State v. Cent. Iowa Ry. Co.

• Decision Date: 15 March 1887
• Citation: 32 N.W. 409,71 Iowa 410
• Parties: STATE v. CENTRAL IOWA RY. CO. AND ANOTHER.
• Court: Iowa Supreme Court

71 Iowa 410

32 N.W. 409

STATE

v.CENTRAL IOWA RY. CO. AND ANOTHER.

Supreme Court of Iowa.

March 15, 1887.

Appeal from district court, Cerro Gordo county.

This is a proceeding to compel the defendant, the Central Iowa Railway Company, to equip, maintain, and operate that part of its line of road from Manly Junction to Northwood, in Worth county. A mandatory injunction was ordered by the district court in accord with the prayer of the petition. The defendants appeal.

SEEVERS, J., dissenting.J. H. Blair and Anthony C. Daly, for Central Iowa Ry. Co., appellant.

S. K. Tracy, for Burlington, C. R. & N. Ry. Co., appellant.

A. J. Baker, Atty. Gen., A. R. Anderson, and Smith McPherson, for appellee.

ROTHROCK, J.

1. The material facts in the case are not in dispute. They are as follows:

The Central Railroad of Iowa was organized as a corporation on the twenty-third day of June, 1869. The object of the corporation, as declared in its charter or articles of incorporation, was “to acquire, construct, maintain, and operate a railroad, from the south to the north line of the state of Iowa, beginning at the state line of Missouri, at or near the terminus of the North Missouri Railroad, and running thence north, on the sixteenth meridian of longitude west from Washington, or as near thereto as practicable.” A railroad was constructed from Albia, in Monroe county, north, through the cities of Oskaloosa, Grinnell, Marshalltown, Eldora, and Mason City, to Northwood, the county-seat of Worth county, which last-named place is within a few miles of the north line of the state. The road was constructed, and the cars running thereon, to Northwood, in October, 1871. The said railroad company became insolvent, and its creditors placed its road and other property in the hands of a receiver, and in May, 1879, the road and its franchises were sold upon a decree of foreclosure. The defendant, the Central Iowa Railway Company, was the purchaser at the foreclosure sale. This company was organized in May, 1879. In its articles of incorporation the object of the corporation was declared to be “to acquire, construct, equip, maintain, and operate a railway from the north to the south line of the state of Iowa, embracing the road and property, both real and personal, of the Central Railroad Company of Iowa.”

The road of the Burlington, Cedar Rapids & Northern Railroad Company, successor to the Burlington, Cedar Rapids & Minnesota Company, is a line of railroad constructed and operated from the city of Burlington, in a northerly direction, through the cities of Cedar Rapids, Vinton, Waterloo, and Cedar Falls, to a junction with the line of the Central Iowa Railroad at Manly Junction, about 11 miles south of Northwood. In the year 1877, and while the Central road was under the management of the receiver, he made a contract with the Burlington, Cedar Rapids & Northern Company, by which both of said companies run their trains over the line from Manly Junction to Northwood, to the same depot. The Burlington, Cedar Rapids & Northern Company constructed a road from Northwood to the north line of the state, and on to Albert Lea, there connecting with another line to St. Paul, Minnesota. The last-named company, by this joint running arrangement, was thus enabled to operate through trains from Burlington to St. Paul. It has ever since that time operated through trains between the points named, using the road from Manly Junction to Northwood as part of the line. Both roads continued to use and operate that part of the line between the points last named until the year 1881, when they entered into a written agreement by which the Burlington, Cedar Rapids & Northern Company took full possessionof the road from Manly Junction to Northwood, as lessee of the Central Iowa Railway Company. By the terms of this lease the lessee agreed to pay $14,000 per year to the lessor as rent, and to keep the road in repair, pay all taxes and assessments upon that part of the road, and to have the exclusive use of the same for 25 years. Exclusive possession was taken by the lessee under this agreement, and since it was executed such possession has been retained, and the Central Iowa Company has not since that time run its trains north of Manly Junction.

In the year 1870, at a special election held in the township in which Northwood is situated, a tax of 5 per cent. upon the taxable property was voted to aid the Central Railroad Company in constructing its railroad through said township. The tax, amounting to $12,608, was collected and paid to the company. There were also certain lands at Northwood conveyed to the company for depot purposes, by private parties, for which no money consideration was paid. A conveyance of certain alleged swamp lands was made by the county to the company, but, as the company took no lands of any value by the conveyance, this alleged aid to the road demands no consideration.

The proceedings in the case at bar originated before the railroad commissioners of this state, under chapter 133 of the Laws of 1884. The people of Northwood made complaint to the commissioners, and the defendants herein were cited to appear, and such proceedings were had that on the thirteenth day of February, 1883, the said commissioners ordered and adjudged “that the Central Iowa Railway is under legal obligations to equip, maintain, and operate its road from Manly Junction to Northwood, and to do so as a part of, and in connection with, its entire and continuous line between Albia and Northwood; and that a failure to so equip, maintain, and operate the portion of the road between Manly Junction and Northwood, and its entire road, is a violation of its charter duties and obligations, and contrary to law.” The Central Railroad Company refused to comply with this order, and this action was brought to compel obedience thereto.

The statute above cited provides that the rulings, orders, and regulations of the railroad commissioners for the direction and guidance of railroad companies in this state may be enforced by proper decrees, injunctions, and orders in the district court, and that the proceedings therefor shall be instituted by the attorney general in the name of the state. Said act further provides that “if the court shall find that such rule, regulation, or order is reasonable and just, and that, in refusing compliance therewith, said railway company is failing and omitting the performance of any public duty or obligation, the court shall decree a mandatory and perpetual injunction, compelling obedience to and compliance with such rule, order, or regulation. * * *”

The ultimate question to be determined in the case is this: Has the Central Iowa Railway Company the legal right to lease that part of its road from Manly Junction to Northwood, and surrender the exclusive use of it to another company, and cease to operate its line north of Manly Junction? It is not claimed in behalf of the plaintiff that the defendant had no legal right to lease its line of road, and we fail to discover why such a lease would not be valid. If the whole line were leased and operated by another company, the integrity of the line would be preserved, and the people of Northwood would have the same means and facilities for transportation from one end of the line to the other as if the owner of the road should retain possession of it, and operate it. But the complaint is that by the lease and surrender of part of the line Northwood is practically deprived of the use of the whole line of road, because it is, in effect, situated some 11 miles north of its northern terminus. The question to be determined is one of very great importance. It involves the rights of railroad companies to lease part of their roads, and thus destroy or break up a continuous road, and deprive localities of the benefit of competing lines, and whether a sale of a railroad under a decree of foreclosure releasesthe purchasing company from the obligations and liabilities which its predecessors owed to the public, and what are the rights of the public in such cases.

Railroad companies have the undoubted power to mortgage their property, (Dunham v. Isett, 15 Iowa, 284,) and, as we have said, the power of a railroad company to lease its whole line of road is not questioned. Indeed, the power to lease is expressly given by section 1300 of the Code. We come, then, to the question whether the Central Iowa Railway Company had the power to lease the part of its line involved in this controversy. And it is proper, at the outset, that some...