Court Opinion

ID: 3629733
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:09:35.080839+00
Date Added: 2024-06-11T13:44:57.307853
License: Public Domain

The parties to this action, plaintiff and defendant, are manufacturing corporations organized and existing under the laws of this state providing for the creation of corporations of that character. Both are engaged in the same business, that is, the manufacture and sale of cement. The plaintiff's plant is located in the same county as that of the defendant and both corporations are competitors in business. The purpose of this action was to compel the defendant to carry the products of the plaintiff, its competitor, to market through a canal or waterway which the defendant insists is its private property and an adjunct to its business. The contention that the defendant is bound by law to furnish facilities for the transportation of the plaintiff's products to market and thus to aid its competitor in the transaction of its business cannot fail to arrest attention and to invite an inquiry with respect to the grounds upon which the plaintiff's claim rests.
By chapter 238 of the Laws of 1823, the Delaware  Hudson Canal Company was incorporated for the purposes described in the preamble to the statute, the first clause of which is as follows: "Whereas, it is desired that a channel should be opened through which the City of New York and other cities of this state may receive a supply of stone coal which is found in the interior of the State of Pennsylvania." The statute, among other things, prescribed the maximum *Page 183 
rate of toll which the corporation should be entitled to charge for merchandise transported in water craft over or through the canal at four cents per mile for every ton of such products as are produced by the parties to this action. It was also enacted that if the corporation should neglect or refuse to keep in repair and good order any dam, lock or sluice of their own construction, or should neglect to remove any obstacle which might occur, so that boats, rafts or other vessels might safely use the navigation of the canal in the manner provided by the act, the corporation shall for every such offense forfeit and pay the sum of one hundred dollars, to be sued for and recovered in any court of competent jurisdiction, one-half to the use of the informer and the other half to the use of the poor of the township or county where the neglect may occur, and the service of process upon the toll gatherer, in the proper county, and next to the place where the offense shall have been committed, shall be held as good and as available in law as if served on the president of the said corporation.
The corporate body thus created constructed a canal or public waterway, in compliance with the provisions of the statute, from Honesdale, in the state of Pennsylvania, to tidewater at Eddyville, on the Rondout creek, a tributary of the Hudson river. This waterway furnished transportation for all merchandise through that section until the year 1899. The length of the canal was about one hundred and ten miles. By chapter 469 of the Laws of 1899 the original act of incorporation was amended and the third section of the amendatory act reads as follows: "Whenever it shall appear to the managers of said canal company that it is able to fulfill the aforesaid purpose of opening and of mining and bringing to market a supply of stone coal which is found in the interior of the state of Pennsylvania more economically by rail over its own or other lines than by its canal, it shall be lawful for said company, and it is hereby authorized and empowered by vote of said managers, to lease, sell or discontinue to use or maintain said canal, or any parts thereof, which in their *Page 184 
judgment are no longer necessary for said purpose." And it was further provided in the next section that when the company should exercise the power granted in the preceding section, to discontinue to use or maintain the canal, or any part thereof, it should within a reasonable time thereafter restore the highway crossings of said canal as are so discontinued to their former state so far as the same can be done; and in case that the canal or any part thereof shall be discontinued, it was bound to make provision for the private crossings over the same. It is found that the canal company on the 24th of June, 1899, sold and conveyed the canal to the Cornell Steamboat Company, which continued to occupy the canal in the same manner and charging the same tolls as theretofore until the 26th of March, 1902, except that it did not carry the coal of the Delaware and Hudson Canal Company. The steamboat company, on the 26th day of March, 1902, sold and conveyed the east twelve miles thereof to the defendant in this case. The remaining part of the canal, extending westerly about ninety-eight miles to Honesdale, in the state of Pennsylvania, has been entirely abandoned. It is no longer used as a canal, but is in different portions thereof diverted and devoted to different uses. The defendant is a large manufacturer of cement, having its works near the westerly end of the twelve miles of the canal purchased by it and it uses the twelve miles to transport its products to market. The plaintiff is also a manufacturer of cement, having its works about five miles from the river, where it was located during the time that the canal company and the steamboat company owned the canal, and during that time used it to transport its products to the river, and had paid for such transportation to both corporations the rates fixed by the act of 1823. After the defendant had acquired the twelve miles aforesaid, it claimed to own that portion of the canal as a private highway, and that it be kept open and in operation for its own private use only. It asserts that it was under no obligation to allow the plaintiff or any other person to use it or transport goods thereon, but it offered, for the accommodation of the plaintiff, to allow it *Page 185 
such use and transportation if it were paid therefor at the rate of sixteen cents per barrel for the cement so transported, and it claimed that unless the plaintiff would pay the sum so demanded it should be excluded from the canal.
The plaintiff's complaint was dismissed at the trial and the judgment has been unanimously affirmed below. There is no finding in the case as to whether the sum demanded by the defendant from the plaintiff for the use of its waterway was unreasonable or otherwise; and the contention of the plaintiff is that it is now entitled to use the twelve miles purchased by the defendant in the same way and subject only to the same tolls fixed by the original statute. I think the fair construction of the act of 1899 is that the legislature thereby intended to permit the canal to be abandoned or discontinued entirely as a public waterway, and that when so discontinued or abandoned, the powers, duties and obligations of the company or its grantees as public carriers ceased. It seems to be conceded that after the passage of the act of 1899 the canal company could at its election have discontinued the canal and filled up the prism, thereby wholly depriving the public of its use as a waterway. If the company had found it to its advantage to divide the canal into parcels one mile in length over its entire distance, then under the plaintiff's construction every part or any part of the ditch so sold must continue to be a public highway, and every owner by himself or in connection with every other owner would become a common carrier. The statute permitted the sale or discontinuance of the canal in parts and ninety-eight miles of it has certainly been abandoned and no longer used as a canal, but in the language of the findings is in different portions devoted and diverted to different uses. If the defendant's purchase had been of a single mile instead of twelve miles, the same question would arise that is now presented. Could it be reasonably asserted that it was bound to keep this one mile open for the use of the public as a canal? The circumstance that the fragment which the defendant purchased is twelve miles instead of one mile does not change the question. No duties or obligations survived *Page 186 
after the sale to the defendant different from the duties or obligations of the numerous other parties who became purchasers of some fragments, more or less, of this original waterway. What the defendant took by its purchase was the physical property without the franchises and without assuming the duties and obligations to the public of a common carrier. It is of no consequence that the conveyance to the defendant or its grantor assumed to convey the original franchise of the canal. In the absence of special statutory authority, which does not exist in this case, neither an individual nor a corporation, such as the defendant is, can buy a franchise in the market like other property. A franchise to a corporation to exercise the powers and perform the duties of a common carrier proceeds from the state in the exercise of its sovereignty, and when the canal company that originally received the franchise abandoned it under the authority of the statute, the defendant did not succeed to its powers any more than did the other numerous purchasers of the other fragments.
If the plaintiff is right in the contention that the obligations and duties imposed upon the original canal company have devolved upon the defendant, then the defendant must be subject to the same penalties and liabilities. What the plaintiff complains of is that the defendant has closed these twelve miles of the canal to the public, and as to the plaintiff has obstructed free navigation and excluded it from the use of the same as a public highway. If that be so, then the plaintiff is entitled to recover from the defendant in an action at law, not only all damages accruing to it from the defendant's refusal to open the canal to the public, but also is entitled to recover a penalty of one hundred dollars for each refusal to comply with the plaintiff's demands. It would follow from this that the plaintiff has a perfect remedy at law, and that a court of equity has no jurisdiction. The controversy simply involves a dispute between the parties to this action as to the ownership of the easterly end of what was originally a canal one hundred and ten miles long. The defendant claims that it owns the land, the prism and every other physical object *Page 187 
connected with the same. The plaintiff denies that claim, and insists that it is still a public highway over which it has a right to transport its goods. If the defendant is a common carrier, as the plaintiff claims, then it can be compelled to do its duty by mandamus or by an action for damages, but I doubt if any controlling authority can be found that justifies the interference of a court of equity by writ of injunction. On the contrary, I think the law is well settled the other way. The rule that governs in such cases was stated by Judge ANDREWS in Moore
v. Brooklyn City R.R. Co. (108 N.Y. 98) as follows: "The threatened violation of a mere naked legal right, unaccompanied by special circumstances, is not a ground for injunction when, as in this case, legal remedies are adequate to redress any resulting injury. If the defendant violates its charter, or fails to perform the conditions under which it exercise its franchises, or if in the management of its trains or business it unlawfully occupies or obstructs the public highway, the remedy in the one case is by a proceeding in behalf of the People by the attorney-general to annul or forfeit its franchise, and in the other by indictment or proceedings under the statute." And by Judge RUGER in Thomas v. Musical M.P. Union (121 N.Y. 45): "It is, therefore, a cardinal rule of equity that it will not entertain jurisdiction of cases where there is an adequate remedy at law, or grant relief, unless for the purpose of preventing serious and irreparable injury. These principles are elementary and lie at the foundation of all equitable jurisdiction. Equity, therefore, interferes in the transactions of men by preventive measures only when irreparable injury is threatened, and the law does not afford an adequate remedy for the contemplated wrong." The principle thus stated has never been departed from in this court. On the contrary, it seems to me that the rule has been observed, if not extended, in a very recent case. (People exrel. Corscadden v. Howe, 177 N.Y. 499.) The authorities are clear and numerous to the effect that a bill in equity will not lie in a case like this. And in some of the cases the facts are almost identical with *Page 188 
the case at bar. (B.M.C. Co. v. L.C.  N. Co., 50 Pa. St. 91;Saylor v. Pa. Canal Co., 183 Pa. St. 167.) The owners of a ferry, a stage coach or a railroad are, doubtless, conducting a business that is affected with the public interests, but I am not aware of any authority for the proposition that if they refuse to perform their proper functions and exclude an individual or even the whole public from the accommodations with which the business is charged they can be disciplined in that regard by an injunction from a court of equity. The remedy in such cases is by mandamus or by action at law for damages, or to recover the statutory penalties for a refusal to grant the accommodations.
Moreover, I am unable to see how a manufacturing corporation can exercise the franchise of operating a public canal or railroad. A corporation has no right to exercise any franchises not conferred upon it by law, and I am not aware that there is any law that has conferred upon a manufacturing corporation the powers, duties or obligations of a common carrier. It cannot acquire by grant the power to engage in a business not embraced within the scope of its charter. The attorney-general may bring an action to dissolve any corporation that is engaged in the exercise of any franchise not conferred upon it by law. (Code, § 1798.) And it would seem to follow that such an action might be maintained against the defendant, in behalf of the People, providing it could be shown that it has actually usurped such powers and is assuming to exercise such a franchise. A court of equity will not compel a manufacturing corporation to do things which, if done, would subject it to dissolution and death in an action in behalf of the People. I cannot believe that the legislature intended, when authorizing the canal company to sell or discontinue the canal in fragments, to impose upon the various purchasers the duties and obligations of the original corporation. It is quite certain that the statute which authorizes the sale or discontinuance of the canal is silent with respect to the franchise, and it must have reverted to the state unless it is distributed among the various owners who at present are in possession of the property *Page 189 
The defendant, doubtless, had the power, within the scope of its charter, to buy the land and the other physical objects which constitute these twelve miles of waterway, but it had no power to acquire by grant or to exercise the powers and privileges originally granted to the canal company. If it acquired any of the powers so conferred, it acquired them all, and these powers included the right to exercise the power of eminent domain and various other things utterly foreign to the functions of a manufacturing corporation. It is of no consequence that the defendant in some instances has permitted others to use the waterway. That is a voluntary act on its part and does not proceed from any legal obligation. The defendant may permit its neighbors to cross its land or use its real estate for their convenience, and it may charge what it deems a reasonable compensation for the privilege. But when it is contended that it is obliged to do it, that presents quite another and different question, and that is what the plaintiff claims and insists upon. It seems to me that the fallacy involved in the argument in behalf of the plaintiff consists in assuming that the original franchise granted to the canal company has followed all the fragments of the original property which composed it, when by statute the owners of the property were authorized to discontinue it or abandon it, which is the same thing, and neither the original franchise nor any obligation or duty attached to it survived or devolved upon the purchasers. By the original statute a corporation was created for the express purpose of constructing and operating a canal. It was a private enterprise, but certain privileges and franchises were conferred upon the corporation and delegated to it by the sovereign, and thus it was authorized to exercise some of the powers of government, such as the right to condemn land, to recover from any one obstructing or in any way injuring the waterway or anything connected with it four times the damages actually sustained, and other powers quite unusual in the case of private corporations. If the duties and obligations of a common carrier have been cast upon the defendant the rights and privileges conferred must have accompanied them *Page 190 
and are now possessed by it, and, hence, it would follow that the defendant, as a mere manufacturing corporation, has acquired powers and privileges not possessed by any other manufacturing corporation in the state.
The statute prohibits any corporation from exercising any corporate powers except such as are expressly conferred by its charter or by law or are necessary to the exercise of the powers expressly enumerated and given. Where did the defendant, a mere manufacturing corporation, get the power to operate and maintain a canal or railroad for the transportation of passengers and goods? By what authority can it exercise the powers and privileges of a transportation company? The contention of the learned counsel for the plaintiff imposes upon him not only the burden of showing that the defendant possessed all these powers but that a court of equity will command and compel their exercise upon the demand of the plaintiff. If the duties of a common carrier have been imposed upon the defendant, as the plaintiff claims, the result has been accomplished in no other way than by a conveyance of the physical property to the defendant by an intermediate owner under statutory authority to "discontinue to use or maintain the canal." Under the exercise of that authority the canal has ceased to exist, as such, since it was sold in fragments, and if the defendant purchased a larger fragment than the other purchasers it took the fragment with only the same burdens and obligations as the others did. It had the power to become the owner of any land necessary for its own operations, and if that land happened to be covered with water, as was the case, it could float its own products on the water like any other private owner, but it was not bound in law to permit others to do so. The defendant could not become a transportation company by any private grant, nor did the governmental powers delegated to the canal company, which we call a franchise, pass to it through a deed like covenants which run with the land. The legislature, I think, conferred authority upon the owners of the canal to discontinue its use or *Page 191 
maintenance as a public highway, and it has been discontinued and abandoned under that authority.
The legislature declared in explicit terms that the managers and owners of the canal might discontinue and abandon it as a public highway when, in their judgment, it was no longer useful or necessary for the purpose of its original construction, namely, the transportation of coal. The use of the waterway for the accommodation of the plaintiff, or for any other purpose than a channel for carrying coal was not contemplated. The abandonment of the canal, as such, was made to depend entirely upon the judgment of the managers that it was "no longer necessary for said purpose;" that is to say, for the purpose of carrying coal. They determined that it was no longer useful for that purpose, and, hence, it was abandoned and sold, and the plaintiff has no right to insist that a fragment of it shall be kept in life for its private use. If the plaintiff wanted it retained for its own manufacturing or transportation operations, it could have outbidden the defendant at the sale, and, if that happened, there can be little doubt that the plaintiff would have assumed the same position with respect to its use by the public that the defendant assumes now.
It is suggested that the defendant cannot set up the defense ofultra vires, and cases are cited to show that a corporation cannot avoid its contracts or defend its wrongful acts on the ground that it had no power to make the contract or to do the thing for which a party sues to enforce a liability. No one disputes that principle or questions the authority of the cases cited, but they have no application whatever to this case, for the plain reason that the defendant is not sued upon any ultravires contract or act. What it is sued for is for refusing to make contracts, or to do things or to engage in a business which, as a manufacturing corporation, it is forbidden to do. The question is not when or how a corporation may defend on the ground of ultra vires, but whether a court of equity will compel a manufacturing corporation against its will and protest to do things and to engage in a business not within *Page 192 
its chartered powers or permitted by law. If any case or any authority can be found to sustain the proposition that a court of equity will make such a decree and thus compel the corporation to incur the risk of corporate death, then such a case or authority is pertinent, but it is entirely safe to assert that no case or authority of this kind can be found. It does not meet the point at all to cite cases to show that a corporation will not be permitted to repudiate its contracts or affirmative acts by the plea of ultra vires. What is sought to be accomplished in this case is to compel a manufacturing corporation to make ultravires contracts and to enter into business relations and to exercise powers not conferred upon it by law, and the exercise of which is prohibited. Some principle or some authority to sustain that claim is what is very much needed in this case.
The exclusion of the plaintiff from the use of the twelve miles purchased by the defendant is not a special wrong peculiar to the plaintiff, but to the whole public of which the plaintiff is a part. The injury, if any, is in common with the whole public, and not special to itself. The principle is quite familiar that, under such circumstances, a private party cannot maintain an action for an injunction, either in his own behalf or in behalf of the public. If the defendant, as alleged, has obstructed or closed up a public highway, and wrongfully excluded the whole public from the use of the same, the remedy is by action in the name of the People by the attorney-general. (Knickerbocker IceCompany v. Shultz, 116 N.Y. 382; Lansing v. Smith, 8 Cowen, 146; B.M.C. Co. v. L.C.  N. Co., 50 Pa. St. 91;Saylor v. Pa. Canal Co., 183 Pa. St. 167; Wakeman v.Wilbur, 147 N.Y. 657.) There is no finding that takes the case out of this principle.
There is another view of this case which is founded upon the condition of the record. The decision is in the short form, and the judgment in favor of the defendant was unanimously affirmed. In such a case the decision of the trial court has the same effect as the general verdict of a jury, and all the facts must be deemed to have been found in favor of *Page 193 
the successful party. In the case at bar the plaintiff cannot succeed unless certain facts are found in its favor.
1. It must be found that the canal was never abandoned, but is still a public highway, and that is a question of fact, or at least a mixed question of law and fact.
2. It must be found that the defendant purchased the twelve miles and assumed control of it, not as a private waterway but as a public highway.
3. It must be found that the defendant prevented the plaintiff from using a public highway to transport its goods and that plaintiff sustained specific damage different from the damage to the whole public.
These facts and all other facts in the case, instead of being found in favor of the plaintiff, have been found in favor of the defendant, under the doctrine of our own decisions, and if any question survives to this court after the unanimous decision it ought to be pointed out, so that we may know just what the rule is in such cases and what are the exceptions, if any. The plaintiff cannot succeed in this appeal, unless we hold, not only that these propositions are still open in this court, but are to be assumed in favor of the plaintiff and against the judgment. If that is so, then I can only say that I am utterly unable to understand the meaning of the numerous decisions of this court on the question. One of the most recent is that of Hutton v.Smith (175 N.Y. 375), where the following proposition was decided: "Where a judgment entered upon a decision of the trial court in the short form is unanimously affirmed by the Appellate Division, the Court of Appeals is concluded thereby and, whatever the views of the court may be, it must assume that facts sufficient to sustain the decision were necessarily found by the trial court." In the case of City of Niagara Falls v. N.Y.C. H.R.R.R. Co. (168 N.Y. 610) the question was whether the locusin quo was a highway, or private property. That is the question in this case, but in that case it was held that no question survived the unanimous decision, although it appeared that the railroad had written title of record to the land. *Page 194 
There are many other cases to the same effect, all so recent that their scope must be well understood. If I am wrong in supposing that the case at bar must share the same fate, it ought not to be difficult to point out wherein this case differs from others, where the decison is in the short form and unanimously affirmed.
I think there was no error in the disposition of this case by the courts below, and that the judgment should be affirmed, with costs.
HAIGHT, VANN, CULLEN and WERNER, JJ., concur with BARTLETT, J.; O'BRIEN, J., reads dissenting opinion; PARKER, Ch. J., absent.
Judgment reversed, etc.