Brown v. Wyandotte & Southeastern Railway Co.

• Decision Date: 21 April 1900
• Citation: 56 S.W. 862,68 Ark. 134
• Parties: BROWN v. WYANDOTTE & SOUTHEASTERN RAILWAY COMPANY
• Court: Arkansas Supreme Court

56 S.W. 862

68 Ark. 134

BROWN v. WYANDOTTE & SOUTHEASTERN RAILWAY COMPANY

Supreme Court of Arkansas

April 21, 1900

Appeal from Garland Chancery Court, LELAND LEATHERMAN, Judge.

STATEMENT BY THE COURT.

This suit was brought by the Wyandotte & Southeastern Railway Company to condemn a right of way over a logging road owned mainly by J. H. Hamlin & Son, in which Joseph Brown also had in interest. Hamlin & Son and Joseph Brown were made defendants, and also Mrs. Brown, the wife of Joseph Brown. Hamlin & Son answered, and asked that their rights under the contract with Brown be protected.

Brown answered, denying the corporate existence of the Wyandotte & Southeastern Railway Company; denying that it had filed the preliminary survey required by section 5169 of Sandels & Hill's Digest, or that five per cent, of the original stock had been actually paid in cash; stating that he had a sawmill plant and property at Gifford and in its vicinity worth $ 500,000, and 17,500 acres of land, accessible over this logging road, worth $ 25 per acre for timber, and, if deprived of the logging road, his property would be destroyed, etc.; and claiming the right to buy the logging road, under his contract with Hamlin & Son, at the price of the old iron on the road. He alleged that the suit was a scheme to transfer his interest in the property to the Malvern Lumber Company; that the incorporation of the plaintiff was not in good faith, but to promote private interests only; that there was no public necessity for the road. He made his answer a cross complaint against Hamlin & Son, and asked that the cause be transferred to equity which, on his motion, by consent, was transferred to equity. Brown filed an amendment to his answer, stating that on June 23, 1896, Hamlin & Son had given him notice that they would no longer operate the logging road jointly with him, and that on July 16, 1896, they notified him to stop using it, and alleged that by the terms of the contract Hamlin & Son were bound to keep the logging road in a condition to permit the safe running of cars at the rate of twenty miles an hour which they had failed and neglected to do, to his damage in the sum of $ 7,000; that Hamlin & Son tore up two miles of road, running through sections 32 and 33, in township 4 south, 15 west, called the "northeast spur," thereby damaging him $ 2,000. He claimed damages for terminal facilities, worth $ 50 per month, according to his estimate.

Plaintiff answered; denied the incorporation was fraudulent; charged Brown with selfish motive in his opposition, etc. Brown filed an amendment to his answer, alleging that the plaintiff had forfeited its corporate existence by failing to construct and put in operation five miles of its railroad within the period prescribed by the statute.

The chancellor sustained the incorporation as valid; held that Brown, under the contract with Hamlin & Son, had the right to buy the road at the value of the old iron delivered at Gifford; sustained the right of condemnation of the logging road by the Wyandotte & Southeastern Railway Company; and found the value of the road to be $ 5,040 without the iron or that Brown was damaged in this amount by the condemnation of the property, and in the sum of $ 75 dollars for injury to lands adjoining, and that Mrs. Margaret Brown was damaged $ 35 on account of land of hers taken by said company,-and decreed accordingly. The court also found that the road had been kept in good repair by Hamlin & Son, and that Brown was not entitled to recover on account of taking up the "spur track," nor for terminal facilities at Gifford, for which Brown claimed compensation, nor for moneys expended by Brown in repairing the logging road, nor for failure of Hamlin & Son to keep said logging road in good condition; and that he was not entitled to claim any set-off by reason of such claim for damages; and dismissed his cross-complaint against Hamlin & Son, except as provided for in the contract between Hamlin & Son and Brown, and that the railway company, Hamlin & Son, and Joseph Brown each pay one-third of the costs, to all of which Joseph Brown and Margaret Brown excepted at the time, and have appealed to this court. Hamlin & Son have taken a cross-appeal.

Judgment affirmed.

Wood & Henderson, for appellants, Brown et at.

The railway company had neither authority nor right to condemn the logging road, because it has failed to comply with the requirements of the law governing the formation of corporations in this state. Sand. & H. Dig., §§ 6148, 6149, 6152. The evidence shows that the railway company was fraudulently incorporated: also, the filing of the profile map required by section 6170 of Sandels & Hill's Digest was a condition precedent to the right to construct any part of the road, or to institute condemnation proceedings. To the point that a railway company, in order to have the right to exercise the power of eminent domain, must comply with the statute granting such right, see:--7 Enc. Pl. & Pr. 468-9, 536, 542 and notes; 10 Am. & Eng. Enc. Law, 1053-4, 1057; 58 F. 751, 756; Lewis, Em. Dom. § 600; 37 Am. & Eng. R. Cas. 430; 36 id. 234; 44 id. 193; ib. 43; 57 id. 536; 57 id. 612; 19 Wis. 459; 40 Wis. 157; 10 Am. & Eng. R. Cas. 23; 120 Mass. 352; 55 Pa.St. 16; 23 Conn. 189; 73 Am. Dec. 17. The company had no power of condemnation for the additional reason that it had failed to build any part of its road within the limit fixed by the act of March 31, 1885 (Acts 1885, p. 170). The forfeiture of the company's charter for non-compliance with this act can be set up by the owner of property which the company is seeking to condemn. 72 N.Y. 245; 106 Mo. 566; 30 Me. 498. The evidence shows that the company has no real right to take Brown's property; and a court of equity has power to grant him relief by injunction. 7 Enc. Pl. & Pr. 708; 62 Am. Dec. 372; 32 A. 680; id. 381; 32 id. 19; 18 id. 431; 9 id. 754; 3 Pom. Eq. § 1345; 6 Thomps. Corp. § 7772; 4 L.R.A. 275; 31 N.J.Eq. 475; 75 Ill. 113; 68 Ia. 164. The court will, under some circumstances, control the location of a railroad. 7 Am. Rep. 385; Rand, Em. Dom. 167. Under his contract with Hamlin & Co., Brown was entitled to the rails at their market price elsewhere, with necessary freight subtracted. 13 L.R.A. 770; 23 Wall. 471; 1 Benj. Sales, 102, 978, 1120-1; 69 N.Y. 384; 47 N.Y. 167. Brown should also be allowed damages to compensate him for the loss to his other property, by the removal of the road. 45 Ark. 252; 44 Ark. 258; 39 Ark. 107; 42 Ark. 528; 54 Ark. 140; 35 Ark. 622; 10 Am. & Eng. Enc. Law, 1169, 1173, 1174, 1175.

Hill & Auten, and Rose, Hemingway & Rose, for appellees, and cross appellants.

Under the decision in 43 Ark. 112, cited by appellants, there is nothing in the evidence that points to fraud on the part of the incorporators of the railway company. "The making of a public improvement cannot be enjoined because it is unnecessary, or is being made to further private ends." Lewis, Em. Dom. § 646; 57 Ark. 359, 364. On condemnation proceedings, valid corporate existence is presumed from the face of a valid charter. Mills, Em. Dom. 82. The failure of a corporation to fulfill what the law requires of it can be urged, as a ground of forfeiture of its charter, by the state alone. In like manner it has been held that only the state could assert a forfeiture of a donation of public lands.46 Ark. 97; 47 Ia. 200. So it is with railroad corporations which have failed to construct their road within the time limit prescribed by law. 2 Wall. 44, 63; 5 id. 267; 92 U.S 50, 66; 106 U.S. 360, 368; 115 id. 470, 473; 103 id. 739, 744. The word "void," as applied in the statute to charters of companies failing to comply with the requirements of the law, means voidable at the instance of the state. Endl. Int. Stat. § 269. These requirements were mere conditions subsequent, and must have been acted on by the state, to effect a forfeiture. 5 Ark. 604; 18 Ark. 338; 20 Ark. 204. They cannot be raised as grounds for attack upon the corporate existence in a collateral proceeding by a private party. 20 Ark. 450; 31 Ark. 476; 43 Ark. 120; 47 Ark. 269; 167 U.S. 646; 20 Am. & Eng. R. Cas. 17; 79 Mo. 632; 10 N.E. 349; 57 N.Y. 401; 70 N.Y. 327; 2 Mor. Corp. §§ 1015, 1023; 10 Am. & Eng. R. Cas. 306; S. C. 105 Ill. 73; 7 Cold. 420; 13 La. 497; 32 Barb. 358; Pierce, Rys. 11, 12; 14 Am. & Eng. R. Cas. 43; 33 id. 84; 4 Am. & Eng. Corp. Cas. 53; S. C. 89 Md. 410. Applying the maxim, Id certum est quod certum reddi potest, the preliminary survey was sufficient. 3 Ark. 18; 2 Dev. Deeds, § 1020. That the survey was sufficient, see: 1 Zab. 448, 450; 9 Kas. 137. The required 5 per cent of the capital stock was paid--invested in rails. The fact that these rails were bought of one of the directors is no objection. 59 Ark. 562. The reduction of capital stock was authorized and legal. Acts 1895, p. 19. There being no fixed period for the duration of the contract between Brown and Hamlin & Son, it was terminable at will. 3 Kent's Comm. 53; 2 Bates, Part. 571; Laws. Bail. § 29;13 Am. & Eng. Enc. Law, 977; Wood, L. & Ten. §§ 14, 15.There can be no such thing as a constructive removal in thiscase. A right of way is an easement--an interest in land.10 Mass. 188; 12 Allen, 461; 101 Mass. 68; 113 id. 59. There was no legal abandonment. 2 Wash. R. Prop. (4 Ed.) 370. The measure of Brown's damages is the value of his land that was taken, together with incidental damages to his other lands. 39 Ark. 168; 47 Ark. 527; 55 Ark. 333; 57 Ark. 207; 53 Ark. 434. Brown should be charged for the rails, the market price, plus freight to Gifford. 5 Am. & Eng. Enc. Law, 31. 14 id. 467; 23 Wall. 471.Brown is estopped, by his acquiescence in the change ofthe northeast spur, from claiming damages for its removal.51 Ark. 492; ...