Plummer v. Chesapeake & Ohio Railway Co.

• Decision Date: 12 April 1911
• Citation: 143 Ky. 102
• Court: Kentucky Court of Appeals
• Parties: Plummer v. Chesapeake & Ohio Railway Co.

143 Ky. 102

Plummer v. Chesapeake & Ohio Railway Co.

Court of Appeals of Kentucky.

Decided April 12, 1911.

Appeal from Lewis Circuit Court.

ALLEN D. COLE, S. J. PUGH and A. R. CAMPBELL for appellant.

WORTHINGTON, COCHRAN & BROWNING for appellee.

OPINION OF THE COURT BY JUDGE CARROLL — Reversing.

The appellant Plummer while engaged for a shipper in loading a railroad car with tan bark was injured by the negligence of the trainmen in moving without notice to him the car in which he was at work. To recover damages for the injuries thus sustained he brought suit against the Chesapeake & Ohio Railway Company, a Virginia corporation, and the Chesapeake & Ohio Railway Company of Kentucky, a Kentucky corporation. The lower court directed the jury to return a verdict in favor of the Chesapeake & Ohio Railway Company of Kentucky, and from the judgment upon this verdict this appeal is prosecuted.

It appears from the admitted facts that for several years prior to July 1, 1907, the railway and its appurtenances were owned by the Chesapeake & Ohio Railway Company of Kentucky, and that during this period the railway was operated by the Chesapeake & Ohio Railway Company as lessee. That on July 1, 1907, The Chesapeake & Ohio Railway Company of Kentucky executed and delivered to the Chesapeake & Ohio Railway Company a deed of conveyance, by which it transferred and conveyed to it in fee simple the railway with all the rights, privileges and appurtenances appertaining thereto, and all property, real and personal, possessed or used in connection therewith. That the Chesapeake & Ohio Railway Company of Virginia, in 1893, when it first undertook as lessee to operate the Kentucky railway, complied with section 841 of the Kentucky Statutes, hereafter copied, but has made no attempt to comply with section 765 of the Kentucky Statutes, hereinafter set forth. Its contention, which was sustained by the lower court, being that as it had while operating the road as lessees complied with section 841, this act relieved it from the necessity of complying with section 765, when it became the purchaser of the railway. The correctness of the ruling of the trial court depends primarily upon the question, whether or not this compliance with section 841 of the Kentucky Statutes was sufficient under the laws of this State to authorize the Chesapeake & Ohio Railway Company to purchase, own and operate the railway in this State, and to enable the Kentucky corporation to divest itself of the title by the conveyance. If it was, the appellee Chesapeake & Ohio Railway Company of Kentucky was not answerable in damages to the appellant because the injury to him happened after the conveyance was made. On the other hand, if the compliance with section 841 of the Kentucky Statutes was not sufficient to authorize the Chesapeake & Ohio Railway Company to purchase, own and operate the railway, and to enable the Kentucky corporation to divest itself of title by the conveyance, then the Chesapeake & Ohio Railway Company of Kentucky was jointly and severally liable with it, as it sustained at the time of the injury the relation of lessor to the Chesapeake & Ohio Railway Company, and consequently was responsible to persons not employes of the operating company for injuries sustained by them on account of the negligence of the operating company. McCabe's Admx. v. Maysville & B. S. R. Co., 112 Ky. 861; Illinois Central R. Co. v. Sheegog's Admr., 126 Ky. 252.

Only two questions are presented by the record for decision, (1) was the purchase and conveyance made on July 1, 1907, made and executed in accordance with the constitution and laws of this State, and therefore sufficient to divest the selling corporation of title. (2) Assuming that it was not, can the validity of the purchase and conveyance be questioned by any person other than the State of Kentucky. Taking up the first question, its solution renders it necessary that we should construe section 211 of the constitution of the State, reading as follows:

"No railroad corporation organized under the laws of any other State, or of the United States, and doing business, or proposing to do business, in this State, shall be entitled to the benefit of the right of eminent domain, or have power to acquire the right of way or real estate for depot or other uses, until it shall have become a body-corporate pursuant to and in accordance with the laws of this Commonwealth."

Section 765 of the Kentucky Statutes, which provides that:

"No railroad corporation, organized or created by or under the laws of any other State, shall have the right to condemn land for, or acquire the right of way for, or purchase or hold land for its depots, tracks, or other purposes, until it shall have first filed in the office of the Secretary of State of this State, in the manner provided in the first article of this chapter, its acceptance of the Constitution of this State, and shall have become organized as a corporation under the laws of this State, which it may do by filing in the offices of the Secretary of State and the Railroad Commission articles of incorporation in the manner and form provided in section 763 of this article."

And section 841 of the Kentucky Statutes, reading:

"No company, association or corporation created by, or organized under, the laws or authority of any State or country other than this State, shall possess, control, maintain or operate any railway or part thereof, in this State until, by incorporation under the laws of this State, the same shall have become a corporation, citizen and resident of this State. Any such company, association or corporation may, for the purpose of possessing, controlling, maintaining or operating a railway or part thereof in this State, become a corporation, citizen and resident of this State by being incorporated in the manner following, namely: By filing in the office of the Secretary of State, and in the office of the Railroad Commission, a copy of the charter or articles of incorporation of such company, association or corporation, authenticated by its seal and by the attestation of its president and secretary, and thereupon, and by virtue thereof, such company, association or corporation shall at once become and be a corporation, citizen and resident of this State. The Secretary of State shall issue to such corporation a certificate of such incorporation."

In the consideration of the case before us, it is not necessary to consider or discuss the power of the State to directly prohibit a foreign railway corporation from owning property or doing business within its territory, or its power to impose such restrictions and conditions as would virtually amount to a denial of this right; as neither the constitution nor the statute attempt to prohibit a foreign railway corporation from purchasing a domestic railway corporation, nor do they place any unreasonable restrictions or limitations upon the right so to do. The conditions annexed to the right of a foreign railway corporation to come into this State and purchase a domestic railway corporation and operate the same are neither prohibitory nor unreasonably restrictive. The only terms imposed are that before the foreign railway corporation purchases or undertakes to operate a railway in this State it must comply with our laws enacted for the purpose of placing foreign and domestic corporations upon the same footing. Section 211 of the constitution, before quoted, as well as section 202, reading: "No corporation outside the limits of this State shall be allowed to transact business within this State on more favorable conditions than are prescribed by law to similar corporations organized under the laws of this Commonwealth," and the statutes enacted in pursuance thereof were not designed to and do not impose upon foreign corporations any limitations or burdens not put upon home corporations. They were only intended to place as near as may be foreign and domestic corporations upon an equality under the law. The foreign corporation is not discriminated against, nor is it extended by the State any favors, not granted to domestic corporations. If a foreign corporation wishes to purchase, own or operate a railway in this State, it may come here under the protection of our laws and enjoy all the privileges and rights that are allowed to home corporations, and in addition those guaranteed by the Federal Constitution and laws. There is no reason why it should be granted any greater, or why any distinction or discrimination should be made by the State between corporations engaged in the same line of business, whether they be foreign or domestic. One should not be allowed, so far as the operation and effect of State laws are concerned, to do business upon more favorable conditions than the other. As section 202 of the constitution merely declares a general principle that shall be observed in the legislative treatment of corporations, we do not think it worth while to further allude to it; but, section 211 relates directly to the matter in hand and requires more careful consideration. This section provides that a foreign railway corporation shall not be entitled "to the benefit of the right of eminent domain, or have power to acquire the right of way or real estate for depot or other uses until it shall have become a body corporate pursuant to and in accordance with the laws of this Commonwealth." We think it clear this language should not be limited in its application to a foreign railway corporation that desires to come into this State for the purpose of constructing a line of railway. This narrow view of the meaning of this section would exclude from its operation a foreign railway corporation that purchased outright an existing domestic railway corporation.

It would impose upon corporations desiring to build a line of railway and seeking to acquire under the right of eminent domain real estate or right of way for such purpose the...