State v. Frost

• Decision Date: 01 April 1902
• Citation: 113 Wis. 623,89 N.W. 915
• Parties: STATE v. FROST.
• Court: Wisconsin Supreme Court

113 Wis. 623

89 N.W. 915

STATE

v.FROST.

Supreme Court of Wisconsin.

April 1, 1902.

Original information by the state against Albert C. Frost, as receiver of the Washburn, Bayfield & Iron River Railway Company. Defendant petitions for removal of the action into the United States circuit court. Petition granted.

This is an original information filed in this court by the state of Wisconsin, in its sovereign capacity, to enjoin the threatened destruction of one of the highways of the state, to wit, a certain railroad constructed in 1895 or 1896 by the Washburn, Bayfield & Iron River Railway Company, a railroad corporation organized under the laws of this state on August 2, 1895. By the information it is made to appear that a mortgage made by said railroad company in 1895 upon all of its property, including franchises, held by a nonresident of the state of Wisconsin, has been in process of foreclosure in the circuit court of the United States for the Western district of Wisconsin since some time in 1898, and that in said action receivers have been appointed and installed, who have taken possession of said road and operated it, the last of whom is the defendant. Albert C. Frost, and that a decree of foreclosure was rendered and entered July 5, 1901, directing the sale of all of its property for cash by the defendant, Albert C. Frost, “receiver and special master in chancery of that court,” as an entirety, in one parcel, with directions as to the detail of the sale and disposition of the proceeds; said decree reserving to the court the right to make such further orders at its foot as may seem just and proper. On July 23d the court fixed as an upset or minimum price at such sale, $275,000. On October 12, 1901, the defendant, as special master, made report of entire inability to sell in accordance with the terms of the decree, notwithstanding efforts to do so, and advised the court that, in his judgment, it is impossible to sell the railroad as an entirety; that the only disposition which can be made is in parts and parcels, the rails to be taken up, and, together with all the motive power, equipment, machinery, furniture, and fixtures, sold at such time or times and in such manner and upon such terms as the court may direct. Thereafter, on the same day, upon the said master's report and various other showings, including the allegation that said railroad could not be operated, save at a loss, and that the receiver had no moneys in his hands with which to operate it, and was unable to further borrow any moneys, the said United States circuit court entered a further judgment or decree setting aside certain of the commands of the decree of July 5th with reference to method and price of sale, which subsequent order or decree authorized and directed “said special master, Albert C. Frost,” to forthwith proceed to take up all of the rails and fastenings of the railroad, and get the same ready for immediate sale, and to sell for cash all the rails, motive power, rolling stock, equipment, machinery, tools, furniture, and fixtures, and all other personal property, in parcels, as his judgment shall dictate. It also authorized Albert C. Frost, as receiver, to discontinue the operation of said railroad. The peril of destruction of one of the highways of the state, urged by the information as ground for injunctional protection, is that the defendant, in obedience to this last decree, is about to tear up and remove the rails from the roadbed of said railway. The information was permitted to be filed by an order of this court, accompanied by a statement of its reasons, filed January 25, 1902 (88 N. W. 912), and having been accordingly filed, and process served upon the defendant, the latter, before the time for answering expired, filed in this court a petition for removal of the action into the circuit court of the United States for the Western district of Wisconsin, by which petition it is alleged that the suit is of a civil nature; that the amount involved therein, exclusive of interest and costs, exceeds the sum of $2,000, and that all the acts done or threatened by the defendant are pursuant to the orders of the said circuit court as its receiver and special master, and his possession, control, and power of disposal of the property are derived and asserted solely from the authority of the circuit court of the United States aforesaid, and that this action arises under the constitution and laws of the United States, in several particulars set forth, in that it questions the jurisdiction and power of the United States circuit court to make and enforce its several orders, and questions the validity and legal effect thereof, and the legal power and authority conferred upon the defendant thereby under the laws of the United States; and that it further involves the force and effect of the act of congress of March 3, 1893, regulating the manner of sale of real and personal property under decrees of the United States court, and the provision of the constitution of the United States that such constitution, and laws made in pursuance thereof, shall be the supreme law of the land. Upon that petition we have heard argument.E. R. Hicks, Atty. Gen., for the State.

Charles B. Wood and Horace S. Oakley (G. W. Kretzinger and M. F. Gallagher, of counsel), for defendant.

DODGE, J. (after stating the facts).

The primary question in this proceeding upon the merits--whether, when a railroad company, under a franchise granted by this state so to do, constructs a railroad, the same becomes one of the highways of the state, the continuance or destruction of which is a matter of government over which the state, in its sovereign capacity, has control, and whether the right of the public to the continued existence of such highway is fundamental and superior to all rights of the corporation, either to exercise itself, or to pledge, mortgage, or convey to others, so that a physical destruction of that highway is a wrong against the public, which the state may prevent--need not and should not at this time be decided. We have already declared, in granting leave to file this information, that the question is of at least sufficient doubt and importance to warrant its grave consideration when properly presented before a forum having power and authority to decide it, and in that view we persist. Further, we have no doubt that, as it involves the welfare of the public, the care and protection of which is intrusted to the state government, this court, in its original jurisdiction, under our constitution, may properly entertain the information of the law officer of the state to examine and decide what are the rights of the public, and how they shall be vindicated or protected against outrage. However the foregoing questions may be resolved, the question here presented is whether, conceding the public right; conceding the power and duty of the state, as a sovereign, to invoke the protective power of this court to prevent an invasion of that right, and the power of this court to entertain such application and grant such protection,--nevertheless the controversy may be transferred to the federal courts by reason of federal law. That the constitution, and the laws of the United States made in pursuance thereof, are the supreme law of the land, controlling courts and judges of the nation and of the states alike, there can be no doubt. Const. U. S. art. 6. That constitution (section 2, art. 3) includes in the judicial power to be exercised by the courts of the United States “all cases in law and equity, arising under this constitution, the laws of the United States, and treaties made, or which shall be made, under their authority”; also controversies “between a state and citizens of another state.” In the distribution amongst the several federal courts of the judicial power thus authorized by the constitution, congress has conferred upon the circuit courts jurisdiction “of all suits of a civil nature, at common law or in equity, where the matter in dispute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars, and arising under the constitution or laws of the United States.” Acts Cong. 1888, c. 866, § 1. In addition to thus conferring original jurisdiction of such a suit, so enabling it to be brought in the circuit courts of the United States, congress has enacted that “any suit of a civil nature, at law or in equity, arising under the constitution or laws of the United States,” “of which the circuit courts of the United States are given original jurisdiction by the preceding section, may be removed by the defendant or defendants therein to the circuit court of the United States for the proper district.” Id. § 2. This law of congress must, of course, control, and we have therefore for consideration only the question whether the present controversy falls within the description of those suits thus made removable into the circuit court of the United States at the petition of the defendant. The several elements of that description are: First, that the suit must be of a civil nature, at law or in equity; second, must arise under the constitution or laws of the United States; and, third, the amount in dispute must exceed, exclusive of interest and costs, the sum or value of $2,000. We proceed, therefore, to apply these several tests.

The first question is whether this is a suit of a civil nature. Upon this subject the contention of the state is not very clearly defined. Much is said as to the peculiarity of the proceeding, by reason of the fact that its purpose is to vindicate neither private nor proprietary rights, but rights of sovereignty to the maintenance of a public utility. How far this contention bears on the immediate question whether it is a suit of a civil nature is not entirely clear. May not the sovereign state engage in a civil suit? Has it done so here? True, the proceeding does not fall accurately within the...