People v. DeGrauw

Hempstead Turnpike Company. It alleged the expiration of the charter in March, 1882, and that it had never been renewed, and that by operation of the law it had ceased to exist at the time last mentioned.

It further alleged that the defendants without being incorporated act as a corporation within the county of Queens, under the name and style of 'the Hempstead & Jamaica Plank Hoad Company, and exercise within that county corporate rights, privileges and franchises not granted to them by the. law of the state, by exercising jurisdiction as a plank road company over the public highway, and by maintaining toll gates on it, and by levying and collecting tolls from persons using it. Upon these allegations the j udgment of the court was asked to restrain defendants from acting as such plank road corporation.

The cause of action is thus plainly seen to rest in the fact that these defendants without being incorporated act as a corporation under the name and style of the plank road company above named.

Thus acting as such named corporation and without being incorporated, the complaint alleges the defendants have performed various illegal acts, such as erecting toll houses on a highway and collecting tolls. These acts are not set out as separate and distinct Causes of action, but are clearly stated as corporate acts performed by defendants under their user of the name of the old plank road corporation whose charter had expired by limitation, but whose rights and privileges the defendants still assumed to exercise.

The defendants answered by denying that they were illegally exercising the privileges or franchises of the plank road company, and alleged that they were acting as, and using the rights, privileges and franchises of the Hempstead Turnpike Company, which .was a corporation duly organized in 1812, and still subsisting.

The case was tried upon an agreed statement of the facts, from which the court made its findings, and from the latter it appeared that shortly before the commencement of this action a meeting of the stockholders of the plank road company and of the turnpike company was held, and after the transaction of other business (fully set forth in the findings of facts), the persons claiming to be stockholders in the turnpike company elected certain of the defendants directors in such company for one year, and until their successors were appointed, and the directors then elected these defendants, who have appeared in this action, officers of the turnpike company, and since that time the road has been run and operated under the directions of this turnpike company as a toll road.

Upon these findings the special term dismissed the complaint, with costs.

Upon appeal the general term reversed the judgment entered upon the decision of the court below and granted a new trial From that order the defendants have appealed here.

The general term granted a new trial on the ground that the reorganization under the turnpike charter was illegal.

We think the special term judgment was right.

The defendants were proceeded against expressly and solely upon the ground of their assumption of the corporate name and privileges of the plank road corporation, which, as the plaintiff alleged, was a corporation that had expired by its own limitation and was not in existence. The facts were agreed upon, and from them it appears that in truth the defendants were not acting in any such capacity or assuming the rights of any such corporation. On the contrary they were assuming to perform the acts which, the complaint alleged were illegal, under and by virtue of the. powers of another corporation which was once legally incorporated, and which they claimed was still in existence. That corporation was not limited in its existence by any definite time, and was not shown to have been dissolved, and it was no party to this, action. The cause of action set up in the complaint was not proved, and hence it was proper to give judgment for the defendants, without considering the question whether the actions of defendants were legal or illegal by reason of the legality or illegality of their organization under the charter of the turnpike company. The defendants were not proceeded against on any such ground, and the fate of this action should not depend upon the solution .of the problem as to the existence of the turnpike company and its regular organization in the absence of allegations regarding it in, the complaint, and in the absence of the turnpike corporation as a. party defendant.

We intimate no opinion on the question of the validity of the: proceedings of defendants regarding the turnpike company. It is not before us, and was not properly before the general term.

We find nothing in the case which would naturally incline a. court to make any special effort to uphold a judgment in the plaintiffs’ favor. They allege the death of the plank road corporation by the expiration of the time provided in its articles of association, and they claim in substance that the real estate upon which the turnpike and subsequently the plank road were built, reverts to the original owners, and that the road has become a. public highway. The stockholders in the plank road and turnpike corporations will thus lose their property, which but for this-claimed forfeiture would still exist, and probably be of some value. The failure to obtain an extension of the corporate life in. some form, and by some proper means, was a pure inadvertence. The stockholders endeavored in good faith to take the steps necessary to accomplish that end, and failed, without intentional or culpable neglect. To sustain this action would appear somewhat like an effort to enforce the consequences of a forfeiture which arose from no willful omission to perform the necessary acts to prevent it, and where equitable considerations would seem to oppose its enforcement. These considerations, while unavailing in case a cause of action in accordance with the complaint had. been properly proved, are not without weight in construing the complaint, and the cause of action therein stated. Whether any wise public policy demands the commencement of another action-is a question the solution of which is confided to the attorney-general.

Upon this record the order of the general term is erroneous, and it is therefore reversed, and the judgment of the special term affirmed, with costs.

All concur, except Maynard, J., not sitting.