In Re the New York Cable Railway Co.

15 N.E. 882, 109 N.Y. 32, 14 N.Y. St. Rep. 51, 64 Sickels 32, 1888 N.Y. LEXIS 695
CourtNew York Court of Appeals
DecidedMarch 20, 1888
StatusPublished
Cited by2 cases

This text of 15 N.E. 882 (In Re the New York Cable Railway Co.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re the New York Cable Railway Co., 15 N.E. 882, 109 N.Y. 32, 14 N.Y. St. Rep. 51, 64 Sickels 32, 1888 N.Y. LEXIS 695 (N.Y. 1888).

Opinion

Gray, J.

When the petitioner’s matter was before this-court upon a previous appeal, it was decided that in certain respects the articles of association, as prepared by the mayor’s commissioners, failed to comply with essential requirements, of chapter 606 of the Laws of 1875, known as the Rapid Transit Act, under the provisions of which, certain individuals, had sought legal incorporation by the name of “The New *39 York Cable Railway Company.” (New York Cable Co. v. Mayor, etc., 104 N. Y. 1.) The decision referred to mentioned as one defect that the commissioners had not provided, as section 1 of the act required they should, for a release and forfeiture to the supervisors of the county of all the rights and franchises acquired by the company, in case of its failure to complete its railways within the prescribed times. A further defect in the organization of the company was that those commissioners had not decided, as it was required of them by section 5, upon plans for the construction of the railways and other appliances specified in that section, and a compliance with its requirements was essential to valid organization.

Because of the failure to comply with the requirements of the act in those respects, there was no valid organization of the incorporators. Those requirements are material and a compliance with them is a condition precedent, upon performance of which depend legal incorporation and the acquisition of powers and rights.

The opinion of this court was elaborate and comprehensive in its exposition of the statute and of the scheme embraced within its provisions, and it was concurred in, in the respects mentioned, by all the members of the court. Since that decision was made the appellants have sought to cure the defects in their organization and thus to remove the objection which existed to the exercise of corporate powers; and, to that end, have caused to be made amendments of the articles of association.

A meeting of the commissioners originally appointed by the mayor, and who prepared the articles of association, was called, and three attended. They proceeded to amend the articles by inserting a provision for the release and forfeiture of corporate rights and franchises, as section 1 of the Rapid Transit Act required it should be; and they made locations of works and detailed plans of construction for the railways to comply with section 5. The directors of the company met and they ratified and approved the action of the commissioners and filed an amended certificate of incorporation.

*40 The appellants insist that, by virtue of the proceedings which have been taken and had, they are now validly organized and have legal capacity to carry out corporate aims and purposes. Their argument, in effect, is based on these grounds, namely: That chapter 135 of the Laws of 1870 gave authority to the directors to so amend; that the mayor’s commissioners had the power, as it was their duty, to reconvene and to amend, and that the amendments, when made, relate back and operate to give to the incorporators existence as a corporation de jure. They also contend that no legal objection exists to the confirmation of the report of' the commissioners as to the surface railways; for, in that respect, this court’s decision did not affect.

We think that the argument of the learned counsel for appellants proceeds upon a misapprehension of the effect of the decision of this court. The defects pointed out were fatal and were not of a --nature which permitted of amendments which might relate back with force and curative effect. Sapallo, J., said, referring to petitioner’s organization, unless validly organized in pursuance of the Sapid Transit Act, it acquired no right to construct the road, and, consequently, could not demand that the Supreme Court confirm the report ■ of its commissioners as a substitute for the assent of a majority of the property owners and the order of confirmation would be of no avail if granted.” (W. Y. Cable Co. v. Mayor, etc., supra.)

' No powers, authority or franchises were conferred directly by the legislature on the petitioner. The act only prescribed the proceedings by which such could be acquired; and upon a substantial compliance with its material requirements necessarily depend the due organization and constitution of the corporation. Not to incorporate a provision for release and forfeiture as required by the act, and to leave the question of plans of construction of the railway and its appliances undetermined, and to relegate it to the discretion of the directors of the company, were material departures from the commands of the act. The act required, in its seventh section, that the commissioners shall prepare appropriate articles of association *41 for the company * * * in which said articles of association shall be set forth and embodied, as component parts thereof, the several conditions, requirements and particulars by said commissioners determined pursuant to sections 4, 5 and 6 of this act, and which further shall provide for the release and forfeiture to the supervisors of the county of all rights and franchises acquired by such corporation in case such railway or railways shall not be completed within the time and upon the conditions therein provided.” The clause as to forfeiture, which the commissioners substituted for the specific provision contained in the act, was in clear violation of the legislative- command; while the plans of construction did not furnish a knowledge of the kind of road, or of the degree to which the streets would be obstructed, or of the efficiency of the proposed mode of construction. The plans were not such as when the local authorities and property owners were applied to for their consents, they had before them the necessary materials to form an intelligent judgment whether the scheme proposed should or should not be assented to. The substantial nature and the fatal effect upon petitioner’s attempted incorporation of the omissions adverted to, are no longer subjects open to discussion. The determination by this court was after the fullest hearing, and it was found that the incorporators never acquired the franchise to be a corporation. Essentials for a corporate existence were wanting. The powers given by the act of the legislature had not been exercised in such -mode as to confer upon the association of individuals a corporate capacity, and there was lacking the possession of faculties and powers for the performance of those acts which alone can be performed by the perfect statutory creature.

The argument of the learned counsel for the appellants does not meet these grave objections. Chapter 135 of the La,ws of 1870, cited by counsel, is not available to the petitioner. That act provides as follows, namely : “ The directors of any corporation organized under any general act for the formation of companies, in whose original certificate of incorporation any *42

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Cite This Page — Counsel Stack

Bluebook (online)
15 N.E. 882, 109 N.Y. 32, 14 N.Y. St. Rep. 51, 64 Sickels 32, 1888 N.Y. LEXIS 695, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-new-york-cable-railway-co-ny-1888.