Brooklyn Heights R.R. Co. v. City of Brooklyn, 182 N.Y. 247 (1905)
A corporation’s implied powers extend to actions that are reasonably necessary to carry out its express powers and fulfill its duties to the public, even if not explicitly stated in its charter.
Summary
Brooklyn Heights Railroad Company sought to connect its railroad to a storage house on State Street, adjacent to its main route on Montague Street. The City of Brooklyn challenged the railroad’s authority to use State Street for this purpose, arguing it exceeded the company’s corporate powers. The court held that the railroad’s actions were a reasonable necessity for the operation of its railroad, impliedly sanctioned by the law of its creation. The court emphasized that corporations have implied powers to take actions reasonably necessary for carrying out their express powers and serving the public convenience, particularly when restricted by local regulations.
Facts
The Brooklyn Heights Railroad Company was authorized to operate a railroad on Montague Street. The city restricted the company from storing cars on Montague Street or adjacent streets east of Wall Street Ferry. The company sought to construct a connection to a power and storage house on State Street, adjacent to Montague Street. State Street was the first adjacent street not primarily residential and was the only practical site for the storage house after a diligent search.
Procedural History
The case originated in a lower court where the railroad likely sought declaratory judgment or injunctive relief to allow construction. The trial court ruled in favor of the railroad. The City of Brooklyn appealed. The New York Court of Appeals affirmed the lower court’s decision, upholding the railroad’s right to connect to its storage house.
Issue(s)
Whether the Brooklyn Heights Railroad Company had the implied power to construct connecting tracks on State Street to reach its storage house, when its charter only explicitly authorized operation on Montague Street.
Holding
Yes, because the construction was a reasonable necessity for the convenient working of the railroad, implicitly sanctioned by the law of its creation and responsive to public convenience.
Court’s Reasoning
The court reasoned that a corporation’s powers extend beyond the explicit terms of its charter to include what is reasonably implied as a means of carrying out its specifically granted powers. The court noted that a railroad corporation is particularly obligated to consider public convenience, and its actions in that regard should be upheld if legally supportable. The court emphasized that the city’s restrictions on where the railroad could locate its storage house justified the railroad’s actions as a reasonable necessity for the convenient operation of its road. The court stated: “When we speak of what a corporation may, or may not, do within its grant of powers, we have in mind the reasonable intendments of its charter, as well as its clear expressions of authority.” The court also considered the fact that the railroad had obtained consent from local authorities and property owners, further supporting its claim of right. The court considered the good faith of the railroad and the lack of any other practical option for locating its storage house. The court found no question as to the good faith of the plaintiff, nor room to doubt as to its having done the only thing which was practicable, in order that it should have a storehouse for its cars. The court found that the railroad procured the nearest land for the location of such a building.