Braintree Water Supply Co. v. Inhabitants of Braintree

Knowlton, J. By the St. of 1886, c. 269, the Braintree Water Supply Company was incorporated, for the purpose of furnishing the inhabitants of the town of Braintree with water. The act of incorporation conferred upon the company extensive powers, and also secured to the town the right to obtain the property and franchise of the corporation, and to control the business of supplying its inhabitants with water, whenever it should choose so to do. Section 10 of this act is as follows: “ The said town of- Braintree shall have the right, at any time during the continuance of the charter hereby granted, to purchase the franchise, corporate property, and all the rights and privileges of said corporation, at a price which may be mutually agreed upon between said corporation and the said town; and the said corporation is authorized to make sale of the same to -said town. In case said corporation and said town are unable to agree, then the compensation to be paid shall be determined by three commissioners, to be appointed by the Supreme Judicial Court, upon application of either party and notice to the other, whose award, when accepted by said court, shall be binding upon all parties. This authority to purchase said franchise and property is granted on condition that the same is assented to by said town by a two-thirds vote of the voters present and [486] voting thereon at a meeting called for that purpose.” The fundamental question in the case is, What were the rights and obligations of the respective parties under this section ? An important part of the chapter relates to the powers and duties of the town in managing the business of furnishing water in case it should purchase the property and franchise of the petitioner, and the intention of the Legislature to give the town the right to take this business in charge is manifest. The authority conferred was not the power to take property by an exercise of the right of eminent domain, but it was somewhat analogous to it. It was an authority to the town to determine absolutely by its own act in the form of a two-thirds vote, at any time during the continuance of the charter, that the petitioner’s property and franchise should become its own. The statute calls it a right to purchase, and seems to contemplate a transfer of' title in the form of a sale, and the execution of some proper instrument as evidence of the transfer. For if the town should vote to purchase after the petitioner’s works had been constructed, there might be a great variety of property, real and personal, to be transferred, and no way is pointed out in which the town could obtain and preserve in convenient form the evidence of its title except through an instrument of sale. But as a preliminary to fixing the rights of both parties, of one to have the franchise and property, and the other to have the pay for it, no writing and no negotiation was required, — nothing but the vote of the town declaring its determination. The Legislature conferred upon the company the corporate franchise, with a condition annexed in favor of the town. By accepting its charter, the corporation impliedly agreed to sell, whenever the town by vote should decide to buy. The legal relation of the parties was as if the corporation had made in writing a continuing offer to sell, at a price to be subsequently agreed upon by the parties, and in default of agreement to be fixed by commissioners. The vote of the town to buy was an acceptance of the offer, which completed the contract. The rights of the parties were then the same as if both had signed an executory contract, binding one to sell and the other to buy, at a price to be agreed between them, or determined under the statute. Neither party could then defeat the right of the other [487] to have the contract executed. By the terms of the statute, it was to be specifically performed. The town might, if it had chosen, have .declined to avail itself of the offer, held out to it under this statute, to purchase at a price to be afterwards fixed, and have voted, under the authority of the Pub. Sts. c. 27, § 27, and perhaps of this statute also, to negotiate with the corporation in reference to making a purchase at a price to which both should agree. But the vote taken at the meeting of January 12, 1887, was not to make a purchase if a satisfactory price could be agreed upon. It was plainly an exercise of the town’s legal right to buy, at a price to be subsequently fixed. The article in the warrant under which the ballot was taken was carefully drawn, with express reference to the provisions of the section which we have quoted. The committee appointed on January 25, 1887, was, in the language of the vote, “ for the purpose of ascertaining what price or compensation shall be paid by the town for the franchise, corporate property, and other rights and privileges of said corporation.” The town’s original action was correctly interpreted by the town itself, when it voted at a subsequent meeting “ to rescind its vote passed January 12, 1887, to purchase the franchise, corporate property, and all the rights and privileges of the Braintree Water Supply Company, according to the provisions of section 10 of chapter 269 ” of the statute of 1886. And this action gave the petitioner rights which the subsequent rescission of the vote could not take away. Nelson v. Milford, 7 Pick. 18. Woodbridge v. Cambridge, 114 Mass. 483. Hall v. Holden, 116 Mass. 172. It is argued that the petitioner entered into a contract with Wheeler and Parks, which prevented the vote from taking effect. But this argument is not well founded. The corporation might go on under its charter, and make any proper contracts for the construction of its works, and for conducting its business. JSTo contract that it might make could deprive the town of the right to purchase its property and franchise under the statute, or prevent the appointment of commissioners to determine the price to be paid. Any contract in terms inconsistent with the exercise of that right would be contrary to the statute, and void as against the town. Any contract properly made in carrying on [488] its business would be binding upon ifc. Section nine of its charter authorized a mortgage of its franchise and property under certain limitations, but it does not appear that the mortgage mentioned in the vote of September 15,1886, and stipulated for in the contract of October 30, 1886, was ever made. The respondent contends that the corporation was never so organized as to be capable of selling its franchise or property, or of maintaining this petition. It must be remembered that this is a corporation created by a charter, and that neither payment for its capital stock, nor even subscription for all of it by individuals, was a necessary preliminary to organization, or to the transaction of business by it. The provisions of the Pub. Sts. c. 105, § 9, in relation to organization, are merely directory, and are intended to secure to all members of a corporation their right to participate in its proceedings. If all the members consent to an organization which disregards the statute requirements as to notice, the organization is valid. Newcomb v. Reed, 12 Allen, 362. Walworth v. Brackett, 98 Mass. 98. The proof of the act of incorporation, of the action under it, and of the dealings of the respondent with the petitioner as such corporation, is presumptive evidence that the corporation was legally organized, and is sufficient for the maintenance of a petition in the corporate name. Narragansett Bank v. Atlantic Silk Co. 3 Met. 282. Middlesex Husbandmen v. Davis, 3 Met. 133. Worcester Medical Institution v. Harding, 11 Cush. 285. Appleton Ins. Co. v. Jesser, 5 Allen, 446. Topping v. Bickford, 4 Allen, 120. Hawes v. Anglo-Saxon Petroleum Co. 101 Mass. 385. The neglect of the town to act upon the report of its committee containing the offer of the petitioner, shows that the parties were unable to agree upon the compensation to be paid. Indeed, bringing this petition, without evidence of negotiation or of attempts to negotiate, would be enough to satisfy the requirements of the statute in regard to that. Burt v. Brigham, 117 Mass. 307. Ætna Mills v. Waltham, 126 Mass. 422. Upon the facts agreed, we think the allegations of the petition are established, and that commissioners should be appointed to determine the compensation to be paid by the respondent for the franchise and property of the petitioner. Ordered accordingly.