In re Kings County Elevated Railroad

This proceeding was inaugurated by the petitioners for the invasion of the easement of Mary Duane and John O’Brien, in Fulton street, in the city of Brooklyn, and for the acquisition of the right to construct and operate an elevated railroad over that street by the exercise of the right of eminent domain under the constitution and laws of the state of New York. The application to the court was for the appointment of commissioners of appraisal, and the property owners, in their resistance to the petition, among other things, interposed a denial of the vitality of the corporation, and claimed that it had lost its life by the expiration of its corporate powers and the termination of its corporate rights. The solution of the question thus presented will depend upon the construction to be received of certain statutory provisions and the proceedings conducted in pursuance of the same. This corporation was organized under the rapid transit act of 1875, chapter 606 Laws of 1875. In its application to the city of Brooklyn that law required the mayor of that city to appoint five commissioners, whose duty was to determine upon the necessity of the proposed railway, and if their decision was favorable, then to fix and determine and locate the route of the same. They were also to fix and determine the time in which such railway should be constructed and ready for operation, and prepare appropriate articles of association for the company, in which should be embodied the several conditions and requirements determined by them, and which should “provide for the release and forfeiture to the supervisors of the county of all rights and franchises acquired by said corporation, in case said railway or railways shall not be com

“Article IX. In case the several portions of such railway or railways shall not be completed each within the time and upon the conditions hereinbefore and as to such portion provided for, the rights and franchises acquired by such corporation shall be released and forfeited to the supervisors of the county of Kings.” So that the final result and effect of all these preliminary measures was to provide ■at the organization and creation of the corporation that the road it contemplated and proposed on Fulton street should be in operation to Nostrand avenue by the 1st day of August, 1879, under the penalty of forfeiture of its franchise, and it is conceded that the road is not even yet completed. The prevalent rule of law is that the legal existence of a railroad corporation armed with full power and authority to construct a railroad lies at the foundation of the right to condemn property for its use under the right of eminent domain. Matter of B., W. and N. Railway Co., 72 N. Y., 245 . That requirement necessarily implies the continued _ existence of such corporation in the full possession of all its corporate powers and franchises without limitation or restriction. And if by non-performance of the conditions of its charter any of its corporate rights are forfeited or lost, the fact may be asserted to defeat an application for the acquisition of property by the exercise of the right of eminent domain. 72 N. Y., supra. In the last cited case the language of the statute was, if the road was not placed in operation in ten years, “its corporate existence and powers shall cease,” and the court held that by a failure to comply with that condition the corporation became extinct by the express hmitation upon the original grant of corporate powers, and that no judicial proceeding or action was necessary to declare a forfeiture of the charter and loss of corporate power. In the subsequent case of the Brooklyn Steam Transit Co. v. The City of Brooklyn ( 78 N. Y., 524 ) the statute under construction was “all the powers, rights and franchises herein and hereby granted shall be deemed forfeited and terminated,” and it was held in that case that the intention of the statute was to make the continued existence of the corporation depend upon a compliance with the condition in its charter, and that in

It is unnecessary to determine the right or the extent of the power bestowed on the supervisors, or whether the franchise was released and reverted to them and they owned the same for ever, then the company is resting under disability and cannot wage an aggressive war upon private property or private rights. Let it be borne in mind steadily that these statutes all execute themselves, as it was distinctly held in the two cases referred to above. When the period of limitation is reached and the condition remains unperformed, the forfeiture is wrought eo instanti by operation of the law. Unless the language here was intended to operate as a limitation of power it has no scope or effect, and if it was so intended and is to be allowed such operation, then it falls easily within the doctrine of the two cases cited and circumscribes the corporate powers of the company. The corporation has omitted its duty and defaulted in the execution of the condition imposed upon it by the statute, and the articles of association and the legislative intention to make the continuation of its existence depend upon the performance of such condition is plainly manifested. At the termination of the period of time limited, its rights and franchises were released and forfeited, surrendered- and lost—to the supervisors, if you will have it so—but still departed and gone from the company, with no trace of power remaining. To escape the consequences of such conclusion the company advances two arguments:

First. That the delay has been unavoidable, and that by

Second. That its failure to perform the condition of itself does not terminate its rights but merely creates a cause of forfeiture which the supervisors alone can enforce, and that until they move the company remains in full possession of all its powers.

This second argument is - founded on the well recognized principle that corporations do not lose their existence ordinarily by a failure to perform any of the duties imposed by their charter, but simply incur the liability of deprivation of their franchises by the judgment of a court in proceedings' instituted for that purpose. But we have seen that the legislature here intended an absolute limitation, and not merely a cause of forfeiture (“at the end of the hmited time all corporate powers are ended”), as if that were the time hmited in its charter for its corporate existence. 78 N. Y., 530 ; 72 id., 245. The same contention was made-in both of these cases, and was not allowed prevalence, and it can be permitted no force in this case.

The saving clause in the resolution of the commissioners, rehed upon in the first argument, is as follows : “The time, if any, unavoidably consumed by the pendency of legal proceedings, or by the delay or interference of the pubhc authorities in refusing to give their consent to the use of the streets and avenues, as required in section 4, chapter 606 of the Laws of 1875, or otherwise, shah not be deemed a part of any period of time within which the construction of the railway or railways is to be made. But the time, if any, during which such unavoidable delay shall continue shah be added to the end of the periods hereby otherwise limited for the construction and completion of the railway or railways.”

That saving clause saves and reserves to the company the time consumed by the delay or interference of the pubhc authorities in any way, either by refusing consent to the use of the streets or otherwise, and also the time unavoidably consumed by the pendency of legal proceedings.

The appeal book contains a stipulation that prior to January, 1886, no legal proceedings had been instituted against the company in which any order had been procured restraining it from building or operating its road, unless such effect was to be allowed to the proceedings taken by the company to obtain consent from the court instead of the property owners', and that only extended down to September, 1880, and there was no restraint after October, 1879,. and no delay was experienced from hostile legal proceedings after that time, and it was not the intention of the legislature to per

This result leads to the affirmance of the order appealed from without an examination of the numerous other questions involved in the appeal. But it is proper, and perhaps better, to say that we have examined the act of 1881, chapter "518, which authorizes the consent of the local authorities required by the conditions to be made and given by the mayor and commissioners of city work, and that we concur with the opinion delivered by the special term, that the law contravenes the constitution, and is void and ineffectual for that reason.

The order should be affirmed, with costs and disbursements.

Barnard, P. J., concurs.