Ames v. State of Kansas Johnston Kansas Pac Ry Co v. Same

• Decision Date: 21 April 1884
• Citation: 111 U.S. 449,4 S.Ct. 437,28 L.Ed. 482
• Parties: AMES and others v. STATE OF KANSAS ex rel. JOHNSTON. KANSAS PAC. RY CO. v. SAME
• Court: U.S. Supreme Court

111 U.S. 449

4 S.Ct. 437

28 L.Ed. 482

AMES and others v. STATE OF KANSAS ex rel. JOHNSTON.

KANSAS PAC. RY CO.

v. SAME.

April 21, 1884.

John F. Dillon, Wager Swayne, and A. L. Williams, for plaintiffs in error.

W. A. Johnston, W. H. Rossington, and C. A. Seward, for defendants in error.

Each of these writs of error brings up for review an order of the circuit court remanding a case to the state court from which it had been removed, and the two cases may properly be considered together. The material facts are these:

The Leavenworth, Pawnee & Western Railroad Company was incorporated by the legislature of the territory of Kansas in 1855, to build a railroad from the west bank of the Mississippi river, in the town of Leavenworth, to or near Fort Riley, and from thence to the western boundary of the territory, which was the east boundary of Utah, on the summit of the Rocky mountains. 10 St. 283, c. 59, § 19. In 1857 this act was amended so as to authorize the construction of a branch from some favorable point on the main line to some point on the southern boundary of the territory. Where an easy connection could be made with a line of road extending to the Gulf of Mexico, and also of a branch to the northern boundary of the territory. The company was organized under these acts in 1857, and before January 1, 1862, had located its line from Leavenworth to Fort Riley, and had, to a large extent, secured its right of way and depot grounds.

On the first of July, 1862, the first Pacific Railroad act was passed by congress, gress, incorporating the Union Pacific Railroad Company, and providing for government aid in the construction of the several roads brought into the system, the Atlantic and Pacific coasts. 12 St. 489, c. 120. By section 9 of this act the Atlantic and Paciflc coasts. 12 St. 489, c. 120. By section 9 of this act the Leavenworth, Pawnee & Western Railroad Company of Kansas was authorized to construct a railroad and telegraph line from the Missouri river, at the mouth of the Kansas river, on the south side thereof, so as to connect with the Pacific Railroad of Missouri, to the point in the territory of Nebraska then established as the eastern terminus of the Union Pacific road. Provision was made for government aid to this company in all respects like that to the Union Pacific. Section 16 is as follows: 'That at any time after the passage of this act all of the railroad companies named herein, and assenting hereto, or any two or more of them, are authorized to form themselves into one consolidated company. Notice of such consolidation, in writing, shall be filed in the department of the interior, and such consolidated company shall thereafter proceed to construct said railroad and branches, and telegraph line, upon the terms and conditions provided in this act.' The Leavenworth, Pawnee & Western Company accepted the provisions of this act, and was thereafter designated as the Union Pacific Railroad Company, Eastern Division. By the act of July 2, 1864, c. 216, § 12, (13 St. 361,) the company was required to build its railroad from the mouth of the Kansas by way of Leavenworth, or, if that was not deemed the best route, to build a branch from Leavenworth to the main stem at or near Lawrence. This act also made provision, by section 16, for the consolidation of any two or more corporations embraced in the system, upon such terms and conditions as they might agree upon, not incompatible with the laws of the states in which the roads of the companies might be.

On the third of July 1866, c. 169, (14 St. 80,) the company was permitted to make its connection with the Union Pacific at any point not more than 50 miles westerly from the meridian of Denver. By another act passed March 3, 1869, c. 324, (15 St. 324,) the company was authorized to extend its road to Denver, in the territory of Colorado, and from there to make its connection with the Union Pacific at Cheyenne, over the road of the Denver Pacific Railway & Telegraph Company, a Colorado corporation; power being given to contract with the last-named company for that purpose. On the same day a joint resolution was passed by congress, (No. 23, 15 St. 348,) authorizing the Union Pacific Railroad Company, Eastern Division, by a resolution of its directors, filed in the office of the secretary of the interior, to change its name to the Kansas Pacific Railway Company. Under this authority the road was built from its junction with the Missouri Pacific Railroad in Kansas City, Missouri, through Fort Riley, in Kansas, to Denver, in Colorado, and government aid was furnished it under the acts of congress. From Denver it formed its connection with the Union Pacific road at Cheyenne, over the road of the Denver Pacific Company. It also built a branch from Leavenworth to Lawrence, but the road from Fort Riley to the original eastern terminus of the Union Pacific was never constructed.

On the twenty-fourth of January, 1880, the Union Pacific Railroad Company, the Kansas Pacific Railway Company, and the Denver Pacific Railway & Telegraph Company, acting under the authority of section 16 of the Pacific Railroad act of July 1, 1862, and section 16 of the act of July 2, 1864, entered into an agreement for the consolidation of the three corporations into one, by the name of the Union Pacific Railway Company, and from that time the road of the Kansas Pacific Company, including that portion which lies in Kansas, has been operated and managed as the Kansas Division of the Union Pacific Railway Company. At the first session of the legislature of Kansas after this consolidation was effected, a resolution was passed directing the attorney general to inquire into its legality, and to report whether, in his opinion, the consolidated company was amenable to the laws of the state, whether the Union Pacific Railroad Company had usurped or was exercising rights and franchises within the state not authorized by law, or had in any manner failed to comply with or had violated any of the laws of the state, whether the Kansas Pacific Company was in law an existing corporation of the state; and whether the state had lost jurisdiction over the property of the corporation. At the next session another resolution was passed, directing the attorney general to institute proper proceedings in the supreme court of the state, 'in the nature of quo warranto, against the Kansas Pacific Railway relinquishment, and surrender of its relinquishment, and surrender of its powers as a corporation to such consolidated company, and also to institute like proceedings against the consolidated company, the Union Pacific Railway Company, for usurping, seizing, holding, possessing, and using the franchise and privileges, powers and immunities, of the Kansas Pacific Railway Company in the state of Kansas.'

Under these instructions the present suits were brought in the supreme the Kansas Pacific Company sets the Kansas Pacific Company sets forth the acts of the territorial legislature of Kansas incorporating the company and extending its powers, passed in 1855 and 1857; the organization of the company under its charter; the acts of congress, passed July 1, 1862, and July 2, 1864, granting aid to the company; and the construction of the road. It then avers 'that on the twenty-fourth of January, 1880, the said Kansas Pacific Railway Company wrongfully and unlawfully attempted to consolidate its said corporation with the Union Pacific Railroad Company, a corporation chartered under the said acts of congress of 1862 and 1864, whose line runs from the Missouri river at or near Omaha, Nebraska, to Ogden, in Utah territory, and the Denver Pacific Railway & Telegraph Company, whose line begins at the city of Denver, in the state of Colorado, and runs in a westward direction to a junction with the Union Pacific Railroad Company, at a place called Cheyenne, in the territory of Wyoming. And the said Kansas Pacific Railway Company unlawfully and wrongfully attempted to confer upon the said consolidated company all of its franchises, immunities, liberties, and privileges granted by virtue of its charter aforesaid, and to merge the same into a pretended corporation, not created by the laws of the territory or state of Kansas, nor owing any duty to the territory or state of Kansas, but a pretended corporation, created, if at all, by acts of congress, and amenable only to federal control, and subject only, as to its rights and the causes of action which might thereafter exist against it, to the jurisdiction of the federal tribunals. And the said attorney general gives the court further to understand and be informed that the said Kansas Pacific Railway Company unlawfully and wrongfully entered into articles of consolidation with said Union Pacific Railroad Company and the said Denver and Pacific Railroad & Telegraph Company, which were expressly in violation of its charter, and in conflict with the duties and obligations owing by it to the state of Kansas under the provisions and terms of its charter aforesaid; and further, that said articles were in conflict with the laws of the state of Kansas respecting railroad corporations and the right of railroad companies to consolidate, and were not compatible with such laws.'

The bill then sets forth a copy of the articles of consolidation, from which it appears that the sole and only authority relied on for the consolidation was that contained in the several acts of congress, and that the intent of the parties was to organize the company thereby formed 'under the said acts of congress, and to make the said acts of congress the charter or constituent acts of this company, as fully as if the same were incorporated herein at large.' The contract then appointed directors of the new company, and the place for holding the annual meeting of stockholders, until otherwise ordered, was fixed at the company's office in the city of New York. The then existing by-laws of the Union Pacific...