McCabe's Adm'x v. Maysville & B.S.R. Co.

• Decision Date: 05 March 1902
• Parties: McCABE'S ADM'X v. MAYSVILLE & B. S. R. CO. et al. [1]
• Court: Kentucky Court of Appeals

66 S.W. 1054

112 Ky. 861

McCABE'S ADM'X v. MAYSVILLE & B. S. R. CO. et al. ^[1]

Court of Appeals of Kentucky.

March 5, 1902

Appeal from circuit court, Mason county.

"To be officially reported."

Action by Peter McCabe's administratrix against the Maysville &amp Big Sandy Railroad Company and the Chesapeake & Ohio Railway Company, to recover damages for the death of plaintiff's intestate. Judgment removing cause to United States circuit court, and plaintiff appeals. Reversed.

A. E Cole & Son, for appellant.

W. H Wadsworth, for appellees.

HOBSON J.

Appellant Emma R. McCabe, as administratrix of Peter McCabe, deceased, filed this suit in the Mason circuit court against appellees, the Maysville & Big Sandy Railroad Company and the Chesapeake & Ohio Railway Company, to recover damages for the death of her intestate, who, she alleged, was killed in September, 1901, while walking along Third street in the city of Maysville, by an engine and train of the Chesapeake & Ohio Railway Company, by reason of the negligence of its agents in charge thereof, as well as the negligence of the Maysville & Big Sandy Railroad Company in permitting it to use the track, which was the property of the latter company. She alleged that after the building and completion of its road, and more than 12 months before the injuries to her intestate, the Maysville & Big Sandy Railroad Company leased and transferred its entire line of road to the Chesapeake & Ohio Railway Company, and that the latter has since that time been in the exclusive possession and control of it; that by the laws of Kentucky the lease and transfer were ultra vires and void; that in December, 1893, pursuant to section 211 of the constitution of Kentucky, and section 841, Ky. St., the Chesapeake & Ohio Railway Company became a corporation, citizen, and resident of this state by filing in the office of the secretary of state, and in the office of the railroad commission, copies of its articles of incorporation, and that thereupon a certificate of said incorporation was issued to it by the secretary of state. She further alleged that the railroad track was laid in Third street under an ordinance from the city authorities; that the railroad track took up the whole street, so as to render it unfit for travel by wagons or vehicles; that the city authorities were without power to authorize such a use of the street; and that the ordinance was void, and the operations of the trains on it was illegal. She prayed judgment for $25,000. The Chesapeake & Ohio Railway Company filed its petition to remove the case to the circuit court of the United States, alleging that it is a corporation created under the laws of the state of Virginia, and a citizen of that state, and of no other; that the Maysville & Big Sandy Railroad Company is not a proper party to the action, and was made a party to it for the sole purpose of preventing a removal of the case to the United States court; that no cause of action is shown in the petition against the Maysville & Big Sandy Railroad Company; that it had authority of law to make the lease referred to, and is insolvent. It is specially pleaded in the petition that, by virtue of the charter and amendments thereto of the Maysville & Big Sandy Railroad Company, and particularly of the act of February 17, 1866, entitled "An act authorizing the sale of the Maysville & Big Sandy Railroad, and providing for the organization of a new company under its charter to construct said road" (Acts 1865-66, p. 664), and of the general laws of the state of Kentucky, that company had full power and authority to make the lease referred to. On this petition the court, over the plaintiff's objection, ordered the case to be removed to the federal court, and the plaintiff prosecutes this appeal.

In Powers v. Railroad Co., 169 U.S. 92, 18 S.Ct. 264, 42 L.Ed. 673, the United States supreme court said: "A petition for removal, when presented to the state court becomes part of the record of that court, and must, doubtless, show, taken in connection with the other matters on that record, the jurisdictional facts upon which the right of removal depends; because, if those facts are not made to appear upon the record of that court, it is not bound or authorized to surrender its jurisdiction, and, if it does, the circuit court of the United States cannot allow an amendment of the petition, but must remand the case." It was the duty, therefore, of the court below, when the petition for removal was presented, to determine whether the jurisdictional facts upon which the right of removal depended appeared in the petition, and, if they did not appear, to overrule the motion for the removal of the case. On appeal from that judgment the same duty devolves upon this court. Under the act of congress the jurisdictional facts to sustain removal are that "there shall be a controversy which is wholly between citizens of different states and which can be fully determined as between them." It has been held that in a suit against two defendants jointly liable, where one of them is a citizen of the state and the other a citizen of another state, if they are properly sued jointly, a removal cannot be had by the nonresident defendant. Railway Co. v. Dixon, 179 U.S. 131, 21 S.Ct. 67, 46 L.Ed. 121. The common-law distinctions between the different forms of action have been abolished by our Code of Practice, and all persons who are liable for a wrong may now be sued jointly in this state in an action to recover for negligence. A railroad company is given by the state certain franchises, and thereby assumes certain burdens. These it cannot transfer to another without legislative authority, so as to exempt itself from responsibility for the torts of its transferee. The Maysville & Big Sandy Railroad Company was therefore liable to appellant jointly with the Chesapeake & Ohio Railway Company, if the transfer was unauthorized, and, in this event, the suit against the two companies jointly might be properly maintained. To hold otherwise would be to require the plaintiff to prosecute two actions, although each of the defendants was alike liable to him. The question then to be determined is, did the petition for removal show that the controversy was wholly between the plaintiff and the Chesapeake & Ohio Railway Company, and that the Maysville & Big Sandy Railroad Company was not a proper party to the action? Section 203 of the state constitution is in these words: "No corporation shall lease or alienate any franchise so as to relieve the franchise or property held thereunder from the liability if the lessor or grantor, lessee or grantee, contracted or incurred in the operation, use or enjoyment of such franchise or any of its privileges." The franchises of a corporation are its property. The declaration that these in case of a lease or alienation shall not be relieved from the liability of the lessor or grantor, lessee or grantee, contracted or incurred in the use of the franchise, or any of its privileges, is, in substance, a declaration that the corporation shall not be relieved of such liability; for its existence is inseparable from all of its franchises. Under this section, therefore, no lease made by a corporation can exempt it from liability for the wrongs of its lessee. If the lease in question was made after the adoption of the constitution, it would not exempt the lessor from liability. The date of the lease is not shown in the record, but if it was made before the adoption of the constitution the result is the same. An act of the general assembly approved January 22, 1858, entitled "An act to authorize railroad companies to make certain contracts with each other," is relied on. But this act only refers to "railroad companies in this commonwealth," or domestic corporations. The act is in these words (see 2 Stant. Rev. St. p. 548): "That all railroad companies in this commonwealth shall have power and authority to make, with each other, contracts of the following character: 1. For the consolidation of either the management, profits, or stock of any two or more companies, the roads of which are or shall be so connected as to form a continuous road, either temporarily or permanently. 2. For the leasing of the road of one company to another provided the roads so leased shall be so connected as to form a continuous line. 3. For the completion in whole or in part, of the unfinished road of any company. 4. For giving a common name and style to any continuous road belonging to two or more companies: provided, however, that all such contracts shall be approved by a majority, in interest, of all the stockholders in each of the contracting companies, at some stated or called meeting of the same." Section 2: "That the called meetings of stockholders, provided for in the first section, shall be called by the president and directors of the company, and notice of the time and place thereof, and of the purposes of such meeting, shall be advertised in one or more newspapers of general circulation in the county where the principal office of such company is then kept, for at least two weeks before such meeting." In the construction of statutes it is a cardinal rule that they are not presumed to be intended to have effect beyond the jurisdiction of the state. The second section of the act can, therefore, have no reasonable application to foreign companies, for it cannot be presumed that the legislature intended to regulate the proceedings of the president, directors, or stockholders of such companies or advertisements to be given in other states. Taking this section in connection with the opening words of the first section, "All railroad companies in this commonwealth," we see no room for doubt that the legislature intended to confer...