Court Opinion

ID: 6250895
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:14:37.272395+00
Date Added: 2024-06-11T08:59:25.003559
License: Public Domain

Me. Justice Mesteezat,
dissenting:
The defendant, the Philadelphia, Harrisburg & Pitts-burg Railroad Company, constructed and operated a railroad from Harrisburg to Shippensburg, passing through Cumberland county. In October, 1890, for the annual consideration of $200,000, it leased to the Philadelphia & Reading Railway Company its railroad, together with its "lands, real estate, tracks, sidings, depots, freight stations, water stations, improvements, rights of way, and other appurtenances,” for 999 years, and "also agreed to lease to the said lessee .... all railroads hereafter by it acquired.” The lessee company has since operated the road.
Subsequent to the date of the lease the plaintiff became the owner of certain lands adjoining the right of way of the defendant company in Upper Allen township, Cumberland county. On this land are rich deposits of limestone with quarries opened for the purpose of shipping the stone to market, also kilns built for the purpose of manufacturing lime which, prior to 1906, had been sold in large quantities for many years. In that year the plaintiff applied to the defendant company for a siding and switch connections between her quarries and its railroad, and the application was refused. Subsequently she filed a bill in equity against the lessor and lessee companies to compel the construction of the siding connection, and a decree in her favor was entered directing the defendants to build the siding as prayed for in the bill. There was an averment in the bill that damages had been sustained by the plaintiff by reason of the refusal of the defendants to perform the duties by law imposed upon them, and the plaintiff prayed for the assessment of damages under the Act of June 4, 1883, P. L. 72. The court, however, declined to pass upon the question.
The present action was brought against the lessor or *276owning company to recover damages for unreasonable discrimination in the matter of furnishing facilities for transportation under the act of 1883. The case was submitted to the jury which returned a verdict in favor of plaintiff, and judgment having been entered thereon, the defendant took this appeal. It was found by the jury that the plaintiff was unduly and unreasonably discriminated against by the refusal of siding privileges, and hence she was entitled to recover damages against the party who was responsible for such discrimination. A majority of the court reverses the judgment upon the ground that the lessor or owning company is not liable to the plaintiff because it had leased its road prior to the time the plaintiff was entitled to demand siding facilities. On every other question raised by the defendant, the majority inferentially holds with the plaintiff.
With deference to the majority, I think the position assumed is untenable.
It is settled law in this country that one railroad corporation cannot, without statutory authority, divest itself of, or relieve itself from any duty or liability imposed by its charter or the general laws of the state by leasing its road and appurtenances to another: York & Maryland Line Railroad Co. v. Winans, 58 U. S. 30. The owning company cannot escape the performance of any duty or obligation imposed by its charter or the general laws of the state by a voluntary surrender of its road into the hands of lessees; and the operation of a road by the lessees does" not change the relation of the original company to the public: Washington, Alexandria & Georgetown R. R. Co. v. Brown, 84 U. S. 445. Legislation authorizing the transfer of corporate franchises and property is strictly construed, and the courts have uniformly held that such transfers can only be made when permitted expressly or by necessary implication in the statute. A statute alleged to confer a power to lease will not be aided by construction: Thomas v. R. R. Co., 101 U. S. 71. If the state grants the right to lease, the lessor company remains liable for *277the discharge of its duties to the public unless expressly relieved therefrom, by a statute.
The lease involved in this case was made under the Act of April 23,1861, P. L. 410,4 Purd. 3880, which authorizes a railroad company to enter into contracts for the “use or lease” of any other railroad, and confers upon the lessee the authority “to run, use and operate such road, not, it will be observed, to contract or build:” Per Sharswood, J., in Pittsburg & Connellsville Railroad Co. v. Bedford, etc., R. R. Co., 81* Pa. 104, 112. It does not authorize a sale of the road, nor does it empower the lessor company to divest itself of the duties and obligations assumed under its charter. It does not expressly or by implication permit a railroad company to sell or lease its franchises, nor does a lease made pursuant to the statute annul the charter or end the corporate existence of the owning company. The company retains its corporate existence and must perform the duties to the public required by its charter, except in so far as the statute can and does expressly authorize it to delegate the performance of those duties to the lessee. There was no authority vested in the defendant to lease its unexercised franchises of appropriation and construction, and hence, no matter how ample the terms of the demise, the Philadelphia & Reading Railway Company, the lessee, took nothing more than the power “to run, use and operate” the lessor’s road, and to do such other acts as were necessary to the successful operation of the existing road: Lewis v. Germantown, Norristown & Phœnixville R. R. Co., 16 Phila. 608. It will be observed in the present case that it was the physical property and not the franchises that was leased. The lessor company does not contend that the right of eminent domain passed to the lessee; on the contrary, since the lease was executed, the lessor has continued to exercise its right to condemn property for additional tracks, as is disclosed in numerous cases in this court. In brief, it may be said that the lessor company after the lease still retained all of its charter *278powers, subject to the right of the lessee company to exercise such of those powers as, under the statute, could be and were transferred to the latter company for the operation of the road.
When the Philadelphia, Harrisburg & Pittsburg Railroad Company, the lessor and defendant here, was chartered, it became subject to the constitution and laws of the commonwealth prohibiting unreasonable discrimination in furnishing facilities in transportation of freight in this state. It is contended, and so held by the majority of the court, that when the defendant company made the lease it relieved itself from the performance of its duties to the public to the extent that it was entirely absolved from the duties imposed upon it by the constitution and laws which required it to furnish to all parties equal and reasonable transportation facilities. The lessee or operating company, and not the lessor company, should, on principle, be held liable for any injuries inflicted by the lessee or for the failure of the performance of any duty resting upon it in operating the road. It cannot discriminate as to rates or in furnishing cars; nor can it successfully defend against its own negligence or against any other default of its own. The statute expressly confers on a railroad company the power to lease to another company to operate the road, and it necessarily follows that any default, negligence, or failure of duty in operating the road must be visited on the lessee. But whatever may be the liability of the lessee company to the plaintiff for unlawful discrimination in furnishing siding facilities, the lessor company is clearly in default by reason of its failure to furnish the sidings. The constitution and laws of the state were written, into and became a part of its charter and they prohibit discrimination in furnishing transportation facilities to the plaintiff or any other party entitled to them. To furnish such facilities is a continuing duty owed to the public, it is the same to-day as it was prior to the lease. It was a duty imposed on the lessor -by acceptance of the charter from the performance of *279which its lease could not and did not discharge it. As the authorities hold, the lessor company retains its corporate existence and its charter powers after the lease; and it necessarily follows that its duties to the public are continuing and must be performed. The majority of the court hold that, without statutory authority, it can divest itself of its duties to the public, and at the same time retain and enforce the powers and privileges granted it by the state. It continues to exercise the power to condemn land adjacent to its right of way for additional tracks. It has, since the lease and by virtue of the authority conferred by its charter, taken the plaintiff’s land to widen its road and thereby increased the rentals paid it, yet this court holds that it cannot be compelled to perform the duty imposed upon it by the constitution and laws of the commonwealth to give the plaintiff siding facilities. The owning company may condemn and appropriate the plaintiff’s dwelling house to widen its road, and turn over the additional trackage to the lessee: Snyder v. B. & O. R. R. Co., 210 Pa. 500, and may construct sidings on the plaintiff’s land to furnish facilities to others, but, under the ruling in this case, the plaintiff cannot compel it to furnish her transportation facilities for the products of her own farm and lime kilns like those constructed by it for her neighbors. When the original appropriation for the right of way through this tract of land was made by the defendant company the damages were diminished by reason of the opportunity for siding and other advantages special and peculiar to the land. It will be conceded that prior to the lease, the defendant, under the facts found by the jury, would have been compelled to furnish siding facilities to the plaintiff as the owner of the premises. The extent to which the damages were diminished was part of the consideration paid for the siding privileges. Shall the defendant retain the consideration and refuse the siding? Nearly a century ago the highest judicial tribunal in this country declared in Dartmouth College v. Woodward, 17 U. S. 518, and all the courts of this coun*280try, federal and state, have since enforced the doctrine, that the charter of a corporation is a contract between the state and the incorporators within the meaning of the constitutional limitation that a legislature can pass no law impairing the obligation of contracts. Adhering to this doctrine, this court has never permitted the people, through the legislature, to infringe in the least on the rights, privileges, powers or franchises of a corporation. Can it be possible that the same doctrine of inviolability of contract, in the absence of preventive constitutional legislation, will not protect the other party to the contract — the state — and compel the corporation to keep its covenants and perform its constitutional and statutory duties to the public?
The covenant in the lease that the lessee would operate the road and perform all the lessor’s obligations to the public is valid and binding inter partes, but it does not relieve the lessor from the performance of its duties to the public: Nugent v. Boston, Concord & Montreal R. R. Co. (Me.), 6 Am. St. Rep. 151. Our statute does not and could not so provide, as legislation does in some jurisdictions, and hence the lessor could not thus divest itself of its charter obligations.
It follows that in this action the defendant cannot set up as a defense that it had leased its road before the plaintiff was entitled to a siding, the controlling reason assigned by the majority of the court for ruling the present case against the plaintiff.
There is another and conclusive reason why the vital and controlling question in this case must be resolved against the defendant company. The plaintiff filed a bill, January 16,1907, against the defendant company and its lessee averring, inter alia, that on or about May 1,1906, she applied to the defendants for the construction of a siding from their lines near her quarries and lime kilns and for the necessary switching connections so as to enable her to ship her product to market, and from that time to the filing of the bill had made frequent applica*281tions to the defendants’ officers for a siding and switching connections but that the defendant companies had refused to make them. It is further averred that the defendants are common carriers under the laws of the state and as such are required to grant the plaintiff the same shipping facilities that they grant to other persons under like circumstances; that the defendant companies were unjustly and illegally discriminating against the plaintiff and thereby causing her to suffer great damage and loss in her property and business; and praying for a decree that the defendant companies should proceed to construct a siding and switching connections and give the plaintiff the same facilities for shipping and transporting her product to market that were furnished to other shippers and owners of lime and stone on the defendants’ lines. The defendants filed an answer in which, inter alia, they admit that an application had been made by the plaintiff for switching connections and the construction of a siding along their railroad, and that the same “was refused wholly because, upon a careful investigation of the situation and business of the complainant, it was found inexpedient and unnecessary for the public service, and would simply be a private convenience for the complainant alone.” The answer admits that the defendants are common carriers but denies the illegal discrimination.
Testimony was taken and the case was disposed of on it and the bill-and answer. The chancellor found, under the issue thus made by the pleadings, that after preliminary negotiations by correspondence with the defendants’ officers, the plaintiff, on May 10, 1906, made a formal request for the siding and offered to pay the entire expense of the installation, and comply with any reasonable regulation of the company; that the defendants’ general superintendent unconditionally refused to grant the plaintiff a siding on June 8, 1906, and thereafter continued to decline to furnish such transportation facilities; that sidings under like conditions and circumstances were furnished to other owners of land contiguous to defendants’ railroad; *282that the plaintiff, upon compliance with the regulations of the defendant companies as to the payment of the cost of construction, has, as an adjoining landowner, the right to a private switch connection with the defendants’ railroad, and “that the defendant companies, in furnishing siding facilities to competitors of the complainant, and refusing such facilities to plaintiff, under conditions and circumstances similar in all essential points, have been guilty of an illegal discrimination, in violation of the provisions of the constitution of Pennsylvania, and of the act of June 4, 1883.” Pursuant to these findings the chancellor on August 23, 1907, entered a decree that the defendant companies “shall and do proceed, without further delay forthwith to place in position, and construct, at a convenient point, opposite the adjoining land of complainant, a switching or siding connection, and lay tracks therefrom across its right of way to the border of her land, .... the cost .... to be paid by the plaintiff.” The chancellor, for reasons stated, refused to award damages, but entered, as part of the decree, that “this refusal, however, is without prejudice to her right to proceed to recover the same in another action.” This reservation from the operation of the decree permitted the plaintiff to bring a subsequent action for damages: 23 Cyclopedia of Law and Procedure, 1145. No appeal was taken from the decree, and the siding and switching connections were furnished in pursuance of it.
The present action was brought July 8, 1908, to recover damages, as averred in the statement, resulting from the illegal discrimination against the plaintiff by the defendant company which was found and decreed to exist in the equity proceeding. With the exception of the additional averment of the equity proceeding in the statement in the present action, the latter and the bill in equity aver substantially the same facts. On the trial of the cause the record in the equity proceeding was put in evidence, and the plaintiff proved by proper evidence, aliunde the equity record, the damages which she alleged in her statement *283were caused by the illegal discrimination by the defendant companies. She did not rely upon the finding of the •chancellor as to the items or amount of damages which she sustained, but proved them on the trial of this case. She was not required to prove again, what was found by the chancellor, that a demand for a siding had been made or when it had been made, nor that she had been illegally discriminated against by the defendant company. Those were facts averred in the bill and were material and. indispensably necessary, under the statute, to support the decree entered in the equity proceeding. The chancellor distinctly found in the equity proceeding that a demand for the siding and switching connections was made on May 10, 1906, and was unconditionally refused on June 8, 1906. These findings were a prerequisite to an intelligent and proper decree requiring the defendant company to furnish the siding facilities. Without a demand, which necessarily implies the date thereof, and without a definite refusal to comply therewith, the decree would have been lacking in material facts to support it. The liability of the defendant for damages began immediately after June 8, 1906, the date of the unconditional refusal to comply with the plaintiff’s demand. It did not and could not arise before. As correctly said by the learned trial judge in his opinion in this case: “The issues (in the equity case) were fully and fairly made up — whether there had been an unlawful discrimination by the defendants, the Philadelphia, Harrisburg & Pittsburg Railroad Company, and the Philadelphia & Reading Railway Company, against the plaintiff, and also whether she was entitled under the law to have them establish a siding and switching connections. Both of these questions were resolved in her favor by a decision rendered on August 23, 1907. No appeal was taken from the findings and decree of the court, and a siding and connections were installed in May, 1908, and the charges for the same paid on July 3, fol- • lowing.”
- The plaintiff proved on the trial of this case, to the very *284cent, the damages which resulted to her from the illegal discrimination which the chancellor found to exist. The decree, as will be observed, was entered against both companies, and hence both and each were liable for the tort resulting in the plaintiff’s injuries. If, in addition to finding the illegal discrimination, the learned chancellor had awarded damages against the defendant companies, it would' not be pretended that the decree could not. have been enforced against the property of either of them. Both of the defendants were found to have been guilty of the tort which caused the plaintiff’s injuries. The chancellor therefore necessarily found that each of the defendants had contributed to the plaintiff’s injuries by illegal discrimination. Had he found no culpability in one of them, the decree would necessarily have not gone against the innocent defendant. The material facts found in the equity case were therefore conclusive in a subsequent action against both or either of the defendants, for torts are joint and several, one may be answerable for the wrong done by both tort feasors — it cannot be apportioned: Philadelphia v. Collins, 68 Pa. 106.
If there is anything settled in the law of this state, it is that a judgment, sentence, or decree of a court of competent jurisdiction is conclusive, not only as to the judgment or decree, but of every fact directly or necessarily adjudicated, or which was necessarily involved in or was material to the adjudication. That principle is settled by a beadroll of cases decided by this court. The rule applies as well to decrees in equity as to judgments at law: Westcott v. Edmunds, 68 Pa. 34; Columbia Natl. Bank v. Dunn, 207 Pa. 548; Klick v. Gernert, 220 Pa. 503. In the equity suit the right to the siding and switching connections, the discrimination in not furnishing them, the date of the discrimination, and every other fact material to the adjudication, were directly involved and were found against the defendants. The present action was brought to recover damages for the illegal discrimination and the equity proceeding is set up in the plaintiff’s state*285ment, and the record was put in evidence on the trial of the cause. That decree remains unimpeached and is therefore conclusive as to all facts material to support it. The facts thus found by the chancellor are therefore conclusively evidential that the plaintiff was denied a siding and switching connections with the defendant companies’ railroad after a specific demand in May, 1906, and a refusal in June, 1906, and that the defendants in furnishing siding facilities to competitors of the plaintiff and refusing such facilities to her under conditions and circumstances similar in all essential points, were guilty of illegal discrimination, in violation of the provisions of the constitution of Pennsylvania, and of the act of June 4, 1883.
While the plaintiff may, under the law, rely upon the finding by the chancellor that a demand was made by her upon the defendant company to install the siding, yet she is not compelled to do so as there is positive evidence by an official of the operating company given on the trial of the present action that a demand was made and when it was made. A reading of the testimony discloses that both upon the examination in chief and cross-examination of the witnesses, with one exception, the parties treated the demand and date thereof by the plaintiff as an established fact. Mr. Stackhouse, superintendent of the operating company, was called as a witness by the defendant and while on the stand testified as follows: “Mr. Sadler: Q. At the time demand was originally made by Miss Moser for the installation of the siding, your double tracking had not begun around Bowmansdale, had it? .... A. Her application was made for a siding before my time. I have her first application on file here— it was before my time, but shortly after I came there she communicated with me concerning this siding, as well as Mr. McKeehan — I have a number of those letters here. Mr. Wetzel: Q. When was the first application — have you the first letter? A. May 13, 1905. I guess it is 1904. I am not certain whether it is 1904 or 1905.” It also appears in the testimony offered in this case that the siding was *286constructed in pursuance of the compulsory proceeding in equity resulting, in the decree compelling its installation. It is contended, however, that in the ruling which is the subject of the first assignment of error, the learned judge relied for this fact upon the findings in the equity case. Concede that he did, the testimony above quoted, given subsequently to his ruling, cured any error which might have arisen upon his relying upon the equity proceeding. It will be observed that the last answer in the testimony quoted was given in response to a question by appellant’s counsel. The appellant company therefore is not in a position to raise the question that the plaintiff failed to show in the present action that a demand was made upon it for the siding.
The reversal of the judgment of the court below on the ground of the nonliability of the lessor company by reason of the prior lease is, I submit, sustained neither by reason nor precedent, and establishes a principle fraught with the gravest consequences to the property owners of the state. I would affirm the judgment.