Commonwealth v. Chicago, St. L. & N.O.R. Co.

• Decision Date: 30 January 1907
• Citation: 124 Ky. 497,99 S.W. 596
• Parties: COMMONWEALTH, TO USE OF LOUISVILLE SCHOOL BOARD, v. CHICAGO, ST. L. & N. O. R. CO.
• Court: Kentucky Court of Appeals

99 S.W. 596

124 Ky. 497

COMMONWEALTH, TO USE OF LOUISVILLE SCHOOL BOARD, v. CHICAGO, ST. L. & N. O. R. CO.

Court of Appeals of Kentucky.

January 30, 1907

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

"To be officially reported."

Action by the Louisville school board, suing in the name of the commonwealth, to recover certain real estate as escheated property. From a judgment dismissing its petition, plaintiff appeals. Reversed and remanded.

Thomas H. Paynter, Randolph H. Blain, D. W. Sanders, Paul F Semonin, W. Rumsey Kinney, and Hardin H. Herr, for appellants.

Trabue Doolan & Cox, and J. M. Dickinson, for appellees.

O'REAR C.J.

More than five years before the institution of this suit the Chicago, St. Louis & New Orleans Railroad Company (the lessor by a perpetual lease to appellee Illinois Central Railroad Company) became the owner in fee of certain lots of real estate in the city of Louisville, this state. It is charged in the petition in this case that the said real estate was not necessary or proper, and was not being used, for carrying on the legitimate business as a railroad corporation by the railroad companies named and sued, and had not been so needed or used for more than five years before the beginning of the suit. The action was instituted by the Louisville school board, suing in the name of the commonwealth for its behalf to recover the property described, as escheated property. Section 192 of the Constitution of Kentucky provides "No corporation shall engage in business other than that expressly authorized by its charter, or the law under which it may have been or hereafter may be organized, nor shall it hold any real estate, except such as may be proper and necessary for carrying on its legitimate business, for a longer period than five years, under penalty of escheat." Section 567, Ky. St. 1903, likewise provides: "No corporation shall engage in business other than that expressly authorized by its articles of incorporation or amendments thereto; nor shall any corporation, directly or indirectly, engage in or carry on in any way the business of banking, or insurance of any kind, unless it has become organized under the laws relating to banking and insurance; nor shall any corporation hold or own any real estate, except such as may be necessary and proper for carrying on its legitimate business, for a longer period than five years, under penalty of escheat." Section 2971, Ky. St. 1903, a part of the laws regulating the government of cities of the first class, reads: "So much real, personal or mixed property in the city, which, from alienage, defect of heirs, failure of kindred, or other causes, shall escheat to the commonwealth of Kentucky, shall vest in the board for the use and benefit of the schools. Said board may, in the name of the commonwealth, for the use and benefit of the public schools of the city, by its president or other officer to be designated by it, enter upon and take possession of said property, or sue for and recover the same by an action at law or in equity, and without office found. The board may sell and convey any of such property by a warranty deed or otherwise."

The circuit court sustained a special demurrer to the petition, interposed by defendants, appellees, as suggesting the plaintiffs' incapacity to maintain the action. The petition was dismissed by the circuit court, which rested its decision largely upon the opinions of this court in Commonwealth v. Wisconsin Chair Co., 27 Ky. Law Rep. 170, 84 S.W. 535, and Commonwealth v. Farmers' Bank of Kentucky, 27 Ky. Law Rep. 153, 84 S.W. 732. Each of these cases was brought by the escheator of Ballard county to recover as escheated estate certain lands held by the corporations sued, and which it was alleged were not needed or proper for their legitimate business, and had not been needed nor used in their legitimate business for more than five years. Demurrers were sustained to each petition, on the ground that the escheator had not the right to maintain the actions. Chapter 44, Ky. St. 1903, relating to escheats, deals alone with escheats which are worked as the result of failure of heirs or devisees, or the failure of the owner to take possession of the land for a certain number of years. That chapter provides for the appointment of an escheator, and defines his duties. It reads: "The escheator shall institute proceedings in the name of the commonwealth in the circuit court of the county in which the land lies that has vested in the commonwealth under the provisions of this chapter for the recovery of same." Section 1611, Ky. St. 1903. That chapter does not provide for the escheat of lands owned by a corporation, for whatever cause.

In the opinions of the two cases above cited, the court was careful to restrict its decision to the single proposition that the escheator's power was limited by the statute to the recovery of lands escheated by the provisions of chapter 44, and not having authority to sue for lands escheated from any other cause, he could not maintain the actions. Those opinions may be laid out of our consideration of this case, at least until it is determined whether the Legislature has conferred the power upon the school board to maintain actions to recover lands escheated to the commonwealth under the provisions of section 192 of the Constitution. The construction of section 2971, Ky. St. 1903, supra, becomes necessary to a decision of the case. The contention of appellee is, and such seems to have been the view of the circuit court, that the section deals alone with escheats as anciently applied. This view results from a construction of the language used, namely, "from alienage, defect of heirs, failure of kindred, or other causes," it being asserted that the general term "or other causes" is to be construed as limited by the preceding specific terms. It is claimed in this connection that the word escheat as used in the section helps out that view of the subject because as it was employed anciently only with respect to cases where there was no known heir to take the title to lands, and inasmuch as the section deals specifically with that class of event, the general clause is reasonably and most naturally referable to other instances not enumerated of the genera specifically named.

Before examining further the rule of construction invoked by appellee, we deem it important to examine the premises upon which it is called into action. The word "escheat" is an old one, and a common in the law. It seems to have been derived from a French word, "echeoir," meaning to happen. It is also defined in its etymology to mean "to fall to; to fall to the lot of; to fall back." In feudal tenure the fief held the land of some superior on condition of rendering him services. Anciently the fee was limited to the use of the land by the vassal (Spelman, Feuds, c. 1), but this view was soon abandoned in favor of the one which now prevails; that is, that it is an estate of inheritance (2 Bl Com. 106). But as the vassal and his heirs were not deemed to hold it upon the same condition, to wit, that of rendering service to the lord of the manor, when the tenant died, and there were no heirs to whom the lord could look for service, the title demised to the original tenant reverted to the lord. It fell back. Hence it was described as escheat. Or, if the tenant, by reason of attainder of blood, was rendered incapable alike of holding or transmitting the title, the feud fell back into the lord's hands by a termination of the tenure. 1 Washb. Real Prop. 2. By a logical extension of the doctrine, when the line of inheritance failed, and the tenure was determined by any unforeseen event, the land resulted back, by a kind of reversion, to the grantor, or lord of the fee. 2 Shars. Bl. Com. 244. As in the United States there are no feudal tenures, escheats are invariably held to go to the state as the sovereign within whose jurisdiction the property may be situated, by way of reversion of the title to its source. Personal property never escheated in the original and technical sense of the term. Commonwealth v. Blanton's Ex'rs, 2 B. Mon. 393. January, 1840, the Legislature provided: "Estates within this commonwealth as to which the owner had previously died or might subsequently die intestate, without legal heirs or distributees, should be vested in said commonwealth without office found"--and it was held in Commonwealth v. Blanton, supra, and in White v. White, 2 Metc. 185, that personal, as well as real, estate was included. The same term and the same idea are carried forward into the existing statutes in this state. Although title to land in this state is allodial, as it is throughout the states of the Union, it seems to be the universal rule, in consonance with that of all civilized society, that, when the title lapses by reason of a failure of heirs, and possibly for other reasons, it vests in the public, and is at the disposal of the government. Shars. Bl. Com. 244, 245. The reason is now probably that, as no one of the public could rightfully claim it or enter upon it to the exclusion of others, and as it ought not to be suffered to lie barren, the government in behalf of all, has a better right to it than any one, although the right is also likened to and is by many supposed to rest upon the doctrines of the feud as they existed at the common law. The title to all lands within the state was formerly in the state, which had...