Commonwealth v. Punxsutawney Water Co.

Opinion by

Mb. Justice Beown,

If the allegations in the suggestion of the attorney general upon which the quo warranto issued in this case, had been sustained by proofs, the appellant would be here justly complaining of the judgment below; but they were not so supported, and the appeal must be dismissed.

The Punxsutawney Water Company was “ formed for the purpose of supplying water for the public at the borough of Punxsutawney and to persons, partnerships and associations residing therein and adjacent thereto, as may desire the same. ” This proceeding was instituted for the forfeiture of its charter on the grounds of alleged misuser and nonuser of its corporate franchises and privileges. It was neither alleged nor proven that the appellee had been derelict in the discharge of its duty to supply water to the borough of Punxsutawney as imposed by its charter; on the other hand, it appears that this duty had been and continues to be, faithfully performed, and in the language of the learned trial judge in his charge to the jury, “ the water service to the borough and its inhabitants has not been interfered with. ” No forfeiture of the company’s franchises could have been declared for disregard of this prime duty.

The reason assigned for asking that the company’s charter be taken from it is, that by its own acts it had lost its existence, having conveyed its property and franchises to the Lindsey Water Company, and incapacitated itself from performing its corporate duties. In its answer to the information filed against it, the appellee specifically denies every allegation that it had done or permitted to be done, the unlawful acts complained of. These charges are that it had fraudulently and unlawfully entered into a combination or agreement with the Lindsey Water Company to convey to and vest in the latter the control, management and supervision of its business, franchises, property and waterworks, and in carrying out such combination or agreement had lost its identity and virtually become extinct, to the great wrong and injury of the complainant. They are denied, and the record will be searched in vain to find either of them supported by proof that the appellee ever did anything relating to the Lindsey Water Company, which was supplying water to the borough of Clayville abutting against Punxsutawney, except to agree temporarily to supply that company with water, and only upon condition that it could terminate the agreement upon twenty-four hours’ notice, whenever it might need all of its water for supplying its own customers. This agreement, referred to in the information as evidence of the truth of the appellant’s allegation that the appellee had ceased to exist, is evidence to the contrary, for the chief concern of the respondent, on the face of the agreement, is its continued full supply of water to its own patrons. Such an agreement was no ground for forfeiture. As long as the temporary supply of water to the other company, upon the condition stated, did not interfere with the supply which the appellee owed to “ the borough of Punxsutawney and to the persons, partnerships and associations residing therein,” no wrong was done for which its life ought to be taken.

Having failed to point out any act of the appellee calling for forfeiture, the appellant alleges that what a majority of the stockholders of the former did with their stock, giving the Lindsey Water Company practical control of the Punxsutawney Water Company, should be regarded as the misconduct of the latter, meriting summary punishment. What a majority of the stockholders did was to sell their stock, as was their right, and through the purchaser it passed into the control of the Lindsey Water Company; but the individual stockholders, as clearly appears ■from the testimony, sold to an individual, who purchased and paid for it with individual money, and, though such sales may have given to the Lindsey Water Company, subsequently acquiring the stock, a controlling interest in the Punxsutawney Water Company, the latter could not have prevented the sales, and, not having been a party to them, is not to be accountable for them, or for their effect. The Lindsey Water Company by acquiring a majority of the capital stock of the Punxsutawney Water Company did not acquire the property and franchises of the latter. The transfer of a majority of the stock was not a transfer of the property of the company. The transfer was of the rights of the stockholders, and the existence of the corporation was in no manner affected by it. It is being continued, subject to the supervision of the commonwealth, with the right to go on in the exercise of its privileges and the performance of its duties until, by some act of its own, either of omission or commission, the penalty will be forfeiture. No misconduct of the Lindsey Water Company and nothing that one or more of a majority of the stockholders of the appellee may have done in disposing of their stock, can be charged to it. If it is to perish, it must be for its own sins and not for those of another.

W e have no concern on this appeal with what the Lindsey Water Company is alleged to have done. Certainly nothing has been disclosed showing that the property of the appellee has passed to it. If it has undertaken to exercise control over the same, and to mortgage what it does not own, the appellee is not affected. All the rights of the latter, as they came from the commonwealth, are still secure and will be protected from invasion. Its duty, heretofore faithfully discharged to supply water to the territory and people named in its charter, still continues, and having maintained its distinct identity, existence and organization, the learned trial judge correctly told the jury that it could not be struck down upon the unsupported allegations of the complainant, no matter what the conduct of others may have been. All the assignments of error are overruled and the judgment is affirmed.