State ex rel. Leese v. Atchison & N. R. Co.

• Citation: 38 N.W. 43,24 Neb. 143
• Court: Supreme Court of Nebraska
• Decision Date: 25 April 1888
• Parties: STATE EX REL. LEESE, ATTY. GEN., v. ATCHISON & N. R. CO.

24 Neb. 143

38 N.W. 43

STATE EX REL. LEESE, ATTY. GEN.,

v.ATCHISON & N. R. CO.

Supreme Court of Nebraska.

April 25, 1888.

Syllabus by the Court.

In a proceeding by quo warranto against a corporation to forfeit its franchises and oust it from the same for misuser thereof, the corporation is the only neces sary party defendant. In case of forfeiture the court will take the necessary steps to protect the rights of other parties in the premises.

Section 89, c. 16, Comp. St. authorizes the consolidation of two lines of railway only in cases where the two roads when so consolidated will form a continuous line, without break of gauge or interruption.

Section 94, c. 16, Comp. St. authorizes the leasing of a railroad constructed by another company only in cases where the road of the lessee and of the company making the lease will form a continuous line.

The Atchison & Nebraska Railroad, extending from Atchison, Kan., to Lincoln, Neb., was completed to Lincoln in 1871, and leased to the B. & M. Railroad in 1880. Held, that it did not form a continuous line with the B. & M. Railroad, and was not within the provisions of the statute authorizing the making of a lease, and that such lease was unauthorized. The mention in the statute of continuous or connected lines excludes all others.

The powers of a corporation organized under legislative statutes are such, and such only, as the statutes confer. The charter of a corporation is the measure of its powers, and the enumeration of these powers implies the exclusion of all others.

Where a railroad company, without authority of law, leases its road to another railway company, with all its rights, property, and franchises, for a long period of time, it thereby abandons the operation of its road, and is subject to forfeiture.

Section 3, art. 11, Const. prohibits any railroad corporation from consolidating its stock, property, franchises, or earnings, in whole or in part, with any other railroad corporation owning a parallel or competing line. The word “consolidate” is used in the constitution in the sense of join or unite.

Section 5, art. 11, Const. prohibits the issuing by a railway corporation of stocks or bonds, except for the consideration actually received. One of the objects of this provision is to enable the public to ascertain the actual cost of each railway in the state, and to enable the legislature to pass laws fixing an equitable rate of taxation, and for the transportation of persons and property, so that justice may be done alike to the railway company, the public, and private individuals.

Quo Warranto.

William Leese, Atty. Gen., and C. G. Dawes, for relator.

T. M. Marquett and J. M. Woolworth, for respondent.

MAXWELL, J.

This is an original action brought in this court by the attorney general to oust the defendant from its franchises. The attorney general alleges in the information that, “on the 25th day of April, A. D. 1871, articles of incorporation were duly filed in the office of the secretary of state of Nebraska by A. J. Cropsey, A. A. Egbert, T. E. Calvert, George Morrison, and O. Chanute, duly incorporating, under the laws of the state of Nebraska, the Atchison, Lincoln & Columbus Railroad Company. The object and purpose of this company was to construct, maintain, and operate a line of railroad, with single or double tracks, and with all the necessary branches, fences, bridges, warehouses, elevators, station-houses, and such other appurtenances as might be thought necessary, extending said line of railroad from a point at the southern line of the state of Nebraska, where the Atchison & Nebraska Railroad Company crosses said state line, and from thence running northward and westward through the counties of Richardson, Pawnee, Gage, Johnson, Lancaster, Seward, and Butler, by way of Lincoln, to the town of Columbus, on the Union Pacific Railway in Platte county.” A copy of the articles of incorporation is attached to the petition as an exhibit. (2) “That on the 10th day of August, A. D. 1871, and long before the aforesaid line of railroad was completed, the said Atchison, Lincoln & Columbus Railroad Company consolidated all of its stock and property of every kind and nature with the stock and property of every kind of the Atchison & Nebraska Railroad Company, a corporation organized under the laws of the state of Kansas; and it was agreed in said articles of consolidation, a copy of which was filed in the office of the secretary of state of this state, that the aforesaid two consolidating companies should constitute but one corporation in law, and to be known and named the Atchison & Nebraska Railroad Company.” A copy of the said articles of consolidation is attached to the petition, and that part of the line of railroad of the defendant lying and being in the state of Nebraska is sought to be affected by this proceeding. (3) “Your petitioner would further give the court to understand and be informed, that at the time of the incorporation of the Atchison, Lincoln & Columbus Railroad Company, as well as the time of the consolidation, the financial circumstances of the defendant were limited, and they were unable to build the said railroad from the south line of the state of Nebraska to Columbus, as aforesaid, and the said company applied to the tax-payers of the several counties through which said line of railroad was to pass, for aid to enable the said company to construct and maintain their railroad as aforesaid.” (4) “That the tax-payers and inhabitants along said proposed line of railroad, for the purpose of obtaining a railroad and getting direct communication with Kansas, Missouri, Illinois, and other eastern and southern states, did, as in such cases made and provided, vote, issue, and deliver to the defendant a large amount of ten per cent. coupon bonds, aggregating, from the counties of Richardson, Pawnee, Johnson, Gage, and Lancaster, more than $500,000.” (5) “That on or about the 15th day of January, 1872, said railroad was completed to Lincoln, in Lancaster county, Neb., and from said day until January 1, 1880, was operated and maintained as a competing line of railroad with the Burlington & Missouri River Railroad Company in Nebraska, (a corporation organized under the laws of this state,) for all the freight and passenger traffic lying and being between the road of this defendant, and a branch line of the aforesaid B. & M. running from Lincoln, in Lancaster county, to Nemaha city, in Nemaha county, by the way of Nebraska City on the east side, and with a branch line of said B. & M. running from Lincoln by way of Crete to Beatrice, in Gage county on the west side, of the defendant's line. That during all of the time aforesaid there was a strong competition between the aforesaid lines, thereby producing a reasonable, but low, rate of charges for freight and passenger traffic, and the people living within the territory above described received a great advantage by reason of the low and reasonable rates charged for the transportation of freight and passengers on the defendant's railroad, resulting from the competition aforesaid. That by the competition aforesaid, the freight belonging to the people using defendant's line of railroad was shipped south to the city of Atchison, in Kansas, and from there connected with other lines of railroads that were competing with the aforesaid Burlington & Missouri River Railroad for Chicago freight, and for other points east. That freight coming from Chicago and other eastern points to the people living along the line of the defendant's railroad was brought at greatly reduced rates, and all the people living in the southeastern quarter of our state received the many advantages derived from competing railroads.” (6) “That on the 1st day of January, A. D. 1880, as aforesaid, for the purpose of defrauding the people living along the line of their railroad, and for the purpose of destroying the competition as aforesaid, the said defendant, the Atchison & Nebraska Railroad Company, disregarding its duties to the state and to the public, unlawfully and willfully entered into an agreement with the aforesaid Burlington & Missouri River Railroad Company to lease their said line of railroad, and all their rights, privileges, franchises, and property of every description to the above last-named railroad company, and on said last-named day the defendant did grant, lease, and demise to the said Burlington & Missouri River Railroad, for the full term of nine hundred and ninety-nine years, all of their railroad, roadway, lands connected with the use and operation of their road, and all machine-shops, depots, and all easements and appurtenances thereunto belonging, as well as all such property as should thereafter be acquired.” A copy of said lease is attached to and made a part of the petition. “In pursuance with the terms of said lease, the defendant, on said day, gave to the said Burlington & Missouri River Railroad Company full and absolute possession and control of all its railroad, roadway, rights, privileges, and franchises, its earnings and property of every description; and ever since the 1st day of Januray, A. D. 1880, the defendant company has utterly and willfully failed and neglected to maintain or operate their said railroad, or any other railroad, in this state, and have failed in the discharge of its duty to the state and to the public during all of said time, whereby the rights, privileges, and franchises of said defendant in the state of Nebraska have become and are subject to forfeiture.” (7) “That afterwards, on the 5th day of April, 1880, the defendant conveyed and assigned absolutely all of its lands, bonds, moneys, and property of every description, not included in the lease hereinbefore mentioned, to the aforesaid Burlington & Missouri River Railroad Company.” A copy of said conveyance and assignment is attached to and made a part of the petition. (8) “And your petitioner would further...