## Facts

- A New York legislative act granted seven named persons the privilege to operate stage-wagons on a specified route between Albany and the New Jersey line and imposed a $500 penalty on unauthorized competing operators, payable to the grantees.
- Donelly was one of the seven named grantees and claimed responsibility for a portion of the route.
- Vandenbergh operated a stage-wagon on the route but was not named in the act.
- Two named grantees, Tremble and Vanderhoff, authorized Vandenbergh to operate, including on the portion Donelly claimed.
- Donelly sued to recover the $500 statutory penalty, alleging Vandenbergh was an unauthorized competitor.
- A jury returned a verdict for Donelly and awarded the $500 penalty.
- Vandenbergh sought review in the New York Supreme Court.

## Issues

1. Whether the statute created a joint, undivided franchise in the seven named grantees or several exclusive rights in separate segments of the route.
2. Whether, absent a legally established division of the route, co-grantees could authorize a third party to operate stage-wagons on the route, including on a segment claimed by another grantee.
3. Whether the evidence established a definitive partition giving Donelly exclusive rights sufficient to trigger the statutory penalty against Vandenbergh.

## Decision

- The court reversed the judgment for Donelly and set aside the $500 penalty.
- The court found insufficient proof that the route had been legally or definitively divided into exclusive segments among the seven grantees.
- Treating the statutory privilege as a joint interest absent clear partition, the court concluded Tremble and Vanderhoff could authorize Vandenbergh to operate under the grant.
- Because Vandenbergh operated with authority from named grantees, his operation did not constitute an unauthorized competition subject to the penalty.
- A dissent would have treated the franchise as partible and Donelly’s segment as exclusive, making Vandenbergh liable as a stranger to that portion.

## Legal Principles

- Private statutory grants conferring operational privileges are construed narrowly; exclusive rights are not implied beyond clear statutory language and clear proof.
- Where a statutory penalty is sought, ambiguity about the scope of exclusivity or the existence of a partition is resolved against imposing the penalty.
- Absent a proven partition, co-grantees of a joint statutory privilege may license or authorize third parties to exercise the privilege, even if another co-grantee objects.

## Conclusion

The court rejected enforcement of a statutory penalty where the plaintiff failed to prove an exclusive, partitioned right in part of a legislatively granted stage-wagon route, and it held that co-grantees could authorize a third party to operate under an undivided joint franchise.


Donelly v. Vandenbergh, 3 Johns. 27 (N.Y. Sup. Ct. 1808)