Hamilton Harris, for appellants.

J. A. Griswold, for respondent.

ANDREWS, J.-The New York, West Shore & Buffalo Railway Company, by the acceptance of the deed of February 8, 1882, became bound to perform the obligation recited therein to locate the highway on the westerly side of the strip of land conveyed by the deed, and to construct a crossing for the use of the plaintiff. The undertaking of the corporation was a part of the consideration of the grant, and, although the deed was not signed and sealed by the corporation, it be came effectual on delivery to and acceptance of the same by the grantee as a contract on its part to perform the undertaking recited, (Dock Co. v. Leavitt, 54 N. Y. 35;) and, upon a refusal of the company to perform, the plaintiff was, according to the general rule, entitled to maintain an action for specific performance or for damages. It is not denied. that the West Shore Railway Company, the successor in title of the original corporation, on becoming vested with the rights and property which belonged to its predecessor, also became subject to and bound by the same obligation in respect to the highway and the railroad crossing, created by the deed of February 8, 1882, which before rested upon the grantee therein alone. The deed under which the West Shore Railway Company acquired its title is not printed in the case, and, so far as appears, that company may have expressly assumed the performance of the obligation of the prior company. If that fact is material, it must here be assumed. The point is now made in behalf of the defendants that the contract between the plaintiff and the New York, West Shore & Buffalo Railway Company is void as against public policy, because as is claimed, it is a contract between private parties providing for the abandonment of a part of an existing highway, and the substitution of a new location to take the place of the highway so abandoned, without the sanction of the commissioner of highways of the town. We are of opinion that this contention cannot be supported.

The New York, West Shore & Buffalo Railway Company did not acquire its right to construct its road upon and along the Catskill and Saugerties highway as against the public by virtue of its deed from the plaintiff of February 8, 1882. The right to use the highway for the purpose was vested in the corporation by the general railroad act on obtaining the consent of the supreme court, subject only to the duty to restore it to its former state, or to such state as not unnecessarily

66

to have impaired its usefulness." (Laws 1850, chap. 140, § 28, subd. 5; Laws 1880, chap. 133:) and, when it becomes

necessary for a railroad company, in order to discharge the duty of restoration, that the highway interfered with should be removed in whole or in part outside of its original limits, the corporation may acquire by purchase or condemnation the lands necessary for the purpose, and the reconstructed highway in the new location becomes a part of the legal highway, (People v. Dutchess & C. R. Co., 58 N. Y. 152.) The corporation has in general the right to determine the route of its road except where its line is coincident with the route of a highway, subject to the right given by statute to parties interested to apply for a change of location in the manner provided. The commissioner of highways is vested by statute with the care and supervision of the highways of the town, (1 Rev. St. p. 502, § 1;) but this, we think, gives him no power to control the location of the railroad within the line of the highway. That power is vested in the railroad corpoation, subject to the approval of the supreme court. The statute requires notice of the application to the court to be given to the highway commissioner. But his consent to the location of the railroad within the limits of the highway is not required, and if given, would confer no authority upon the company in addition to what it before possessed; so also in respect of the duty imposed on a railroad company whose road is located in a highway to restore it to its former state, or to such state as not unnecessarily to impair its usefulness. The duty is solely a corporate duty which the company is bound to perform, and for any failure in its performance, in addition to other remedies, the commissioner of highways is authorized, by chapter 255 of the act of 1855, to maintain an action to enforce the performance, or for damages sustained by the town from non-performance. But it is for the company, in the first instance, to determine the method of restoration. The responsibility is not divided between the company and the commissioner. The obligation is cast upon the company, and "it takes the risk of its act being in accordance with its obligation." JOHNSON, J., Wademan 2. Albany & S. R. Co., 51 N. Y. 570. See, also, People v. New York Cent. & H. R. R. Co., 74 N. Y. 302; People v. New York, N. H. & H. R. Co., 89 N. Y. 266, 10 Am. & Eng. R. Cas. 230. In the present case the company, by the deed from the plaintiff, acquired the fee to the highway, subject to the public easement, and additional land adjoining sufficient for the highway when changed. We think the contract between the parties providing how the restoration should be made was legal. The public were not concluded, and its right of action for a failure by the railroad company to perform its statutory duty remained unimpaired.

It is further contended that the performanee of the contract on the part of the railroad company was prevented by the action of the town commissioner. It appears that, in the fall of 1882, he objected to the construction by the company of the new highway under the hill for prudential reasons. The answer heretofore given to the point made that the contract was opposed to public policy applies here also. The commissioner could not dictate how the work of restoration should be accomplished. It might be very reasonable that the company should desire to consult the wishes of the town officers on the subject, and thereby avoid any future question. or difficulty. But the covenant with the plaintiff was not discharged by the objection of the commissioner, for the company was under no legal compulsion to follow his direction in the matter. It certainly does not appear that the construction by the company of the highway at the place agreed upon between it and the plaintiff would not have satisfied the statutory duty resting on the company. Moreover, we think it is a very grave question whether, assuming that the company had no right as between itself and the town to locate the road under the hill, the plaintiff was not nevertheless entitled to enforce the contract so far as to give him a road for his use at the place indicated. The main purpose of the contract was to insure the plaintiff a convenient road to and from his premises. This the plaintiff could have provided, although the road should no longer continue a public legal highway. Story, Eq. Jur. § 779.

The point that the plaintiff waived the provision in the con. tract by selling to the company the land for the road over the hill, and receiving pay therefor, followed by the construction of the hill road by the company at large expense, is not supported by any facts proved or found, and in addition, which alone is conclusive, the defendant's counsel did not request any finding on the subject, nor is the point raised by any exception in the case. The facts show that there was no waiver, and, that, in the negotiation which re

sisted

to release the company from the original contract, and inthe road provided for therein. Under such circumstances, there could be no estoppel.

upon

The point that there was no evidence to justify the court in awarding $2,500 damages for the non-construction of the road provided for in the covenant is not, we think, well

taken.

farm by reason of the obstruction of the old highway, and the failure to construct a new one under the hill, in the aggregate, at $5,000. The claim is that, as the damages arose

The witnesses placed the damage to the plaintiff's

from two causes, the non-construction of the road, and the failure to build the crossing, and as the damage from each cause was not separately stated by the witnesses, they could not be separated by the court in its findings. But, by stipulation of the parties, the court, after the testimony was in, viewed the premises. There was evidence in the case showing the increased cost of carrying on the farm by reason of the plaintiff being cut off from the use of the old highway, and being required to use the hill road in the transportation of the products of the farm, enough we think, to justify the specific finding in question. The defendants cannot justly complain of any injustice. By the judgment, they have been relieved from a specific performance of the contract to construct the road, which they proved would cost $13,000, and in lieu of such performance a payment of $2,500 damages was adjudged. There was no error, we think, in decreeing a specific performance of the contract to construct a crossing, nor in requiring that it should be under and not over the track. See Jones v. Seligman, 81 N. Y. 191, 3 Am. & Eng. R. Cas. 236. There was error, we think, in charging the West Shore Railway Company with damages at, the rate of $200 per year, which accrued prior to December 5, 1885, the date when that company obtained its title. The sum of $600 should therefore be deducted from the judgment, and as amended, the judgment should be affirmed, without costs in this court to either party. All concur.

Subscription to Bonus Offered Railroad Company for Extension of RoadFailure to Raise Required Amount-Withdrawal of Subscription.-In Buchel v. Lott, (Texas Court of Appeals, January 18, 1890,) 15 S. W. Rep. 413, it was held that a person who signs a subscription list binding himself to pay a certain amount to a railroad company if its road should be constructed to a certain point within a certain time, which list was prepared by the citizens of the place to which the road was to be extended in response to a proposition from the company that it would extend its road to that place for a bonus of $25,000, is liable for the amount of his subscription although it appears that the list aggregated only $23,000, which was at once rejected by the company; after which defendant notified the committee in charge that he withdrew his subscription, and with the knowledge of this withdrawal, the company agreed with the committee to construct the road for the $23,000 subscribed, which was done within the six months prescribed.

BARR et al.

ข.

NEW YORK, LAKE ERIE & WESTERN R. Co.

(125 New York, 263.)

Fraud as a Ground for Avoiding Obligation.-Fraud furnishes ground for rescinding a contract and for avoiding an obligation imposed; but such obligation cannot be assailed as a means of continuing in the possession of property which the contract, legal in itself, was designed to, and did

transfer.

Same-Contract of Corporations With Directors-Lease of Road Constructed by Them.-Where a railroad company leases another road constructed by a syndicate of its directors, to whom all the bonds and stock of the new road, amounting to almost twice the amount of the cost of such road, were isssued, and the old company agrees to pay the new company an extravagant rental, and it appears that the lease is made in pursuance of a corrupt scheme to impose upon the old company an obligation for the benefit of some of its directors, the obligation of such lease is voidable,

but not void.

Same-Ratification of Lease by Stockholder.-By the terms of such lease, which was executed in July, 1870, the old company agreed to pay a rental equal to thirty per cent. of the new road's gross earnings, and guaranteed that such sum should never be less than $105.000 per annum, or seven per cent, of the total issue of bonds and stock. This guaranteed rental was paid until January 1, 1872, after which, and until the beginning of the suit, only $70,000, or seven per cent. on the bonds was paid annually. The old company became insolvent in 1875, a mortgage was foreclosed in 1878, and the defendant company purchased the road, assuming all the obligations of the receiver. The plaintiffs were stockholders in the new company, having received their stock as members of the original construction syndicate, and brought this suit in 1880 to recover the remainder of the rental due under the lease. The old company never ceased to operate the new road under the lease, and in order to reduce the amount of the obligation thereunder, the receiver and the management preceding him purchased all the new company's stock, except that owned by the plaintiffs. Held, that it was error to dismiss the plaintiff's complaint on the merits, since the course of dealing had amounted to a ratification of the lease.

APPEAL from Supreme Court, General Term, First De

partment.

The plaintiffs, as stockholders of the Suspension Bridge & Erie Junction Railroad Company, have brought this action against that company, the New York, Lake Erie & Western Railroad Company, and Hugh J. Jewett, as receiver of the Erie Railway Company, as defendants, to compel the payment of certain rental moneys, which were payable according to the terms and provisions of a lease under which the New York, Lake Erie & Western Railroad Company is now operating the road of the company. The action was instituted by the