actual payment into the treasury of said company, of said twenty per cent.; and that no payment has at any time hitherto been made in money upon said shares; and that, at the time of the corn» mencement of the construction of said railroad, said notes were wholly due and unpaid: And farther; that although the requirements of said act have not been complied with, yet the said company claims to exercise, and does now exercise all the franchises named in said act, and did, on or about the 1st day of April, 1852, commence the construction of said section of said railroad; and on the 16th day of August, 1852, did file in the office of the clerk of the county commissioners, in said county of Hampshire, a location of said section of said railroad, whereby it appears that said section of said railroad is not located from said Palmer to said village in Amherst, as is by law directed, but on the contrary that the northern terminus of said roaa is located at the distance of one half mile from said village, and that said location is the exercise by said company of a franchise and privilege not conferred by law; and further that by such departure from the line of location authorized by said act, the real estate of the petitioner is greatly and unnecessarily injured, and his interests put in hazard.
G. P. Huntington, for the petitioner.
E. Dickinson, for the respondents.

Opinion:
Shaw, C. J.
This is a petition for leave to file an information in the nature of a quo warranto, against the respondent company, pursuant to the statute 1852, c. 312, § 42, upon the several grounds set forth in the petition.
The petitioner sets forth that he is a stockholder in said company; and also, that they pass through his lands. He must show satisfactorily, that in one or the other of these capacities, he is injured in his private rights. It is the purpose of this statute, to lend the aid of the government in an aggravated case of usurpation and encroachment on private rights by a corporation, by the exercise of a franchise not granted to them.
It is manifestly a very high power, to be exercised only upon extraordinary occasions, and for this purpose it is manifestly placed under the discretion of this court. If it were intended to be a remedy for the ordinary violation of private right, the statute would have given the party aggrieved the power to file his information, as of right. Accompanied as it is with a power to issue an injunction as prayed for in this case, the occasion must obviously be an extraordinary and urgent one, to wan'ant it.
The complaint is, first that the company have violated their charter by issuing stock below par; and by beginning to work before they have completed their stock, by subscriptions of responsible persons; and second, that they did not pursue their charter by making a terminus of one section of the road at the village of Amherst.
I. This statute is not designed to punish a corporation for violations of duty, if not converted into a public prosecution, as it may be by the intervention of the attorney-general; and no judgment of forfeiture is to be rendered. But by § 47, it is provided, that the judgment shall be, that the corporation be perpetually excluded from such franchise or privilege. From what franchise ? Manifestly a franchise not conferred by law, by the exercise of which the private right or interest of any person is injured or put in hazard.
It is exceedingly questionable whether any of the breaches of duty alleged in the petition, in the mode of issuing the stock; in issuing stock below par, as prohibited by § 12 of their charter, is the exercise of a franchise not granted, to the injury of the petitioner's private right. They are empowered to raise money, in the manner directed; this is a franchise granted; but the argument is, that it is granted conditionally, that is, upon condition that they comply with the requisitions of the law; that these are conditions precedent, and if they are not complied with, the power is not conferred.
This assumes several positions, which, to say the least, are doubtful. 1. That they are conditions. 2. That they are conditions precedent. 3. That they are injurious to the petitioner's private right and interest.
1. The statutes do not make them conditions, in terms, and there are ample means of enforcing their observance, without holding all the proceedings void, if not complied with. Thev may be directory.
2. They may be conditions subsequent, and then they do not suspend the right to exercise the franchise, but only subject the company to some penalty or forfeiture.
3. But further; we cannot perceive how they can injure the private right of the petitioner. Certainly not as a proprietor, or holder of shares in the stock. On the contrary, it may be .beneficial to him in that capacity, by promoting the enterprise.
But we are then to consider another point, which is preliminary, and that is, the certificate required by the 14th section. This provision renders it less necessary to construe these requisitions about stock as suspensive conditions. This section provides that before they proceed to commence the construction of the road, on the section now in question, a certificate shall be filed, &c. This carries a strong implication, that when such certificate is filed, they may commence, &c., still remaining hable in other respects, to the requisitions and the particular provisions of their act of incorporation, and the general laws referred to, and adopted by it.
If, then, it be inquired what is the legal effect of this certificate, we must answer different in different aspects. Certainly it would not be conclusive of the facts in a criminal prosecution against the corporation. But it is to be taken as primd facie evidence of the facts contained in it, and goes far to rebut and control the allegations of non-performance of the duties set forth in the petition.
But in regard to the supposed breach of duty in not properly issuing the shares, how does this operate to the present injury of the petitioner as a landholder ?
If compliance with the requisitions in regard to the amount subscribed, and the issuing of stock below par, are not conditions precedent to the commencing and making of the road, then whether this money has been subscribed and paid, or not, there is no injury to the petitioner, as a landholder; it makes no difference to him. The law has provided security to him, which is deemed a complete indemnity.
II. As to not making the village in Amherst one terminus.
It is difficult to see how this can be injurious to the petitioner. It is barely possible, that by going to either of the two villages in Amherst, they would necessarily avoid touching his land, and so the present location may be injurious to him, though, without more knowledge of the localities, we cannot perceive how this could be done.
But without dwelling further on this, it appears to us that the actual location is not a violation of their charter.
The whole act is to be taken together as one act, and every part must be construed with reference to every other. The express authority and franchise is to make a railroad from Palmer to Montague, through Belehertown, Amherst, Leverett, &c. There is no other limit between the termini, but the towns. This alone would authorize the railroad company to lay their road where they have laid it. Then the question is, whether this is altered or modified by the provision in the 13th section. That provides that the road thereby authorized, the same road, shall be divided into two sections, one extending from Palmer to the village of Amherst, and the other from Amherst to Montague. "What is the object of this section ? Obviously, we think, to divide the one line already authorized into two parts, so as to allow one to proceed, if the stock for that part could be raised, without the other. It appears to us that it is not intended to fix a new intermediate terminus, but to fix a point at which the whole line authorized to be constructed should be divided. Suppose funds had been obtained, in the first instance, for the entire line ; would it not be competent to run through Amherst without a depot or terminus, at either village; in fact, as it has been run ? Did the legislature intend to depart from this, and vary the route, if one section only were first built? We think not. The second section of the road is described, as from Amherst to Montague, without saying the village in Amherst. But the two parts were intended ultimately to meet, unite, and form one line; and they must, therefore, come.to the same point is Amherst. We think the term " village of Amherst," used in this part of the act, was not intended to vary the line of location and route stated in the previous section, but to fix a point of the line northerly from Palmer, to which the first section should extend, if the stock for both should not be filled up.
We think, therefore, there is no sufficient ground to maintain that they have exercised a privilege not granted, in locating this first section of their road so as to extend as far north as the village of Amherst; and that a straight line from one village to the other fixes the line of this section of road with reasonable accuracy. The petitioner's land, therefore, is within the limits within which they are authorized to locate their road; and, in this respect, they did not exercise a franchise not granted.
Petition dismissed.