Oregonian Ry. Co. v. Oregon Ry. & Nav. Co.

• Decision Date: 01 December 1884
• Citation: 22 F. 245
• Parties: OREGONIAN RY. CO. (Limited) v. OREGON RY. & NAV. CO.
• Court: U.S. District Court — District of Oregon

22 F. 245

OREGONIAN RY. CO. (Limited) v. OREGON RY. & NAV. CO.

United States Circuit Court, D. Oregon.

December 1, 1884

John W Whalley and William Gilbert, for plaintiff.

Charles b. Bellinger, for defendant.

DEADY J.

This action is brought by the Oregonian Railway Company (Limited,) a foreign corporation alleged to have been formed in Great Britain under 'The Companies' Act of 1862,' against the Oregon Railway & Navigation Company, a domestic corporation formed under the general incorporation act of Oregon of 1862, to recover the sum of $68,131, alleged to be due the plaintiff for the use of its railway in Oregon, commonly called the 'narrow gauge' road, for the half year beginning May 15, 1884.

It is alleged in the amended complaint, filed August 15, 1884, that the plaintiff became a corporation on April 30, 1880, by certain persons making and delivering for registry under the British act aforesaid a 'memorandum of association' and 'articles of association,' as therein set forth that the defendant became a corporation under the Oregon act aforesaid on June 13, 1879, by certain persons making and filing articles of incorporation to that effect, as therein set forth; that on August 1, 1881, the plaintiff was the owner of a certain railway in Oregon, and then demised the same by a written instrument to the defendant for the term of 96 years, for and upon a yearly rental of 28,000 pounds sterling, to be paid in half-yearly installments in advance, and that the defendant, by its proper officers, duly executed said instrument, they being first thereunto fully authorized by a vote of its directors; and that the defendant thereupon entered into possession of the railway and operated the same, but has failed to pay the installment of rent falling due on May 15, 1884.

By the second amended answer to this amended complaint, filed October 18, 1884, the defendant expressly admits that it is a corporation formed under the laws of Oregon, and that is president and assistant secretary signed the written instrument aforesaid, and that in pursuance thereof it entered into the possession of said railway and operated the same until May 15, 1884, when it offered to return the same to the plaintiff, which offer was declined, and that it has since retained the possession thereof, only under a special agreement with the plaintiff, not material to the present inquiry, and denies (1) that the plaintiff is or ever was a corporation under the companies act of 1862, or otherwise, or at all; (2) that the law of Great Britain confers on the plaintiff the power to lease said railway; (3) knowledge or information sufficient to form a belief as to whether a memorandum of articles of association were made and delivered for registry, as alleged in the complaint, or at all; (4) that plaintiff is or ever was authorized to construct, own, operate, lease, or sell a railway in Oregon, or that it has ever complied with the laws of Oregon on the subject of foreign corporations doing business therein; (5) that either the plaintiff or defendant ever had authority to execute said written instrument, or indenture for the leasing of said railway, or that the plaintiff ever demised the same to the defendant; and (6) that any sum of money is due the plaintiff from the defendant; and avers that it has fully paid the rental provided for in said pretended lease for the period during which it was in possession of said railway, to-wit, for the period ending May 15, 1884.

The plaintiff moves to strike out his answer as being 'frivolous and immaterial,' and for judgment. In the brief submitted by counsel in support of this motion, it is maintained that the denials of knowledge or information concerning the alleged execution and delivery of the memorandum and articles of association are insufficient, because they relate to matters which are of record, and of which the defendant can inform itself, or to such things as are presumptively already within its knowledge, and therefore it is not at liberty to controvert the allegation otherwise than by a positive denial; citing, Heatherly v. Hadley, 2 Or. 275; State v. McGarry, 21 Wis. 500; Hance v. Rumming, 2 E.D.Smith, 48; Curtis v. Richards, 9 Cal. 38; Nelson v. Murray, 23 Cal. 338; Pom. Rem. Sec. 641; Moak's Van Santv. Pl. Sec. 517. But none of these authorities go so far as to hold that because the subject of an allegation in a pleading is of record, that therefore the party answering or replying thereto must take the trouble to inform himself so as to be able to deny the allegation positively, if at all. A party may, by the force of a statute, have constructive notice or knowledge of the existence and contents of a private writing duly admitted to record in a public registry, but there is no presumption that he has any actual knowledge or information on the subject, unless it also appears that he had some connection with the transaction contained in the record or relation to the proceeding out of which it grew. The rule was long ago stated by Mr. Justice FIELD in Curtis v. Richards, supra, as follows:

'If the facts alleged are presumptively within the knowledge of the defendant, he must deny positively, and a denial of information or belief will be treated as an evasion. Thus, for example, in reference to instruments in writing alleged to have been executed by the defendant, a positive answer will alone satisfy the requirements of the statute. If the defendant has forgotten the execution of the instruments, or doubts the correctness of their description, or of the copies in the complaint, he should, before answering, take the requisite steps to obtain an inspection of the originals. If the facts alleged are such as must be within the personal knowledge of the defendant, he may answer according to his information and belief.'

-- Or rather, he may deny knowledge or information thereof sufficient to form a belief. See, also, on this point, Pom. Rem Sec. 641, wherein it is said in effect that a party may controvert an allegation by a denial of any knowledge or information thereof whenever such denial would not, in the light of the circumstances, appear to be palpably false.

Now upon the facts stated in this case, there can be presumption that the defendant has any personal knowledge concerning the existence or contents of the documents made and registered in Great Britain, by means of which the plaintiff claims to have become a corporation. How can such presumption arise? The defendant was an utter...