Appel v. Chi., M. & St. P. Ry. Co.

• Citation: 148 N.W. 513,34 S.D. 306
• Decision Date: 10 August 1914
• Docket Number: No. 3482.,3482.
• Court: Supreme Court of South Dakota
• Parties: APPEL v. CHICAGO, M. & ST. P. RY. CO.

34 S.D. 306

148 N.W. 513

APPEL

v.CHICAGO, M. & ST. P. RY. CO.^†

No. 3482.

Supreme Court of South Dakota.

Aug. 10, 1914.

Appeal from Circuit Court, Pennington County; Levi McGee, Judge.

Action by Margaret Appel against the Chicago, Milwaukee & St. Paul Railway Company. Judgment for defendant, and plaintiff appeals. Reversed, and new trial granted.Schrader & Lewis, of Rapid City, for appellant.

Robert Burton, of Rapid City, and Porter & Grantham, of Aberdeen, for respondent.

POLLEY, J.

Plaintiff, who is also appellant, is the owner of a number of town lots, with a dwelling house thereon, facing upon one of the streets in Rapid City. The building is occupied by plaintiff and her family as a residence. In her complaint she alleges that, while she was the owner of, and so occupying, said premises, and about the year 1907, the defendant, together with its predecessor in interest, the White River Valley Railway Company, located and constructed a railroad along and upon said street in front of plaintiff's said lots and dwelling house, and ever since said time has operated said railroad along said street, throughout its entire length, thereby rendering said street wholly impassable for vehicles and traffic, and destroying all means of egress and ingress to and from said lots, and diminishing the amount of light and air to which she would be otherwise entitled as an appurtenance to said premises; that, although defendant is vested with the right of eminent domain, no steps have ever been taken by defendant to ascertain the amount of damage caused plaintiff by the construction and operation of said railway; and that such construction and operation of said railway is without right or payment therefor. Plaintiff asks judgment that she recover damage in the sum of $1,000, and that such judgment be declared a first lien upon said railway and its appurtenances, and that, if said judgment be not paid within a time to be fixed by the court, said railway and appurtenances be sold to satisfy the same. The defendant, by its answer, denied that the property had been damaged $1,000, or any sum in excess of $75, and alleged that defendant had acquired said railway and right of way after the railway had been constructed and was in use for value and without any notice or knowledge of plaintiff's claim that said right of way had been acquired from, and full compensation made therefor to, the rightful owner thereof, and that plaintiff acquired her interest in said lots subject to defendant's right of way and right to use the same, and after full compensation had been made therefor.

It appeared as a fact that, prior to the construction of the said railroad, the city council had, by ordinance, granted the said White River Valley Company the right to construct and operate said railroad along and over the said street.

At the trial, and while plaintiff was putting in her evidence, it appeared as a fact that the said White River Valley Railway Company owned said railroad and operated the same from the time of its construction-some time about the year 1907-to about April, 1910, when it was sold and transferred to defendant, who had operated it since that time. Upon this state of the case, defendant moved the court to dismiss the action, upon the ground:

“That it appears by the testimony now in evidence before the court that the injury to the property, if any, was suffered at a time prior to the ownership or any interest of the defendant company in the property; that the injury was done by another than the defendant in court, and presumably by the grantor of the defendant, the White River Valley Railroad Company, the damage having been done by the White River Valley Railroad Company, and cause of action having matured at the time of the injury; therefore, the defendant now in court is not liable to the plaintiff on account thereof, and for the foreclosure of any lien for damages by reason of such injury the White River Valley Railway Company is a necessary party under the record in this case, and the action cannot be maintained as against the Chicago, Milwaukee & St. Paul Company alone.”

This motion was granted, and judgment entered dismissing the case at plaintiff's cost. A motion for new trial was overruled, and plaintiff appeals.

[1]Defendant does not question plaintiff's title to the lots involved; neither does plaintiff claim to be the owner of the fee to the street, and is not trying to recover for the increased burden placed thereon by the construction and operation of the railroad. Her claim to damage is based solely upon the interference with the use and enjoyment of her said dwelling house and the lots upon which it stands. The damage claimed therefor is consequential, rather than for a taking of any of her property; but that she has been damaged in the use and enjoyment of her property, to some extent, by the construction and operation of the railroad is admitted. It must also be conceded that the damage is what is known as original and permanent damage, and not a case of a continuing nuisance giving rise to a new cause of action from day to day during the continuance of the nuisance. This leaves for consideration but the single question: May the plaintiff recover her damage from the defendant (the present owner of the railroad), or must such damage, if recovered at all, be from the White River Valley Railway Company, the company that owned the same at the time of, and for some time following, its construction?

The measure of plaintiff's damage is the difference between the value of the property immediately before and immediately after the construction of the railroad. This having been done by the White River Valley Railway Company, it was this company, of course, that caused the damage; and, under respondent's theory, it is from this company alone that recovery can be had; respondent contending that it is not liable for damages caused by its predecessor. In this position respondent claims to be supported by the weight of authority, and cites and relies upon the following authorities: Guinn v. Ohio River R. R. Co., 46 W. Va. 151, 33 S. E. 87, 76 Am. St. Rep. 806;Atchison, T. & S. F. Ry. Co. v. Anderson, 65 Kan. 202, 69 Pac. 158;Denver & S. F. Ry. Co. v. Hannegan, 43 Colo. 122, 95 Pac. 343, 16 L. R. A. (N. S.) 874, 127 Am. St. Rep. 100; and Frankle v. Jackson et al. (C. C.) 30 Fed. 398.

[2]While it is true that these cases appear to support respondent's contention, it is also true that none of them present the same situation as the case at bar. In Guinn v. Ohio River R. R. Co. the railroad causing the damage was constructed by one company under a license from the city, and, after it had been operated for some time, was leased to another company. The action was against the lessee. The court held that “a lessee railroad company is not liable for a completed tort of its lessor railroad company,” and that the lessor was liable if either was. In Atchison, T. & S. F. Ry. Co. v. Anderson the railroad causing the damage was constructed and put into operation by one company under a license from the city, and thereafter leased to another company. The action was brought against the lessee alone. The court reversed the judgment against the lessee, but the reversal seems to be based upon the ground that there had been no change of ownership of the road, the court saying:

“In this case there was never any change of ownership, but, on the contrary, the company which laid down the track in 1889 owned it at the time this action was commenced in the court below and when the defendant in error obtained judgment against the Santa Fé Company.”

-clearly implying that, had the defendant taken by purchase instead of by lease, plaintiff might have recovered.

In Denver & Santa Fé Railway Company v. Hannegan, supra, the railroad was constructed under a permit of the city council, and, after being operated for a period of five years by the company that constructed it, was sold to the defendant, who immediately leased it to a third company, who was operating it at the time the action was commenced. It also appeared that, some time after the commencement of the action, but prior to the trial, the rails and ties used in the construction of the road were torn up and removed, and the street was entirely abandoned for railway purposes. Plaintiff had judgment, which, on appeal, was reversed, the court saying:

“Where, as in the case at bar, nothing appears in the record either by pleadings or proofs tending to show that the sale was made upon inadequate consideration, or that it was characterized by bad faith in any manner, the purchaser takes the property without liability for the payment of the vendor's unsecured debts. ‘Where a corporation transfers all of its assets to another corporation, which does not agree to assume the liabilities of the selling corporation, and both corporations maintain a separate existence, then, in the absence of fraud, the purchasing corporation will not be answerable for any debts of the selling corporation”’-citing 10 Cyc. 1268; Goldmark v. Magnolia Metal Co., 44 App. Div. 35, 60 N. Y. Supp. 425;Brundred et al. v. Rice, 49 Ohio St. 650, 32 N. E. 169, 34 Am. St. Rep. 589;Montgomery Web Co. v. Dienelt, 133 Pa. 585, 19 Atl. 429, 19 Am. St. Rep. 663.

The court was not satisfied to rest its conclusion upon this ground alone, however, and...