Waterbury v. Connecticut Ry. Ltg. Co. , 86 Conn. 180 ( 1912 )

The plaintiff's appeal presents three general subjects of complaint. Two relate to incidental matters arising during the progress of the cause. The third touches more substantial questions resulting from the court's action in sustaining a demurrer to the complaint. This demurrer assigned a considerable number of reasons. The major portion of them attacked the sufficiency of those averments which undertook to establish the existence of an obligation binding upon the defendants. The court sustained this contention and the demurrer for these reasons. The subject of this ruling has occupied a large share of the attention of counsel in argument. We have no occasion to enter upon a consideration of the important questions which this phase of the case involves, since there appears at the very threshold of it another reason, pointed out in the demurrer, which is fatal to the plaintiff's recovery upon the complaint as framed.

The plaintiff rests its right of action upon a provision contained in a vote of its court of common council approving a plan for the electrification of the street-railway lines of the Waterbury Traction Company, which vote was passed upon an application presented by the company pursuant to § 2 of chapter 169 of the Public Acts of 1893 (p. 308), and also upon an agreement of the same tenor claimed to have been made by the company in connection with the passage of such vote, together with the conduct of the company in availing itself of the permit which the vote embodied. It is not asserted that the company came under any duty to make payments to the city based upon income, other than such a duty as the language of that vote expresses.

The action is brought to recover amounts which it is claimed became due annually for several years prior to the commencement of the action, in accordance with the terms of this vote. It will be noted that these terms, in addition to an attempt to state a rule for the determination of the amounts of the several payments, provide (1) a condition precedent to payments becoming due, and (2) a limitation of the amount to be paid under certain conditions of the net revenue account. The condition precedent is that the annual payments shall not be required except "when and after such time as the net earnings of said company shall exceed the sum of six per cent on the capital actually invested in said company, in stock or bonds, or both."

The pleader having in his complaint made known the existence of this condition, was bound to show that it had been satisfied. The plaintiff is in no position to claim redress unless the net earnings did, during some portion of the period covered by the complaint, pass the mark set by the vote, and in no position to invoke judicial intervention unless it claims that such was the fact. It matters not what dark and devious ways the defendants may have trodden in an unlawful effort to defeat the plaintiff of its rights, if there has been no such defeat. The latter can establish no claim to judicial intervention or relief by merely charging fraudulent conduct. It must show that by such conduct it has been deprived of something to which it was in fact and in truth entitled. In this case it is entitled to nothing unless the net earnings have passed a certain figure. Until it is charged that such has, upon an honest and true accounting, been the case, the plaintiff has acquired no standing in court to ask it to enter upon the inquiry and make the accounting asked for.

The pleader understood his duty in this regard, and we find three allegations, two covering separate periods, and one the entire period, since electrification, which were inserted to meet the requirements of the situation. They vary slightly in form, but all unmistakably indicate the pleader's intention to limit the fund upon which the six per cent. computation was to be made, to the actual investment, for the time being, by the several owning or operating companies, for construction and equipment. The first of these allegations, which deals with the period of the Traction Company's ownership, is that "the net earnings of said company exceeded six per cent on the capital actually invested by said company for construction and equipment of its railway lines." The second allegation, which relates to a later period, differs in substance only in that the words "by said company" do not appear between "capital actually invested" and "for construction and equipment." The qualification of the investment as that "by" the company is here not expressed; but it is necessarily implied from the context. In the third averment the pleader returns to his former use of language, and the investment is expressed to be one by the companies and "for construction and equipment."

It is apparent from an examination of these repeated averments, and of the prayers for relief, that they were not inadvertently, but intentionally, made in the form in which they appear. The pleader has given to the terms of the vote expressive of the obligation claimed to have been imposed upon the Traction Company, a construction which placed upon it the duty to make the prescribed annual payments whenever its net earnings should exceed the sum of six per cent. on the capital actually invested "by" it "in the construction and equipment of its lines." Unless this construction is justified, the complaint fails to state a cause of action, since it is not shown that a situation has ever arisen when a payment was required. We are in form dealing with a question of pleading; but it requires only a little study of the plaintiff's allegations to discover that we are in fact here brought to a consideration of one of the fundamental propositions of the case the plaintiff has chosen to present, to wit: one as to the scope and character of the obligation claimed to rest upon the defendants in its favor.

By the terms of the vote the six per cent. computation is to be made upon the actual investment "in said company, in stocks or bonds, or both." This unmistakably refers to the contribution to the company which the stockholders, or stock and bond holders, have made. The construction which the pleader has placed upon it transforms this investment into one by the company, that is, expenditure, — a radically different thing. And it is not made the equivalent of the contribution to the company by the stock and bond holders, by its limitation to expenditure for construction and equipment. It is clear from the context that the pleader had no thought that it was, and it is not. It is a matter of common knowledge that the capital invested in a street-railway enterprise not only may be, but ordinarily is, used in other legitimate ways and for other legitimate purposes than these. There are organization and preliminary expenses to be borne, rights of way to be acquired, property perhaps to be purchased, working capital to be supplied, and no inconsiderable incidental charges to be taken care of. All these things, as well as construction and equipment, enter into the burden for the bearing of which capital must be provided and used. The language of the vote in important particulars leaves much to be desired in the matter of certainty and precision, and this unfortunate feature is not lacking at the point we are discussing. But however uncertain it may be, it must be said of it that it is by no possibility susceptible of a construction which calls for the six per cent. computation to be made upon the basis of the cost to the company of the construction and equipment of its lines.

There is no error.

In this opinion HALL, C. J., and THAYER, J., concurred; RORABACK and WHEELER, Js., dissented.