State v. Atl. City & S. R. Co.

• Decision Date: 01 March 1909
• Citation: 72 A. 111,77 N.J.L. 465
• Parties: STATE v. ATLANTIC CITY & S. R. CO.
• Court: New Jersey Supreme Court

72 A. 111

77 N.J.L. 465

STATE

v. ATLANTIC CITY & S. R. CO.

Court of Errors and Appeals of New Jersey.

March 1, 1909.

(Syllabus by the Court.)

Error to Supreme Court.

Information, in the nature of quo warranto, by the Attorney General ex officio on behalf of the State, against the Atlantic City & Shore Railroad Company and another. To the plea of the Atlantic City & Shore Railroad Company the Attorney General interposed a demurrer, which was overruled (09 Atl. 468), and the State brings error. Reversed.

Robert H. McCarter, Atty. Gen., and Eli H. Chandler, for plaintiff in error. Clarence L. Cole, for defendant in error.

PITNEY, Ch. To an information in the nature of a quo warranto, filed by the Attorney General ex officio in behalf of the state, against the Atlantic City & Shore Railroad Company and the Central Passenger Railway Company, setting up certain alleged usurpations of corporate powers not granted by the state, the companies filed separate pleas. To the plea of the Atlantic City & Shore Railroad Company, the Attorney General interposed a demurrer, and upon the issue of law raised the Supreme Court gave judgment in favor of the defendant. That judgment is now under review. So far as we are informed by the record returned to us, issue has not been joined upon the plea of the Central Passenger Railway Company, and we have no present concern with the matters set up by that company.

The averments of the information as against the Atlantic City & Shore Railroad Company are in part admitted and in part qualified or denied by the averments contained in its plea. Since the demurrer admits what is well alleged in the plea, we must accept the averments of the latter so far as they are variant from the information.

The case thus disclosed stands as follows: The Shore Company (as it may be called for brevity) is a corporation organized and existing under the revised "Act concerning railroads" (P. L. 1903, p. 645), and, under its charter and according to its route filed in the office of the Secretary of State, is authorized to build a line of railway from a point on the meadows in the township of Egg Harbor, in the county of Atlantic, to a point at the corner of Virginia and Adriatic avenues in Atlantic City, in the same county, and had been operating its railroad for about six months prior to the filing of the information. This company has acquired all of the bonds (amounting to $40,000) and all of the stock of the Central Passenger Railway Company, excepting a few qualifying shares of stock necessary to preserve the organization of the latter company; the amount of stock thus acquired being 2,491 shares. Before the filing of the information the Shore Company had verbally entered into a certain agreement with the Central Company, and since the filing of the information this agreement has been reduced to writing. A copy thereof is annexed to and made a part of the plea of the Shore Company. Its purport will be stated presently. The Central Passenger Railway Company is a corporation organized and existing under the "Act to provide for the incorporation of street railway companies and to regulate the same" (P. L. 1886, p. 185; Gen. St. 1895, p. 3210), and the various acts amendatory thereof and supplemental thereto. Under its charter and according to its amended route filed in the office of the Secretary of State, it has secured from the city of Atlantic City ordinances enabling it to construct certain lines of street railway in Atlantic City, and is empowered to operate and does operate certain of the lines thus authorized. The lines in operation extend from a point at Virginia avenue and the Boardwalk northwardly along Virginia avenue to Adriatic avenue, thence westwardly along Adriatic avenue to South Carolina avenue, and thence southwardly along South Carolina avenue to the Boardwalk. The tracks of the Shore Company and of the Central Company meet at Virginia and Adriatic avenues, and the Shore Company has formed a junction between the tracks of the two companies at that point.

The Shore Company claims to have entered into a contract for itself and on behalf of the Central Company with the West Jersey & Seashore Railroad Company, whereby the Shore Company has secured a lease upon the Somers Point branch of the latter company extending from Pleasantville to Somers Point in Atlantic county, and has further acquired traffic rights over the tracks of the West Jersey Company; and the Shore Company has agreed to exchange traffic and sell exchange tickets good on all intersecting lines of the West Jersey & Seashore Railroad Company with the line of the Shore Company and of the Central Company, and has agreed that the West Jersey & Seashore Railroad Company shall have the right to operate its cars over the line of the Shore Company and the Central Company to the terminal points of the latter two companies.

The information avers that the Shore Company is operating its cars over the lines of the Central Company from the terminal point of the latter company at the foot of Virginia avenue over and along the lines of the Central Company on Virginia avenue, and over and along the line of the Shore Company, to the intersection between the railroad of that company and the line of the West Jersey & Seashore Railroad Company. The Shore Company by its plea denies that it is operating its cars over the line of the Central Company or any portion thereof, or that the Central Company is operating its cars over the line of the Shore Company or any portion thereof, and avers that the Shore Company operates only its own road and its own cars.

The agreement between the Shore Company and the Central Company which is embodied in the plea, after reciting that the Shore Company operates a railroad from Somers Point to Virginia and Adriatic avenues in Atlantic City, and that the Central Company operates a street passenger railway in that city along Virginia, Adriatic, and South Carolina avenues as already mention ed, and that the tracks of the two companies meet at Virginia and Auriatic avenues, contains stipulations to the effect that, upon the arrival at Virginia and Adriatic avenues of each of the cars of the Shore Company running from Somers Point or from any intermediate point, the Shore Company may deliver possession of such car to the Central Company, and the latter company will operate the same as a street railway car upon its lines in Atlantic City, either to Virginia avenue and the Boardwalk, or to South Carolina avenue and the Boardwalk; that through passengers shall become the passengers of the Central Company, and be transported by it as required by law; that the cars upon reaching the terminus of the Central Company's line, either at Virginia avenue and the Boardwalk, or at South Carolina avenue and the Boardwalk, will be operated by the Central Company over its lines from such terminus to Virginia and Adriatic avenues, and there be delivered over to the Shore Company, which shall thereupon operate them as railroad cars over its lines to Somers Point or to some other intermediate point. The agreement contains stipulations for the sale of through tickets at rates to be agreed upon from time to time by the two companies, and provides for the apportionment between the two companies of the passenger fares to be thus received. It contains certain other provisions not necessary to be recited.

The information challenges the right of the Shore Company under its act of incorporation to acquire, own, and hold the stock and bonds of the Central Company, or to operate its cars over the lines of the latter company; charges that the acts and doings of the Shore Company in securing the franchise rights and privileges of the Central Company, and the operation of its cars and motive power over the lines of that company, and the acquisition and use of these lines to form an extension or continuous line of railroad under the ownership and control of the Shore Company, is an attempted fraud upon the people of the state, sought to be committed under color of assumed franchise privileges that have not been granted to the Shore Company and are not included among the rights conferred upon railway companies incorporated under the act of 1903; and that the operation of the cars of the Shore Company over the line of the Central Company is a fraud upon the state, and a violation of the franchise privileges granted to the Shore Company and the Central Company under their respective articles of incorporation.

The information prays that the companies may answer to the state by what warrant they severally claim the right to make an agreement for the consolidation and merger of their respective lines with each other and with the West Jersey & Seashore Railroad Company in law or effect, and by what warrant they claim the right to operate the cars of the Shore Company over the lines of the Central Company.

The matters discussed in argument are, first, the right of the Atlantic City & Shore Railroad Company to acquire, own, and hold the stock and bonds of the street railway company; secondly, its right to operate its cars and motive power over the street railway; and, thirdly, its right to enter into an agreement with the street railway company for the purpose of enabling the Shore Company to secure a right of way for the operation of its motive power, cars, and other equipment through Atlantic City under the franchise privileges granted to the street railway company.

Upon the first topic, the Supreme Court entertained the view that, irrespective of the powers conferred upon railroad companies by section 3 of the revised act concerning railroads (P. L. 1903, p. 647), the Legislature, by the fifty-first section of the general corporation act (P. L. 1896, p. 294), has conferred upon every corporation of this state, no matter under what law it may have been organized, the right to acquire and hold the stock and bonds of any other corporation of...