State, ex rel. Caldwell v. Lincoln Street Railway Co.

• Decision Date: 18 December 1907
• Docket Number: 15,063
• Citation: 114 N.W. 422,80 Neb. 333
• Parties: STATE, EX REL. JAMES L. CALDWELL, APPELLANT, v. LINCOLN STREET RAILWAY COMPANY ET AL., APPELLEES. [*]
• Court: Nebraska Supreme Court

114 N.W. 422

80 Neb. 333

STATE, EX REL. JAMES L. CALDWELL, APPELLANT, v. LINCOLN STREET RAILWAY COMPANY ET AL., APPELLEES. ^[*]

No. 15,063

Supreme Court of Nebraska

December 18, 1907

APPEAL from the district court for Lancaster county. LINCOLN FROST JUDGE. Reversed with directions.

REVERSED.

F. M Tyrrell, Charles O. Whedon and J. M. Stewart, for appellant.

Clark & Allen, contra.

DUFFIE C. EPPERSON and GOOD, CC., concur.

OPINION

DUFFIE, C. J.

Section 1, art. XIb of our present constitution, adopted in 1875, is as follows: "No corporation shall be created by special law, * * * but the legislature shall provide by general laws for the organization of all corporations hereafter to be created. All general laws passed pursuant to this section may be altered from time to time, or repealed." Section 2 of the same article is in the following words: "No such general law shall be passed by the legislature granting the right to construct and operate a street railroad within any city, town, or incorporated village, without first requiring the consent of a majority of the electors thereof." At the session of the legislature held in 1877 (laws 1877, p. 135) an act was passed relating to the formation of street railway companies. The act, so far as necessary to an understanding of this case, is as follows: Section 1. "Any number of persons may be associated and incorporated under the general laws of this state providing for the creation of corporations for the purpose of constructing and operating a street railroad within any of the cities of this state, upon procuring the consent of a majority of the electors of any such city as hereinafter provided." Section 2. "Every such corporation, previous to the commencement of any business except its own organization, must adopt articles of incorporation and have them recorded in the office of the county clerk of the county in which the city within which it is proposed to construct and operate such street railroad is situated, and must procure the consent of a majority of the electors of such city as herein provided." Section 3. "The articles of incorporation must fix the termini of such street railroad, and state the street or streets through which it is proposed to construct and operate the same." Section 4 provides for obtaining the consent of a majority of the electors of the city by submitting the question to the electors at an election to be held for that purpose, and requiring ten days' notice by publication, which notice shall state the termini of such proposed street railroad, and the street or streets through which it is proposed to construct and operate the same. Section 5 provides for the holding of such election in the same manner and at the same places as the general city election, and that, if a majority of the votes cast shall be in favor of the construction and operation of such proposed street railroad, the council shall cause the city clerk to make out a certificate of the result, stating that the consent of a majority of the electors has been given to the construction and operation of such street railway, which certificate shall be delivered to the chief officer of the railroad company, who shall cause the same to be recorded in the office of the county clerk where the articles of association of such street railway company are recorded, and in the same book, and such certificate shall be prima facie evidence of the facts stated therein and thereupon such street railroad company shall be authorized to proceed and construct and operate such street railroad, as described in its articles of association, or any portion thereof, subject to such rules and regulations as may be established by ordinances of the city.

On March 9, 1885, articles of incorporation of the Lincoln Street Railway Company were filed and recorded in the office of the county clerk of Lancaster county, which articles provided for certain termini of the railway, and the streets through which it was proposed to construct the same. The streets mentioned in the articles are from First to Twenty-Seventh streets, both inclusive, running north and south through the city, and from A to W streets running east and west, and other streets, which, as we understand, included all the then established streets of the city. The articles also provided for termini of the company "at such other points within five miles of the corporate limits of the city of Lincoln as the company may see fit to build to." An election was thereafter held, the notice of which described the streets of the city through which it was proposed to construct the road as described in the articles of incorporation, but which omitted to give the termini of the proposed road, and a certificate was duly issued to the street railway company certifying that a majority of the votes cast were in favor of the proposition. Some time in January, 1890, the Lincoln Electric Railway Company was incorporated and filed its articles in the office of the county clerk of Lancaster county. The third paragraph of these articles, after designating certain termini of the lines of the company within the corporate limits of the city, contains a clause providing for other termini "at such other points in the vicinity of Lincoln as it may be advisable to select for such termini lines," and in the same paragraph is a provision for constructing its tracks in all the streets of the city then established, running both east and west and north and south through the city. July 1, 1887, the Standard Street Railway Company was incorporated for the purpose of constructing a street railway in the city of Lincoln. The third article provides as follows: "The termini of the lines of such company are fixed at or near the several railway depots in the city of Lincoln, and at or near University Place, and at such other points in the city of Lincoln and vicinity for a radius of five miles outside the limits of said city of Lincoln as it may deem advisable to select." The streets through which it is proposed to construct its line of road are, as we understand, all the streets of the city then laid out or existing, running both north and south and east and west through the city. March 19, 1887, the Lincoln Rapid Transit Company was incorporated; the third paragraph of the articles providing for termini at the several railroad depots, at or near the intersection of Eleventh and P streets, at or near the intersection of Eleventh and N streets, at or near the intersection of Twelfth and N streets in said city, also in West Lincoln, and at the Nebraska Exposition Association grounds, at a point near the Wesleyan University place, Wyuka cemetery, the penitentiary, the hospital for the insane, and such other points in the vicinity of Lincoln as it may be deemed advisable to select for termini of lines. Said article further provides for the construction of tracks, branches and connecting lines over and along First, Second, Third, up to and including Thirty-Third street, and other named streets running north and south, and the streets running east and west through the city, which description includes, as we understand, all the streets of the city then laid out or in existence. Elections were held to obtain the consent of the electors to the construction of railways by each of the above named companies, the notice of such election reciting, in substance, the provisions of the aforementioned articles of incorporation relating to the streets over which it was proposed to construct street railways by the several companies above mentioned, except that the termini of the proposed roads were omitted, and certificates issued to the chief officers of the several companies showing that the proposition had been adopted by a majority of all the votes cast at the election.

By chapter 38, laws 1889, street railways were authorized to unite their roads by consolidation, purchase, sale, or by subscription to or purchase of capital stock, and to mortgage their railways and property for the construction, equipment and extension of their roads. Under the provisions of this act the Lincoln Street Railway Company and the other companies above named executed articles of consolidation at different dates during the year 1891, and thereby became merged in a single corporation which retained the name of Lincoln Street Railway Company; and thereafter the lines constructed by each of the above named corporations were operated by the Lincoln Street Railway Company formed by the merger and consolidation of the above named separate companies. In July, 1891, the Lincoln Street Railway Company executed and delivered to the New York Security & Trust Company a trust deed on its property and franchises to secure the payment of bonds in the sum of $ 600,000 issued for the purpose of borrowing money to construct and equip its lines of street railway. About June, 1892, said railway company executed and delivered to the New York Guaranty & Indemnity Company a trust deed on its railway and franchises to secure bonds in the sum of $ 800,000 issued for the purposes aforesaid. Default being made in the payment of the interest accruing on these bonds, the mortgagees commenced an action of foreclosure in the United States circuit court, and in July, 1897, a decree was entered in favor of the mortgagees finding that each of said mortgages was a valid lien on the railway and franchises of the Lincoln Street Railway Company, and directing the property and franchises of the company to be sold and the proceeds applied on the sum found due. A sale under this decree was had in December, 1897, at which Moses L. Scudder and William Belcher, alleged to be acting as the agents of the Lincoln Traction Company, bid in the property in their own names, and the...