Case Name: Trenton Street Railway Company, petitioner and respondent, v. United New Jersey Railroad and Canal Company et al., appellants
Court: New Jersey Court of Errors and Appeals
Jurisdiction: New Jersey
Decision Date: 1900-06-18
Citations: 60 N.J. Eq. 500
Docket Number: 
Parties: Trenton Street Railway Company, petitioner and respondent, v. United New Jersey Railroad and Canal Company et al., appellants.
Judges: 
Reporter: New Jersey Equity Reports
Volume: 60
Pages: 500–507

Head Matter:
Trenton Street Railway Company, petitioner and respondent, v. United New Jersey Railroad and Canal Company et al., appellants.
[Filed June 18th, 1900.]
1. Under the act of March 22d, 1895 {Gen. 8tat. p. 2717), which authorizes the chancellor to define the mode in which one railroad may cross another, it is essential to the jurisdiction of the chancellor that the lawful route of the petitioning company should cross the line of railroad belonging to the other company.
2. The powers delegated by the eighth and eleventh sections of the act of April 6th, 1886 {Gen. 8tat. p. 3216 ¶ 55, 59), are confined to companies incorporated under that act, and companies having special charters, whose tracks have been located, their lessees and assigns.
On appeal from a decree advised by Vice-Chancellor Reed, who delivered the following conclusions:
This is not the first time this matter has been before this court, but it is the first time the specific grounds for challenging the right of the petitioners to cross have been presented to this court. The Trenton Street Railway Company is a corporation composed of several original companies. The first is the Trenton Horse Railway Company, incorporated by special charter in 1859. P. L. of 1859 p. 266. The next is the City Railway Company, formed under articles of incorporation filed December 9th, 1875, under the general railroad law. The next is the Hamilton Township Street Railway Company, formed under articles filed September 12th, 1890, under the act of April 6th, 1886. And the next is the South Clinton Avenue and Broad Street Railway Company, formed under articles filed October 28th, 1890, under the same act. All these companies were consolidated under the terms of an agreement dated September 21st, 1891, and filed September 30tli, 1891, under the name of tlie Trenton Passenger Eailway Company, Consolidated, under acts of February 21st, 1888, and April 16th, 1891. After this the Pennington Avenue Passenger Eailway Company was formed under articles filed September 14th, 1897; the Mulberry Street Eailway, under articles filed on the same dajr, and the Ewing Passenger Eailway Company, under articles filed February 2’5th, 1898, all under the act of April 6th, 1886. The consolidated company, viz., the Trenton Passenger Eailway Company, Consolidated, formed a new consolidation with the three last-named corporations, by a new consolidated agreement, dated January 28th, and filed on the 29th, 1898, under the name of the Trenton Street Eailway Company, which is the present petitioner. It appears that at the time of the first consolidation agreement the tracks of the companies so consolidated, other than the City Eailway Company, ran from the easterly side of Trenton, through Clinton street to Stanton street, and through Stanton street to South Broad street. The line of the City Eailway Company ran down Broad street and stopped at Division street, four blocks north of the point where Stanton street enters Broad street. Ordinances were passed and accepted authorizing the laying of tracks and the use of electricity as motive power by each of the said roads. The first consolidated company built its road down Broad street to the line dividing the city of Trenton from Hamilton township, and seems also to have connected by a short track the terminus of the old city road at Division street with the continuation of the roads from Stanton street. Then, under an ordinance of the township committee of Hamilton township, passed May 12th, 1893, the consolidated company extended its line to the toll-house at Broad Street Park, on Broad street. Then, under an ordinance of the same township committee, passed March 8th, 1894, the same company extended its road from the toll-house to the White Horse hotel. Then the same committee, on December 8th, 1898, passed an ordinance authorizing the last-named consolidated company to extend its road from White Horse to Yardville. This ordinance was accepted December 23d, 1898, and the acceptance filed January 3d, 1899.
If the consolidated road was a corporation made up by the merger of the preceding existing roads, then the consolidation road possessed all the privileges of each eompan}r consolidated. Gen. Stat. p. 8226 ¶ 79. Nor. does it matter whether the corporation was de jure or de facto. A de facto corporation may exercise the power of eminent domain. 2 Wood Railw. L. 819. In National Docks Railroad Co. v. Central Railroad Co., 5 Stew. Eq. 755, the court of appeals held that this court could not inquire into the de jure existence of a corporation, and enjoin it from crossing land or tracks of another road because of its want of power as a de jure corporation, if it were a corporation in fact. The test to be applied in ascertaining whether a corporation has a de facto existence is — first; the existence of a law under which a corporation might be formed; second, an effort in good faith to organize a corporation under the law, and third, the assumption and exercise of corporate functions as a result of such effort. Vanneman v. Young, 23 Vr. 403. This test is applicable to corporations formed by consolidations. 7 Jones Corp. ¶ 8251.
It is insisted that one of the parties to the first consolidation agreement was neither a corporation de jure nor de facto, and therefore the attempted consolidation was null. It is admitted that the City Railroad Company was incorporated under the general railway act. It is insisted that a street railroad cannot be incorporated under that act, and therefore the city railway is not a de facto street railway, because there was no statute then under which a street railway could be incorporated. It is also insisted that if it can be regarded as a de facto incorporation, it must be as a steam road, and that a steam road is not within the class covered by the consolidation acts of 1888 {Gen. Stat. p. 8225), and of 1891 {Gen. Stat. p. 8229). It is contended that the city railway was incapable of becoming a party to the first consolidation agreement, and therefore that that agreement is void and vulnerable to collateral attack. It is further contended that if the first consolidation was ineffectual to create a new corporation, it follows that the second consolidation, to which the pretended new corporation is a party, must, upon the same reasoning, be regarded as a nullity. It is true that it was decided in Railway Co. v. Flanagan, 28 Vr. 236; S. C., 28 Vr. 696, that a supplement to the general railroad and canal act limiting the time in which actions for injuries could be brought did not apply to street railways. The street railways in question in that case were, as I understand it, organized as such, and the question is whether the legislation applied to a class of corporations not organized under the general railroad law. The question now presented seems to me to be quite different from that. The query here is whether a corporation formed under the general railroad act, to do most of the things which a railroad does, but some that it does not, can be regarded as a corporation at al-1. The functions of the two railroads are so similar that it has been held in the State of 'Hew York that a street railroad could be formed under their general railroad act. In re Washington St., A. & P. R. Co., 115 N. Y. 442. Where the purposes of a corporation are partly within and partly without the law, it may have a cle facto or de jure existence, as the case may be, and it will simply be incapable of exercising the unauthorized powers. Heck v. McEwen, 12 Lea 97. Many street railroads in this state have been organized under the general railroad act. These, in my judgment, after years of use as such must be regarded as corporations in fact. But, if so, are they included within the consolidation acts which the petitioner invokes? I am inclined ' to think they are. The city railway was in fact a street railroad. It operated its cars in the streets with the usual motive power, and in the manner which distinguishes a street railroad from a steam railroad. It will be observable, also, that the supplement of Í893 to the act of 1891, includes “any company owning or operating a railroad operated as a street railway.” Without deciding this point, but assuming the City Eailway Company was incapable of consolidating with another street railway, it does not follow that a new corporation did not spring from the first consolidation agreement. Two of the parties to the agreement, namely, the Hamilton Township Street Eailway Company and the South Clinton Avenue and Broad Street Eailway Company, both organized under the act of April 6th, 1886, were admittedly empowered to consolidate with each other. Suppose that they were not empowered to treat for the property of the City Railroad Company, and so far their contract was ultra vires, yet I do not see how this fact would impair the effort by the two companies to consolidate under a valid general law, and form a new corporation, the franchise of which they have since used. It may well be that the stockholders of either company could have stopped the execution of the contract for consolidation, but I am unable to see how a third party can question the existence of the new corporation. It follows that if the new corporation had even a de facto existence, the second consolidation agreement was valid, and from it sprung another corporation, having the power of each of the constituent members of both consolidations, including the power to extend tracks.
In regard to the point that the consolidation acts do not provide for the creation of a new and distinct corporation, it is admitted that the act of 1888 (P. L. of 1888 p.-71¡.) in express terms so provides. But it is insisted that this act empowers horse, but not electric roads, to consolidate; and it is further insisted that the act of 1891, which applies to street railroads generally, contains no provision for the creation of a new corporation. The act of 1891 authorizes a street railway company to merge and consolidate its corporate franchises and other property with that of any other horse or street railway company. It provides that the merger may be effected in the same manner provided by statute for the merger and consolidation of horse railway companies. The last provision is attacked upon the ground that it makes an already existing law • a part of it by reference. The reference to the method of procedure in effecting a consolidation was not objectionable. Campbell v. Board, 18 Vr. 347; De Camp v. Railroad Co., 18 Vr. 43, 49. The method of procedure prescribed by the act of 18S8 implies the erection of a new corporation. The agreement which is to be submitted to the stockholders of each of the companies contains the name of the new corporation, the number of shares of the new company, and the manner of converting the stock of the old into stock of the new corporation. Without stopping to consider whether the act of 1888 applied to all street railways,' I am of the opinion that the act of 1891 was a perfect act. It put all street railroads within the class of roads included within the general railroad act of 1888, and the reference to the provisions of the last act was sufficient without re-enactment of nearly the whole body of that statute. I will advise a decree in the same form as the one last advised.
Mr. Alan H. Strong and Mr. Charles E. Gummere. for the appellants.
Mr. Robert S. Woodruff and Mr. John II. Baches, for the respondent.

Opinion:
The opinion of the court was delivered by
Dixon, J.
The Trenton Street Bailway Company presented to the chancellor a petition, asking him to define the mode in which the company might cross the railroad of the United New Jersey Eailroad and Canal Company, near the village of Yardville, in the county of Mercer, pursuant to the act of March 22d, 1895. , Gen. Stat. ¶. 2717. At the hearing before Vice-Chancellor Eeed, counsel for the latter company required proof of the right of the petitioner to cross its tracks, and it appearing that the proposed crossing was part of an extension of the petitioner's railroad beyond its original route, counsel denied the power of the company thus to extend its road. Notwithstanding this objection, the chancellor made a decree defining the mode of crossing, and thereupon the United New Jersey Eailroad and Canal Company appeals.
By the language of the act of March 22d, 1895, it is made essential to the jurisdiction of the chancellor that the route of the petitioning company should cross the line of railroad of the other company; and by the route here mentioned is certainty intended the lawful route. It was therefore incumbent on the petitioner to show that it had legally laid its route over the appellant's railroad, and, as one of the steps to that end, that it had lawful power to lay out and construct its proposed extension.
In answer to the same objection made in this court by the appellant, the respondent bases its right on the eighth and eleventh sections (amended ) of "An act to provide for the incorporation of street railway companies, and to regulate the same," approved April 6th, 1886. Gen. Stat. p. 3216 ¶ 55, 59.
The power delegated by the eighth section is ponfined to companies incorporated under that act, and the power delegated by the eleventh section is confined to street railway companies whose tracks have been located and whose charters have been duly accepted, their lessees and assigns.
It does not appear that either the petitioner or any of the companies, by consolidation of which it was formed, was incorporated under the act of April 6th, 1886, and therefore the eighth section is not applicable.
The phrase employed to describe the class of corporations embraced in the eleventh section, "whose charter has been duly accepted," is not entirely unambiguous, but we think it denotes with sufficient clearness those that exist under special charters.
The expressions used in our street railway statutes to indicate the document by which a corporation is formed under the general laws are, "articles of association," "articles of incorporation," "certificate of incorporation," "certificate of organization." Such an instrument would not be called, in the ordinary use of words, "a charter accepted." These terms, in their usual meaning, signify, under our system of government, a special act of the legislature offering corporate existence and franchises to designated individuals, -who thereupon accept the offer. This is the sense that we think it bears in the eleventh section of this statute.
The petitioning company did not show that either itself or any -of its constituent corporations had thus received and accepted a charter. Hence we cannot regard it as being within the purview of the eleventh section.
The petitioner's claim of right to extend its route seems, therefore, to be unsupported, and for that reason the decree appealed from must be reversed.
For reversal — The Chancellor, Ci-iiee-J ustioe, Van Syckel, Dixon, Garrison, Lippincott, Gummere, Ludlow, Hendrickson, Adams, Vredenburgi-i, Voorhbes. — 12.
For affirmance — None.