Secombe v. Railroad Company

CourtUnited States Supreme Court
Writing for the CourtDAVIS
Citation23 L.Ed. 67,23 Wall. 108,90 U.S. 108
Decision Date01 October 1874

90 U.S. 108
23 L.Ed. 67
23 Wall. 108
October Term, 1874

Page 109

ERROR to the Circuit Court for the District of Minnesota; in which court Secombe brought ejectment against the Milwaukee and St. Paul Railway Company, to recover a lot in Minneapolis used by the company for a station.

The cause was heard by the court without the intervention of a jury.

It was admitted that Hiram Osborne and Ovid Pinney, under whom Secombe, by deeds of quitclaim made in 1870, claimed, had once been owners of the lot. But the railway company was now in possession of it, claiming under an act of condemnation made in 1867—three years before the deeds of quitclaim—in favor of the Minnesota Central Railway Company, in the alleged exercise of the right of eminent domain. The company defendant had succeeded to that company's rights.

Against the right of the Minnesota Central Railway Company, in whose favor the judgment of condemnation was entered, Secombe alleged:

1st. That under the constitution and laws of Minnesota the company was not a corporation, and, therefore, under the said laws not authorized to procure a condemnation in any form.

2d. That whether it was a corporation or not, all of the proceedings taken to obtain title to the lot were, under the said constitution and laws, void.

The case was thus:

In 1856, the territorial legislature of Minnesota incorporated a certain railroad company under a name then given to it.

Page 110

In 1858, the Territory became a State and made a constitution.

This constitution prohibited the 'formation' of corporations by special act.1

It ordained also that 'no person should be deprived of property without due process of law,' and that private property should not be taken for public use without just compensation therefor 'first paid or secured.'2

About the same time, by a constitutional amendment, the State authorized the company above mentioned as incorporated by the Territorial legislature in 1856, and to which it had since made a loan of its credit by the issue of State bonds, for the payment of whose interest the company was to provide, to mortgage its roads, franchises, &c., to the State as security for payment of the principal and interest of the bonds. The railroad company made the mortgage, but paid neither principal nor interest on the State bonds; and in 1860, the legislature of the State, by an act declaring that a default had occurred on the part of the company, in paying the interest on the bonds, directed the governor to foreclose the mortgage, and to bid in and purchase the roads and franchises in the name of the State. This the governor did.

In the following year, 1861, the legislature by another act—a special act—which recited the act authorizing the foreclosure of the mortgage, and the purchase and acquisition of the road, its franchises, &c., by the State under the foreclosure—granted the road, its franchises, &c., to certain persons who had organized themselves into another company; the grant being subject to certain conditions, for the non-performance of which the grant was to be forfeited.

In 1862, the conditions having been broken, and a forfeiture having occurred, the road was regranted to a yet third set of persons organized into a new company, and called the Minnesota Central Railway Company.

It was this company which had caused the lot in question to be condemned for the purposes of its road; and the company

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derived its corporate existence under legislation of the same character as did the St. Paul and Pacific Railroad Company, which in the case of the St. Paul and Pacific Railroad Company v. Parcher,3 the Supreme Court of Minnesota held good and constitutional. That court considered that although corporations could not be formed by special act, yet that the State could buy the property including the franchise—or right to be a corporation of a corporation already created—and could hold without a merger, if it was for its interest and it desired to do so, the franchise which it had thus bought. It considered further that it was for the interest of the State to do so, because this would better enable it to secure the successful prosecution of important enterprises which it could not well carry on itself; while, that it was the intention of the State to keep alive the purchased franchise and hold it without merger, sufficiently appeared, the court thought, from legislation subsequent to the foreclosure. The court, in conclusion, said:

'There was no attempt here to create new corporate franchises, and thus to form and to bring into existence for the first time that which is the very essence of a corporation, and without which a corporation is nothing. But corporate franchises already in existence and held by the State as property, without merger in its general sovereignty and without extinguishment, were transferred to the persons enumerated in the act. This, we think, was a legitimate and constitutional transaction.'

The part of the case relating to the proceeding of condemnation was thus:

An act of 1862 enacted:

'SECTION 10. The said company shall have the right of way upon any lands, to survey and lay down said road, not exceeding two hundred feet in width, and whenever it is necessary to have such lands, they shall have the right to enter upon, take and hold such lands, and occupy the same. When the same shall not be granted to said company, the compensation to be paid therefor shall be thus ascertained. The said company shall

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apply to the Judge of the District Court of the Territory of Minnesota, for the appointment of three commissioners, whose duty it shall be, to proceed to assess the damages which may be sustained by the several owners of the lands through which the road of said company is located. It shall be the duty of said company to give thirty days' notice of their application for the appointment of said commissioners, in one or more newspapers published in each of the counties through which said road is laid out; and it shall be the duty of such commissioners to cause ten days' notice of their meeting to appraise the damages of any land through which said road may run, to be given to the owner or claimant thereof. Either party feeling aggrieved by the decision of such commissioners, may appeal to the District Court of the county in which such land may be situated; and said appeal shall be tried in the same manner as if commenced therein. The notice to be given by the commissioners to the owners of lands required by the railroad, shall be in writing, and delivered to said owner or owners, or left at their usual place of residence; or if non-residents, then said notice shall be published in the nearest newspaper to where said land is situated, at least four weeks before making such appraisement.'

The court below found as facts the following matters; this finding under the statute authorizing such finding of fact by the court, being in the nature of a special verdict:

1st. That, on the 26th of September, 1863, the company petitioned the District Court of the Fourth Judicial District of Minnesota, for the appointment of three commissioners to assess the damages which might be sustained by the owners of the...

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