Attorney General v. Erie & Kalamazoo Railroad

Champlin, J.

This is an application by the Attorney General for leave to file an information in the nature of a quo warranto against the Erie & Kalamazoo Railroad Company. Notice was given to the respondent, and it has been heard in opposition to the application. The Erie & Kalamazoo Railroad Company was chartered by an act of the territorial legislature of Michigan, approved April 22, 1833 (3 Terr. L. 1125). The charter was perpetual, but was amended in 1816 so as to authorize the Legislature at any time to alter, amend or repeal it.

As originally granted, the charter authorized the company to construct a railroad from Port Lawrence through or as near as practicable to the village of Adrian, and thence on the most eligible route to such point on the Kalamazoo river as they may deem most proper and useful. Important additional franchises were conferred upon the company by an amendment of its charter by an act approved March 26, 1835 (3 Terr. L. 1392). And by another amendment made in 1816, they were prohibited from constructing their road beyond the village of Adrian. The charter empowers the company to transport property and persons over their road by the force of steam or other power, and to charge and collect tolls for the same. Under the grant of power conferred by this charter, the Erie & Kalamazoo Railroad Company located and constructed its road from Port Lawrence (now Toledo) to Adrian. As located and constructed, the road passed through the village of Palmyra, at which a regular passenger and freight depot was established. In 1849 the Erie & Kalamazoo Railroad Company leased its road and franchises to the Michigan Southern Railroad Company, in perpetuity.

The Palmyra & Jacksonburg Railroad Company was chartered by the territorial legislature when the township of Port Lawrence constituted a portion of Monroe county. After the loss of the “ disputed ground ” by the Act of Congress defining the northern boundary of the state of Ohio and admitting -the State of Michigan into the Union, and the assent of Michigan thereto, the Legislature of this State passed an act by which the State agreed to release certain securities against the Palmyra & Jacksonburg Railroad Company, in consideration that it would release so much of its road as lay between the Michigan Southern road then owned by the State, and the Erie & Kalamazoo Railroad, and it was enacted that it should not be lawful for the Palmyra & Jacksonburg Company or its assignees ever to construct its road southerly beyond the Southern Railroad so as to connect with the Erii & Kalamazoo Railroad. Sess. L. 1846, p. 288. This legislation on the part of the State was in the interest of its own enterprise in building the Michigan Southern from Monroe to New Buffalo, by preventing the traffic which would pass over the Jacksonburg road from going to Toledo over the Erie & Kalamazoo road.

In 1846 the Michigan Southern Railroad Company was incorporated, and the-State sold to this corporation the Michigan Southern Railroad, and it undertook the completion- of the project which had been commenced by the State as part of her scheme of internal improvements. By the act of incorporation the Michigan Southern Railroad Company were bound to bnild the Tecumseh branch from the village of Tecumseh by way of the village of Clinton, and of Man-Chester to the village of Jackson, along the line formerly authorized to be constructed by the Jacksonburg & Palmyra Railroad Company. The road from Tecumseh to Manchester was completed in 1855, and from there to Jackson in 1857. In 1856 the Michigan Southern & Northern Indiana Railroad Company, which was the successor of the Michigan Southern Railroad Company, constructed a road from a junction with the track of the Erie & Kalamazoo Company about 5000 feet east from the station at Palmyra village to a connection with the road of the Michigan Southern Company at Lenawee Junction, so called; said Lenawee Junction being the point at which the Jackson branch road of the Michigan Southern Company connects with its main line of road between Adrian and Monroe. The main object of constructing this piece of road was to save the necessity of transporting passengers and freight coming from the direction of Toledo, destined over the Jackson branch or over the main line, towards Monroe, or coming from the Jackson branch or from Monroe, destined towards Toledo, around by the way of Adrian, thus saving a distance of about eight miles. Another object was to avoid the heavy grades and reverse curves which existed on the line of the Erie & Kalamazoo Company’s road between Palmyra and Adrian.

There are several affidavits filed by the Attorney General in support of his application, from which it appears that the Erie & Kalamazoo Railroad Company, as early as 1835 or 1836, constructed its road between Adrian and the village of Palmyra substantially upon the line at present occupied by it, and that a general freight and passenger station was then established and has ever since until recently been maintained at Palmyra village; that this village contains about two hundred and twenty-five inhabitants, three stores, three blacksmith shops, one wagon shop, three halls, a graded schoolhouse, two churches, one steam saw-mill and one paper-mill; that it is the only village in a township containing about two thousand inhabitants; that soon after the completion of the road between Lenawee Junction and the Erie & Kalamazoo road east of Palmyra village, the company controlling and operating said Erie & Kalamazoo Kailroad commenced gradually to withdraw the business which had been previously carried on over the Erie & Kalamazoo road between Palmyra and Adrian and to transfer it to the road to Lenawee Junction; but they still maintained depot facilities at Palmyra station and afforded the people all the usual accommodations at such station until 1867, when from that date to 1873 the railroad facilities at Palmyra station were still further diminished, and from 1873 the Lake Shore & Michigan Southern Pailroad Company (who succeeded the Michigan Southern & Northern Indiana in 1869) has ceased and refused to deliver at said village freight in quantities less than car-loads; and since December 1, 1882 they have ceased to maintain any depot or station at Palmyra village, and have ceased to run freight and passenger trains over that portion of the Erie & Kalamazoo Pailroad lying between the cut-off about a mile east of Palmyra village, and the point of junction of the Erie & Kalamazoo Kailroad with the Michigan Southern Pailroad near the city of Adrian, being a piece of road five and seventy one-hundredths miles in length; that instead of using said piece of road for the transportation of freight and passengers it is used as a place for the storage of cars, some of which are stock cars which are left in a filthy condition near to the residences of farmers, and constitute by reason of the stench arising therefrom a nuisance; that they have suffered this portion of the road to become out of repair and unfit for use in transporting passengers and freight; that a bridge has become so dilapidated that it is unsafe for engines or cars to pass over the same, and that none have passed over the same since December, 1882; that since that date no freight has been brought into the village except from the eastward and in car-loads; and that the company has continually refused to receive or deliver freight in quantities less than car-loads except as a special concession in favor of a paper-mill firm; that in 1877 they sold all the station buildings, water-tanks, sheds, platforms and appurtenances previously in use by the company in the village, and the same have been removed; that in 1881 they took up and removed- all the side track except about seven rods. These several acts are alleged to be a great public wrong and to have a blighting effect upon the village, transforming this modern Palmyra, like the ancient, into a Tadmor in the desert.

Affidavits have been filed and arguments made in opposition to this application, not denying that the station at Palmyra village has been practically discontinued, and the portion of the track above described wholly abandoned for the purpose of running and operating freight and passenger cars over the same, but excusing such non-user on economic grounds. "Whether such a justification can be made to appear as will excuse the Erie & Kalamazoo Railroad Company from performing its charter obligations I do not think it proper to pass upon at this stage of the case. Upon general principles of law, the Erie & Kalamazoo Railroad Company were bound to construct their road between the termini named in their charter; and having so constructed it, to run and operate the whole and every material part thereof until relieved therefrom by the Legislature. Whether there are exceptions to this general principle, and whether the company may be able to bring itself within such exceptions, I shall not attempt here to decide. The question does not appear to me to be presented in such shape as to call for an expression of opinion upon it.

So far as the affidavits produced in support of the application set out the grievances of the residents of Palmyra in relation to being deprived of railroad facilities at Palmyra station, although of vital consequence to them, they do not appear to me to affect the general public. If to the greatest number of the patrons of the road increased facilities are afforded, time is saved and expense of transportation lessened, it would seem that the greater number interested would be benefited by the management as complained of. Admitting all that is alleged against the management, yet I fail to discover how a writ of quo warranto will afford redress to the citizens of Palmyra. If the charter should be declared forfeited, it will not restore the railroad or afford shipping facilities in place of those now withdrawn. It may cause the right of way to revert to the owners and abate the nuisance complained of; but it will not give them a railroad station at Palmyra. It seems to me that those interested in having the Erie & Kalamazoo Pailroad Company perform its duties to the citizens of Palmyra have mistaken their remedy. Their remedy lies, not in a forfeiture of the charter, but in compelling obedience to its requirements. I therefore lay out of view those portions of the affidavits showing personal or private grievances. The affidavits do show a violation of charter obligations in relation to the abandonment of a portion of the road. The Attorney General has thought such violation to be of sufficient importance to the public to call upon the company to show why its charter should not be f orfeitedj and he applies to us for leave to file an information in the nature of a quo warranto. It is obviously the intention of the statute that corporations shall fulfill the conditions and perform the duties enjoined upon them by their charters as the terms upon which they are permitted to enjoy their franchises.

No doubt the requirement that the Attorney General shall first obtain leave of the Court to file the information implies that the Court shall exercise a legal discretion in passing upon his request. Cases might, by possibility, arise where a technical breach of the charter condition would, in case of forfeiture, be followed by results disastrous to the best interests of the people. In this instance the railroad company complained of is a quasi public corporation. It subserves great public interests. It may safely be said that the State has outgrown that narrow policy which sought to compel all great lines of transportation from the west to the seaboard to pass through ports or points exclusively within her own borders. The people of this State are deeply interested and affected by every facility afforded to the great producing and manufacturing interests in finding ample facilities for transportation to the markets of the world. The Erie & Kalamazoo road forms the main line of the Lake Shore & Michigan Southern Kailroad to Toledo and the east. ’ Into this main line a number of branch roads leading from the interior of the peninsula are connected.

The effect of a forfeiture of the Erie & Kalamazoo division upon a large section of the State would, for a time, be serious. Assuming, therefore, that here is a violation of the charter of the Erie & Kalamazoo Railroad Company, which, in the strict letter of the law, would call for a judgment of forfeiture, is it for the best interests of the people of the State, who are represented by the Attorney General, that such charter should be forfeited? Would we be exercising a sound legal discretion to permit the information, under the circumstances, tobe filed? No one can be foolish enough to suppose that the link would not be restored by a new road, at whatever cost. What interest of public policy or even individual welfare, requires such unnecessary work and useless outlay of capital ? Shall it be done simply as a penalty inflicted upon the Erie & Kalamazoo Railroad Company or its lessees? I agree with my brother Campbell that the penalty is too great in proportion to the offense alleged. Still, it must be remembered that the Court is possessed of no-dispensing power. If the papers before us show to our satisfaction that the Erie & Kalamazoo Railroad Company has willfully violated its charter in matters relating to the essence of the corporate grant, thereby affecting the contract between the State and corporation, our duty is plain. No matter what the consequences may be in such case, the leave asked should be granted. It is therefore proper to consider, assuming that the fact that since 1882 the Erie & Kalamazoo Railroad Company have neglected to run cars for the transportation of freight and passengers over that portion of its road between Palmyra village and Adrian is a violation of its charter in a material point, whether such violation has been willful, since it must be not only an intentional but willful violation of its charter which will render the violator amenable to this process for the purpose of depriving it of its charter rights. In determining this question the entire history of the road, as well as of those with which it has been connected and by which it has been managed, is proper to be considered. Railroad facilities for the people of the township of Palmyra have not been lessened, except at Palmyra station, while others have been established in close proximity. A glance at the map introduced by the respondent will show; relatively the respective localities and distances. A through line of railroad from Toledo to Adrian has been maintained and operated. It is certainly questionable whether the discontinuance of a station upon a line of road at a place not named in its charter as a point through which it must pass, will constitute a ground of forfeiture of the charter, and I do not express any opinion upon it; and,[aside from this act, the change of route by the lessees of respondent, and the management and operation of the railroad leased by them, do not indicate a design to willfully violate the charter of the Erie & Kalamazoo Railroad Company. It is true, the people of Palmyra, by repeated petitions, besought both the Erie & Kalamazoo Railroad Company and its lessees to do them justice by continuing a general station at the village ; but the question of the right to the station is not so clearly of the essence of the contract between the State and the company, and undisputed, as to fasten upon the company the design to willfully violate the contract in the discontinuance thereof.

I am not satisfied, from all the facts before us, that the failure of the Erie & Kalamazoo Railroad Company to run and operate its road the whole distance from Toledo to Adrian has been willful. It evidently left its management and mode of operation entirely to its lessees; and while it has been engrafted into the system of railroads operated by its lessees, it has not become an integral part thereof, and its franchises and privileges are independent of such lessees and must be preserved by its own action; and it must be held responsible for the performance of those duties devolving upon it by the legislative grant; and now that its attention has been specially drawn to this obvious breach of duty by the Attorney General, should it persist in the course it has pursued for the past two years (unless relieved from the performance thereof by the Legislature), I shall feel it my duty upon a future application, speaking for myself, to grant leave' to file an information, in which case the whole range of inquiry will be opened to investigation on behalf of the State.'

For the reasons stated I think the present application should be denied.