Chicago General Ry. Co. v. Chicago City Ry. Co.

Mr. Justice Windes delivered the opinion of the court. We have not set out the special causes of demurrer assigned, for the reason that after consideration of the same we are of opinion they are not well taken, and to refer to them in detail would unnecessarily extend this opinion. The principal question presented for consideration is upon the general demurrer. Appellant’s counsel, in his brief, says that the theory of the declaration is that appellee, “ under the provisions of its charter, is authorized to operate its ears in State street by ‘ animal power only,’ and that in violation of this restriction in its charter it was at the time of the accident operating its said railway by means of steam-driven cables, and that because of the operation of its railway in this manner the collision occurred, whereby the appellant suffered the damages alleged by it in its said declaration.” In his reply brief he also says, “ we are seeking to recover damages for the destruction of our car by means of the unlawful use of cable power,” and that appellant can not complain that appellee operates its cars “ unless they ran into us or in some way caused us special injury;” and that appellant. is not seeking, to prevent appellee from operating its cars nor to have a forfeiture of its charter declared, but that “ we are seeking to recover damages which we have suffered because of certain acts of appellee which we allege are unlawful.” In other words, the question presented may be stated thus: Can appellant, in this action, recover damages without any allegation that appellee was negligent, upon the simple allegation that in the operation of its cars, under and by virtue of its charter from the State and ordinance of the oitv, it has exceeded its charter powers by using cable instead of animal power, by reason of which the injury complained- of was caused, while appellant was in the exercise of due care? . The principal contention of appellant’s counsel seems to be that the matters alleged in the declaration show that appellee is guilty of a nuisance in the public street, and that because of such nuisance it is liable for any damage which may result therefrom, without reference to whether it was negligent or not. It is elementary that a pleading is to be construed most strongly against the pleader. The declaration shows, in effect, by each of the counts, that appellee’s tracks were laid and its cars are operated under and by virtue of its charter from the State and an ordinance of the city. The tracks are therefore laid in the street and the cars are operated thereon rightfully and lawfully. In C. & E. I. R. R. Co. v. Loeb, 118 Ill. 211, the court say: “ A railroad track laid upon a street of a city by authority of law, properly constructed, and operated in a skillful and careful manner, is not, in law, a nuisance.” There is no allegation that ■ appellee’s tracks were not properly constructed nor that its cars were not operated in a skillful and careful manner. In Cooley on Torts, p. 732, the author says that where a public easement has been authorized by the State, “ no action can be maintained on the assumption that what is thus allowed is a public nuisance, for that can not be a public nuisance that the State assents to and authorizes. It would be a contradiction in terms to say that the State assents to a certain act, and yet that the act constitutes an offense against the State.” This statement of the law is supported, among other authorities by the following: Commonwealth v. Reed, 34 Pa. St. 275; Danville, etc., R. R. Co. v. Commonwealth, 73 Pa. St. 29, in which latter case it is said, “ a work which is authorized by law can not be a nuisance; ” and People v. Gas Co., 64 Barb. 55-70; Everett v. City, 53 Mich. 450. It is not alleged in the declaration that the operation of appellee’s cars in the street by cable power make a nuisance, nor are there any facts alleged from which it may be said, if proven, they show, as matter of law, that appellee was guilty of a nuisance. In Wood on Nuisances, Sec. 248, the author says, “Any unreasonable obstruction of a highway is a public nuisance,” but that what the extent of the obstruction must be in order to create a nuisance is not definitely settled by the cases. From a somewhat extensive examination of cases we think the statement of the author is correct. . We are inclined to the opinion that, the declaration showing, as it does, that appellee occupied the street with its tracks and cars rightfully and lawfully, the mere change in the motive power of the cars, and the operation of three cars at a time instead of one, and at a higher rate of speed than they could be operated by animal power, would not be such an unreasonable obstruction of the street as to constitute a nuisance. The law seems well settled that “ corporations are responsible for the wrongs committed or authorized by them under substantially the same rules which govern the responsibility of natural persons.” Cooley on Torts (2d Ed.), 136; Darsey Mch. Co. v. McCaffrey, 139 Ind. 545-51; R. R. & Bk’g Co. v. Smith, 76 Ala. 572-82; State v. R. R. Co., 23 N. J. L. 368; Nims v. Mt. Hermon Boys’ School, 160 Mass. 177; Denver, etc., Ry. v. Harris, 122 U. S. 608. And in the case of a tort it is held in the McCaffrey and Smith cases, supra, and Hussey v. R. R. Co., 98 N. C. 41, the doctrine of ultra vires has no application. The question as to whether the corporation is liable or not, must be determined independent of. the fact as to whether the.act complained of is ultra vires or not. There are cases to be found in the books, some of which are cited by appellant’s-counsel, which hold a different rule as to ultra vires acts, notably, Jones v. Ry. Co., 3 L. R. (Q. B.), 733-6; Mo. Packet Co. v. R. R. Co., 79 Mo. 479-90; Thomson v. Penn. Co., 51 N. J. L. Rep. 42; but we think they are not sustained either by reason or the weight of authority. It seems unreasonable and unjust to hold that a corporation should be mulcted in damages for the doing of an act simply because it is ultra vires,, when, if the same act were done by a natural person there would be no liability. It certainly can not be maintained that a teamster, who has a perfect right to drive his wagon on the public streets, would be liable for -damages, without regard to his negligence, if he hitched together three wagons, one after the-other, and propelled them along the streets by some unseen power at a high rate of speed, and by so doing caused an injury, unless he so obstructed the street as to create a nuisance. If an individual would not be liable under these circumstances, there seems to us no good reason, either in law or morals, why appellee should, be liable .under the - allegations of appellant’s declaration. It is no doubt the law that if the act of a corporation is ultra vires, and such that it creates a public nuisance, then it is liable for such injuries as may result from the ultra vires act. Wood on Nuisances, Sec. 300; Salt Lake City v. Hollister, 118 U. S. 256-61; R. R. Co. v. Alexander, 66 Miss. 496; Hussey v. R. R. Co., 98 N. C. 34-41; Nims v. Mt. H. B. School, 160 Mass. 177-80. No doubt, upon the doctrine just stated, the courts have proceeded in the cases in which it is held that corporations are liable for ultra vires acts simply because they are ultra vires, but in none of the cases which we have seen does it appear that the right of the party injured to raise the question of ultra vires was made. If, however, we are wrong in holding as we do, that plaintiff has not alleged such facts as show that appellee is guilty of a nuisance in the operation of its cars by cable instead of animal power, and that the appellant’s declaration, when fairly construed, shows that appellee has exceeded its charter powers in propelling its cars by cable, and that such act constitutes a nuisance by obstructing the street, for which it is liable for any injuries caused thereby, without reference to the question of negligence, still the question as to whether appellee has exceeded its charter powers can not, in our opinion, avail appellant in this action but can only be taken advantage of by the State or the city, in a direct proceeding against appellee. In Pres, and Trustees v. Thompson, 20 Ill. 197, it was held that the power of a corporation, acting as such, can not be questioned collaterally on the ground that it has not complied with its charter. The case was debt for a penalty for selling liquors by the president and trustees of a town. In Rice v. R. R., 21 Ill. 93, it was said- that if a corporation “ has usurped franchises not granted by the statute, that should more properly be inquired into by a direct proceeding to seize the franchises to the people and dissolve the corporation,” and held that the corporation should not be compelled in every suit it might bring to show that its organization was formal and proper. The doctrine of these cases is repeated and reaffirmed in Tarbell v. Page, 24 Ill. 46, Renwick v. Hall, 84 Ill. 162, and People v. Trustees, 111 Ill. 172, which last case was mandamus to compel school trustees to appoint appraisers to value school property, and it was held that the organization of a corporation, acting as such, and exercising the franchises of a' school district, could not be attacked in such a proceeding. In Alexander v. Tolleston Club, 110 Ill. 65-72, where the question was as to the power of "a corporation to hold real estate under its charter, it was held that as the corporation might, for some purposes, hold title to real estate, its right in that regard could only be questioned by a direct proceeding in behalf of the State; and that it made no difference whether the matter of ultra vires was interposed for or against the corporation. The doctrine is again asserted in Barnes v. Suddard, 117 Ill. 243, where the question was as to whether the corporation had exceeded its powers in taking title to real estate, and it was said that this was a question that did not concern a third party, but only the corporation and the State. The same question was again before the Supreme Court in Hamsher v. Hamsher, 132 Ill. 286, and it was held that the question could not be raised by any party except the State. Numerous cases in other jurisdictions, where the question arose on matters ex contractu., are to the same effect. Ragan v. McElroy, 98 Mo. 349; Bank v. Merchants Bk., 10 Mo. 84; Grant v. Coal Co., 80 Pa. St. 209; Pixley v. Navgn. Co., 75 Va. 320-4; and Lumber Co. v. Ward, 30 W. Va. 43-9, are only a few of such cases. There are also numerous cases that corporations can not shield themselves for a tort committed in the prosecution of their business by a claim, that the acts were ultra vires. The doctrine of ultra vires has no application in such cases and affords no defense. 3 Wood on Railroads, 1612. This is right and as it should be; the plaintiff too should be allowed no advantage in a suit against a corporation; for an injury caused by its ultra vires act, simply because the act is ultra vires, when the act is not prohibited by positive law, or is a nuisance or a crime. We see no reason why the holdings in the cases above cited, where the question arose collaterally as to the.excess or usurpation of corporate powers, in the cases of taking title to real estate and in matters esa contractu, should not be applied in actions for tort based solely upon an excess of corporate power. There is, however, authority more nearly in point than any of the cases above noted. In the case of Williams v. Citizens Ry. Co., 130 Ind. 71, certain house movers were restrained from moving a house across and along a street electric railroad, because it would necessitate cutting the railway company’s wire and stop its cars. It was claimed that the railway company had no lawful right to use electricity as a motive power for propelling its cars, and therefore the injunction should not have issued, and it was held that, although this might be true, the house movers could hot raise the question; that inasmuch as the railway company assumed, under color of law and claim of right, to exercise its corporate functions, only the State could raise the question as to the validity of such assumption and exercise of such functions and rights, and an individual could not successfully assail them in a collateral proceeding. The court say: “ It would violate the plainest principles of law to permit an individual citizen to confiscate or destroy the property of a corporation which has assumed to exercise rights under the laws of the State and to which the ofiicers of a governmental subdivision have given recognition by granting to it the right to use the streets of a city.” In Hine v. Ry. Co., 73 N. W. Rep. 116-18 (Mich.), which was an action against the company to recover for injuries caused by it to a child on the street, it was claimed that the company was liable because it had no right to use electricity. The court say: “We do not think this question can be raised in this proceeding. The fact was made to appear that the company did operate its cars by electricity, and for the purpose of this case the trial must proceed as though it had the right to do so. If the street railway company is operating its road contrary to the terms of its franchise, the question could undoubtedly be raised by the city in a proper proceeding, but we do not think the question is involved in this issue.” In the Pixley case, supra, the court gives the reasons why an excess of corporate power can not be taken advantage of in a collateral suit, which reasons seem equally pertinent in an action ex delicto. The court say: “ It (the charter) is not a contract between the corporate body on the one hand, and individuals whose rights and interests may be affected by the exercise of its powers on the other. It is a compact between the corporation and the government, from which they derive their powers. Individuals, therefore, can not take it upon themselves, in the assertion of private rights, to insist on breaches of the contract of the corporation as a ground for resisting or denying the exercise of a corporate power. That can be done only by the government, with which the contract was made, and in proceedings duly instituted against the corporation.” If appellant can in this case raise the question as to the right of appellee to operate its cars by cable power, then every other corporation or person who may claim to be injured or be aggrieved by the method of operation of appellee’s cars may make the same claim, and thus compel the appellee over and over again to litigate this question as to whether it has exceeded its charter powers, which would be purely collateral and incidental to the right of recovery in every such suit. And even if it had a perfect right, under its charter, to use cable power, it would still have, to make its defense until the State or city authorities could be prevailed upon to bring a direct proceeding and thus settle the question. We are of opinion that it would be unreasonable to allow such collateral attack upon appellee’s franchise, and therefore think that the demurrer to appellant’s declaration was properly sustained. The judgment is affirmed.