Chippewa Valley & S. Ry. Co. v. Chi., St. P., M. & O. Ry. Co.

• Decision Date: 03 December 1889
• Citation: 44 N.W. 17,75 Wis. 224
• Court: Wisconsin Supreme Court
• Parties: CHIPPEWA VALLEY & S. RY. CO. v. CHICAGO, ST. P., M. & O. RY. CO. ET AL.

75 Wis. 224

44 N.W. 17

CHIPPEWA VALLEY & S. RY. CO.

v.CHICAGO, ST. P., M. & O. RY. CO. ET AL.

Supreme Court of Wisconsin.

Dec. 3, 1889.

Appeal from circuit court, Dane county.

The amended complaint, in effect, alleges the incorporation and organization of the plaintiff, usually called the “Chippewa Company,” on June 15, 1881. That thereupon the work of locating and constructing its railway was commenced and prosecuted until the fall of 1882, when the same was completed from the Mississippi to Eau Claire, with a branch from near the mouth of the Red Cedar river by way of Menominee to Cedar Falls, and from that time the same has been operated as a railway company engaged in the business of a common carrier. That the defendant the Chicago, St. Paul, Minneapolis & Omaha Railway Company, usually known as the “Omaha Company,” was organized during all the times hereinafter mentioned. That June 15, 1881, it was the owner, among other things, of a railway extending from Elroy, through Eau Claire, to Hudson, and thence to St. Paul. That it was also the owner of a railway from Hudson, in a north-easterly direction, a distance of about 120 miles, known as the “North Wisconsin Railway.” That June 15, 1881, the defendant the Chicago, Milwaukee & St. Paul Railway Company, usually known as the “St. Paul Company,” was engaged in operating railways in the states of Wisconsin, Illinois, Minnesota, and Iowa, and the territory of Dakota. That one of its lines extended from La Crosse, by way of Wabasha, in Minnesota, to St. Paul. That about 3,000 miles thereof was in the states of Minnesota and Iowa, and the territory of Dakota, constructed over prairie lands almost entirely destitute of timber and lumber. That said Chippewa Company was organized by parties interested in and friendly to the St. Paul Company, with a view of connecting the lines of said last-named company with the extensive prairies and timber lands in north-western Wisconsin, and of reaching the parts of Lake Superior, and connecting them with said system of railways, and operating the same in connection with the St. Paul Company, and eventually transferring the same to the St. Paul Company, to be made a part of and be operated with it as a part of its system. That with that view it determined to and did construct said Chippewa Railway. That arrangements were made by said company for the extension of said railway from Cedar Falls, on this route, to Lake Superior, passing over the line of that part of the land grant hereinafter mentioned, more particularly from Superior to the point of intersection at or near Veazie with the North Wisconsin Railway. That, at or about the time of the organization of the plaintiff company there was organized a railway company, by the name of the “Chippewa Falls & Northern Railway Company,” with the object of constructing a railway from Chippewa Falls in a northerly direction, by way of Chetek, Rice Lake, and said land grant intersection at or near Veazie, and thence, either by its own line or a branch of said Omaha Company, to Superior. That that company was organized in the interest of said Omaha Company, and by the officers thereof, and controlled and substantially owned by that company. That it proceeded, with the assistance of said Omaha Company, to construct its road from Chippewa Falls, on the route indicated, towards Superior. That the Omaha Company subsequently and prior to January 10, 1882, acquired the ownership in form of said road so commenced and partially constructed by said company, and is now the owner thereof. That the lines of railway proposed to be constructed by the plaintiff and by the Chippewa Falls & Northern Railway Company and said Omaha Company were identical from Chetek northerly to Superior, a distance of about 125 miles. That by the acts of congress of June 3, 1856, and May 5, 1864, grants of land, described, were made to Wisconsin, among other things, for the construction of a railway from Madison or Columbus, by way of Portage City, to St. Croix, at a point described, and from thence to the west end of Lake Superior, and to Bayfield, upon the conditions named. That March 4, 1874, the legislature of the state accepted said grants, and thereupon granted to the Chicago & Northern Pacific Air-Line Railway Company all the right, title, and interest which the state then had, or might thereafter acquire, in or to that portionof the lands granted by said acts of congress as was or could be made applicable to the construction of that part of the railway lying between the points of intersection mentioned and the west end of Lake Superior, upon the express condition that said last-named company should construct, complete, and put in operation that part of its said railway above mentioned as soon as a railway should be constructed and put in operation from Hudson to said point of intersection, and within five years from said last-mentioned date, and should also construct and put in operation a railway from Genoa northerly at the rate of 20 miles per year; which said grant was duly accepted by said last-named company, May 1, 1874. That the name of said last-named company was afterwards, and about 1874, changed to the Chicago, Portage & Superior Railway Company, commonly known as the “Portage & Superior Company.” That by an act of the legislature of the state approved March 16, 1878, the time limited for the construction and completion of said last-named railway was extended for the term of three years, or to about May 1, 1882. That for more than two years prior to January 10, 1882, a railway had been completed and put in operation from Hudson to said point of intersection, as stated, but that said Portage & Superior Company had not, on or prior to said last-mentioned date, completed or constructed any portion of said land-grant road from said point of intersection to Superior, and had not constructed or put in operation any part or portion of any railway, and was not the owner of any railway whatever. That said last-named company was then wholly insolvent, and unable to complete or build any portion of said land-grant road, or put the same in operation, and that it had no means or ability to complete, construct, or operate a railway, and no property of any kind or description. That one Barnes, of New York, was the owner of nine-tenths of the bona fide stock thereof, and was, January 10, 1882, and for several weeks prior thereto had been, offering to sell his stock entire, with the control of said company, and all the franchises thereof, to different parties, especially to the plaintiff and the St. Paul Company and the Omaha Company. That it was well understood by all parties that the said land grant would lapse to the state on May 1, 1882. That the plaintiff, in its own behalf, and in the interest of the St. Paul Company, and the Omaha Company, were both proposing to apply to the legislature for said grant, and were both proposing to construct their line of road over the line of said land-grant road; and, in view of the facts stated, the plaintiff and the Omaha Company, respectively, were proposing to ask the legislature to confer said land grant upon them, and thus prevent the grant from lapsing and reverting to the United States, and thereby be lost to the state. That it was apparent to both parties that in case the plaintiff, aided and assisted by the St. Paul Company, and the Omaha Company, should enter into a contest before the legislature for that grant, they might defeat each other, and that no disposition of said land grant would be made, and that said road would not be constructed, and that said land grant would probably fail of its object and become forfeited. That it was manifest that only one road from the Chippewa valley, on the line indicated, to Lake Superior, was needed by the public for the transaction of business, and that, if an arrangement could be made by which both the companies interested could have traffic arrangements over the road to be constructed, all parties would be better accommodated, and all interests better subserved, than by the construction of two parallel and competing lines. That in view of the situation, and on January 10, 1882, said companies met, by their respective representatives and officers, and entered into a contract in due form of law, in the words and figures, omitting signatures, following:

“This agreement, made this 10th day of January, in the year A. D. 1882, between the Chicago, St. Paul, Minneapolis & Omaha Rail way Company, party of the first part, and the Chicago, Milwaukee & St. Paul Railway Company, party of the second part, witnesseth, the party of the first part, in consideration of the agreements of the party of the second part hereinafter expressed, agrees: (1) That in case the party of the first part shall obtain the land grant heretofore granted to the Chicago, Portage & Superior Railway Company in the state of Wisconsin, either by grant of the legislature or negotiation with the said Chicago, Portage & Superior Railway Company, or by both such grant and negotiation, the said party of the first part will give to the said party of the second part one equal fourth part of the lands received under said grant. (2) That it will grant to said party of the second part all rights, franchises, and property which it may obtain from the said Chicago, Portage & Superior Railway Company south of the junction of said road with the main line of the North Wisconsin Railway, including all grade and right of way of said company between said junction and the city of Chicago, which the party of the first part may acquire. (3) That it will make a contract of lease with the said party of the second part, giving said party of the second part an equal right with the party of the first part to run its trains from Chippewa Falls (or, if the party of the first part shall construct a road from Eau Claire to Chippewa Falls, then from Eau Caire by way of...