Town of Bethel v. Atlantic Coast Line R. Co.
| Citation | 81 F.2d 60 |
| Decision Date | 06 January 1936 |
| Docket Number | No. 3929.,3929. |
| Parties | TOWN OF BETHEL v. ATLANTIC COAST LINE R. CO. |
| Court | United States Courts of Appeals. United States Court of Appeals (4th Circuit) |
M. K. Blount, of Greenville, N. C. (Blount & James, of Greenville, N. C., on the brief), for appellant.
Thomas W. Davis, of Wilmington, N. C. (W. B. Rodman, Jr., of Washington, N. C., on the brief), for appellee.
Before PARKER and SOPER, Circuit Judges, and COLEMAN, District Judge.
The Atlantic Coast Line Railroad Company filed a bill in equity in the District Court to secure an injunction against the town of Bethel in North Carolina restraining it from laying a pavement on the railroad right of way through the town and from levying an assessment therefor upon the Railroad Company. The court assumed jurisdiction of the case and rendered a decree in the railroad's favor. It was adjudged that the Railroad Company is the owner of the right of way, and the town was enjoined from assessing it with any portion of the costs of the pavement, but was permitted to complete the work, since it had already been begun, without prejudice to the right of the Railroad Company upon reasonable notice to require the town to remove the pavement at its own expense. The town appealed.
We express no opinion upon the merits of the controversy, for we have reached the conclusion that the District Court was without jurisdiction in the premises. Jurisdiction was based in the bill of complaint upon diverse citizenship, the Railroad Company alleging that it was a Virginia corporation suing a municipal corporation created under the laws of North Carolina to protect a property right of more than $3,000 in value. We are convinced, however, from an examination of the corporate history of the Railroad Company that it is not only a Virginia but also a North Carolina corporation, and that it can maintain the present suit only in the latter capacity. Hence diversity of citizenship does not exist.
The Atlantic Coast Line Railroad Company came into being through a series of consolidations or mergers, of which the first was the consolidation of the Richmond & Petersburg Railroad Company, a Virginia corporation, and the Petersburg Railroad Company, which was incorporated both in Virginia and in North Carolina. The Petersburg Railroad Company was incorporated by an act of the General Assembly of Virginia of February 10, 1830, Laws of 1830, c. 62, p. 59,* to construct a railway from some point in Petersburg to some convenient point on the North Carolina line. In the same year, the General Assembly of North Carolina passed an act to be found in the Revised Statutes of North Carolina of 1836-37, vol. 2, p. 275, wherein this Virginia charter was set out in full, and it was recited that it was proposed by the Petersburg Railroad Company to continue the railroad through that part of North Carolina between the Virginia line and the Roanoke river, and that the consent of the Legislature of North Carolina was requested to the Virginia act to enable the company to construct the road. By the enacting clause, the assent of the Legislature to the Virginia act to incorporate the Petersburg Railroad Company was as fully given "as if the said act had been passed by this present General Assembly" with certain exceptions and additions relating to the mode of acquisition of the necessary property for the railroad in North Carolina and the location of the railroad in that state; and the duration of the act was limited to sixty years "and no longer without a renewal of the charter." By the acts of North Carolina of March 9, 1891, c. 540, and March 1, 1893, c. 149, "the charter of incorporation granted to the Petersburg Railroad Company by the General Assembly of North Carolina at the session of 1830" was extended and renewed for an additional term of sixty years.
The Richmond & Petersburg Railroad was incorporated by an act of the Legislature of Virginia of March 14, 1836 (Acts 1835-36, c. 121, p. 146), for the purpose of making a railroad between the city of Richmond and the town of Petersburg. By an act of the Virginia Legislature of March 1, 1898 (Acts 1897-98, c. 635, p. 674), the Petersburg Railroad Company was authorized to consolidate with and to convey all of its property and franchises to this corporation, and the consolidated company was authorized to change its name to the Atlantic Coast Line Railroad Company of Virginia. By virtue of this power, the Petersburg Railroad Company conveyed all of its property and franchises to the Richmond & Petersburg Railroad Company, including that portion of the railroad in North Carolina. See Lee v. Atlantic Coast Line R. Co. (C.C.) 150 F. 775, 776. By the act of the Legislature of North Carolina of February 13, 1899 (chapter 77, Public Laws of 1899, p. 208), this consolidation and conveyance of the North Carolina portion of the Petersburg Railroad Company to the consolidated corporation were ratified and approved and the Atlantic Coast Line Railroad Company of Virginia was created "a body politic and corporate in the state of North Carolina" (section 2) with the right to have all the general powers and be subject to all the general restrictions imposed by the law of the state to and upon railroad companies. Specifically it was given all the powers and made subject to all the restrictions "except the restriction as to the term to which its charter is limited, granted and imposed by the charter of the said Petersburg Railroad Company or any amendments thereto under the laws of the state of North Carolina." Section 3.
Prior to this consolidation, the Atlantic Coast Line Railroad Company of South Carolina had been formed through the consolidation of certain railroad corporations of South Carolina under an act of the Legislature of that state of March 5, 1897 (No. 151 of the South Carolina Laws of 1897, 22 St. at Large, p. 653). The Code of Civil Statute Laws of South Carolina of 1894, c. 51, art. 3, § 1615 et seq., gave power and authority upon certain conditions to any railroad organized and operating under the laws of the state to merge and consolidate with any other railroad company operating under the laws of that or any other state whenever the railroads proposed to be consolidated should form a continuous line of railroad with each other or by means of any intervening railroad.
The line of railroad operated by the Atlantic Coast Line Railroad Company of Virginia, as above consolidated, connected with the line of railroad owned and operated by the Wilmington & Weldon Railroad Company in the State of North Carolina, in which the town of Bethel was located; and the line of the latter railroad connected with the line of railroad owned and operated by the Atlantic Coast Line Railroad Company of South Carolina as above consolidated, so that the lines of the three railroads formed a continuous line of railroad in the states of Virginia, North Carolina, and South Carolina. See Lee v. Atlantic Coast Line R. Co. (C.C.) 150 F. 775, 777.
Company was authorized to change its name to the Atlantic Coast Line Railroad Company of North Carolina, and "to consolidate or to merge its railroad with, or to buy or lease" any other railroad organized under the laws of North Carolina or of any adjoining state with which it might connect either directly or indirectly, by an act of the Legislature of North Carolina of February 24, 1899 (chapter 105 of the Private Laws of North Carolina of 1899, p. 212). By this act it was provided:
"Such consolidation, merge, sale or lease may be made between the Wilmington and Weldon Railroad Company and any other such company upon such terms and conditions as may be agreed upon by a majority of the stockholders of each corporation entitled to vote at all stockholders' meetings; and on like terms and conditions the said Wilmington and Weldon Railroad Company may sell or lease in whole or in part any of its railroads to any other such railroad company, and power hereby is given to any other such railroad company organized under the laws of this or of any adjoining state, to take such lease or to make such purchase; * * * Provided, that this act shall not have the effect of ousting the jurisdiction of the courts of this state over causes of action arising within the state: Provided, further, that any and all corporations consolidated, leased or organized under the provisions of this act shall be domestic corporations of North Carolina and shall be subject to the laws and jurisdiction thereof." (Italics inserted.)
On January 12, 1900, the Legislature of Virginia passed an act (Acts of 1899-1900, c. 18, p. 24), by which it authorized the Atlantic Coast Line Railroad Company of Virginia to change its name to the Atlantic Coast Line Railroad Company and to "consolidate with itself, or purchase or otherwise acquire" any other railroad company incorporated by the laws of the United States or of any of the states thereof.
Thereafter, on April 18, 1900, a deed and agreement of consolidation or merger was executed by and between the following parties therein described as the Norfolk & Carolina Railroad Company, a corporation created under the laws of Virginia and North Carolina, the Wilmington & Weldon Railroad Company, a corporation created under the laws of North Carolina, the Southeastern Railroad Company, a corporation created under the laws of North Carolina, the Atlantic Coast Line Railroad Company of South Carolina, a corporation created under the laws of South Carolina and North Carolina, and the Atlantic Coast Line Railroad Company of Virginia, a corporation created under the laws of Virginia and North Carolina. The deed recited that it was proposed to consolidate the other railroads named in the deed with the Atlantic Coast Line Railroad Company of Virginia and to change its name to the Atlantic Coast Line Railroad Company under the authority of the Act of Virginia of January 12, 1900, above referred to; and that...
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