Territory v. Honolulu Rapid Transit & Land Co.
| Decision Date | 24 July 1916 |
| Docket Number | No. 909.,909. |
| Court | Hawaii Supreme Court |
| Parties | TERRITORY v. HONOLULU RAPID TRANSIT & LAND CO. |
OPINION TEXT STARTS HERE
APPEAL FROM CIRCUIT JUDGE, FIRST CIRCUIT. HON. T. B. STUART, JUDGE.
Syllabus by the Court
The rule noscitur a sociis does not apply in the construction of a statute where specific words are used which are not relatives of the same genus. There neither word derives color from association with the others, but each stands as the representative of a distinct class.
In ascertaining the meaning of a statute which requires construction the court should consider the language used in connection with the conditions and circumstances existing at the time of its enactment.
A uniform practical construction given to a statute by executive officers of the government who have duties under the act, though not controlling, is, in case of doubt, entitled to much weight, especially where rights of parties have been adjusted in accordance with it.
The term “actual cost” means money actually paid out, or “real cost.” It may be considered as synonymous with “expense” and as excluding all profit.
The Honolulu Rapid Transit & Land Co. has power under sections 17 and 37 of the franchise act (S. L. 1898, Act 69; R. L. 1915, Secs. 784, 804) to expend so much of its income as it may desire in making extensions in and to its line of road; and to increase its capital stock to an amount equal to the actual cost of its property, including income expended therein (except such as might otherwise be payable to the Territory as its share of excess income over 8% in any one year) and money borrowed upon bond issues, plus 25% in addition to such cost.
I. M. Stainback, Attorney General, W. H. Heen, Deputy Attorney General, and W. T. Carden, Second Deputy City and County Attorney, for complainant.
W. F. Frear and D. L. Withington ( Frear, Prosser, Anderson & Marx and Castle & Withington on the brief) for defendant.
The Territory, in a suit for an injunction to restrain the Honolulu Rapid Transit & Land Company from carrying out an alleged plan to increase its capital stock, averred that it is provided by the charter and franchise of the company that it shall not be lawful to increase the capital stock of the company in excess of the sum of $200,000 unless the proposed increase shall, when taken with the original capital stock ($200,000) represent only the actual cost of the property of the railway (company) and not over 25% of such cost in addition thereto; that the amount of its capital stock now outstanding is of the par value of $1,207,500, and that it exceeds the actual cost of the property of the railway and 25% of such cost in addition thereto. By an amendment to the bill, however, it was averred that neither the actual cost nor the actual value of the property exceeds the sum of $966,000. The sum of $966,000 plus 25% amounts to $1,207,500, the present outstanding capital of the company. The bill further averred that the company plans and intends to and will, unless restrained, further increase its capital stock to the sum of $1,600,000, which would far exceed the actual cost of its property and 25% of said cost in addition thereto. The company, in its answer, denied that the amount of its present capital stock exceeds the actual cost of its property and 25% in addition thereto, and averred that the actual cost of its property exceeds the sum of $2,171,841.51. It was also averred in the answer that though neither the directors nor the stockholders of the company have taken any action looking to the increase of the capital stock, the company has a just and legal right to increase the same to the sum of $1,600,000, and that it may do so at any time unless restrained by order of court. Aside from the point whether the company planned and intended, unless restrained, to increase its stock to $1,600,000 or merely claimed the right to do so at any time, the only issue raised by the pleadings was as to the amount of the capital stock which the company is authorized to issue based upon actual cost of its property. At the hearing, however, the complainant conceded that of the items aggregating the sum of $2,171,976.11, which the company submitted as capital expenditures representing the original cost of the property, items to the amount of $1,603,056.68 were correctly stated. Nevertheless a great mass of testimony was offered and admitted as to the actual present value of the company's property. The complainant advanced the contention that the company could issue stock only upon the value of its plant after deducting depreciation. In other words, that the alleged proposed increase of stock could not legally be made unless it represented actual existing value. The circuit judge, in his decision, after referring to some of the testimony as to the value of the property, and the stipulation of the complainant as to its actual cost, but without making any express findings as to the actual value or the exact cost of the property, held that the right of the company to increase its capital stock turned upon the actual cost and not upon its present value; that by its franchise and charter the company is authorized to issue stock to the actual cost of its property and 25% in addition thereto; and that under any view that may be taken of the evidence (as to either cost or value) the company has the right to issue stock to the amount of $1,600,000. A decree dismissing the bill was entered, and from that decree the Territory has appealed.
We have found some difficulty in ascertaining which, if any, of the several questions discussed in the appellant's brief are properly before this court for consideration and determination. The following are the errors specified in the brief of the attorney general as having been committed by the circuit judge: (1) “In holding that the respondent may lawfully increase its capital stock to the actual cost of the property of the railway and twenty-five per cent. of such cost in addition thereto.” The complainant's bill avers, however, as above stated, that the company's charter and franchise provides that it shall not be lawful for the company to increase its capital stock in excess of $200,000 unless the proposed increase, when taken with that sum, shall represent only the actual cost of the property and not over 25% of such cost in addition thereto. And the bill was evidently drawn upon the theory and understanding that the company has the right to increase its stock to a sum which will equal the actual cost of its property plus 25% thereof. Furthermore, any question as to the additional 25% over and above actual cost would seem to be of no practicality since the complainant has admitted that the “original cost,” which we take to mean “actual cost,” of the property was $1,603,056.68, the only right claimed by the company being to increase its capital to the sum of $1,600,000. (2 and 3) “In holding that paid up capital stock may be issued pro rata to stockholders without consideration of the amount of the cost of the property of the railway paid for by the proceeds from the sale of bonds” or “paid for by surplus earnings and to the full extent of such earnings.” A careful reading of the decision of the circuit judge fails to show that he so held. (4 and 5) “In holding that the actual cash value of the property of the railway at the time the above entitled cause was commenced against which capital stock might be issued was $2,139,710” and that “the cost of the property of the railway against which capital stock might be issued was $2,171,976.11.”
The circuit judge made no such findings. As above stated, he made no specific finding as to either the actual value of the property or its exact cost, but only a general finding that upon the basis of either value or cost as shown by the evidence an increase of the capital stock to $1,600,000 would be authorized. The remaining specifications of error (6 and 7) are general ones as to refusing to grant the injunction and in dismissing the bill. Were this a writ of error the last two specifications would be too general as assignments of error to require consideration. But as this is a general appeal intended to bring the case up for review upon the whole record (R. L. 1915, Sec. 2509) we feel disposed to consider some of the questions which have been argued notwithstanding the failure of the appellant's brief to specify them as errors under Rule 3 of this court. The material facts are not disputed, the questions raised being questions of law. The views of counsel for the complainant seem to have developed considerably since the bill was filed.
The Honolulu Rapid Transit & Land Company was incorporated under a charter which authorized it to construct a street railway in such streets, roads and places in Honolulu as are designated in Act 69 of the Session Laws of 1898, of the Republic of Hawaii (R. L. 1915, Chap. 54) and to operate the same under and in accordance with the authority of said act. The capital stock of the company was designated to be $200,000 with the right to increase the same from time to time upon notice to the minister of interior (superintendent of public works) by the issue of new shares not to exceed in all $2,000,000, provided that whenever such increase is made for the purpose of constructing new lines or branches of its railway, and of equipping the same, or for covering extensions already made, the notice of the increase shall be accompanied by a sworn certificate of the company showing the estimated or actual cost of such proposed extension or of such extension already made, and that not more than 25% of such cost has been added. Section 17 of the franchise act (R. L. 1915, Sec. 784) provides as follows:
“The following charges shall be lawful upon the income of said railway:
1. The expense of operating, repairs,...
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...Sys., 61 Haw. 596, 602, 607 P.2d 415, 419 (1980) (citing Keller v. Thompson, 56 Haw. 183, 532 P.2d 664 (1975) ; Territory v. Honolulu Rapid Transit & Land Co., 23 Haw. 387 (1916) ); see alsoFratinardo v. Employees' Ret. Sys. of State of Hawai‘i, 129 Hawai‘i 107, 115–16, 295 P.3d 977, 985–86......