Windsor Glass Co. v. Carnegie Co. ( 1903 )

Opinion bí

Me. Justice Mitchell,

The Act of June 19,1871, P. L. 1360, gives courts the right of inquiry, at the instance of private parties, into the existence and extent of franchises conferred by corporate charters when the latter are set up in support of acts injurious to the individual parties complaining. The language is, “ in all proceedings .... in which it is alleged that the private rights of individuals, or the rights or franchises of other corporations, are injured or invaded by any corporation claiming to have a right or franchise to do the act from which such injury results, it shall be the duty of the court .... to examine, inquire and ascertain whether such corporation does in fact possess the right or franchise to do the act from which such alleged injury .... results ; and if such right or franchise has not been conferred upon such corporation, such courts ” shall enjoin or award damages, etc.

The act was intended to enlarge and make clear the rights of individuals to inquire into the charter franchises of corporations when asserted to their individual injury. In general after a charter is once shown, the subject is only open to further inquiry at the direct suit of the commonwealth itself. This act enables the private suitor to demand that the charter right to do the thing complained of shall be shown. But it does not put him in the commonwealth’s place or clothe the court at his instance with the commonwealth’s general powers of inquiry. The inquiry is limited to the nature and extent of the franchises prima facie conferred by the charter, and does not extend to the validity of the charter itself. This is the plain limit of the language of the act, “ and if such right or franchise has not been conferred,” etc., and such has been its uniform construction.

In Western Pa. R. R. Co.’s Appeal, 104 Pa. 399, it was held that the inquiry must be confined to the charter, and the question of loss or forfeiture of franchises by laches can only be raised by the state.

“ But the appellant, by its counsel, insists that the act of 1871 warrants a much wider investigation into causes of forfeiture than those which may appear merely from the conditions and limitations of a charter. In other words, that the position of the commonwealth, as in a writ of quo warranto, may be assumed, and the mere nonuser of the franchise proved, in order to establish forfeiture of the defendant’s right to act under its charter. But to this we cannot agree. . . . The act of 1871 contemplates nothing more than that it shall be made to appear from the charter that the corporation has the power to do the particular act in controversy, and which involves some right of the contestant.”

The appellant’s complaint in the present case is thus stated in its own abstract of its bill wherein it avers: “ That said Union Railroad is not a bona fide corporation engaged in operating a railroad for public use in the conveyance of persons and property, but is a scheme or device of the defendants for the operation under the guise of a railroad charter of a private railroad or system of railroad tracks located upon the property of the defendants, and connecting the various plants and departments of the manufacturing system operated by defendants and forming a part thereof-and used exclusively for the purposes of said manufacturing system. That defendants have no right or power under the said charter to construct, maintain and operate a railroad of the character and in the manner herein described, and their occupancy and use of your orator’s land, as aforesaid, is wrongful, unwarranted and in violation of law.”

The inquiry under this bill, it is manifest, is not into the rights conferred by the charter, but into the conduct of the defendants under it. Defendants obtained a charter it is said, for a general railroad, but all the corporators were stockholders in a manufacturing company and acted in the interests of the latter, not in good faith, to build and operate a railroad but merely to make an addition to their manufacturing plant. Similar efforts to go behind the rights expressed in the charter have been before this court heretofore.

Rudolph v. Pa. Schuylkill Valley R. R. Co., 166 Pa. 480, was a very similar case. A railroad had constructed a short branch to a village where there was a large iron works and after the construction, the branch was used altogether for the carrying of freight to and from those works. No other stations were provided and no passenger cars. An owner whose land was crossed by the branch filed a bill on the same grounds as the present bill, that the branch was not in good faith a branch road authorized by the statute, but a private road for private benefit. It was held that the charter showing the franchise to build a branch was conclusive, the court saying that if there was bad faith, “the commonwealth would be the proper party to complain.”

In Gaw v. Bristol, etc., R. R. Co., 196 Pa. 442, a similar question was determined in the same way though the operating motive for the incorporation of the railroad was admitted to be the accomplishment of an object in which the corporators had been previously defeated, the distinguished counsel frankly arguing that “ it is not an illegal evasion to accomplish a desired result, lawful in itself, by discovering a legal way to do the thing desired.”

In Oliver v. Thompson’s Run Bridge Co., 197 Pa. 344, it was again held that where a bridge was being constructed across a ravine, in accordance with the charter of a bridge company for that purpose, it was not a good objection under the act of 1871 that the building of the bridge may have been inspired by the desire of a passenger railway company to secure a means of passage over the ravine, which it could not obtain for itself for lack of the right of eminent domain.

These cases are conclusive that under the act 1871 the inquiry is limited to the grant in the charter to do the thing complained of. If the power is there given, the authority of the court to interfere is at an end. The further questions of good faith in obtaining the charter or in acting under it can only be raised by the commonwealth. In the present case, as already said, the real substance of the complaint is not that defendants are doing something that the charter does not authorize but that they are not doing something the charter enjoins, to wit: not furnishing passenger cars at all, and not furnishing stations or freight cars which the public can use as they have a right to use a public railroad. It is a conclusive reply that if the defendants should now provide stations, passenger and freight trains, time schedules, etc., there could be no question of the charter right to do so, and yet plaintiff’s whole complaint would be swept away on the facts.

Much reliance is placed by appellant on Edgewood Railroad Company’s Appeal, T9 Pa. 257, but the distinction is obvious. There the acts complained of were not omissions of any part of the charter duty (as is averred here), but were acts affirmatively shown not to be authorized by the charter. Such a case was directly within the act of 1871. Mory v. Oley Valley Ry. Co., 199 Pa. 152, was another case of the same kind and the decision was put on the same ground. “ The only possible conclusion,” said our Brother Brown, “ is that it (defendant) has undertaken to exercise a right expressly withheld from it by the statute creating it. . . . For a case like this the act of June 19, 1871, was passed.”

Decree affirmed at costs of appellant.