THE COURT OF CHANCERY
OF THE STATE OF NEW JERSEY,
OCTOBER TERM, 1863.
[16 New Jersey Equity 321 (1863) or 1 Green 321 (1863)]
THE DELAWARE AND RARITAN CANAL AND CAMDEN AND AMBOY RAILROAD AND TRANSPORTATION COMPANIES vs. THE CAMDEN AND ATLANTIC RAILROAD COMPANY, THE RARITAN AND DELAWARE BAY RAILROAD COMPANY, and others.
‘1. The restraining power of a court of equity is exercised for the protection of rights, the existence of which are clearly established, and so far only as may be essential for the protection of those rights.
2. The phraseology of the clause under which the exclusive privileges are claimed by the complainants, “it shall not be lawful, &c.," (Pamph. L. 1832, p. 80,) is the form in which the faith of the state is usually pledged, and in which contracts with corporations, touching the exercise of exclusive franchises under legislative authority, are entered into. It is none the less obligatory that it is not in form a contract.
3. The legislature cannot divest itself or its successors, of its sovereignty, or extinguish the trusts committed to its custody for the public welfare. It not only may, but must determine in what manner that sovereignty shall be exercised, and how those trusts shall be executed.
4. By the grant of exclusive privileges to the joint companies, the legislature in no proper sense derogated from the power of subsequent legislatures to provide highways. The legislature have the same control over their franchises and property as over those of any other citizen, and they may be taken and condemned for public use upon making just compensation.
5. The clause in the charter of incorporation, rendering the consent of the corporation necessaryto legalize the construction of a competing road, cannot affect the validity of the law as an act of legislation. Their assent is no part of legislation. It does not create the law, but merely avoids the constitutional objection to its validity.
6. An engagement by a contracting party that he will not do any act to the prejudice of the other contracting party, without his consent, is, in effect, identical with au absolute and unqualified engagement not to do the act.
7. By the act of 1851 (Pamph. L. 388,) supplementary to the act entitled "an act relative to the Delaware and Raritan Canal and Camden and Amboy Railroad and Transportation Companies,”the true intent and meaning of the said last mentioned act, are declared to he "fully and effectually to protect, until the first day of January, 1869, the business of the said joint companies from railroad competition between the cities of New York and Philadelphia."
Held, the grant of this exclusive privilege operates only to protect the through business from city to city, and not between intermediate places and over any and every part of the route between the said cities. The franchise is exclusive only in regard to passengers. and merchandise transported over the entire route.
8. But even if the exclusive privilege also extend to way business, still a competing route for local business is not a nuisance, unless so near the route of the complainant's road as materially to affect or take away its custom.
9. It is a well settled rule of construction that public grants are to be construed strictly; and in all cases of grants of franchises by the public to a private corporation, the established rule of construction is that any ambiguity in the terms of the contract must operate against the corporation, in favor ofthe public. The corporation take nothing that is not clearly given by the act.
l0. Parties cannot effect by combination what neither can do lawfully. Nor can they effect by the agency of others, what they may not do themselves.
11. An injunction is the proper remedy to secure to a party the enjoyment of a statute privilege, of which he is in the actual possession, and when his legal title is not put in doubt.
12. If a corporation goes beyond the powers with which the legislature has invested them, and in a mistaken exercise of those powers interferes with the rights or property of other, equity is bound to interfere by injunction if the exigency of the case require it. Whether those rights are invaded by a mistaken or a fraudulent exercise of power is immaterial.
13. The legislature cannot be presumed by a charter to intend or contemplate any grant inconsistent with, or that would operate as an invasion of, a grant already made.
15. To justify the issuing of an injunction to restrain the erection of a nuisance, or to abate it after it is erected, it must appear not only that the complainant's rights are clear, but that the thing sought to be enjoined is prejudicial to those rights. The fact of the nuisance must be clearly established.
16. A structure, though illegal, will not be enjoined as a nuisance, where it occasions no injury to the rights of the complainant.
17. The closing of a road used as a highway for travel, by injunction, can only be justified by the clearest necessity.
[Omitted is a summary of the history of the case and the pleading.]
THE CHANCELLOR.The complainants, the United Delaware and Raritan Canal and Camden and Amboy Railroad and Transportation Companies, ask to be protected in the enjoyment of certain franchises and exclusive privileges granted to them by the State of New Jersey.By their original bill, they asked that an injunction should issue to prevent the formation, by the defendants, of a continuous line of conveyance by railroad from the Delaware river to Raritan bay, by a junction of their respective roads, which might be used for the transportation of passengers or merchandise between the cities of New York and Philadelphia, or to compete in business, between the said cities, with the railroads of the complainants, or that might in any manner be used, or intended to be used, for the purpose of defeating the true intent of the contracts made by the state with the complainants, to protect, until the first clay of January, 1869, the business of the complainants' railroad from competition between the cities of New York and Philadelphia.
The Camden and Atlantic Railroad Company, one of the corporations which are made defendants, by virtue of their charter, granted on the 17th of March, 1852, have constructed a railroad from the city of Camden through the counties of Camden and Atlantic, a distance of about sixty miles, to the ocean at Absecom inlet, in the county of Atlantic.
The Raritan and Delaware Bay Railroad Company, the other defendant corporation, by virtue of their charter, granted on the third of March, 1854, and of the supplements thereto, were authorized to construct a railroad from some suitable point on Raritan bay, eastward of the village of Keyport, in the county of Monmouth, through the counties of Monmouth, Ocean, Burlington, Atlantic, and Cape May, to Cape Island, on the Atlantic ocean;the general course of the route of the road, as prescribed in the charter, being nearly parallel with the line of the sea coast, and in its direct course crossing the Camden and Atlantic railroad nearly forty miles from Philadelphia. At the time of filing the complainants' bill this road was in the course of construction, and it is alleged in the bill that the company are not constructing their road on the route prescribed by their charter, but that the road is made to diverge ten miles to the westward of the direct route: to May's Landing (one of, the points in the prescribed route), to Atsion, near the extreme northwest corner of the county of Atlantic, for the purpose of approaching nearer to the city of Philadelphia, and by means of a connection with the Camden and Atlantic road, formed by a branch road from Atsion to Jackson, forming a continuous and convenient railroad line to Camden, and thereby interfering with the chartered rights of the complainants. It is not suggested that the granting of these charters, or either of them, by the legislature, or that railroads constructed in accordance with the route prescribed in these acts of incorporation, constitute any violation of the contract made by the state with the complainants. But the complaint is that the junction thus illegally attempted to be formed between the roads of the defendants, much nearer to the city of Philadelphia than was contemplated or authorized by their charters, will open a communication by railroad and steamboat between the cities of New York and Philadelphia, which will compete in business with the complainants' railroad, and thereby infringe their chartered rights.
The Camden and Atlantic company, by their answer, alleged that they were authorized to construct a branch road from some convenient point on their main road, to be determined upon by the company, to Batsto, in the county of Burlington; that they located their branch railroad from Jackson station, on the main line of their road, to a point near Atsion (which branch constitutes the connecting link of the two roads of the defendants); that the terminus of the Batsto branch at Jackson is the most convenient and proper point on their railroad from which to make a branch solely for a local road; that it is, the most practicable route for the said branch, so far as the topography of the country is concerned; and that the branch was so located because it was supposed that such location will best promote the interest of the stockholders and of the people of the counties through which the road passes, and will best answer the design of the legislature in authorizing such branch. They admit that an additional reason for thus locating the Balsto branch through Atsion was, that thereby a nearer and more direct communication will be opened between Batsto and the city of New York, and points in the line of the Raritan and Delaware Bay Railroad. They do not admit, nor do they deny, that the controlling reason for that location of the Batsto branch, was to aid the Raritan and Delaware Bay Railroad Company in their purpose of approaching nearer to the city, and by means of a connection with the Camden and Atlantic road, forming a continuous and convenient line to Camden.
The Raritan and Delaware Bay Railroad Company, and the president and other officers of the company, by their answer, among other things, admit that at the time of obtaining from the legislature their act of incorporation, no person interested in the application for said road, had any intention of constructing a railroad to transport passengers or merchandise between the cities of New York and Philadelphia. They admit that the road, as constructed, diverges about ten miles from the direct route to May's Landing, but say that the location by way of Atsion, as at present located, is the most feasible, expedient, and proper location for the railroad contemplated in the act of incorporation, and that the direct route from Squankum to May's Landing was surveyed by direction of the company and found to be impracticable; and that the terminus of the Batsto branch (which forms the connecting link between the two roads) at Jackson, is the most convenient and proper point on the Camden and Atlantic road, from which to make a branch solely for a local road.They deny that any agreement has been made, or is intended to be made, for the transportation of freight or passengers between the cities of New York and Philadelphia. They admit that they and the Camden and Atlantic Railroad Company have in view the construction and perfecting, by means of their respective railroads and a convenient connection between them, of a continuous and convenient line of railway communication across New Jersey, from the city of Camden to Port Monmouth, but they deny that they or any of them have in view the continuation of said line; at either end thereof; by steamboat transportation to the cities of New York and Philadelphia, for the purpose of using the same for the transportation of passengers or merchandise in a manner which will violate any contract between the state and the complainants, or any provisions of the act of the legislature referred to in the complainants' bill. They also deny that any contract or arrangement made by them is calculated or intended to form a continuous line of railway communication between the said cities, to compete in business with the business of the complainant, contrary to their vested rights. They admit that it is possible, if not prohibited by law, that a line of communication by railroad and steamboat between the cities of New York and Philadelphia might be opened; but they say that their railroad is not a public highway, and cannot be so used without their concurrence and consent, and as they have made no arrangement whatsoever so to use the same, and do not intend any unlawful use of their road, such use, if unlawful, cannot be made, and if attempted, can be restrained by the courts. They also deny that they intend in any way to violate the chartered rights of the complainants, or that they intend during their existence, to violate any of the alleged exclusive privileges of the complainants. And the defendants, all and each of them, declare that it is not and never leas been their intention, by the construction of their railroad, or its connections with the Camden and Atlantic railroad, or otherwise, to interfere with the complainants' chartered rights, by competing with the railroad of the complainants by the transportation of passengers or merchandise between the cities of New York and Philadelphia, or otherwise.
The answers having been filed, and affidavits taken touching certain allegations in the answers, the case was heard upon a motion for a preliminary injunction as prayed for in the bill to restrain the defendants from forming the proposed junction between their respective roads.
The application was denied upon grounds which were briefly assigned at the time of the decision.
On the tenth of June, 1863, the complainants filed their supplemental bill, charging that since the former hearing, the Raritan and Delaware Bay Railroad Company have completed their road from Port Monmouth to Atsion, and in combination with the Camden and Atlantic Railroad Company have completed the branch from Atsion and Jackson, and by means thereof have connected the two roads, so as to form a convenient and continuous line of railway from Camden to Port Monmouth, and have made arrangements, by contract, for continuing the line by means of steamboats, between Port Monmouth and New York, and between Camden and Philadelphia, so as to form a complete line of travel and transportation over the said line of railroad between the cities of New York and Philadelphia, and have established lines of transportation, both of freight and passengers, between the said cities by means of said line, and are actually engaged in such transportation, in open and direct violation of the chartered rights and privileges of the complainants.
The defendants have answered; evidence has been taken; and the cause is now to be decided upon final hearing.
The right of an incorporated company to be protected in the enjoyment of their franchises, and the duty of a court of equity, by the exercise of its restraining power, to afford such protection, are familiar doctrines of this court. These principles have been so often declared, and are so constantly recognized in practice, as to render their re?affirmance, or the citation of authorities in their support, an unnecessary formality. They are freely conceded as the recognized law of the court. The power of the court is exercised for the protection of rights, the existence of which is clearly established, and so far only as may be essential for he protection of those rights. The first subject for consideration, therefore, is the existence and extent of the rights for which protection is asked.
The exclusive privileges claimed by the complainants, depend mainly upon the acts of March 2d, 1832, and of March 16th, 1854. By the second section of the act of 1832, it is
enacted,“that it shall not be lawful at any time during the said railroad charter to construct any other railroad or railroads in this state, without the consort of the said companies, which shall be intended or used for the transportation of passengers or merchandise between the cities of New York and Philadelphia, or to compete in business with the railroad
authorized by the act to which this supplement is relative."
By the preamble of the act of 1854, it is recited, that by reason of existing contracts between the state and the companies, as set forth in their acts of incorporation and other acts in relation to the said companies, they are possessed of certain exclusive privileges which prevent the construction, except by their consent, of any other railroad or railroads, in
this state, which shall be intended or used for the transportation of passengers or merchandise between the cities of New York and Philadelphia, or to compete in business with the railroads of tire said companies. And by the first section of the act it is enacted,“that it shall not be lawful,before the 1st day of January, 1809, to construct any other railroad or railroads in this state, without the consent of the said joint Companies, which shall be used for the transportation of passengers or merchandise between the cities of New York and Philadelphia, or to compete in business between the said cities with the railroads of the said joint companies, or that may in any manner be used, or intended to be used, for the purpose of defeating the true intent of the act passed March 2d, 1832, or of this act; which intent and meaning are hereby declared to be, fully and effectually to protect, until the 1st day of January, 1869, the business of the said joint companies from railroad competition between the cities of New York and Philadelphia."
It is difficult to conceive of a more express engagement on the part of the state, or of a clearer recognition of the exclusive rights of the companies than is contained in these statutes. Whatever doubts may be entertained as to the construction of the contract, there can be none as to the fact of making it.
That the engagement is not in the form of a contract, renders it none the less obligatory. It is the form in which the faith of the state is usually pledged, and in which contracts with corporations, touching the exercise of exclusive franchises under legislative authority, are entered into. The same form was adopted in the grant of an exclusive franchise to the proprietors of the bridges over the rivers Passaic and Hackensack, which was recognized as a valid contract on the part of the state, both in this court and in the Court of Appeals. 2 Beas. 81, 503.
The grant is founded upon a valuable consideration paid by the companies.
It was made as an inducement to private enterprise and private capital, to construct an important highway, required for public travel and the convenience of commerce, and which it was incumbent upon the state in, its sovereign capacity to provide, either directly by its own means, or through the agency of others.
Whether the grant was wise or injudicious; whether the consideration received for it was adequate or inadequate, were questions exclusively for legislative, not judicial cognizance. These considerations cannot affect the existence, or impair the obligation of the contract.
The obligations created by the act of 1832 and by other acts affecting the complainants, were recognized by the legislature in the preamble of the act of 1854, as existing contracts, conferring upon the companies exclusive privileges, which prevented the construction of competing roads, and which privileges could be extinguished only by purchase or by consent. And by the act of 1854, the legislature not only acknowledge the existence and obligation of the act of 1832, but, with the assent of the companies, they limit its duration, re?affirm its engagements, and declare its meaning. It would seem that every sanction which the legislature could give to its contract with the companies has been given, and that every guarantee which could be required for the quiet enjoyment of the franchises granted has been furnished. By no act of legislation, has the existence or validity of the contract been called in question.Grave questions have arisen, and different opinions have prevailed, as to the construction and effect of the contract, but so far as is known, its obligation has been by the legislature uniformly acknowledged and respected. Under such circumstances, it would certainly be a remarkable spectacle if courts of justice, whose peculiar duty it is to maintain the authority of laws and enforce the obligation of contracts, should be found denying the existence and the obligation of a contract which the contracting parties admit, and the binding force of which they acknowledge.
But it is objected , that the act of 1832 is null and void, inasmuch as it derogates from the power of subsequent legislatures, upon the familiar principle that acts of parliament, derogatory from the lower of subsequent parliaments, bind not. 1 Black. Com. 90.
The power of the legislature to make a contract is not denied. It is an inherent attribute of sovereignty. The constitution does not deprive the legislature of the power of contracting, but only of violating its contract. The prohibition is, that“no state shall pass any law impairing the obligation of contracts."Independent of this constitutional provision, any subsequent legislature would have as full power to annul the contract, or to pass a law inconsistent with it, as the legislature had to make it. It is the constitution then, and not the contract, that derogates from the power of subsequent legislatures.
The inability of the legislature to divest itself or its successors of its sovereignty, or to extinguish the trusts committed to its custody for the public welfare, is not questioned. But the legislature not only may, but must determine in what manner that sovereignty shall be exercised, and how those trusts shall be executed. It may not strip itself of the power of taxation, but it may, in the legitimate exercise of its powers, exempt the property of corporations or of individuals from taxation for a limited time, and for adequate consideration. So it may not divest itself of the power of furnishing necessary and convenient highways for public accommodation. But whether they shall be constructed directly by state officers, by means furnished from the public treasury, or by the agency of public corporations, townships, cities, or counties, by means raised by taxation, or by the agency of private corporations, by means furnished by private enterprise and capital, secured and stimulated by the hope of reward, is purely a question of legislative discretion. All these means and agencies of providing highways have been from time to time adopted, without a question as to the right of the legislature to resort to either of them. In this state great works of internal improvement, requiring large outlays of capital, have been almost universally constructed by private capital and private enterprise, aided in some instances by public bounty. Brides, turnpikes, railroads, and canals have been thus constructed. It has been neither the disposition of the people, nor the policy of the legislature, to incur the hazards of such enterprises, and experience elsewhere has fully demonstrated that the policy of the stale, in this regard, is a wise one. If these works are entrusted to private enterprise, the inducements held out for their execution must rest in legislative discretion.
The doctrine as attempted to he applied by counsel, carried to its legitimate conclusion, would deprive the legislature of all power of disposing of public property. The sale of a part of the public domain, in one sense, derogates from the power of future legislatures. What has once been granted cannot be granted again. And yet the power of the legislature, as well as of parliament, to alienate the public domain, to convert arms of the sea, where the tide ebbs and flows, into arable land, to the utter destruction of the common rights of navigation and fishing, is well settled, and has been repeatedly exercised. Gough v. Bell, 2 Zab. 457; 3 Ibid. 624; Lowe v. Govett, 3 Barn. & Cr. 863; The King v. Montague, 4 Barn. & Cr. 598.
So the legislature nay grant the franchise of taking tolls, which are a branch of the prerogative, upon ferries, bridges, or highways.If once granted, the same franchise cannot be granted again. The legislature cannot grant to another the right of taking tolls upon the defendants' road without making compensation. To some extent, the grant of any franchise must in this sense be derogatory of the power of a subsequent legislature. But it is not contended that the legislature has no power of granting the franchise of taking tolls, or of granting any other property which the state may own. This was not contended in the case of The Charles River Bridge v. Warren Bridge, 11 Peters 420; nor did the court so decide. What the majority of the court in that case did decide was, that where there was a grant of the franchise of a ferry without exclusive words, the legislature might lawfully establish another ferry to the detriment of the former. That the grant of the franchise being a public grant, must be construed strictly, and that noticing should pass by implication. Where no exclusive privilege was expressly granted, none would be presumed to exist.
The extent of the principle as applicable to this case, fairly stated, is simply this : that the legislature cannot divest itself of the power or the duty of providing necessary highways for public use. And the answer to the objection is, that they have not done so.The legislature have the same control over the franchises and other property of these complainants, that they have over the property of any other citizen. It is subject to the right of eminent domain. By virtue of that right, if the public necessities so require, the exclusive franchises, as well as the other property of these complainants, may be taken and condemned for public use upon making ,just compensation. West River Bridge Co. v. Dix, 6 How. 529; Richmond R. R. Co. v. Louisa R. R. Co.,13 How. 83; Enfield Toll Bridge Co. v. Hartford & New Haven R.R., 17 Conn. 40;Boston and Lowell R. R. Co. v. Salem & Lowell R. R. Co., 2 Gray 1.
The legislature, therefore, have in no proper sense, by the grant of exclusive privilege to the complainants, derogated from the power of subsequent legislatures to furnish highways. The only question is, whether just compensation shall be made to the complainants for their property, or whether it may be taken and appropriated, in disregard of the honor of the state and of the rights of the complainants.
The clause in the act?which renders the consent of the companies necessary to legalize the construction of any competing road, cannot affect the validity of the law as an act of legislation.If the clause were erased, the legal effect and construction of the contract would remain unchanged. An engagement by a contracting party, that he will not do any act to the prejudice of the other contracting party without his consent, is in effect identical with an absolute and unqualified engagement not to do the act. The party whose interest are affected may consent to the act, and thus waive his rights under the contract. It in no sense confers on these corporations legislative functions, or makes legislation subservient to their views. Their assent is no part of legislation. It does not create the law, but merely avoids the constitutional objection to its validity. It stands upon the same footing with all modifications of private charters. They are valid only when accepted by the corporation whose rights are affected.
The existence and validity of the grant of exclusive privileges by the state to the complainants, which they ask to be protected, are satisfactorily established. But an important question is raised touching the true construction of the contract, and the extent of the exclusive privileges thereby conferred. The complainants claim that by virtue of their contract they are entitled to protection from all competition, not oily upon the entire route between the cities of New York and Philadelphia, but from all competition upon any and every part of the route;the protection extending as well to the way business as the through business between the said cities. The prohibitory clause declares that “it shall not he lawful at any time during the said railroad charter to construct any other railroad or railroads in this state, without the consent of the said companies, which shall be intended or used for the transportation of passengers or merchandise between the cities of New York and Philadelphia, or to compete in business with the railroad authorized by the act to which this supplement is relative."The ambiguity of the enactment is occasioned by the various senses in which the word “between" is appropriately used. It may mean in the intermediate space, without regard to distance, or it may mean extending or passing from city to city. The prohibition, therefore, may be limited to the through business, alone, or it may extend to transportation over any mid every portion of the route. But if the design of the enactment had been to exclude all competition, that object would have been effectually attained by prohibiting the construction of any road or roads intended or used to compete with the business of the company. The clause prohibiting the construction of a road for the transportation of passengers and merchandise between the two cities would have been nugatory. But the primary design of the prohibition is indicated by declaring: first, that no road shall be constructed for the transportation of passengers or merchandise between the two cities; and then, in order to guard against any evasion of the prohibition, not to enlarge it, the second clause of the prohibition is added.
That this was the real design of the enactment will appear by reference to previous legislation on the subject.The design of the incorporation of the railroad company is stated in their charter to be, “to perfect an expeditious and complete line of communication from Philadelphia to New York;" and it is made their duty to provide suitable vessels at either extremity of their road for the transportation of passengers and produce“from city to city." The protection afforded to the company was, that if the state should authorize any other railroad for the transportation of passengers across this State from New York to Philadelphia, which should be constructed and used, and which should commence and terminate within three miles of the commencement and termination of the roads authorized by the act, the transit duty should cease; and that if any other railroad should be constructed for the transportation of passengers between New York and Philadelphia, it should be liable to a tax not less than the amount payable to the state by this company.
The entire prohibition applies to roads constructed and used for the transportation of passengers across the state, from city to city. The whole protection afforded is to the through?passenger business. It is clear that no reference is had to way business, and that no limitation was designed to be placed upon the chartering or construction of local roads.
By the act of 1831, it is enacted that when any railroad or railroads, for the transportation of passengers and property between the cities of New York and Philadelphia, across this state, shall be constructed and used for that purpose, by virtue of any law, of this state or of the United States authorizing or recognizing said road, the dividends upon the stock transferred by, the company pursuant to the act, should be no longer payable, and the stock should be retransferred to the company. All the protection which the company sought, all that the legislature granted, was to the business from city to city. This was the prize for which these then rival companies were struggling. It was the only object deemed worthy of competition, or worth protecting. But for this the charter would not have been asked, nor the road constructed. It was for this valuable franchise that the consideration was paid by the corporation to the state, and for this that the protectionwas given.
All these provisions have reference exclusively to the through business from city to city. Yet, on examination, it will be found that they were not effectual for the end designed. In terms they limited the prohibition either to a single road, or to a road to be constructed within a limited time, or within certain definite limits, or to a road for the transportation of passengers only. They afford protection to a particular line of road. This clearly did not fully attain the object of securing full protection against competition between the cities. The act, therefore, of 1832, which was passed after the union of the railroad and canal companies, applies the prohibition to the construction of any other railroad or railroads anywhere in this state, at any tune during the continuance of the railroad charter, which should be intended or used for the transportation of passengers or merchandise between the cities of New York and Philadelphia, or to compete in business with the railroad of the complainants. The provisions of the acts of 1830, 1831, and 1832, are all in pari materia, all form parts of one entire contract, and all have in view the same general object. It cannot be said upon any sound rule of interpretation, that the legislature, by the use of a certain term, confessedly of equivocal import, appropriate to express the intent of the parties as expressed in former acts, and necessary to avoid circumlocution, have essentially enlarged the scope of the enactment and limited the power of legislation.
But how did the parties to the contract understand it?
By the act of 1854, the true intent and meaning of the act of 1832 are declared to be, “fully and effectually to protect, until the first of January, 1869, the business of the said joint companies from railway competition between the cities of New York and Philadelphia."
The plain and natural import of this language, as well as of the act of 1832, is to afford protection against competition in business from city to city. A broader interpretation requires a forced construction to be given to the use of the terms employed. A contract by A that he will not engage in the forwarding or transportation business between the cities of New York and Philadelphia; or that he will not enter into competition with the business of B between those cities, would not be violated in letter or spirit by A's engaging in the transportation of goods between Trenton and Princeton, between Camden and Haddonfield, or between Atsion and Long Branch; unless, indeed, the local business would form one link in a chain of communication reaching from city to city, and should thus be used in violation of the spirit of the contract. The language of the act of 1854 is not the language of the legislature alone, but of the companies also. Like the other acts affecting their corporate rights and privileges, it was formally accepted by the companies. Their assent was given to all its provisions. It expresses their construction of the contract. It is no violent presumption that it was approved, if not framed, by their own counsel. The act was passed more than twenty years after the act of 1832, to which it gives construction, had been in operation. The ambiguity of its phraseology could not have escaped the attention of the companies or their counsel. In 1851, the ambiguity created by the use of the word “between,”had been animadverted upon, and its effect, as used in the charter of a railroad company, in a clause similar to that now under discussion, had been treated as a vexed question by the Supreme Court of the United States. Richmond R. R. Co. v. Louisa B. R. Co., 13 How. 71. They were familiar with the rule of interpretation, that, in a case of doubt, the construction of a grant must be taken most strongly against the corporation.
Under such circumstances, it is a reasonable presumption, that if the intent and meaning of the act of 1832 had been to protect against competition, not only the business between the cities, but between all the intermediate places, and over any and every part of the route between the said cities, it would have been unequivocally expressed. That it was not so done, that the ambiguity was not removed when it might have been done with facility, is the strongest evidence that such was not the intention of the contracting parties.
I am of opinion that the grant of exclusive privileges made by the legislature to the complainants, operates to protect only the through business from city to city against competition. That the companies have the franchise of taking tolls upon any and every part of the route or routes between the cities; but that they have the exclusive franchise only in regard to passengers and merchandise transported over the entire route.
But if it be admitted that it is not clear that this is the true construction of the contract, and that its import is doubtful, the construction must still be against the complainants. It is a well settled rule of construction that public grants are to be construed strictly; and in all cases of grants of franchises by the public to a private corporation, the established rule of construction is, that any ambiguity in the terms of the contract must operate against the corporation and in favor of the public. The corporation take nothing that is not clearly given by the act.Proprietors of Stourbridge Canal v. Wheeley, 2 Barn. & Ad. 793; Bealy v. Lessee of Knowler, 4 Peters 168 ; Prov. Bank v. Billings, 4 Peters 614 ; United States v. Arredondo, 6 Peters 738; Charles River Bridge v. Warren Bridge, 11 Peters 420 ; Richmond R. R. Co. v. Louisa R. R. Co., 13 How. 81 ; Proprietors of Bridges v. Hoboken Land Co., 2 Beas. 81.
There is another view of this part of the case which appears to me to be decisive of the rights of these parties, so far as the way business is concerned.
If the grant of exclusive privileges to the companies extend to the way business as well as to the business from city to city, it must, nevertheless, receive a reasonable interpretation. It must be restricted within such limits as may be fairly deemed to have been within the contemplation of the contracting parties, and as shall appear to be in accordance with the reason and spirit of the grant.
It was a principle of the common law, that if one had a ferry by prescription, and another erected a ferry so near it as to draw away its custom, it was a nuisance:. The same principle applies to any exclusive privilege created by statute. The grant must be construed so as to give it due effect by excluding contiguous and injurious competition. The competing route for local business must be so near the route of the complainants' road as materially to affect or take away its custom. Ogden v. Gibbons, 4 Johns. Ch. R. 160 ; Newburgh Turnpike Co. v. Miller, 6 Ibid. 112.
If, therefore, the grant could be so construed as to protect the grantees against the construction of any railroad in the immediate vicinity of their route, and against competition in local or way business upon that route, it would not give to the complainants the monopoly of all local business however remote, which, for want of railroad accommodations upon the natural and direct routes of travel and intercourse, might be driven by inconvenient and circuitous routes to seek its destination over the complainants' road. The grant of the exclusive franchise of having a railroad, and of carrying passengers and freight between Camden and Amboy, cannot confer a monopoly of the business between Camden and Manchester, or Toms River. The local business upon the two roads cannot be regarded as a competing business.
The right of the complainants to be protected in the exclusive enjoyment of their franchise of taking tolls upon their roads for through business being established, are the acts of the defendants in violation of those rights?
The application for a preliminary injunction to restrain the connection between the defendants' roads, was denied on the 12th of August, 1862. The junction was formed, and the roads thus united went into operation in September, 1862. The route is continued by means of steamboats between Port Monmouth and New York and between Camden and Philadelphia, which run in connection with the road, so as to form a complete and uninterrupted line of travel and transportation over the roads, between the cities of New York and Philadelphia. In eleven months, commencing with November, 1862, they were transported over these roads, between Camden and Port Monmouth, and mainly between the cities of New York and Philadelphia, 14,000 tons of freight and 17,600 passengers. A small portion of the freight consisted of munitions of war, and nearly the whole of the passengers were soldiers, carried over the road for the United States government. The transporting of merchandise from city to city, is carried on by
the agency of transportation companies, who have established offices for the reception and delivery of freight in each city, from which offices goods are regularly shipped over the entire route. Daily regular freight lines are thus established.The route is advertised, the attention of merchants and shippers is directed to it as a new and expeditious route, and their patronage solicited. The business of transporting way freight and passengers, is conducted by the railroad companies in their own names. Ordinarily, through tickets are not furnished, and freight is advertised to be carried between Camden and Port Monmouth only. But arrangements are made,
and information furnished, which enable passengers to pass from city to city without interruption, and both passengers and through freight reach the cities from the termini of the roads by the same boats which accommodate tire way travel, and which are provided by the companies for the accommodation of the regular lines upon their respective roads.
The through freight over the roads has been chiefly transported by the Philadelphia and Eastern Transportation Company, under an agreement bearing date on the 20th of December, 1862, entered into between them and the Raritan and Delaware Bay Railroad Company, by which the railroad company agree to transport over the roads, for the space of ten years, at stipulated rates, all the merchandise and freight of every description delivered to them by the transportation company, and that the entire business of transporting freight over the roads between Camden and Port Monmouth, should be enjoyed and transacted for the benefit of the transportation company, excepting the way freight, the traffic in coal, and the business received from the Pennsylvania Railroad Company, the control of which the railroad company reserve to themselves. The transportation company is constituted the exclusive agent of the railroad company, with power at their expense, to contract for the transportation of freight over the line from Camden to Port Monmouth; and the transportation company agree to exert their utmost influence to procure freight for the line, and to furnish for transportation, over said line of railway, exclusively, all the freight of whatsoever kind or description which they may or can receive, control, or influence for transportation, into, through, across, or beyond the state of New Jersey.
By an agreement entered into on the 25th day of October, 1861, between the Camden and Atlantic company and the Raritan and Delaware Bay company, it was, among other things, stipulated that the Camden and Atlantic company should construct without delay the Batsto branch of their railroad. That the Raritan and Delaware Bay company should furnish the means, control the construction, designate the point of termination on their road, and determine the cost of the work. That the Camden and Atlantic company should transport, or allow the Raritan and Delaware Bay company to transport, in connection with their road, all locomotives, cars, passengers, and freight that may be delivered to them by the Raritan and Delaware Bay company, over their road and branches, between the points, of intersection and the termini of their road, and should procure staunch and commodious ferry boats to be used at the termini of their road and branches on the Delaware, and convey promptly to and from Philadelphia and the termini of their road at Camden and elsewhere on the Delaware, all such freight, passengers, and cars as the Raritan and Delaware Bay company should require. That the number of trains, the times of running, the rate of speed, the charges for freight, and the rates of fare, should be regulated by the Raritan and Delaware Bay company. That if the Camden and Atlantic company failed to perform any part of their agreement, the Raritan and Delaware Bay company were authorized to perform it at the cost of the defaulting party.
It was further mutually agreed between the contracting parties, that if legal proceedings were instituted, calling in question the right of either or both parties to carry out the contract in whole or part, each party will use every effort promptly and in good faith to defend itself and each other, will employ the best counsel, and use the utmost diligence to defend itself or themselves, against all claim, suits, or interference; that all suits at law or in equity shall be carried to the court of last resort; and that all expenses of litigation shall be borne by the parties in a designated proportion. That the Camden and Atlantic company would form no connection with any other corporation or individuals, for the conveyance of passengers or merchandise by railroad to or from Raritan bay, nor make any connection with any other intersecting railroad, between the junction of the two railroads and the termini of the Camden and Atlantic company on the Delaware, north of the Atlantic road; and that the Raritan and Delaware Bay company will make no connections with any road or roads that either directly, or by connection, run to the Delaware river, north of Camden; and that the agreement should extend and be binding oil the parties; for thirty years from the completion of the Raritan and Delaware Bay Railroad and the branches of the Camden and Atlantic Railroad.
By the supplemental agreement of the 16th of February, 1862, the Camden and Atlantic company agreed that, if the agreement of the 25th of October, 1861, shall not be carried out in good faith, the Raritan and Delaware Bay company shall have a right to take possession of and manage the Camden arid Atlantic road, so as effectually to carry out the purpose of that agreement, and they, and such persons as they might substitute, were constituted the attorneys, irrevocable, of the Camden and Atlantic company for that purpose; and they empowered the attorneys, or their substitute, to consent to a decree for the specific performance of the agreement, giving to the Raritan and Delaware Bay company, the management and operations of such portion of the Camden and Atlantic road, and of the ferries in connection therewith, as might be required for that purpose.
By the agreement of the 20th of December, 1862, between the Raritan and Delaware Bay company and the Philadelphia and Eastern Transportation Company, it was stipulated that these agreements between the railroad companies should be held by designated agents, for the benefit of the transportation company, by whose agency the through business over the line is carried on.
The real character and design of these contracts cannot be mistaken. So far as the rights of the complainants are concerned, their character cannot be altered by the fact, that in terms the transportation is limited to the line of the road. Taken in connection with the other evidence in the cause, they are obviously designed to promote the formation of a through route for the transportation of merchandise between the cities of New York and Philadelphia. Neither company has a right to permit its road to be used for such purpose. They cannot effect by combination, what neither can do lawfully. Nor can they effect by the agency of others, what they may not do for themselves. The companies control not only the railroad line across the state, but the boats at either terminus upon the Raritan bay and the Delaware. The Camden and Atlantic Company are under stipulation to furnish boats upon the Delaware. The boats upon the Raritan bay are owned in whole or in part by officers of the company, and are used in connection with the regular daily lines upon the road. The evidence shows that arrangements have been entered into, with direct reference to the formation of a continuous line of transportation between the cities of New York and Philadelphia, and, that the transportation of freight and passengers from city to city, is carried on over the defendants' roads by their co?operation, with their knowledge, and under and by virtue of agreements entered into between themselves and with others. The fact is clearly established, that the railroads of the defendants are used for the transportation of passengers and merchandise between the cities of New York and Philadelphia, and are competing in that business with the roads of the complainants, in direct violation of the engagement made by the state, and of the rights and privileges of the complainants.
The only remaining inquiry is, to what relief are the, complainants entitled?
An injunction is the proper remedy to secure to a party the enjoyment of a statute privilege of which he is in the actual possession, and when his legal title is not put in doubt. Livingston v. Van Ingren, 9 Johns. R. 506; Croton Turnpike Co. v. Ryder, 1 Johns. Ch. R. 615.
And if corporations go beyond the powers which the legislature has given them, and in a mistaken exercise of those powers interfere with the rights of property of others, equity is bound to interfere by injunction, if the exigency of the case require it. Agar v. Regent's Canal Co., Cooper's R. 77; River Dun Nav. Co. v. North Midland Railway Co., 1 Railway Cas. 154 ; Bonaparte v. Camden and Amboy R. R. Co., Baldwin's R. 23 ; Scudder v. The Trenton Delaware Falls Co., Saxton 694.
The complainant's rights are clear and unquestioned. They have been in the actual enjoyment of their franchise for more than thirty years. The defendants, by using, or permitting their roads to be used, for the establishment of a through route for the transportation of freight and passengers between the cities of New York and Philadelphia, have exceeded the powers conferred upon them, and interfered with the rights and the property of the complainants. There is nothing in the charters of the defendant corporations, or of either of them, which expressly, or by implication, confers the power of establishing such route, or the franchise of taking tolls thereon. The legislature cannot be presumed to have intended or contemplated any grant, inconsistent with the manifest design of the charters of the complainants. Whether the complainant's rights have been invaded by a mistake, or a fraudulent exercise of power, is immaterial. In either event, they are entitled to have their rights protected and the wrong suppressed. The complainants are entitled to an injunction restraining the defendants from using, or permitting to be used, their roads, or either of them, for the purpose complained of, pursuant to the prayer of the supplemental bill.
The original bill in this cause was filed before the connection between the defendants' roads had been formed, and sought to enjoin the completion of the wok. The connection having been formed, and the roads used for an unauthorized purpose; in violation of the complainants' rights, it is now insisted that the roads, as constructed and used, are an existing nuisance, which should be ordered to be abated, and that the defendants should pay to the complainants the damages sustained by their unlawful acts in the premises.
The powers of a court of equity in regard to nuisances, are corrective as well as preventive. It may order them to he abated, as well as restrain them from being erected. Slate of Penn. v. Wheeling Bridge, 13 How. 519; Van Bergen v. Van Bergen, 2 Johns. Ch. R. 272 ; Hammond v. Faller, 1 Paige 197; Earl v. De Hart, 1 Beas. 280 ; Washburn on Easements 578.
In Earl v. De Hart, Chancellor Williamson sail : “There is no reason why the court should not exercise a power to abate, as well as prevent the erection of nuisances, in clear cases." The nuisance in that case was ordered to be abated, and the decree of the Chancellor was affirmed by the unanimous opinion of the Court of Appeals. In the case of The Slate of Pennsylvania v. The Wheeling Bridge Co., 13 How. 519, before the Supreme Court of the United States, the bill was filed to enjoin the erection of a nuisance. The bridge was completed after the bill was filed. The court said, the defendants having had notice of an application for an injunction, before the defendants had thrown any obstructions over the river, they cannot claim that their position is strengthened by the completion of the bridge. The bridge was ordered to be abated as a nuisance to the rights of the complainant.
Relief in this form is not asked for, either in the original or supplemental bill. As a general rule, such relief will not be granted unless made the subject of a special prayer. Story's Eq. Pl. 43.But this objection may, perhaps, be regarded as too formal to interfere with substantial equity.
The bill seeks to restrain the defendants from making any connection between their roads, so as to form a continuous line by railroad from the Delaware to the Raritan, which might be used for the purpose of defeating the true intent of the contract made by the state with the complainants; and also to restrain the Raritan and Delaware Bay company from further constructing their road on the line to Atsion, or on any line deviating materially to the west of a direct route from Squankum to May's Landing.
The application is based upon two distinct grounds, viz.
1st. Because the divergence of the Raritan and Delaware Bay road to Atsion from the line of the direct route to Cape May, by way ofMay’s Landing, was an unauthorized and fraudulent deviation from the route prescribed by the charter. And 2d. Because the roads, as united, were, intended to be used in violation of the complainants' rights, for the transportation of passengers and merchandise between the cities of New York and Philadelphia.
In order to justify the issuing of an injunction to restrain the erection of a nuisance, or to abate it after it is erected, it must appear, not only that the complainants' rights are clear, but that the thing sought to be enjoined is prejudicial to those rights. The fact of the nuisance must be clearly established. Mohawk Bridge Co. v. Utica and Schenec. R. R. Co., 6 Paige 554. So far as the complainants are concerned, the erection complained of is no nuisance, however unlawful, unless it occasion injury to them. The, ground of relief is thus stated by Mr. Justice Baldwin :“If the complainants' rights of property are about to be destroyed without authority of law; or if lawless danger impends over them by persons acting under color of law, when the law gives them no power, or when it is abused, misapplied, exceeded, or not strictly pursued, and the act impending would subject the party committing it to damages in a court of law for a trespass, a court of equity will enjoin its commission. So of any act of peculiar trespass, occasioning grievous mischief or lasting injury, destructive of property, a right, or franchise." Bonaparte v. Camden and Amboy 4. R. Co., Baldwin's R. 231.
The construction of a railroad over the land of a complainant, without lawful authority, will be enjoined as a nuisance. It is a permanent appropriation of the land of the complainant, and an irreparable injury to his freehold. So if a bridge be erected without lawful authority across a navigable river, to the prejudice of the rights of navigation, the structure itself is a nuisance, and will be abated at the instance of a party injured. But the defendants' roads are not erected upon the lands of the complainants; they do not obstruct their right of way; they destroy no right or franchise of the complainants, which would subject the defendants to damages at law. How, then, do they constitute a nuisance, or entitle the complainants to a remedy by injunction? It is not the structure, but the use of the roads in violation of the complainants' franchise, which creates the nuisance.
The road having been constructed, even if unauthorized, it cannot be abated as a nuisance, as it occasions no injury to the complainants. If there be any room for doubt whether the location of the defendants' road to Atsion is authorized by the charter, an order to abate it would occasion certain loss and injury to the defendants, without any corresponding benefit to the complainants. An injunction to restrain the use of the roads, as prayed for in the complainants' bill, is, under the circumstances, the only appropriate remedy.
Relief in this form is sanctioned by authority and precedent. Boston and Lowell R. Co. v. Salem and Lowell R. Co., 2 Gray 1 ; Pontchartrain R. Co. v. New Orleans and Carrollton R. Co., 11 Louisiana An. R. 253.
The closing of a road used as a highway for travel, by injunction, could only be justified by the clearest necessity.
It will be referred to a master, to take an account of all the through passengers and freight which have been carried over the road since the opening of the route; and also all damages which the complainants have sustained thereby. In taking the account., the master will include all the soldiers, horses, baggage, and munitions of war that have been transported, distinguishing this part of the account from ordinary business.
No proof has been offered in support of the allegation of the answer, that they were carried over the roads of the defendants by order of the secretary of war, or by orders of the general government. Should it appear before the master that any such orders were made, he will report the evidence thereon, and the disposition of that part of the case will be reserved till the coming in of the report.
MODIFIED AND AFFIRMED, 3 C. E. Gr. 546.
CITED in Carlisle v. Cooper, G C. E. Gr. 581; Black v. Del. & Rar. Can. Co., 7 C. E. Gr. 199, 401?403; Penn. R. R. Co. v. Nat. R. R. Co., 8 C. E.. Gr. 455; Black v. Del. & B. Rar. Can. Co., 9 C. E. Gr. 494; African M. E. Church v: Conover, 12 C. E. Gr. 161.