People v. Ulster & D.R. Co.
| Decision Date | 06 October 1891 |
| Citation | 128 N.Y. 240,28 N.E. 635 |
| Parties | PEOPLE v. ULSTER & D. R. CO. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from supreme court, general term, third department.
Action in the name of the people, brought by the attorney general against the Ulster & Delaware Railroad Company, to declare a forfeiture of its franchise. Plaintiff appealed to the general term from a judgment for defendant entered upon a verdict directed for defendant, and from an order granting an allowance in addition to costs to defendant, where the judgment was affirmed and the order reversed. Plaintiff appealed to this court. Affirmed.
George Zabriskie, for the People.
E. Countryman, for respondent.
This action was brought in the name of the people by the attorney general to determine the corporate existence of the defendant, upon the alleged ground that it had forfeited its charter through a failure to build a portion of the railroad track, which its predecessor was authorized to construct. The Rondout & Oswego Railroad Company was organized in 1866, under the general railroad act, to build, operate, and maintain a railroad from Rondout, in Ulster County, to the village of Oneonta, in the county of Otsego; and during the period of its existence actually built a road from Rondout to Stamford, but failed to build that portion extending from Stamford to Oneonta. The defendant, the Ulster & Delaware Railroad Company, through a plan of reorganization adopted by the bondholders, under chapter 430 of the Laws of 1874, on the sale of the property of the railroad under a mortgage foreclosure in 1875, succeeded to the rights, property, and franchises of the original company. It was for the failure of the defendant to complete the railroad originally projected by the Rondout & Oswego Company that this action was brought. The action is claimed to have been authorized by the provisions of section 1798 of the Code of Civil Procedure, providing that an action may, by leave of court, be brought by the attorney general to procure a judgment annulling the existence of a corporation created under the laws of this state, when, among other things, it ‘has violated any provision of law whereby it has forfeited its charter, or become liable to be dissolved by the abuse of its powers, or forfeited its privileges or franchises by a failure to exercise its powers.’ A violation of the provisions of this section apparently creates a cause of forfeiture, and contemplates a punishment to be inflicted upon the offender, and not a benefit to be recovered by the prosecutor. No absolute right to enforce a forfeiture for the causes specified is conferred upon any party, but it is made to depend upon certain conditions. The statute does not execute itself, but requires the action of the attorney general to make it effective. Even the willful neglect of a railroad corporation to exercise all its franchises does not, of itself, terminate its corporate existence; but, to effect that result, the state, through its attorney general, must not only elect to enforce the forfeiture, but also procure leave from the court to bring an action for that purpose. Section 1798, Code Civil Proc.; People v. Railroad Co., 24 N. Y. 261;People v. Sugar Refining Co., 121 N. Y. 582, 24 N. E. Rep. 834. Such actions are not even then maintainable, except some public interest is involved, which requires the exercise of the franchise by the corporation. People v. Sugar Refining Co., supra. It was therefore incumbent upon the state to show upon the trial of the action that a cause of forfeiture had not only been incurred by the defendant, but that it continued to exist, and that its existence involved some public interest, and also that the court had authorized the bringing of the action. An action thus commenced is even then necessarily always within the control of the state, as the sole party interested, to prosecute or abandon, at its mere will and pleasure. People v. Phoenix Bank, 24 Wend. 431. It is responsible to no one for the exercise of its discretion in this respect, and can, through the action of its legislature, not only discontinue an action brought by it, but can also repeal or confirm charters, waive or abolish causes of forfeiture, release rights of action, and limit the operation of its statutes upon individuals and corporations at its own will. By enforcing the forfeiture of corporate existence the state receives no benefit and acquires no property, and by waiving such forfeiture it loses no privilege and interferes with no vested right. Having the absolute power at will to take the corporate life, it does not hamper its freedom of action by forbidding its servants, in specified cases, from prosecuting actions for forfeiture. It requires no exercise of judicial power to enable it to waive a forfeiture, but it may be effectuated by the mere expression of its will, and its will may be based upon cause or utterly without one. Having absolute power, as the supreme representative of the people, in respect to the question, it may do so with or without cause, or upon whatever terms or conditions it may see fit to impose.
It is claimed by the defendant that the state, by the enactment of chapter 236 of...
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