State v. Twin Village Water Co. , 98 Me. 214 ( 1903 )

Strout, J.

Information by the Attorney General, in nature of quo warranto.

By chap. 607 of the special laws of 1893, the Glidden Water, Illuminating and Power Company was incorporated and authorized to furnish water to Nobleboro, Newcastle and Damariscotta and their inhabitants, for domestic, sanitary and municipal uses, and the extinguishment of fires, — and to furnish electric lights for lighting streets in those towns, and to dispose of electric light and power to individuals and corporations. It was also given the right of eminent domain so far as necessary to accomplish the purposes of the corporation. It was also authorized to contract with the towns or any village corporation, and with other corporations and individuals, to supply water or electric light or power. The Act provided that in case no portion of the works of the corporation should be put into operation within two years of the date of the approval of the Act, which was March 28, 1893, “the rights and privileges” granted by the Act should be nidi and void. By chap. 10 of the special laws of 1895, amending the act of 1893, the name of the corporation was changed to the “Twin Village Water Company,” and the time within which some portion of the works should be put in operation, to preserve the charter, extended to four years from the date of approval of the Act of 1893. This amendment was approved February 1, 1895, and took effect at that date.

On or before January 1, 1897, the company had put in operation its water plant, and has ever since continued such operation and furnished water to the towns under the charter. It has never furnished electric light or power as authorized by its charter. Because of this omission, the State claims that the corporation should be ousted from that portion of its charter which relates to electric lights and power. As this branch of corporate rights- is distinct and separate from the rights as to water, it is competent to render such a decree if the evidence warrants. King v. London, 2 T. R. 522; State v. Old Town Bridge Corporation, 85 Maine, 33.

All express conditions contained in the act of incorporation, which are precedent to the right of the corporation to do business, must be substantially complied with before the corporation can exercise its full powers. Express conditions subsequent must also be substantially met, or the corporation will lose its right to continued existence, or the continued exercise of full corporate powers, dependent upon the extent of forfeiture imposed by the condition. People v. Kingston and Middletown Turnpike Road Co., 23 Wend. (N. Y.) 193, 205, 35 Am. Dec. 551. In addition to express conditions imposed by the charter, other conditions may be and often are implied, but as to these a somewhat more liberal rule is applied: In this case, the corporation was authorized to supply water and electrical light and power. This authority carried with it the implied obligation to perform all the objects for which the charter was granted, but this duty should be construed with some reference to actual conditions and needs.

It was a condition precedent that the corporation should have in operation some portion of its works, within the limited time. This it did. It had its water plant in operation within the time. It then became vested with the full chartered powers. The Act contemplated that other portions of the works, and of course the duty appertaining thereto, would be further delayed. No time was fixed by the Act within which such remaining portion should be put in operation. The law then would require it to be done within a reasonable time.

The distinction between franchises and powers should not be overlooked. A “franchise” given by Finch, adopted by Blackstone, and accepted by every authority since, is “a royal privilege or branch of the King’s prerogative, subsisting in the hands of a subject.” To be a franchise, the right possessed must be such as cannot be exercised without the express permission of the sovereign power, — a privilege or immunity of a public nature which cannot legally be exercised without legislative grant. It follows that the right, whether existing in a natural or artificial person, to carry on any particular business, is not necessarily or usually a franchise. The right given this corporation to furnish electric light and power, aside from the right of eminent domain, authorized a business which was open to any individual, without special legislative grant, and falls within the definition of powers. In these the public have less interest, than in the use or abuse of franchises, in their nature exclusive, and existing only by grant from the State. Non-user or misuser of powers, unless carried so far as to amount to a misuser of the franchise to be a corporation, or so substantial and continued as to amount to a clear violation of the condition upon which the franchise was granted, and so derange or destroy the business of the corporation that it no longer fulfils the end for which it was created, are matters for the stockholders, and do not call for interference by the State, nor justify a decree of ouster. State v. Minnesota Thresher Manuf’g Co., 40 Minn. 213, an instructive case upon this subject.

The information alleges that by the Act of 1895, defendant’s charter was to become null and void, unless some portion of its works were in operation within four years after'February 1 of that year. That within that time it had put in operation a water works plant, but that it has failed to furnish electric lights and power, and “lias neglected and unreasonably refused” to do so, and has “wilfully, intentionally and unlawfully refused to perform its aforesaid chartered duties, and has abandoned the same,” and is still claiming “to hold the said franchise as its own, and is illegally and unlawfully preventing the occupation” of the streets in the towns “-by any other corporation that might otherwise be lawfully authorized to occupy the •same,” and lias “usurped the liberties, privileges and franchises” appertaining to furnishing electric light and power.

The burden of proof rests upon the State to establish its allegations. There is no evidence of any usurpation by the corporation. Non-action in regard to electricity is all that is shown, and that is in no sense usurpation, — nor is the allegation that defendants prevent the use of streets by any other corporation of any weight. The charter, authorizing the use of streets, is not exclusive. It did not prevent the Legislature from granting like authority to another corporation.

There remains only the fact that the corporation has not furnished electric light and power, which is not denied, as the ground for a decree of ouster.

The evidence shows that the corporation, in erecting its works, made provision for generating electricity, and has steam power sufficient to operate its water works and an electric plant, and is desirous of installing the same, and distributing electricity as soon as the towns or individuals are willing to take it and pay a reasonable price therefor, and that it has made efforts with the towns and individuals to that end, but without success thus far, and that it is ready and willing to do so, whenever it can receive reasonable assurance that it <;an be done upon a reasonably paying basis. They have not wilfully refused to do this business, nor abandoned the idea of doing it.

Is such a suspension of the exercise of the power to furnish electric light and power, for the time it has existed, sufficient cause to require the court to decree an ouster from the power? We think not. In granting the right, it cannot be supposed that the Legislature intended to impose upon the corporation the duty of establishing an electric plant, with all the appliances for its distribution, when neither the towns nor individuals wanted it or would become purchasers. It looked to the future, and it is not improbable that a different feeling may obtain in the towns in the near future. If so, the preparation already made and expense already incurred to that end, will be available to the corporation, which ought at least to have further time and opportunity to fulfill this one of the objects of its incorporation.

In this view we are not without authority.

Abandonment is a question of intention. Non-user is a fact in determining it. “Its weight depends upon the intention to be drawn from its duration, character and accompanying circumstances.” Raritan Water Power Co. v. Veghte, 21 N. J. Equity, 480. Here the acts of the corporation, as well as the testimony of its officers, negative the intention to abandon, and give a reason for delay.

It has not been wilful, in the sense of a disregard of public interests, but because the towns and their citizens did not want and would not take the electricity. The public has not suffered, because the public did not desire the accommodation.

It is said by the court in State v. Pawtuxet Turnpike Corp. 8 R. I. 188, “It is not every failure to perform a duty imposed that will work a forfeiture.” “A specific act of non-feasance not committed wilfully, and not producing or tending to produce mischievous consequences to any one, and not being contrary to particular requisitions of the charter, will not be” ground for a forfeiture. To the same effect are Attorney General v. The Superior & St. Croix R. R. Co., 93 Wis. 612; Heard v. Talbot, 7 Gray, 119. In Commonwealth v. Fitchburg Railroad Co., 12 Gray, 180, the railroad had abandoned running passenger trains upon a branch of its road, because the business was insufficient to support them. The court, recognizing the general principle that conferring powers upon railroad corporations to carry freight and passengers, imposed upon them the duty, at reasonable times and for reasonable compensation,' to run trains, held that it had qualifications. The court said, “It is clear that the duty required is not more than to meet and supply the public wants. These are measured by the business actually done, or what could be clearly shown would be done, if increased facilitiés were .granted.” No “just implication from the powers and privileges conferred upon the corporation require that trains for passengers or frieght .should be provided which are not wanted, or which the business upon”the road would utterly fail to support.”' The information asking' forfeiture for failure to run passenger trains was dismissed. The reasoning in that case applies with full force to this.

Until the towns of Nobleboro, Newcastle and Damariscotta, or their inhabitants, desire electric light and power, the defendant corporation may well be excused from the exercise of its chartered powers in that regard. When the towns, or their inhabitants, in sufficient numbers to justify its exercise, require or will take the electric light and power, it will be the duty of the corporation to furnish-it. This, its officers say, it is ready, willing and able to do. If at that time the corporation fails to supply the demand, it will be derelict in its duty, and an application for ouster may be sustained. Meantime, neither the general public, nor that of the three towns, can sutler inconvenience from the unexercised power held by the corporation. Ouster of the corporation at this time can be of no benefit to any one, but may be a possible, perhaps probable, serious loss to the corporation, and therefore unjust.

The Legislature at its last session, has indirectly expressed an opinion on the subject, when it refused to charter a gas company for Damariscotta and Newcastle.

Information dismissed.