Brooklyn Crosstown Railroad v. Brooklyn City Railroad

Headnote

Railroads—Mutual agreement—Lease—Assignment.

Where two railroad companies entered into an agreement conferring upon each the right to run its cars over the tracks of the other, hut retaining

absolute control of their respective roads for all other purposes, Held, that the agreement grants mutual privileges and makes concessions of mutual conditions without granting or conveying any right or interest which could become the subject of lease or assessment.

Appeal from an order of the special term of Kings ■county restraining the defendant from running cars or operating a railroad on Manhattan avenue, between Van, (Jott avenue and Green Point avenue in' the city of Brooklyn.

On application of the plaintiff company to enjoin the defendant company, the defendant answered setting up a lease to it from the Bushwick Railroad Company of all the latter’s railroads, franchises, rights, etc., including the right to run cars over plaintiff’s tracks under an agreement entered into between plaintiff and the Bushwick Company, the material parts of which are as follows:

That the party of the first part hereby grants to the party ■of the second part the right to run its cars over the track of the party of the first part on Union avenue, Brooklyn, E. D.,

. from Van Cott avenue to Greenpoint avenue, a distance of 3,086 feet (being 6,172 feet of single track), and the party of the second part grants to the party of- the first part the right to run its cars over the track owned by said party of the second part in Broadway and Fourth street, Brooklyn, E. D., now in use by the party of the first part (being 3,229 feet of single track). It is understood and agreed that each party to this contract is to run its cars in such a manner as not to interfere with running of the cars of the other party, and that the party owning each portion of the track used in common is bound to keep such portion clear of all obstructions, and particularly of snow.

Each party as to the portion of track used and not owned by them, must run their cars on said portion at a rate of speed not less than that on the tables made or to be made from time to time by the party who owns such portion of track.

“The compensation to be allowed each party for the use of said track shall be at the rate of $700 per annum per mile of single track, the same to be paid semi-annually, dating from January 1, 1876. ■ This contract may be abrogated by either party on giving six months’ notice to that effect to the other party; but with such abrogation of this contract, nothing herein contained shall be so construed as to deprive either party of the legal rights held by them prior to the making of this contract, in full satisfaction for the compensation due to either party, at the rate above cited of $700 per mile of single track annual rental.”

The following is the opinion of Justice Pratt upon granting the injunction which is referred to and approved by the opinion of the general term:

Pratt, J.—If the contract between the Bushwick and the Crosstown Railroad Companies must be regarded as a lease, I think it was assignable, there being no restrictions of that kind in the instrument. The plaintiff contends that the lease by the Bushwick Company to the defendant, is void as being ultra vires, and hence the defendant has no title to any of the property of the Bushwick Company. Undoubtedly the rule of law is that a corporation cannot-assign its property and franchise without legislative authority, but by the statute of 1839, and subsequent statutes, the legislature has granted permission for railroad companies to-make leases of portions of their property and track to each other. It is unnecessary to discuss these statutes to determine-whether or not it is within the power of a railroad corporation under these statutes to sell or lease its entire property,including its franchises, and there is no statute which authorizes-the leasing by a corporation of its property and franchises-to an individual.

The case of Abbott v. Railroad Company ( 80 N. Y., 27 ) was a case of that kind, and, it being without legislative authority, the contract of sale and assignment of lease was held to be ultra vires, and that case has no application to the question here. But it seems to me that the agreement between the Bushwick Company and the plaintiff is not a lease. It conveys no estate, confers no property, but simply gives a right or license to the Bushwick Company to use, in conjunction with the plaintiff, the piece of railroad track in question. This use is strictly limited by the terms of the contract to the cars belonging to the Bush-wick Company. It does not confer any right to run the cars of any other company thereon.' As soon as the lease or assignment of the Bushwick Company to the defendant took effect the title to all of the property, including the cars, became vested in the defendant, and the right to use this piece of track under the contract with the plaintiff ceased. This seems plain from the peculiar form of the contract. The only right conferred is for the Bushwick Company to run its cars over the track. The agreement is merely in the nature of a personal license, and cannot be assigned so-as to enlarge the rights of the licensee or assignee under it.

This contract, like all others, must be construed so as to-effectuate the intention of the parties as expressed inits terms. All the right the Bushwick Company had under the agreement, was to run its cars. The use of the word “its” in-such connection, indicates a plain intention that the use-must be confined to cars owned t>y the Bushwick Company. No other construction cap be spelled out of the agreement, or the surrounding circumstances. It would indeed be a great hardship, and violative of the sense of justice to say,..

where a railway company has granted the right to run upon, a portion of its track to a tributary company, that the .grantees can assign such a right to a company whose line is competitive and injurious to the grantor. If such a right can be enlarged to the extent of adding one other line of railway, there would seem to be no limit. The defendant further claims that the plaintiff is left to his notice under the contract, as the only remedy. That is so as long as the contract is not violated; but I see no reason why the plaintiff cannot insist that a mere transfer, although claiming to act under the contract, shall not use its tracks. The defendant further suggests, that only the cars belonging to the Bushwick Company run upon the tracks in question; But it is conceded that such cars are run upon routes other than those of the Bushwick Company, thus enlarging the grant by adding to their use another line of railway, and the cars of another owner. Neither can I see an estoppel upon the plaintiff to prevent its seeking a remedy by injunction. The failure to resist a trespass, confers no right to committ additional trespasses. If the defendant is using the track without right, it commits a trespass each time it runs over the track of the plaintiff. For the purposes of this case "it is not necessary to decide whether it was within the power of the Bushwick Company, to make the lease to the Brooklyn City Railroad Company, which it is conceded covers all of its property, rights and franchises. It is enough to hold that the plaintiff is not in a position to raise that question. Therefore, I do not hold that the contract between the defendant and the Bushwick Company is invalid. Neither is it necessary to decide whether or not the contract between the Bushwick Company and the plaintiff is .assignable. But it does seem clear from its terms that it cannot be assigned so as to give one or more railway lines the right to use the track in question, and thus enlarge the grant. In cases where the facts are all conceded, a preliminary injunction is the ordinary remedy, as it must be assumed that the facts will not be changed by a trial! If my view of the law is correct, plaintiff is entitled to an injunction upon the defendant’s paper. Motion granted with ten dollars costs.”