In re Brooklyn El. Ry. Co.

• Decision Date: 06 February 1891
• Citation: 125 N.Y. 434,26 N.E. 474
• Parties: In re BROOKLYN EL. RY. CO.
• Court: New York Court of Appeals Court of Appeals

125 N.Y. 434

26 N.E. 474

In re BROOKLYN EL. RY. CO.^*

Court of Appeals of New York.

Feb. 6, 1891.

Appeal from supreme court, general term, second department.

Edward M. Shepard, for appellant.

George Hoadley, for respondent.

EARL, J.

This is a proceeding under the provisions of the general railroad act to acquire real estate interests in Grand avenue in the city of Brooklyn, from Charles U. Wing, for the purposes of the Brooklyn Elevated Railway. Issue was taken upon the allegations of the petition, and the matter was brought to a hearing before a justice of the supreme court, who, after hearing the evidence, made findings of fact and of law, holding that the petitioner had made a case for the appointment of commissioners to ascertain and appraise the compensation to be paid to Wing for his real estate interests taken, and an order was made and entered appointing such commissioners. From that order Wing appealed to the general term, and then to this court. The Brooklyn Elevated Railway Company derives its corporate life from the following acts of the legislature: Chapter 585 of the Laws of 1874; chapter 422 of the Laws of 1875; chapter 350 of the Laws of 1879; chapter 459 of the Laws of 1880; chapter 338 of the Laws of 1881; and chapter 539 of the Laws of 1885,-and its road was built through Grand avenue, and in operation there at the time when this proceeding was instituted. The acts required that the road should be commenced and completed within times specified, and, in default thereof, that it should ‘forfeit the rights acquired by’ it under the acts. We will assume that it did not commence or complete its road within the time specified, and yet we reach the conclusion that the claim of Wing that it had lost its corporate existence and its ‘rights acquired’ under the acts is unfounded. What is meant by ‘rights acquired’ under the acts? We answer: All its rights, including its right to be a corporation. It could not, within the meaning of the act, forfeit all its rights and still be a corporation. A corporation without rights, without legal capacity to do anything, not even to acquire rights, is inconceivable. What was plainly meant is that the corporation should, in the event mentioned, forfeit its charter, and that included all the rights acquired by it under the acts from which it derived corporate existence; and thus the legislative meaning is the same as if the language used had been ‘forfeit its charter,’ or its ‘chartered rights.’ For the non-performance of conditions specified such language has never been held ex proprio vigore to put an end to corporate life. By such non-performance a corporation is not ipso facto dissolved or deprived of its corporate existence or corporate rights, but it is simply exposed to proceedings on behalf of the state to establish and enforce the forfeiture. The state, which gave the corporate life, may take it away. The state, which imposed the conditions, may waive their performance, and the corporate life may run on until the state, by proper proceeding, intervenes, and enforces the forfeiture. Until the state does thus intervene, a private individual cannot set up the forfeiture, or in any way challenge the corporate existence with its full vitality. The authorities for these views are numerous and uniform, both in this country and England. State v. Fagan, 22 La. Ann. 545;Bank v. Johnson, 8 Wend. 645;People v. Manhattan Co., 9 Wend. 351;In re New York El. R. Co., 70 N. Y. 327;In re Kings Co. El. R. Co., 105 N. Y. 97, 13 N. E. Rep. 18; Day v. Railroad Co., 107 N. Y. 129, 13 N. E. Rep. 765; Moore v. Railroad Co., 108 N. Y. 98, 15 N. E. Rep. 191; Farnsworth v. Railroad Co., 92 U. S. 49;Van Wyck v. Knevals, 106 U. S. 360, 1 Sup. Ct. Rep. 336. Our attention has been called to many cases arising under the revenue laws of our country, which provide for forfeiture of goods on account of offenses against such laws, wherein, as claimed, it was held that the forfeiture of title in such cases takes effect from the commission of the offense without legal proceedings. Those cases, and others involving violations of the police laws, may stand upon a peculiar policy, and, in any event, they are not authority in the case now here. The learned counsel for the appellant, with all his industry, has not been able to find a single case involving the forfeiture of corporate rights and franchises wherein such language as we have here has been held sufficient to work out a self-executing forfeiture without the intervention of the courts or the legislative power. The general rule established by the authorities above cited was fully recognized in Re Brooklyn, W. & N. R. Co., 72 N. Y. 245, 75 N. Y. 335, and in Transit Co. v. City of Brooklyn, 78 N. Y. 524. For the non-performance of conditions specified in the former case it was provided that ‘the corporate existence and powers shall cease,’ and in the latter case that ‘this act, and all the powers, rights, and franchises herein and hereby granted, shall be deemed forfeited and terminated.’ We held that this clear and emphatic language indicated a legislative intent that the corporate life should, for the defaults mentioned, come to an end, and not merely be exposed to forfeiture by proceedings on behalf of the state. These decisions, we think, stand well upon reason. But they are border cases, and the doctrine laid down in them should not be applied to cases where the legislative intent of a self-executing forfeiture is not equally plain. An undue extension of the doctrine would imperil the vested rights of individuals, and in many cases might prejudice the interests of the public. We have found but one similar decision,-that made in Oakland R. Co. v. Oakland, B. & F. V. R. Co., 45 Cal. 365, where the language to be construed was, ‘shall utterly cease and be forfeited.’ Similar language was held not to provide for ipso facto forfeiture in Chesapeake & O. Canal Co. v. Baltimore & O. R. Co., 4 Gill & J. 1;Briggs v. Canal Co., 137 Mass. 71, and Wallamet, etc., Co. v. Kittridge, 5 Sawy. 44.

It was provided in section 10 of the act of 1874, in which the life of the Brooklyn Elevated Railway Company originated, that the corporation thereby created should possess all the rights, powers, and privileges, and be subject to all the provisions, of the general railroad act of 1850 and the several acts amendatory thereof, ‘except as far as the provisions of said acts and amendments are modified by or are inconsistent with the provisions of this act.’ Among such amendatory acts is the act chapter 775 of the Laws of 1867, in which it is provided that, ‘if any such corporation formed under the general act shall not within five years after its articles of association are filed and recorded begin the construction of its road, and expend thereon ten per cent. of the amount of its capital, or shall not finish its road and put it in operation in ten years from the time of filing its articles of association as aforesaid, its corporate existence and powers shall cease.’ In Re Brooklyn, Winfield & Newton Railway Company we held that the language of this act which we have italicized provides for a self-executing forfeiture, and if, therefore, as claimed by the learned counsel for Wing, the provision quoted is made applicable to this corporation, his contention that it has lost its corporate existence and its right to institute this proceeding is well founded. But the provision of the general railroad act is inconsistent with that contained in the act of 1874, and, as to this corporation, is modified by that act, which provides a particular time for the commencement and completion of the road authorized...