Court Opinion

ID: 5208002
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:06:33.257199+00
Date Added: 2024-06-11T08:27:19.345324
License: Public Domain

Chester, J. (dissenting):
The evidence clearly sustains the finding of the Board of Bail-road Commissioners that public convenience and a necessity require the construction of the railroad in question, but the prevailing opinion advises that that determination shall be annulled, not on *484the ground that it is against the weight of evidence, but because the Board of Bailroad. Commissioners erred in the; exclusion óf, certain offered testimony with respect, to whether or not ten per centum of the capital, stock had been paid in good faith to the directors named in the certificate of incorporation. Affixed to such certificate was the affidavit of thrpe directors named in the certificate of incorporation in conformity with the requirements of section 2 of the Bailroad Law (Laws of 1890, chap. 565, as amd. by Laws of 1892, chap. 676) that at least $1,000. of capital stock for each mile of road built or proposed tó be built as stated in the certificate, being at least ten per centum of the minimum amount of capital stock authorized by law, has been ■ subscribed thereto and paid in good faith and in casli to the, directors named;in the. certificate. This affidavit was supplemented on the hearing by testimony showing that on the 23d day of January, 1907, there wás paid to said three directors $50j000 in cash, and the Same was thereupon deposited by them in the Bank of Steuben to their credit as the" directors of said company, whereupon such bank issued to them a pass book showing such deposit and such credit. The 'pass book showing , the credit was put' in evidence. It was shown, that at the time of the. hearing such deposit still remained in. the same form in which it was entered in the pass book, and the minutes of the first meeting, of the board of directors of such: company showed that a resolution was passed requiring said funds to remain on deposit until the, by-laws of the company had been adopted designating, the proper custodian or. custodians of the funds of the. company and defining his or their powers and duties. All this was clear and convincing evidence that the required amount of capital stock had in fact been paid in in good faith and in cash to such directors, and that- they still held it for the company.
The Board of Bailroad Commissioners were not governed by such ■strict rules of law as are the courts in the reception or rejection- of evidence, and it is not- surprising that they ■ Were .convinced by the evidence, both oral and documentary, presented in relation thereto of the good faith of the transaction in ■ question. After being so convinced it was evident that they did' not desire to prolong the examination with respect to it. The testimony which was excluded did not show or tend to show that the' money, in question was *485not in fact subscribed. It was aimed at finding out from what source the money came, or to prove that the company or some of its directors had incurred some obligation to procure it. Those matters were immaterial so long, as the money had been properly subscribed and deposited to the credit of the directors named in the certificate. The. company could not incur an indebtedness. Nor was it important to show that the directors as individuals had incurred some obligations in procuring the money, for if they had, it was their personal obligation, and was not the debt of the company, for the company had not yet been fully organized so that it could exercise its corporate powers, and could not, therefore, incur any indebtedness. Neither could these moneys so deposited be applied to any other uses or purposes than to the uses and purposes of the company when the time came when it could exercise its corporate powers. ' If the individual incorporators misapplied these, funds they would be guilty of a breach of trust, and would be individually liable therefor. I think, therefore* the ruling of the Board of Railroad Commissioners in excluding the testimony was , correct. But, even if such exclusion should be held to be technical error, I do not think, with the clear and convincing testimony of good faith presented, that it should be. regarded as"reversible error which should result in the annulment of the certificate in question.
I, therefore, advise the affirmance of the determination, ■ with fifty dollars costs and disbursements.
Sewell, J., concurred.
Determination annulled,, with fifty dollars costs and disburse^ ments, to be paid by the respondent, the Homell, Bath and Lake Keuka Railway Company, to the relator.