Burke v. Concord Railroad ( 1881 )

The private property of the Concord Railroad Corporation, subject to a public right of transportation, is held in trust by the corporation for the benefit of the stockholders. The corporation is trustee, holding the legal title; the stockholders are beneficiaries, holding the equitable interest. The plaintiffs, as stockholders, complain that their interests are endangered and their rights violated by illegal management of the trust property. March v. Eastern Railroad, 40 N.H. 548 — S.C., 43 N.H. 515; Zabriskie v. C. Railroad, 23 How. 381, 395; Hawes v. Oakland, 104 U.S. 450; Greenwood v. Freight Co., 105 U.S. 13, 16. The terms of the trust were originally declared in the trustee's charter; and the first question raised by the contract made by the trustee and the Boston Lowell Railroad Corporation is, What rights of the beneficiaries, and what powers and duties of the trustee, are declared in the charter?

By section 1, certain persons, and their associates, successors, and assigns, are made a corporation, under the name of the Concord Railroad Corporation, and are vested with all the powers necessary to carry into effect the purposes of the charter. The corporation is authorized to locate and construct a railroad, beginning at any point at the southerly line of the state in Hudson, Pelham, or Salem, or beginning at any point in Nashua village, in Dunstable (now Nashua), or between the factories of the Jackson Company in Dunstable, and Merrimack river, so as to enter on the Nashua Lowell Railroad, paying for the right to use the same, or any part thereof, such a rate of toll as the legislature may prescribe, and complying with such rules and regulations as may be established by the Nashua Lowell Railroad Corporation, and running northerly to Concord.

Section 2 vests the immediate government and direction of the affairs of the corporation in seven directors, and authorizes but does not expressly require them to choose a treasurer and other agents and servants.

By section 3 the directors are authorized and empowered, by themselves or their agents, to exercise all the powers granted in the charter to the corporation for the purposes of locating and constructing the road, and for the transportation of persons and property thereon, and all such other powers and authority for the management of the affairs of the corporation, not before granted, as may be necessary and proper to carry into effect the object of the grant; to purchase and hold land, materials, engines, cars, and other necessary things, in the name of the corporation, for the use of the road, and for the transportation of persons and property.

By section 5 a toll is granted and established, for the sole benefit of the corporation, upon all passengers and property transported upon the road, at such rates as may be established from time to time by the directors. The road may be used by any person or persons furnishing their own cars, in conformity to regulations prescribed by the directors.

By section 6 the directors are authorized to erect toll-houses establish gates, appoint toll-gatherers, and demand and receive toll.

By section 16 the corporation has full power to extend its road from the southern line of the state, so as to connect with the Boston Lowell Railroad, whenever the state of Massachusetts shall grant to the corporation power so to do, with such reasonable conditions as may be required by that state and agreed to by the stockholders; and for such extension the capital stock may be enlarged by new shares.

The interpretation of this charter, like the interpretation of any other grant, statutory, contractual, or testamentary, is the ascertainment of intention; and the question of intention is a question of fact to be determined upon competent evidence. The general rule is, that a grantor intends, if he is able, to convey those rights and powers without which the grant would be of no effect, or the means reasonably necessary for the enjoyment of the granted property or right, the exercise of the granted power, and the accomplishment of the object of the grant. Liford's Case, 11 Co. 46, 52; Broom's L. Max. 362. This rule is applicable to a grant from one person to another (4 Kent Com. 467; Dunklee v. Wilton R. R.,24 N.H. 489, 495), to a grant from the people to the government (2 Story Const., c. 24), and to a grant from the government to individuals. Trustees v. Peaslee, 15 N.H. 317, 330, 331; Downing v. Mt. Washington Road Co.,40 N.H. 230, 232; 1 Kent Com. 464. "Upon examining the railroad charters in this state, there is as much difficulty to find in them an express authority to the corporation to engage in the business of common carriers, either of persons or property, which is their principal business, as to find such authority to keep warehouses or to receive deposits. From the powers granted by the charter, and the general principles of the common law, it is inferred that they have the power to transport goods and persons. . . . It may be just as readily inferred that they may make any contracts and contract any obligations naturally connected with and incident to their business." Smith v. Nashua Lowell Railroad, 27 N.H. 86,95.

The clause of the Concord Railroad charter, granting all the powers necessary to carry into effect the purposes of the charter, is merely declaratory of the common-law rule of interpretation. If that clause were struck out, the legal meaning of the charter would not be altered. Without that clause, the grantor's intention to authorize the means reasonably necessary for doing what the charter authorized the grantee to do, would be necessarily implied. 2 Story Const., ss. 1237, 1241. Legislation, in affirmance of the common law, is not unusual. McDuffee v. P. R. R. R.,52 N.H. 430, 456, 457. The provision of Gen. Laws, c. 145, s. 5, that corporations not municipal "may make contracts necessary and proper for the transaction of their authorized business, and no other," is an instance. Grave errors in the construction of a statute, general or special, may result from a failure to consider whether some part of it is common law.

The charter of the Concord Railroad Corporation shows that the grantor and grantee intended the grantee's road should be not detached and isolated, but connected with others in a line from Boston to Concord. The grantee was empowered to locate and construct a road, beginning at any point within certain bounds "so as to enter on the Nashua Lowell Railroad, paying for the right to use the same, or any part thereof, such a rate of toll as the legislature may from time to time prescribe, and complying with such rules and regulations as may be established by said Nashua Lowell Railroad Corporation, and running northerly to the town of Concord," and to extend its road "from the southern line of this state, so as to connect with the Boston Lowell Railroad," when the state of Massachusetts should grant power so to do. The charter authorized the directors to purchase engines and cars, in the name of the corporation, for the use of its road and for the transportation of passengers and freight, and to establish a toll for passengers and freight; authorized any person or persons to use the road, furnishing their own cars; and authorized the directors to erect toll-houses, establish toll-gates, appoint toll-gatherers, and demand and receive toll upon the road. The corporation was a rail-turnpike company, as well as a common carrier. At its northern as well as its southern end its rails were to be open to the car-wheels of any person or persons, the construction of whose wheels, the forms of whose cars, and the weight of whose loads were in conformity to the rules of the road, and who in all things complied with its regulations. Like the harbor of Portsmouth, and the Piscataqua and its navigable branches, the Concord track is a highway, dedicated, upon reasonable conditions, to the freedom of travel and commerce established by state and federal law. The public right of use to which the plaintiffs' private property in the road is subject is a very extensive one. As a reasonably convenient public use of the road as a highway, connecting at its southern end with another highway connecting with another leading to Boston, was the chief object of the charter, it was necessarily intended that the public convenience should be consulted in the working of the road, not merely as a highway between Concord and Nashua, but also as a part of a continuous highway between Concord and Boston. It was not intended to require the public to submit to the unreasonable inconvenience of a change of cars for passengers, baggage, and freight, at Nashua, on the passage, both ways, between New Hampshire and Massachusetts.

There has been no legislation applicable to this case that shows an intention to obstruct travel or commerce by requiring a change of cars on such a line of railway, but the contrary intention has been constantly apparent. Section 10 of c. 142, Rev. St., is, "Any railroad corporation may contract with any other railroad corporation for the transportation of freight or passengers, and the conducting of all business connected therewith on their road." Section 15 of c. 128, Laws 1844, provides that "Such corporations, whenever thereto required by the legislature, shall permit all persons to run locomotives and cars on their road, or may be required by the legislature to draw the cars of such persons with the engines of the corporation on said road, subject to such tolls, rules, and regulations as the legislature may from time to time prescribe; . . . Provided, that when cars and engines are placed by others on the road, such others shall be liable to pay all damages arising from their own default or neglect."

Section 8 of c. 953, Laws 1850, provides that no contract between two or more railroad corporations for the use of their roads shall be legal or binding unless sanctioned in writing by the railroad commissioners, and approved by the governor and council; that in no case shall such contract be for a longer term than five years; and that no such use of another road shall be allowed unless by contract in writing, executed by both parties, a copy being filed with the secretary of state. This section prohibits the use of one road by the corporate owner of another road, except upon certain conditions, but does not require each corporation to keep its cars on, or to exclude the cars of other corporations from, its own road, nor make the approval of the railroad commissioners and governor and council essential to the legality of the cars of one road passing over other roads. This section is to be read in connection with s. 4 of the same chapter, which requires every railroad corporation to post up at each of its stations a statement of the whole cost of freight, and the fare of each passenger between the stations on its own road and other roads for which it assumes to execute any agency or joint contract, whether within or without this state. Thus the act, which in s. 8 prohibits the use of one road by the corporate owner of another road without governmental sanction, takes it for granted, in s. 4, that each railroad corporation may lawfully assume to execute some agencies and joint contracts in relation to the transportation of freight and passengers between stations on its own road and stations on other roads. Such agencies and joint contracts were not understood to be limited to the contracts of s. 8, which, unless approved by certain state officers, could not be made by one corporation with another for the use of their roads. A contract of s. 8, for the use of several roads for not more than five years, in writing, executed by the parties, sanctioned in writing by the railroad commissioners, and approved by the governor and council, a copy being filed with the secretary of state, was not described in s. 4 as any agency or joint contract which a corporation assumes to execute for another road in relation to the transportation of freight and passengers between its own stations and the stations of the other road. The language of s. 4 is a recognition of a well known usage of railroads, by which freight and passengers were carried over more than one road upon a single contract made by one of the roads with the freight-owners or passengers, without reference to such a contract as is called, in s. 8, a "contract between two or more railroad corporations for the use of their roads." "Any agency or joint contract," of s. 4, is one under which each corporation uses its own road, and does not imply that it uses any other road than its own. The contract of s. 8, "between two or more railroad corporations for the use of their roads," is a contract under which a railroad corporation uses, jointly or severally, some other road than its own.

By c. 1277, Laws 1852, the first four sections of the act of 1850 are repealed, and reenacted with material amendments. Section 1 requires each railroad corporation to establish and post up in its depots the rates or tariffs of tolls between its stations and the stations of other roads with which it has "a joint business connection for the conveyance of freight and passengers," and requires the rates thus established to "be the same for all persons, and for the like descriptions of freight between such stations." In this change of language there is no alteration of the meaning of so much of the act of 1850 as was applicable to such a case as this. The "joint business connection for the conveyance of freight and passengers," of the act of 1852, does not mean less than the "agency or joint contract" of the act of 1850. The requirement of equality of rates for passengers and freight between the stations of one road and the stations of another with which it has "a joint business connection for the conveyance of freight and passengers," while it does not authorize one corporation to use, that is, to work the road of another, does, by necessary implication, recognize as lawful such a joint business connection (not amounting to a joint or several use by one corporation of another's road) as the public convenience requires.

This provision of the act of 1852, in a condensed form, but without any alteration affecting the sense, is copied in the revisions of 1867 and 1878. Gen. St., c. 149, ss. 1, 2; Comrs. Rep. on Revision of 1867, c. 150, ss. 1, 2; Gen. Laws, c. 163, ss. 1, 2. For thirty-two years a railway corporation has been forbidden, by statute, to work another's road without governmental license. For forty years the legislature have expressly recognized the authority of such corporations to make joint business connections with each other, in pursuance of which passengers and freight could be carried from any station of one to any station of another, without change of cars, upon a single contract made by each passenger or freight-owner and one of the corporations. The distinction is between a corporate carrier, on the one hand, making with passengers and freight-owners contracts of transportation over its own and another's road, and jointly or severally working the other road as well as its own, and such a carrier, on the other hand, making similar contracts, which are executed on the other road by another carrier, in pursuance of a contract, express or implied, between the two carriers, each working its own road.

The commissioners of the revision of 1867 proposed to strike out of s. 8 of the act of 1850 the words "for the use of their roads," and to insert in lieu thereof the substance of the phrase of s. 10, c. 142 of the Rev. St., "for the transportation of freight or passengers, and the conducting of all business connecting therewith on their road." Comrs. Report, c. 151, s. 10. This amendment, marked by the commissioners as a substitute materially different from the existing law, the legislature rejected. The prohibition of the use of one road by the corporate owner of another road, was retained (Gen. St., c. 150, s. 10), with the other provision of the act of 1850, as condensed in the act of 1852, in relation to "a joint business connection for the conveyance of freight and passengers." Gen. St., c. 149, ss. 1, 2. Here seems to be a very significant legislative act of carefully considered adherence to the distinction between a contract for the use of roads for which a governmental license is necessary, and a joint business connection for which such a license is not required.

The commissioners of revision also proposed another substitute, materially different from the existing law. They proposed another section, which included not only a contract for the use of any railroad, but also a sale, lease, and mortgage of any railroad, and made such sale, lease, mortgage, and contract for use invalid unless in writing, filed in the office of the secretary of state, and authorized by the legislature. Comrs. Report, c. 146, s. 2. This substitute the legislature adopted, in Gen. St., c. 145, s. 2; and its adoption, with the retention, in s. 10 of c. 150, of the clause relating to contract for use (which the commissioners had proposed to strike out of that section), gives two provisions, in different chapters, on the subject of contract for use, — the second, relating to a contract made by two or more railroad corporations for the use of their roads for a time not longer than five years, which must be approved by the railroad commissioners and the governor and council, — and the first, relating to a contract for the use of any railroad, without a limit of five years or other time, which must be filed in the office of the secretary of state, and authorized by the legislature. What is the full extent of the difference between these provisions (Northern Railroad v. Concord Railroad,50 N.H. 185-194) we need not now inquire, since there is no difference that has any bearing on the present case, and it is not claimed that the contract in controversy was authorized in the manner prescribed by either of them.

The legality of a joint business connection without a special license is not an open question. In Nashua Lock Co. v. Worcester Nashua R. R.,48 N.H. 339, a New Hampshire railroad corporation was held liable for goods delivered to it to be carried to the city of New York, and lost by the burning of a steamer on Long Island sound. Judge Perley, delivering the opinion, says (pp. 345, 360, 361, 363), — "We have no hesitation in holding that railroads may contract to carry goods and passengers beyond their own lines. They could not answer the main objects of their incorporation without the exercise of this power. They are laid out and established with reference to connections in business with other extended lines of transportation, and the power to contract for transportation over the connected lines is implied in the general grant of corporate authority. On this point the authorities are nearly unanimous. It has been held otherwise in Connecticut by the opinion of three judges against two. . . . The connected line transacts business as one joint concern, and the business cannot be transacted otherwise with convenience either to the carriers or the owners of the goods. . . . The use of steam in carrying goods and passengers has produced a great revolution in the whole business. The amount and importance of it have of late vastly increased, and are every day increasing. The large business between different parts of the country is done, as in this case, by parties who are associated in long, continuous lines, receiving one fare through, and dividing it among themselves by mutual agreement. They act together, for all practical purposes, so far as their own interests are concerned, as one united and joint association. In managing and controlling the business on their lines, they have all the advantages that could be derived from a legal partnership. They make such an arrangement among themselves as they see fit for sharing the losses, as they do the profits that happen in any part of their route. If, by their arrangement, each party to the connected line is to make good the losses that happen in his part of the route, the associated carriers, and not the owners of the goods, have the means of ascertaining where the losses have happened. And if this cannot be known, there is nothing unreasonable or inconvenient in their sharing the loss, as in the case of a legal partnership, in proportion to their respective interests in the whole route. . . . Few things are of greater importance to the whole country than the cheap, convenient, and safe transportation of goods between distant points. . . . Most of this business is done on connecting lines of railroads and steamboats. . . . The owner of goods must entrust them to these associated carriers; they cannot be carried in any other way. Not only those who are engaged directly in carrying and sending goods are interested in this subject: all who produce and all who consume are interested that goods should be carried as cheaply, as conveniently, and as safely as possible."

This decision affirmed the authority of railway companies of a continuous line to make what is called in the statute "a business connection," under which passengers and freight owners can contract with one of the companies, and safely pay one of them for transportation over all the roads of the associated companies, and under which the companies can divide among themselves the earnings of the joint business. In R. R. Co. v. Pratt, 22 Wall. 123 130, the supreme court of the United States said they were not aware that the contrary rule prevailed anywhere except in Connecticut. In Barter v. Wheeler, 49 N.H. 9, 25-28, this court followed the decision of this point made in Nashua Lock Co. v. Worcester Nashua R. R., and held that in the case of a continuous line formed by several companies, each operating a part of the line, and empowered by the others to contract for freight over the whole route, and to receive payment for the whole distance, the receipts to be divided among the several companies in prescribed proportions, the companies "stand substantially in the position of partners in such through business." The associated carriers of that case formed a transportation line from Boston, through Nashua, Concord, Vermont, New York, and various ports of the Western lakes. In any view that can be taken of the present case, it is enough that the doctrine of corporate power, laid down in Nashua Lock Co. v. Worcester Nashua R. R., is the law of Massachusetts and the federal court as well as of New Hampshire. Najac v. B. L. R. R. Co., 7 Allen 329, 333; Hill Mfg. Co. v. B. L. R. R. Co., 104 Mass. 122, 133; Railway Co. v. McCarthy, 96 U.S. 258, 266; Ins. Co. v. R. R. Co., 104 U.S. 146, 157; Pierce Railroads 508.

The corporate obligation has a material bearing upon the business connection that may be formed by the companies of this line. Chapter 1113, Laws of 1861, provided that in all cases where railroads were unable to agree upon terms of connection, or on referees to whom the same might be submitted, either road might apply to the court for the appointment of referees to adjust and determine all matters of connection between such roads. This act was repealed by c. 1666, Laws of 1855, which provided that every railroad corporation should draw over its road the cars, passengers, and freight brought to it by any other railroad which is authorized to unite with or enter upon and use the same, as well as also all cars, passengers, and freight destined for such railroad, for a reasonable compensation; that no railroad, drawing the cars of other roads, should be required to allow its road to be used by any other motive power than its own; and that, if the roads could not agree as to the reasonable compensation, either party might apply to the court for the appointment of referees to adjust and determine the rates of compensation for transportation, and all matters of connection between such roads. Chapter 1847, Laws of 1856, so amended the act of 1855 as to give the benefits of it to connecting railroads, notwithstanding neither of them was authorized by law to unite with or enter upon and use the other. In the revision of 1867, by a change of the statutory language supposed by the commissioners to be material, the right to obtain, by a compulsory reference, an adjustment of the rates and terms of such transportation and all matters relating to the connection in future was limited (if the language of s. 1 of c. 150 of the revision is to be taken literally, and is to control the next eight sections of the chapter) to cases in which one railroad is authorized to enter on and use the road of another company. It is not necessary in this case to inquire whether the act of 1856 was limited in the revision, because the charter of the Concord Railroad brings that company and the Nashua Lowell company within even the most narrow construction of the revised law now in force. G. S., c. 150; G. L., c. 164. The charter of the Concord Railroad authorized that corporation to locate and construct its road, beginning at any point within certain limits, so as to enter on the Nashua Lowell Railroad, paying for the right to use the same or any part thereof, and complying with the rules of that road. If the two companies are unable to agree upon the terms of connection, either may apply to the court, upon Gen. Laws, c. 164, s. 3, for the appointment of referees to adjust and determine the rates and terms of transportation on the New Hampshire portion of the Nashua Lowell road, and all matters relating to the connection of the two roads. And, whatever may be the limitations of such compulsory arbitration between other roads, this judicial power of adjusting and determining all matters relating to the connection of these two roads must be very broad, because it was the intention of the legislature that both the New Hampshire part of the Nashua Lowell road and the Concord road (located and constructed so as to enter on the Nashua Lowell) should be parts of a public road extending from Concord to Boston; and the provision for a compulsory adjustment and determination of all matters relating to the connection of the parts furnishes a means of requiring the parts to be so worked as to give the public many, if not all, of the practical conveniences of one road to the extent of New Hampshire jurisdiction.

It was not intended that while the Concord could enter on and use the Nashua Lowell, and obtain a compulsory adjustment of all matters relation to the connection of the roads, the Nashua Lowell should have no other rights of connection with the Concord than such as the Concord might grant. An adjustment of all matters relating to their connection would require a consideration of public rights, and public convenience, and the duties of both roads to the public. It was not the intention of the legislature, that, while the Nashua Lowell might be required to draw over its road the cars of the Concord, the latter could not be required to draw over its road the cars of the former. It was the intention that the Concord might obtain, by compulsory arbitration, an adjustment of the connection of the two roads upon such grounds of convenience, efficiency, and economy as would promote the interest of the public in whose service the corporations are employed, with due regard for the interests of both corporations, and in strict conformity to the limitations of their powers. Such an adjustment might require much reciprocity and unity of action in the two corporations, each working its own road, to enable them to render the transportation service which is due to the public, and which New Hampshire authority would endeavor so to control for the public accommodation as to give the public substantially such a service as would be received from a single corporation, or a partnership of corporations, working the road between Concord and Boston. Nothing less than such a service can amount to the reasonably convenient use of that highway to which the public are entitled.

And if the Concord were not expressly authorized by its charter to enter on and use the Nashua Lowell road, and if ss. 1 and 2 of c. 163, Gen. Laws, did not recognize the validity of business connections of railroads, and if c. 164 had not provided a method of compulsorily adjusting the business connection of the Concord and the Nashua Lowell, we should not be prepared, upon such consideration as we have been able to give the subject, to say that there was such a defect of corporate powers, or such a defect of public rights or remedies, that these companies could not be compelled to make with each other a convenient and economical business connection. It may be found, should this point ever be presented for consideration; that as these roads, running, the one from Nashua north to Concord, and the other from Nashua south to the Massachusetts line towards Boston, are highways, authorized to be located and constructed for public use, there is, by necessary implication, a judicial power of compelling the corporations to work them as parts of a continuous line, in such a business connection as is required by the reasonable necessities of public convenience and public economy. In the public character of railways, and the public purpose for which railway corporations are created, is included an extensive public right of convenient and economical use, for the enforcement of which the common law may afford more adequate methods than there has been occasion in this state to employ.

The right of way can be taken for public railways and other highways without the land-owners' consent by the public, acting through public agents, and exercising the public power of eminent domain. The right of way can be compulsorily taken only by the public. It can be thus taken by the public only for public use. The public use for which it is taken is a reasonable use; and what is a reasonable use is generally a question of fact depending upon the circumstances of each case. Varney v. Manchester,58 N.H. 430. When the right of way is taken for several railroads as parts of a continuous line, the corporations which accept the duty of providing for the reasonably convenient and economical public use of the line fail in this duty if they do not make, between themselves, the business connection necessary for such use, as a town would fail in its duty if it allowed an ordinary town road part of a line of roads through several towns, to be defective at its junctions with other parts of the line. The duty is the same whether the public right of way is acquired with or without the consent of the land-owners. And, in the absence of all express statutory remedy for such a neglect of duty, it would seem there must be ample remedies at common law. Where there is a legal right, public or private, and no statutory remedy, the common law generally furnishes an adequate remedy by appropriate process of law or equity. And in case the Concord and Nashua Lowell companies should neglect their duty of making a business connection as economical, convenient, and efficient as the public have a right to demand, it would be strange if the judicial introduction of numerous forms of action and process during the last one or two thousand years had so exhausted the resources of the common law that it could no longer produce the simple remedies needed for the maintenance of such an ordinary prerogative as the public right of reasonable use of connected highways.

On the question of the existence of legal remedy, it would be immaterial whether the duty of providing for the reasonable public use was imposed upon towns or other corporations, or whether, in the connected highways, carriages were drawn by animal or steam power, on rails or on the ground. Although a compulsory arbitration for adjusting all matters relating to the connection of the Concord and the Nashua Lowell roads is provided by c. 164, only on the application of the proprietors of a railroad, it does not necessarily follow that the public have, under existing law, no means of obtaining a business connection of these roads as economical, convenient, and efficient as the public have a right to enjoy. It may not be easy to show how, by some peculiar and newly discovered misfortune, the remedy-producing power of the common law, so often and so vigorously exercised in former times, has been lost in our day.

The limits of the business connection which the Concord and the Nashua Lowell corporations may, by statutory or common-law process, be compelled to adopt for the accommodation of the public and of each other, need not now be determined. It would seem that they may, by agreement, without governmental license, form such a business connection as, by legal process, may be forced upon them in case they are unable to agree; that they may waive the benefit of s. 2, c. 164, which provides that no proprietors of any railroad over which the cars of other railroads are drawn in conformity to the preceding section, shall be required to allow their road to be used by any other than its own motive power; and that they may, by agreement, adopt, or, by legal process, be compelled to form, a connection, under which, with the assent of Massachusetts, and of the proprietors of the Massachusetts roads between Boston and Nashua, trains may be run between Boston and Concord without change of cars, engines, or trainmen. We are not prepared to say they cannot be joint owners of rolling stock so run (Olcott v. Tioga R. R., 27 N.Y. 546, 560), the fuel and oil used in running it, and a Nashua junction station, occupied by a ticket-seller, baggage-master, and other agents employed by the Concord and the Nashua Lowell companies. Rolling stock and buildings that may be jointly owned may be jointly built and jointly repaired. The legal extent of a connection, formed either by agreement of the parties, or the compulsory action of the authorities of the states under existing law, in pursuance of which the seventy-six miles of rail highway between Boston and Concord may be or should be operated, we now undertake to explore so far only as a general view of it is necessary for an understanding of the present case, and for a consideration of the question whether the connection of which the plaintiffs complain exceeds the legal limit.

By the contract of the Boston Lowell and the Concord, both companies, as partners, work the whole road between Boston and Concord. For every legal and practical purpose, and in every legal and practical sense, the Boston Lowell uses the Concord road as it uses the rest of the line, and the Concord uses the rest of the line as it uses its own road. As principals, they jointly work the whole line, and as principals they divide the net profits. Nothing is wanting to complete the partnership. Eastman v. Clark, 53 N.H. 276; Berthold v. Goldsmith, 24 How. 536; Beauregard v. Case,91 U.S. 134, 140. If the contract in its present form is not a general partnership contract for working the whole line, there are no stipulations capable of making it such a contract that can be added to it. A clause could be inserted assuming to convey to both parties all the corporate property, rights, and powers of each. Such a conveyance would aim at a certain amalgamation, but would, if valid, add no necessary legal element of partnership to the arrangement for operating the roads. A clause could be inserted, requiring each to contribute its share of deficiency if the losses and expenses of operation should be more than the gross earnings. But such a stipulation is implied from the agreement, that, as joint principals, they work the line and divide the net profits.

Authority to enter into such a partnership is not granted to the Concord Railroad Corporation by its charter or any other statute, unless such authority is necessary to carry into effect the purposes of the charter. That corporation has not the legal capacity either to work the Massachusetts portions of the line as a partner with the Massachusetts corporation, or to admit the latter as a partner in working the Concord road, if the partnership is not a reasonably necessary means of exercising corporate powers shown to have been granted. Its power of partnership must be an instrumental power, reasonably necessary for accomplishing the objects of the corporate existence. The general proposition, that the corporate owners of the line between Boston and Concord can make, and should be compelled to make, such a business connection of their roads as will practically give the public many, if not all, of the advantages of a general partnership of the owners, is to be taken with the general qualification, that, in the absence of a special governmental license or authority for one to work and manage, jointly or severally, another's road, each corporation must be sole principal in working and managing its own road. Whether there can be facts requiring a further modification of the general proposition, or a modification of the general qualification, we do not determine.

If the directors of the Concord Railroad should vote to build a line of telegraph on its road from Nashua to Concord, and stockholders should ask an injunction against the execution of the vote, one question would be whether a telegraph line is reasonably necessary for working the road, and carrying into effect the purposes of the charter. It would be largely, if not wholly, a question of fact: and by proof, agreement, statement, or judicial observation, the facts on which the merits of the question must be decided would need to be brought to our official knowledge. The defendants, contending that a similar question of reasonable necessity arises in this case, have made a written statement of facts, in sixteen propositions, which they offer to prove. And the question arises whether the facts thus stated show a reasonable necessity for the partnership. This question must be answered in the negative. The facts stated do not show that substantially all the public and private advantages of the partnership cannot be attained by a business connection in which each corporation works and manages its own road. The defendants say the local business of the Concord road is a small part of its whole business; that the great mass is connecting business. This is immaterial on the present question. If the Concord road had no local business, — if its entire business were the transportation of passengers and freight, carried between Boston and Chicago or San Francisco, without change of cars, and without a stop at any intermediate point, — that state of things would not show a reasonable necessity for an instrumental power of the Concord company to jointly work its own road, and the rest of the line, as a partner with other corporations. If its road ran through an uninhabited country, and it did a vast business of transportation exclusively between other states or foreign countries, a partnership of this company with others in the working of its road, and the rest of the line in other states or countries, would not, on that account, be necessary to carry into effect the purposes of such a grant as its present charter.

The defendants say, that in the necessary connection of their roads as parts of the line between Boston and Concord there must be a great variety of business matters that cannot be adjusted upon exact computations, and that the local business cannot be so distinguished and separated from the connecting business that the expenses of each can be ascertained. If it be so, such difficulties are not obviated by the partnership. Expenses and earnings of the companies, by their business connection necessarily so mixed that the share of each cannot be identified and separated from the rest by a precise method, must be divided by some method that is not precise. What cannot be done by bookkeeping must be done in some other way. If a comprehensive estimation is the only available means of adjustment, the parties must resort to such estimation. The law does not require what is impossible. But an inevitable hotchpot of expenses, losses, or earnings, that can be divided by the companies working the whole line as partners, can be divided by the same companies, each working its own road. If, by a proper business connection, each working its own road, the parties must have a mass, small or large, of expenses, losses, or earnings which it is impracticable to divide by any other method than the application of some measure of percentage adopted upon a general estimate, the only practicable method of division is the only one required by law. The necessity of a general estimate, or a general rule of average or proportion, for dividing property the identity of which is lost by fusion, is not a necessity for this partnership. The subjection of the plaintiffs to such a partial union of interests as unavoidably results from a necessary business connection of this line of roads, does not practically transform them from stockholders of the Concord road into stockholders of the whole line, compelled to exchange a large part of their interest in all the earnings, expenses, losses, and risks of the Concord, for an interest in all the earnings, expenses, losses, and risks of the rest of the line.

The defendants say that under the present contract the net earnings of each road will be increased by the economical management and working of each road, and the public will receive the benefit of cheaper and more convenient and efficient transportation. But the defendants do not state any facts going to show that substantially all the increase of net earnings and public benefit would not result from a proper business connection not amounting to a general partnership. While the public have a right of use, reasonably economical, convenient, and efficient, the plaintiffs, as stockholders, have legal rights which cannot be sacrificed for cheaper transportation, or other public advantage. A mere fact of profit or loss, while it may be a fact of great interest to the stockholders and the public, is not the legal test of corporate power. There are many partnerships and enterprises in which, however profitable they might be for the Concord company and the public, that company cannot engage. There does not appear to be any conflict of interest between the plaintiffs and the defendants, or between either of them and the public. The plaintiffs, the defendants, and the public are interested in having an economical, convenient, and efficient business connection of the line of roads from Boston, through Nashua, to Concord. The defendants' statement of facts does not show that such a connection, without the general community of interest and management established by their contract, will not give the plaintiffs, the defendants, and the public all the practical advantages of the partnership.

The defendants say, in general terms, that under their contract the rights of the stockholders of the Concord Railroad are more fully protected, and the rights of the public better subserved, than they have ever been under any preceding contract, or can be under any arrangement which does not substantially embody its provisions. If the business connection of this line of roads has not been what it ought to be, it is the duty of the companies to improve it; but the mere need of improving their business connection does not prove the need of this partnership. By the statement that the contract is better for the stockholders and the public than any arrangement that can be made which does not substantially embody its provisions, we do not understand the defendants mean that a general partnership is essential. In its printed argument the Concord Railroad says, "By the terms of the contract, the idea of amalgamation, consolidation, or partnership is expressly repudiated."

It is argued that as the directors of two connecting roads may severally appoint the same person superintendent or manager of each road, and the stockholders of each company may elect the same directors, there can be no legal objection to the stipulations of this contract, which provide for a joint management. The stockholders of each company can elect the same directors, and the directors of each can, to some extent, employ the same persons as agents and servants of each; and, without any evidence, there would be a presumption of fact that, to some extent, the same persons ought to be so employed. The directors of one road may employ one person because, being a suitable person, he is employed by the directors of connecting roads. In many matters of management, the directors of one road may take a certain course because, being a proper course, it is taken by the directors of other connecting roads. The business connection which it is the duty of the companies of this line to -form, undoubtedly requires much harmonious and united action on the part of the directors of the several roads. But in the facts stated by the defendants, no necessity appears for the Concord directors being bound by contract to the concurrent action of partners in the choice of a general manager of all the roads, or in the "control over the management" of all the roads, or in the division of the net profits of all the roads. By the ninth article of the contract, the roads must be operated and managed by a general manager chosen by the concurrent vote of a majority of the directors of each of the contracting parties, and removable in like manner, or by the unanimous vote of either board. The manager is not the agent of the Concord company alone for operating the Concord road, and of each of the other companies alone for the several management of the road of each. He is as much the agent of the Boston Lowell company for managing the Concord road, and of the Concord company for managing the Boston Lowell road, as of the Concord company for the management of its road. He is a partnership agent for a general partnership management of all the roads. The same person may, of course, be chosen by the directors of each company, and vested with large powers of agency for the several management of each road. And he may exercise his powers for carrying into effect the business connection which it is the duty of the companies to form. But the facts stated by the defendants show no reason why he should not be exclusively the agent of the Concord company in working its road, and exclusively the agent of each of the other companies in working its road. Whatever difference of fact there would be in the work he would do, or his manner of doing it, there is a broad legal distinction between his working each road as the agent of its corporate owner, and his working each road as the agent of the corporate owners of all the roads united in this general partnership; and there is a broad legal distinction between his being elected, under a general partnership contract, by the members of the firm acting as such, and his being elected by each corporation, not acting as a member of a firm, and not acting under the legal obligation of a contract to submit his election to another corporation for confirmation.

The directors of the Concord Railroad are authorized by its charter to elect such agents and servants as are necessary for doing the work of the corporation. They may exercise this power in such a manner as not only to accomplish the object of working the Concord road as a highway between Concord and Nashua, but also to accomplish the object of working it as part of the highway between Concord and Boston. But this elective power is a fiduciary one, and the general rule is, that fiduciary power cannot be delegated by the trustee. Wilson v. Towle, 36 N.H. 129, 138. An executor, guardian, or selectman has no more authority to appoint a joint principal and official partner, and share with him the powers and duties of his trust, than to convey them entirely away. If a trustee could convey a portion of his fiduciary responsibilities to a partner selected by himself, he could alienate them altogether, and furnish an official substitute. W. Mills v. Upton, 10 Gray 582, 596, 597; Thomas v. R. R. Co., 101 U.S. 71,80, 83, 84. There is a wide legal difference between a trustee exercising his fiduciary powers on his own responsibility, seeking and acting upon the information and advice which his judgment demands and approves as a ground of action, and a trustee taking a partner as a joint principal in the execution of the trust. There is a wide difference between a Concord Railroad board of directors consulting the directors of another road as to the appointment of a Concord Railroad manager, and other matters, but retaining and exercising their undivided powers of appointment, removal, and management, and a Concord Railroad board making a contract of fiduciary partnership with the directors of another road, and sharing with them the powers and duties of the Concord company.

No reason appears why the trainmen, employed on a through train between Concord and Boston, should not be exclusively the servants of the Concord company while the train is on the Concord road. They may, of course, be employed by a single person who is Concord manager in the working of the Concord road, and manager of each of the other roads in the working of each. No reason appears why each corporation should not severally work its own road by its own agents and servants, many of whom may be severally employed by all the companies of the line, and paid by one agent, similarly employed, out of one fund conveniently provided for the purpose.

In some important respects, the difference between a business connection in which each company is sole principal in working its own road, and this general partnership in which each company is a joint principal in working all the roads, may be more a difference of law than of fact. In other respects, and especially in the general result, the practical difference may be material. It is not a matter of statute or common law, and it is not a matter of fact settled by any natural law of chance by which the legal rights of the plaintiffs can be determined, that, under this partnership contract, a series of losses on the Massachusetts part of the line would not exceed the profits of the whole line, and leave the plaintiffs for a time without dividends. Without the partnership, a series of losses on the Concord road might for a longer time deprive the plaintiffs of dividends, which, under the partnership, they might receive out of the profits of the more fortunate Massachusetts section, notwithstanding such losses. Without the partnership there are risks for the stockholders of each part of the line. No legal reason appears for compelling the plaintiffs to exchange their share of the risks of their own road for an equal or greater or less share of the risks of the whole line. Certain risks beyond their own road the plaintiffs may be obliged to incur as a consequence of the business connection which it is the public duty of the corporations to form. If through freight or through baggage is lost on the line, and it cannot be ascertained on which part of the line it was lost the associated companies may share the loss as they would in the case of a partnership. Nashua Lock Co. v. Worcester Nashua R. R. 48 N.H. 339, 361. In this way each company may incur a risk of losses happening on the roads of the other companies. But the necessity of incurring such a risk is not a necessity of incurring all the risks of this general partnership. If the Concord stock now owned by the plaintiffs could, by this partnership contract, be subjected to the risks of the whole line for five years, there is no limit of the time for which it could, by successive contracts, be subjected to the same risks.

We do not need to be informed by witnesses that this line of seventy-six miles can be more cheaply worked as one road than as several roads. And argument is not necessary to convince us that a cheap working of the line can be and ought to be useful to the stockholders in the security of their stock and dividends, and useful to the public in low prices of transportation. But our conclusion upon the whole case is, that the facts stated by the defendants are not a defence, and that the plaintiffs are entitled to an injunction against the performance of the contract, because it is the formation of a general partnership, and, for aught that appears in those facts, substantially all the public and private advantages of economy, convenience, and efficiency which the contract was made to secure can be obtained by such a business connection, not a general partnership, as it is the duty of the directors of the several parts of the line to form.

Injunction granted.

All concurred.