Birmingham & A.R. Co. v. Louisville & N.R. Co.

• Decision Date: 02 July 1907
• Citation: 44 So. 679,152 Ala. 422
• Parties: BIRMINGHAM & A. R. CO. v. LOUISVILLE & N. R. CO.
• Court: Alabama Supreme Court

44 So. 679

152 Ala. 422

BIRMINGHAM & A. R. CO. v. LOUISVILLE & N. R. CO.

Supreme Court of Alabama

July 2, 1907

Appeal from City Court of Talladega; G. K. Miller, Judge.

Bill by the Louisville & Nashville Railroad Company against the Birmingham & Atlantic Railroad Company and another. From a decree overruling motions to dismiss the bill for want of equity and to dissolve a temporary injunction, defendant railroad company appeals. Affirmed.

Cecil Browne, for appellant.

Whitson & Harrison, for appellee.

DENSON J.

The Louisville & Nashville Railroad Company filed this bill in the city court of Talladega on the 19th of March, 1907 against the Birmingham & Atlantic Railroad Company and the Louisville Property Company. In the bill it is averred that complainant is a common carrier, engaged in operating a railroad, through the city of Talladega, from Calera to Gadsden, Ala., connecting with its main line at Calera, Ala that the Birmingham & Atlantic Railroad Company is engaged in operating a railroad from Pell City to Talladega, the latter place being its terminus; that the complainant's passenger and freight stations at Talladega had become inadequate for the proper accommodation of the public and the efficient discharge of complainant's duties to the public as a common carrier; and that in order to build a new and enlarged passenger and freight station in the city of Talladega, and to provide adequate terminal facilities for its patrons and the public, complainant, during the fall of 1906, purchased valuable property adjoining and near to its present depots, paying therefor $25,000. The property purchased is accurately described in the bill, and the names of the persons from whom purchased are set forth. Part of the property is the north end of lot No. 107 in the city of Talladega, described in the bill, and purchased from J. E. Stone for $2,500 in cash, paid by the complainant. It is alleged that all of the property so purchased by the complainant was conveyed to the Louisville Property Company by the parties from whom complainant purchased, but that complainant furnished all of the purchase money therefor and purchased the same for railroad uses and purposes, for the construction of its new depots and station and the necessary tracks to serve the same. It is averred that the said property was conveyed to the Louisville Property Company upon its agreement to hold said lands for complainant's use and benefit and in trust for the complainant, and to convey the same to complainant as soon as it should be ready to construct its new freight and passenger depots or station in the city of Talladega and the necessary tracks for use in connection with the same. It is averred that the complainant is preparing to use the property for such purposes. Continuing, the bill avers that on March 9, 1907, the Birmingham & Atlantic Railroad Company filed its petition in the probate court of Talladega county to condemn a portion of said lot 107; copies of the petition for condemnation and plats showing the property sought to be condemned being attached as exhibits to the bill and made a part thereof. The bill avers that before and at the time the petition for condemnation was filed the petitioner had full notice and knowledge of complainant's equitable title in the property sought to be condemned, and that it had been fully advised of complainant's plans as to such proposed new passenger station and terminal facilities at Talladega as the same were shown on plats of lands so equitably owned by the complainant before the filing of the petition. The bill further avers that the portion of lot 107 so equitably belonging to complainant that is sought to be condemned by the petitioner in the condemnation proceeding is the key to the use of all the property purchased by the complainant for its new station and terminals, and that without the use thereof complainant could not reach with its line of railroad such property so acquired for such uses, or the portion thereof that is to be so used for such new station; that it is necessary for appellee to use the same for its own tracks; and that it was about to apply it to such public use. The Louisville Property Company and J. E. Stone are made parties defendant to the condemnation proceedings, but complainant is not made a party thereto. The prayer of the bill is for a temporary injunction, restraining the Birmingham & Atlantic Railroad Company from proceeding with the condemnation suit as to that portion of lot 107 conveyed by J. E. Stone to the Louisville Property Company, for which complainant paid the purchase money, and for the enforcement of a resulting trust against the Louisville Property Company, as to said portion of lot 107, and a divestiture of the legal title out of the Louisville Property Company and the investiture of same in complainant. It is also prayed that, on final hearing, the temporary injunction be made perpetual. The Birmingham & Atlantic Railroad Company moved to dismiss the bill for the want of equity, assigning several grounds for the motion, and also moved to dissolve the injunction on the same grounds as those assigned for the motion to dismiss. The chancellor overruled both motions, and from his decree the Birmingham & Atlantic Railroad Company takes this appeal.

It is important to determine first the nature and extent of complainant's interest in the lands, before proceeding to the discussion of other questions presented for consideration. Complainant alleges that its interest is a resulting trust. Resulting trusts, says Mr. Pomeroy, "arise where the legal estate is disposed of or acquired, not fraudulently or in the violation of any fiduciary duty, but the intent in theory of equity appears or is inferred or assumed from the terms of the disposition, or from accompanying facts and circumstances, and that the beneficial interest is not to go with the legal title. In such case a trust 'results' in favor of the person for whom the equitable interest is thus assumed to have been intended, and whom equity deems to be the real owner." 1 Pomeroy's Eq. Jur. (3d Ed.) § 155; 3 Pomeroy, § 1031. The same distinguished author gives this illustration of a resulting trust: "Where a purchase has been made, and the legal estate is conveyed or transferred to A., but the purchase price is paid by B." 3 Pomeroy, §§ 1031, 1037. The averments of the bill, it seems clear, bring the complainant's interest in the lands directly within the definition and illustration given, and show that the transactions which gave rise to the execution of the conveyance and culminated in its execution should be construed as creating a resulting trust by operation of law. This doctrine is fully indorsed and recognized by numerous decisions of this court. Haney v. Legg, 129 Ala. 619, 30 So. 34, 87 Am. St. Rep. 81; Sanders v. Steele, 124 Ala. 415, 26 So. 882, and authorities there cited; Long v. Mechem, 142 Ala. 405, 38 So. 262. "The interest of the cestui que trust is not a mere 'equity.' It is an equitable estate in the land, and may be conveyed, transferred, devised, or otherwise dealt with as property." 3 Pomeroy's Eq. Jur. § 1043. But it may be cut off by a sale to a bona fide purchaser without notice. Lehman v. Lewis, 62 Ala. 129.

It is urged by the respondent (appellant) that the trustee is the only necessary party to the condemnation proceedings, and that upon it devolved the duty of making all the defenses against the application, for the protection of the rights of the cestui que trust, that could have been made, and that in the absence of an averment in the bill that the trustee would not protect the interest of the cestui que trust, or that it had refused to do so, the bill is without equity, and no ground is shown for an injunction. Section 1713 of the Civil Code of 1896, as the same is amended by an act passed at the session of 1903 of the Legislature and approved October 1, 1903 (Gen. Acts 1903, p. 374), requires that applications for the condemnation of lands "must describe the several tracts and state the names and residence of the owners of each tract, if known, or, if unknown, must show that reasonable diligence has been used to ascertain the same." Here, we have seen, the party holding the legal title to the land in question was made a party to the proceedings for condemnation, its name was given as the owner, and, it being a nonresident, publication of notice was made as required by the statute, and, notwithstanding the petitioner was duly notified of the status of the title and that the Louisville & Nashville Railroad Company held an equitable estate in the lands--was the beneficial owner of the same--it was not made a party. In New & Old Decatur Belt & Terminal R. R. Co. v. Carcher, 112 Ala. 676, 21 So. 825, it is held that, the exercise of the right of eminent domain being a power delegated by the Legislature, statutes conferring such power must be strictly construed; further, that our statutes relating to condemnation, in the use of the word "owner," contemplate...