Philadelphia, Wilmington & Baltimore Railroad v. Kent County Railroad ( 1875 )

Houston, J.,

delivered the opinion of the court: The party plaintiff in the rule, The Kent County Railroad Company, was originally incorporated by an act of the legislature of Maryland in the year 1856, and afterward by a further act altering and amending it passed in the year 1864, to locate and construct a railroad from the waters of the Chesapeake Bay or some point on Chester River through Kent County in that State, from which it derived its corporate name, to the boundary line of this State, as appears by the preamble to the act now in question, passed by our legislature in 1865, to incorporate the company in this State also for a particular and specific object in connection with the road to be constructed by it in that county, as further appears from another recital in the preamble and which is as follows: “ And whereas, the said Kent County Railroad Company desire to extend the said railroad within the limits of this State so as to unite the same with the Delaware Railroad at some point on the line of said railroad not more than four miles from the place called Townsend, and to obtain authority therefor from the General Assembly of this State.” And which is the only reason assigned by the company or the legislature for the enactment of it.

According to the evidence, the company was organized under the acts of the legislature of Maryland, and it could not have been otherwise, since the act of this State makes no provision whatever for the organization of it, as is usual in such acts, but being merely subordinate and supplementary in its nature and purpose to the Maryland acts, and evidently assuming that it had been or would be organized under those acts, it proceeds in the first section to incorporate “ the subscribers to the stock of the company, their successors and assigns,” by the same name and by that name to have perpetual succession and to be capable in law of purchasing' and holding, leasing, mortgaging, and selling, both real and personal estate, to sue and be sued, to make and use a common seal, and to ordain and enforce such bylaws and regulations as they should deem necessary for the government of the corporation, and generally to do all and singular the matters and things and exercise and enjoy all the rights, powers, and privileges properly appertaining to the well being and ordering of the same. By the second section, however, the more definite and specific power is conferred on the company to extend and construct their said railroad within the limits of this State from the point on the line dividing it from the State of Maryland where it should be located by the said company to the Delaware Bailroad at any point not more than four miles from the place called Townsend on said railroad which they might deem advisable and by such route or routes as they might deem most eligible, while all of the powers, rights, and privileges conferred by the succeeding sections and provisions of the act have reference only to this special franchise and this specific object of it and which are wholly incident to and dependent upon it, and to that portion of the said railroad which was to be extended and constructed within the limits of this State pursuant to the provisions of it.' And if any doubt can arise from the broad and general terms employed in the first section as to this constituting in point of fact the paramount and controlling object of the act of incorporation by the legislature of this State, we may have recourse also to the recital in the preamble before stated to so restrain and explain them. 1 Kent’s Com. 461; Crespigny v. Wittenoom, 4 T. R. 790. And it must therefore be so considered and construed by us.

It is a fact, however, admitted in the case that, owing to the objection of the Delaware Bailroad Company to the location and extension of the road by the route then contemplated by the legislature and the company, so as to connect it with the Delaware Bailroad at or near Middletown in this State, no part of it has in fact been located or constructed within the limits of this State; and since for that and other reasons it has not in fact been located and constructed, even in Kent County, Maryland, in the direction of the boundary line of this State any further than to Massey’s Cross Boads in that county, from which point, pursuant to an agreement between the two companies, a branch railroad has since been constructed by the former company to the Delaware Bailroad at Townsend in this State, and which is now leased to and operated by the latter company, and that it has been so made and constructed according to the understanding of the parties to the agreement, in lieu of that portion of the Kent County Bailroad which it was then contemplated and intended to have located and constructed to the boundary line and extended and constructed within the limits of this State as indicated and provided for in it, we are bound to consider and conclude that this necessarily constituted in its legal operation and effect as an absolute renunciation, not only of their original intention to so extend it, but also of their power to do so under this act without further legislation in this State to authorize it. For the connection of the Kent County Railroad with the Delaware Railroad at Townsend having since been made in the manner stated by agreement between the companies and pursuant to the powers which they possessed for that purpose, has by such substitution superseded the location, extension, and construction of it as specially provided for in this act, and with it the power and authority granted in it for that particular purpose and no other. And furthermore we may remark that it does not appear that the company has ever done anything under the provisions of this act to avail itself of the benefits of it, although ten years at least have elapsed since the passage of it. Besides, it appears that it has never been expressly accepted by the company ; and notwithstanding there is no provision in it requiring such an acceptance, and although it has been held in other cases that grants beneficial to corporations as well as to natural persons may be presumed to have been accepted from their action under them, and that in a majority of instances, perhaps, it is rather to be inferred or presumed from the course of conduct of the company afterward than to be expected to be proved by an express act or resolution to that effect, it is manifest from what we have already stated that nothing has been done by the company under this act to constitute even an implied acceptance of it in this case. 1 Redf. on Railways 69; Charles River Bridge v. Warren River Bridge, 7 Pick. 344; Bank, of the United States v. Dandridge, 12 Wheat. 64. Indeed, the fact that the company has built no part of the railroad authorized by and provided for in this act, but so much of it as it afterward concluded to construct has been built in Kent County, Maryland only, and, of course, exclusively under the authority of the laws of that State, absolutely negatives, we think, such an implication.

But we may go further and say that a mere act of incorporation cannot of itself create an existing corporation in point of fact under the laws of this or any other State. The act does not create the corporation but simply authorizes and provides for the formation of it, and it must afterward be organized and established pursuant to the provisions of it to give it any life or existence in fact as a corporation ; and until it is so indued with such an organic life or existence the act itself remains practically and in effect but a dead letter. And until the future company authorized and provided for in the act has been duly formed and organized as provided for in it, the corporation to be instituted cannot properly be said to be created or in existence. And, therefore, strictly and literally speaking in the words of our statute in regard to foreign attachments against corporations, Rev. Code Amend. 642, cannot properly be said, perhaps, to have been either created or organized and existing under the laws of this State or the act now in question, but solely under the laws of Maryland previously enacted and which properly provided for the creation and organization of it, whilst it was merely recognized as a corporation already created, organized and existing in that State under the acts referred to in the preamble of this act, then to be sanctioned and recognized under the act of this State, for it simply incorporates as we have before observed, the “ subscribers to the stock of that company, their successors and assigns,” under the same name and without making any provision whatever for the organization of the company under it in this State. But independent of this strict construction of the words of our statute, which are as follows, “a writ of foreign attachment may be issued out of the Superior Court of this State against any corporation aggregate or sole not created by or existing under the laws of this State, etc.,” nothing has ever been done under this act and it has never been in fact accepted either in express terms or by implication by the Kent County Railroad Company, while it certainly has been created and duly organized and established as an existing corporation under the laws of Maryland in the county of Kent in that State, where its president and other officers now reside and always have resided, and where its principal office and place of business is situated and its corporate residence must be considered to be. What ground then can there possibly be for holding under all these facts and circumstances that it is not a foreign, but a domestic corporation of this State within the true and proper meaning of

the words of our statute? We think there is none and the rule must therefore be discharged.