Court Opinion

ID: 8267397
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:11:34.408905+00
Date Added: 2024-06-11T16:43:24.622648
License: Public Domain

Beasley, Chief Justice,
dissenting.
If I felt called on to express an opinion on the legal merits of this case, as they -are now presented to this court, the only difficulty which, as at present advised, I should have in coming to a conclusion, would be with respect to the effect to be given to the act of the 17th of March, 1870. This is the law which, it is contended, authorizes the lease in controversy, and the question whether it confers such power, is, it is admitted, fundamental to the case of the respondents. No one pretends that such an instrument could be legally made in the absence of a legislative sanction. But if I could conclude that this act confers the requisite power, and I deemed the occasion appropriate for the expression of a judicial decision, I should, under the force of present impressions, vote to affirm the decree which has been brought here by this appeal-Not that I should be willing to assent to the idea that the legislature, and a majority of the stockholders of a corporation, can, against the wishes of, and without compensation to, the minority of the members, alter, in any essential particular, the constitution of the company, or the object for which the body corporate was created. Nor could I agree to the oilier proposition, that the converting, for a long period of time, of the stockholders of a railroad company into the lessors of a railroad, was not such a material change of corporate organization and purpose, as is prohibited by the law under the conditions mentioned. But assuming that the statute referred to confers the leasing power, I think the exercise of such power could be vindicated on the ground that provision is made, in this law, for the payment to the dissentient stockholders, of an equivalent for their interest in the company. Nor do I find this provision open to the objection which was so forcibly urged against it, that it does not require such payment before the taking of the property sought to be condemned, because, I *485think, that by a reasonable construction of this act, such prepayment will be demanded. The clause, in the first place, directs, in general terms, payment to the dissatisfied stockholders for their stock, the value thereof being ascertained by three commissioners ; and it then declares that such payment shall not be compelled, unless such dissatisfied stockholders shall give written noticie of their dissatisfaction within three months after the lease should have been made and assented to by the requisite number of stockholders. It was argued, upon this enactment, that as the execution of the lease was to precede the jiayment to the stockholders who dissented, it infringed the constitutional safeguard which prevents private property being taken for public use, without being first paid for. Rut I think this argument is not sound. The execution of a lease would not pass any title as against dissenting corporators, until compensation should be made to them. So far as relates to such members, the execution of such an instrument would have the effect, simply, to fix a time within which their dissent would have to be expressed. The lease, although executed, could not be put into effect, nor any property delivered under it, if objected to by the non-assenting stockholders, antecedently to the payment of the assessed value of their stock. The proper remedy, therefore;, of dissenting stockholders under this act would be, not to ask that the execution of a lease should be prevented, but to ask that its effect should be suspended until they had received the compensation which should be awarded to them. Until such payment should have been made, I think a court of equity would forbid all attempts to put the lease in force by a delivery of the property under it. This construction seems to me plainly the proper one, as, in this way, the act can be, in every respect, constitutionally enforced.
And it is on this account that, as I have said, if it should be conceded that the statute of the 17th of March, 1870, empowers the United Companies to lease their works to a foreign corporation, I should, if the conditions of the case now required the expression of a final opinion, have been. *486inclined to vote in favor of the respondents. But my embarrassment has been and is, to perceive how such a concession can be made with respect to this enactment. The act .is admittedly imperfect, and such imperfection appears to me to leave the legislative intention upon the point in question, in a state of incurable obscurity. To make it readable in the sense claimed, a word having a definite meaning must be be displaced, and another word, having also a definite but different meaning, is to be substituted, and the word thus changed is the all important one in the clause, for there is but little in the context to help its interpretation. The right claimed by force, almost exclusively, of this ill-assorted term, .is of the most important description. Corporate franchises of great magnitude, property of great value, in which the state itself has, in part, a proprietary interest, are authorized, it is said, to be passed under foreign control. To warrant .such a conclusion, a plain expression of legislative intent should be required. This is the wholesome doctrine which should ever be rigidly enforced, for it is the only way in which we can expel from our laws ambiguous terms and obscure phrases, bearing, it may be, on an ingenious analysis, a covert .signification. To give force to laws couched in unapt phraseology, and when the meaning ascribed to the language cannot jise higher in the scale of certainty than mere conjecture, is to open the door wide to all kinds of frauds upon legislation. It seems to me essential to the public welfare, that it should be undérstood that the courts of this state will not so interpret statutes, that incorporated companies can derive important privileges from alleged grants expressed in indistinct phrases, or in terms that in themselves convey no pertinent meaning. As against the state, these companies should be always required to present a clear title. I should find, on this account, great difficulty in concluding that the act to which I have referred, comes up to this standard.
But the view which I take of the present aspect of the case now before the court, altogether dispenses with the necessity of any conclusion upon these important matters. *487They have been referred to by me in this general way, only for the purpose of helping to explain what I have now to express.
The application now made to this court is for a preliminary injunction. Nearly two years ago, a bill in chancery was filed, praying that the respondents might be prevented from executing a lease, which, it was alleged, they were then on the point of making. To that bill an answer was put in, and after-wards this matter came on to be heard before the Chancellor, .and the prayer for an injunction was not granted. The proceedings, as they stood before the Chancellor, are now before this court. In short, it appears that we are apprised of' the rights and interests of these parties as they existed on the 18th day of October, 1871, when the decree appealed from was rendered. The question is, whether this court ought, under these circumstances, to reverse the action of the court below, and now, at this time of day, order an injunction to issue ?
In my judgment, such an application is not to be listened to. To yield to it would be to overlook the essential grounds on which the injunction power should ever be exercised. The purpose of this process is to keep things in the position in which they are at the time of the application for it, until the termination of the suit. This is the only legitimate scope of the remedy. The claim to the writ depends upon the equitable status of the parties at the crisis of applying for the aid of the court. Manifestly, therefore, the court must have knowledge of these vital facts; that is, the situation and equities of the litigants at the point of time when its authority is invoked. So, too, a plain case must be presented for its intervention. The injunction power is the strong arm of the court, and is not to be used except in cases of clear necessity.
With these principles before us, bow can the court venture to grant the relief asked for ? The request is to direct the Chancellor to issue the order of his court, forbidding the execution of this lease until the final hearing. Such an order will be rational, only on the assumption that such lease has not been executed. If the act to be enjoined has been done *488the order of prohibition would be an absurdity ; for as a writ of injunction it could have no effect; it would be a mere brutum fulmen. If, at the present moment, extrinsic facts could be regarded, each member of the court would be possessed of the knowledge that this lease has, in reality, been executed, and the property delivered under it; and if we-could look even at the statute book, we would find that the lease has been so recognized by the legislature, that the act of the -17th of March, 1870, would, in all probability, be considered as having received a legislative interpretation. It is probable, if such information was accessible, that every vestige of uncertainty might be removed. But this court, at an antecedent stage of these proceedings, decided not to admit evidence in proof of extrinsic facts. In this rejection I did not and cannot concur. This ruling, of course, concludes the point. The matters just referred to, therefore, cannot be taken into account, and the case made upon the record before us is alone to be regarded.
Confining our view then by this narrow horizon, is the principle of action altered ? In my judgment it is not. The facts that this court is ignorant of the present position of these parties, arid of the present condition of the equities existing between them, and that the act sought to be enjoined is, under the circumstances, likely to have been done, are conclusive against the exercise of the injunction power. A court never uses that power when it is blindfolded. The moment it is in the dark, it refuses to act. Among the innumerable precedents which exist, no example can be found, of an injunction issuing when the situation of the parties was. in obscurity. But more than this : if we sum up the probabilities arising from the facts of the present case, as they are^ now developed before us, we will be led, almost irresistibly, to the result that the lease endeavored to be prohibited has already been made. The bill shows that, at the time of its exhibition, the execution of this lease was imminent. It has since then been sustained by the Court of Chancery, and no reason appears why the project should not, long ago,, have. *489been carried into effect. It seems undeniable, therefore, that this court is asked for an injunction which, to state it in the mildest form, is altogether likely to be utterly idle and inefficacious.
It should be observed, that the objection to this court’s taking this step does not, in the remotest degree, depend upon the question whether or not this appeal has been prosecuted with sufficient diligence. Ear from this. If no laches is to be imputed to the appellants, this course of action should not, in my judgment, be adopted. The court should refuse to do the act asked for, not because any body is in fault, but because it does not seem becoming, in a judicial tribunal, to do any act which must be, there is every reason to suppose, empty and profitless. In speaking to a similar point, the Court of Errors in New York, at a time when it was distinguished by the great ability and learning of Chancellor Kent, uses this emphatic language : “ There is nothing upon which the judgment of reversal can operate. To pronounce a nugatory and idle judgment, which we have not the power to enforce, is incompatible with the dignity of judicial proceedings.” Trustees of Huntington v. Nicoll, 3 Johns. R. 578. And in the case of the Attorney-General v. City of Paterson, 1 Stockt. 627, Chancellor Green, perceiving, it is probable, the very great abuses to which such a power was liable, expressed the opinion, that a refusal of the Court of Chancery to grant a preliminary injunction was not appeal-able. That view, it is true, has not been received with favor, nor has the doctrine been adopted in this state; but it seems to me that its wisdom will become remarkably conspicuous, if mandates of this character are to be issued by this court on occasions when it cannot know what their effect will be, or whether they will have any effect at all.
Nor do I think it tends to relieve the pressure of this difficulty, to say that this court must assume that affairs remain as they were when the decree in the court below was rendered. Such a proposition is a mere assumption, and a begging of the very point in debate. Why should this *490court now assume, in despite of the allegations of the-respondents to the contrary, that this lease has not been made? Is such an assumption an intendment juris et de jure f If so, in what decision has the doctrine been propounded? I know of none such, nor even of any dictum with such an aspect. And, indeed, if such a decision could be produced, I could not look upon it as either scientific or rational, because it would require the judicial mind to draw a conclusion which, from the same premises, the minds of no other class of men would be likely to draw. Given the-before stated facts of this case, that many months ago, these-parties were desirous of making the lease in question, and that such lease has been ratified by the Chancellor, and that no circumstance appears, showing that such parties have altered their views, and that it is now alleged before this court, by the respondents, that the lease has been made and delivered, it can hardly be doubted, that ninety-nine men in every hundred would conclude that such lease has long since been executed. On what ground is it, that this court, exercising a sober judgment, is, from this state of facts, to come to the-opposite result? Men, by becoming judges, do not give up the ordinary principles of reasoning. I have used the usual standards of judgment, and have, in this way, come to the conviction that the lease in question has been made,, and on this account, I cannot participate in making an order which, it is almost certain, will be a prohibition not to-do that which has already been done. lam not willing to agree to the notion, that it is in any case necessary for a court of justice to listen for days to learned arguments, and to gravely consider the question whether it shall temporarily prohibit the doing of a certain act, when there is every reason to inter that such act has already been performed; when-everybody else but the judges of the court, is fully aware that such act has been performed ; and when the fact whether-such act has been done or not, is susceptible of easy proof.. Under such circumstances, an adjudication becomes a mere-form, and an abstract expression of opinion. I cannot find,. *491that ever, heretofore, a judicial tribunal has placed itself in-such an attitude.
There is also a second reason for which I think the relief which is asked on this appeal should be refused, and that is the want of proper parties to this bill.
The objection arising from this defect, is substantial and not technical. The parlies who have been omitted have a real interest in the suit, which will be materially affected by the operation of an injunction, if such injunction is to be at all operative. These parties who were entitled to be joined as defendants in the cause are the Philadelphia and Trenton Railroad Company, and the Pennsylvania Railroad Company. With respect to the first named company, its interest appears to he identical with that of the three companies that are made defendants. This company is one of the four companies which the bill charges were in the act of making the lease in question. It has a separate organization and independent existence, and has no such connection with the other defendants that they have or had the faintest pretence of a right to represent it in a suit of this character. The Pennsylvania Railroad Company stands upon a different ground, but it too, should, in my judgment, be a party, prior to the issuing of an injunction such as is here prayed for. This corporation is the contemplated lessee, and it appears that a contract exists, by necessary implication, between it ami these other corporations that this lease shall be made. Under such circumstances, an order forbidding the performance of the contract by the execution of the demise, must be supposed to affect injuriously as well the party to which the lease is to bo made as the parties who are to give it. The corporation that desires to become the lessee of these roads has to all appearance as much interest in the question whether a lease-shall be allowed to be made, as have those corporations that desire to become lessors. It does not seem to me to be reasonable to deny that this Pennsylvania Railroad Company has rights which would be materially affected by the allowance of even a temporary injunction of the kind in question. On what ground is it then, that this court can be-*492asked to compel the Chancellor, against his judgment, to issue a writ which will very greatly and probably very injuriously operate on the interests of these absent parties.
The general principle is, that all persons who are materially interested in the object of the bill are not only proper, but necessary parties. The exceptions to this general rule are few. The rule is a cardinal one, and should be strictly enforced unless where public policy or the necessities of equity require, under a particular exigency, its temporary relinquishment. These are primary principles, and are everywhere admitted. I shall not refer to authorities in their support.
By force of these fundamental maxims of equity, then, these two companies should have been joined as defendants in this cause. The only questions are, were there any circumstances which excused their omission, and if not, what is the effect in equity of such non-joinder ?
With respect to the first point. I perceive no reason why these companies were not made defendants. It was said that the interest which must be possessed by a person to make him a necessary party,to a bill, must be a legal or equitable estate. It may well be questioned whether the rule of equity is not too broadly stated in this proposition. If this statement of the rule is meant to imply that a person is not a necessary party to a proceeding in equity in any case unless he has an interest in the transaction involved in the suit which he himself could enforce, either at law or equity, I think such doctrine is manifestly erroneous. If two persons enter into a contract by parol, with respect to the sale and purchase of real estate, and which is not enforceable on account of the statute of frauds, inter sese, I should certainly hold that a third party could not go into equity to restrain the performance of such contract, without calling both the contracting parties into court j and that, in principle, is the position, taken at the strongest, of the Pennsylvania Railroad Company with respect to the lease which was in contemplation. But the question is not in reality material, inasmuch as the rule, if it exists to the effect claimed, does not embrace within its operation the *493Trenton and Philadelphia Railroad Company. As this company has identical rights with those companies that are made defendants, it cannot be plausibly contended that it has no equities and that it will not be affected by the operation of the decree. I do not see anything in these suggestions, nor in the circumstances of the case, which should, on any known ground of practice, absolve .these complainants from the obligation of embracing in their action these two omitted corporate* bodies.
The question which results from this conclusion as to the effect of this non-joinder, is one of some nicety. I think it no answer to the objection, to say that these omitted parties might come in and pray to bo admitted., As their interests are involved, their joinder to the cause before any order affecting such interests, is a legal right, and should not be made a mere matter of grace. They were entitled to be cited, and before being notified in some form, could not be required to take part in the procedure. But still, notwithstanding such is the general right of a person having an interest in the subject of the suit, I by no means desire to be understood as implying that, in a case of emergency, the Chancellor may not order an injunction, and, at the same time, direct the bill to be amended, so as to bring in the persons who have bean erroneously left out. In some instances, the existence of this power is indispensable to the ends of justice. And if in the present case an injunction had been ordered, and the appropriate amendment directed, it is not probable that this court would have felt itself justified in interfering with such order, on the sole ground of the absence from the action, of those parties. Such was the rule adopted in this court in the case of Morgan v. Rose, 7 C. E. Green 592, in which, it was said that “ the non-joinder of an essential party does not, of necessity, lead to the dissolution of an injunction. The general rule is that it will have that effect, but such rule is not universal.” And in that case, the injunction having been ordered in the Court of Chancery, this court refused, on appeal, to set it aside, on the ground that a party having a *494technical right to be joined had been omitted. But where the injunction has been refused in the court below, a much more delicate duty, in reviewing such action, falls upon this court. When substantial parties are not joined, the question whether the Chancellor will proceed, and, by an order, affect their rights, is one which seems addressed very much to his-discretion. There is no fixed and measured rule to be applied. Each ease must rest on its own peculiar circumstances. It seems to me that it is only in very 'clear cases that this court should attempt to supervise and control the Chancellor in the exercise of this delicate duty. Is the present such a case? In my opinion it should not be so regarded by this court. I have said that these two companies, in my estimation, are necessary parties to this proceeding. I think they are obviously such. No reason apj>ears,, nor has any excuse been offered, for their omission. This-defect in the bill was pointed out and insisted on in the court below. The complainants had it in their power to remove that defect, and have failed to do so. By such course these parties have been shut out from all participation in the-cause. The complainants brought on an argument in the Court of Chancery, involving the entire merits of .the cause,, in the absence of those parties whose interest's were so deeply involved. They then transferred the case to this court, and have sought here to obtain the opinion of this court on all the. important legal questions which lie at the foundation of this-controversy. It is impossible to close our eyes to the fact, that if the complainants should be successful in this endeavor, the cause would be completely concluded, and the rights of' those non-joined corporations virtually passed upon without any opportunity for a heai'ing being extended to them. The entire case would be adjudged in their absence. Such a course-will not harmonize with my ideas of justice or a proper’ administration of the law. These companies thus omitted are substantial and not technical parties, and it is their legal and equitable right to have the opportunity of putting in their answers and having their views presented for considera*495tion, before this court proceeds to pronounce an ultimate judgment on the whole law of the case, that will affect them equally with those who are here as defendants upon the record. I have given what I deem.the strongest grounds for the persuasion that the lease has been made, and if this is so, and the prayer -of these appellants is granted, they will have gained nothing, unless it is the abstract opinion of this court on certain legal propositions included in the controversy. Under such circumstances, as soon as they reach the court below, their first step will necessarily be to make the lessee, the Pennsylvania Eailroad Company, a party to the suit. Without joining that corporation, no final decree could be given. Tims the whole matter will be thrown open again new issues will be formed, and the new party will have the right, on appeal, to re-arguo the very questions that this court is now urged to decide. It is obvious, therefore, that all that this court can now do, if those appellants are listened to, is to commit itself to certain views with respect to the case, which are to have no practical effect, and concerning which these absent parties have not been heard. Under these cirenmstances, it seems to me very plain that these appellants are not here in good faith asking the court to extend to them the aid of the injunction process; all they want is the opinion 'of this tribunal of last resort, on the important questions of law to which I have referred. Such an opinion ought not ever, if it can be avoided, to be expressed in a suit in limine, but should be reserved for the final heáring. Why, at this juncture in these proceedings, should this court compromit itself in regard to the legal merits of the case ? Substantial parties are absent. There is great reason to believe that the only practical form in which an opinion can, at present, be put, will be profitless. "Where is the necessity, or the propriety, then, for such action ? 1 can see none.
I have not omitted to give due consideration to the form in which it is proposed to put the order of this court. As I understand it, that order is to be special, and to the effect that if the situation of the parties has changed since the *496original hearing, and new issues are formed, that then the Chancellor is to proceed and determine such issues according to equity. I am at a loss to comprehend what the operation of such an order is to be. If it is to tell the Chancellor that in case the lease has been already made, he need not issue an injunction to forbid its being made, such a mandate from this court seems hardly necessary; and yet I cannot suppose that it is intended to have any effect beyond this, because it seems undeniably clear that this court cannot control the action of the Court of Chancery, except on the single point of issuing or not issuing a preliminary injunction. If the legal status of the case has changed, and that matter should be brought in due form to the knowledge of the Chancellor, and new issues should bo thus formed, it would certainly seem clear that the Court of Chancery, by force of its inherent power, would deal with such matters, and that this court, on this appeal, can exercise no control whatever over such proceedings. To attempt to do so seems to me to overlook the fact that the jurisdiction of this tribunal is solely appellate, and that the only question it can now respond to is, whether the injunction asked for is to be granted or refused. The very form of this order appears to me tacitly to suggest the fundamental difficulty in dealing -with this case under present circumstances; but that difficulty cannot, as I think, be got rid of. It is, that the action of this court is based, in point of fact, on the existence of an improbable possibility, to wit, the present non-existence of this lease. If that lease exist, no form of decree can cover or avert the fact that a decree of reversal in this court must be blank paper. The opinion that accompanies it, I am well satisfied, will be all that the appellants care for. I have already given my reasons for thinking that under existing circumstances, such opinion ought not to be obtained from this court.
Nor can the question here involved be regarded by me as one of merely transient interest. This is not to be an exceptional or isolated case. A course of practice will be established, and that practice will be, that in every case where a prelim*497inaiy injunction shall be refused the complainant may appeal, and this court, rejecting all proof tending to show that the act sought to be enjoined has been done, and rejecting all inference, even the most cogent, leading to that conviction, will proceed to determine the vital legal questions of the case, and that, too, in the absence of a material and necessary party, whose non-joinder was objected to in the court below. I cannot find that such a course of procedure has ever prevailed in any appellate court, and it appears to me that if it should in the future be adhered to by this court, it will inevitably lead to inconvenience, oppression, and injustice.
As these views are not consistent with those entertained by the rest of the members of this court, I am quite conscious that the great probability is that they are unfounded in reason and in law; but as my convictions have become fixed, after full reflection, I feel conscientiously constrained to announce them. I do not wish to be understood, however, as dissenting from any of the views, on the general topic, so lucidly presented in the opinion just read by Judge Van Syckel • my objection being, exclusively, to the expression of those views in the present position of this cause.
On the grounds already set forth, I shall vote to affirm the decree of the Chancellor.
Decree reversed by the following vote :
For reversal — Belle, Clement, Dalrimple, Depue, Latiirop, Sculler, Van Syckel. 7.
For affirmance' — Beasley, C. J.