Union Terminal Ry. Co. v. Chicago, B. & Q.R. Co.

• Decision Date: 19 November 1902
• Court: U.S. District Court — Western District of Missouri
• Parties: UNION TERMINAL RY. CO. v. CHICAGO, B. & Q.R. CO. et al.

119 F. 209

UNION TERMINAL RY. CO. v. CHICAGO, B. & Q.R. CO. et al.

United States Circuit Court, W.D. Missouri, Saint Joseph Division.

November 19, 1902

Brown &amp Doran, for plaintiff.

Willard P. Hall and Mosman & Ryan, for defendant.

The plaintiff, a Missouri corporation, filed its petition in the state circuit court of Buchanan county, Mo., against the Chicago, Burlington & Quincy Railroad Company (hereinafter called the 'Burlington Railroad'), an Illinois corporation, and the Kansas City, St. Joseph & Council Bluffs Railroad Company (hereinafter called the 'Council Bluffs Railroad'), a Missouri corporation, to have condemned for the plaintiff's use certain lands at the city of St Joseph, in Buchanan county, Mo., alleged to be owned by the defendant companies. The proceeding was had before the circuit judge in vacation, as authorized by the state statute. Summons was issued to the defendant companies, who appeared and filed answer to the petition, raising issues of law and fact as to whether the property sought to be condemned was liable to be so taken and appropriated by the plaintiff, etc. The defendant Burlington Railroad Company alleged in its answer that it was the sole owner of the property sought to be condemned, having acquired the same by deed of conveyance from the defendant Council Bluffs Railroad Company. The latter company by its separate answer alleged that it had no interest whatever in the property sought to be condemned, having hitherto conveyed all of its right, title and interest to the Burlington Company. At the time of the filing of these answers the Burlington Company presented its petition, with sufficient bond, for the removal of the cause into the United States circuit court. After alleging that the Burlington Company was a nonresident corporation and that the amount in dispute exceeded $5,000, exclusive of interest and costs, it set up the deed of conveyance to it from the Council Bluffs Company, and alleged that it was the sole owner of the property in controversy, and that this fact was known to the plaintiff when the petition for condemnation was filed herein, and that the resident company was made a party defendant for the fraudulent purpose of preventing the Burlington Company from removing said proceeding into the United States circuit court. The petition for removal was granted, and the plaintiff has filed a motion to remand which has been heard and submitted on proofs.

Before THAYER, Circuit Judge, and PHILIPS, District Judge.

PHILIPS District Judge (after stating the facts).

The first question arising on the motion to remand is whether or not the allegations of the petition for removal are true. It is a settled rule of procedure that, where the petition alleges a joint cause of action against a resident and nonresident defendant, the cause is not removable on petition of the nonresident, although it is averred in the petition for removal that the resident defendant has no interest in the controversy or that the cause of action in fact is not joint; nor is it sufficient that the answers of the defendants raise a separable controversy, or show that one of the defendants is not liable. Railroad Co. v. Wangelin, 132 U.S. 599, 10 S.Ct. 203, 33 L.Ed. 473; Railway Co. v. Dixon, 179 U.S. 131-138, 21 Sup.Ct. 67, 45 L.Ed. 121. But this rule is qualified by the proviso that the defendant moving for a removal may allege and prove to the satisfaction of the court that the local defendant was joined in the action for the fraudulent purpose of preventing a removal by the nonresident defendant. To support the last averment, the defendant Burlington Railroad Company on the hearing of this motion put in evidence a warranty deed in fee from the Kansas City, St. Joseph & Council Bluffs Railroad Company to the Chicago, Burlington & Quincy Railroad Company, of date January 1, 1901, duly acknowledged and recorded in the recorder's office of Buchanan county, Mo. On its fact this deed conveys and transfers to the said Burlington Company all the railroad tracks, depots, switches, property, franchises, and privileges of the said Council Bluffs Company, including its road and track and grounds in Buchanan county, Mo.; the granting clause concluding as follows:

'Together with all roadbeds, rights of way, bridges, depot and terminal grounds, and other lands or interest therein; station houses, buildings, and structures of whatsoever kind; leaseholds, rights under contract, and licenses; locomotives, cars, and other rolling stock and equipment; telegraph lines, supplies, tools, and materials; rents, profits, and income; and all other property real or personal, of whatsoever kind and wheresoever situated, now owned by it or hereafter to be acquired, whether appurtenant to the railroad aforesaid or otherwise. Also all rights, privileges, immunities, and franchises belonging to the said first party, except its franchise to be a corporation.'

On such sale and transfer from one railroad company to another, it goes without question that every conceivable interest in or right to any property (real or personal), privilege, or immunity belonging or appertaining to the grantor passes to and vests absolutely and unconditionally in the grantee. It is inconceivable that anything in the way of property rights, appurtenances, and privileges owned by the grantor at the time of the grant was reserved, 'except its privilege to be a corporation. ' The plaintiff's counsel admitted at the hearing of this motion that before instituting the condemnation proceedings he saw and examined this deed. It is also such a well-known fact that in such matters, preliminary to the filing of such suit, counsel for the petitioner examines with care the record of conveyances to ascertain exactly where the title to the property is, that it might almost be assumed by a court that this was done. When questioned at the hearing why, in the fact of this information and fact, the Council Bluffs Railroad Company was nevertheless joined as a party defendant, the answer was that the deed itself contained a reservation which counsel apprehended made it conservative to join it as a defendant. This alleged apprehension was based upon the concluding clause of the deed, which is as follows:

'And, to the end that the second party may have, hold, use, exercise, and enjoy the railroad and property and franchises of the first party hereby conveyed and intended to be conveyed, and whether now existing or hereafter acquired, as fully as might be done by the first party if this conveyance had not been made, the first party agrees to execute from time to time any additional assignment, conveyance, or assurance, and to perform any act, which the counsel of the second party may advise; and for the purposes aforesaid the first party agrees, if the second party shall so desire and advise, that it will keep up and maintain its corporate existence and organization.'

This provision of the deed was nothing more than of the nature of a covenant for further assurance, and the corporate existence of the grantor was continued merely for the purpose of enabling it, if required by the grantee, to give a further deed of assurance or affirmation. It was finally stated by counsel that, as he sought to acquire by the proceeding certain riparian rights on the Missouri river touched by parcels of the land sought to be condemned, he was apprehensive that possibly such right might be in the Council Bluffs Company, which did not pass under its deed to the Burlington Company. I confess my utter inability to grasp or to find any tangible basis for this contention. As a railroad company, under the laws and public policy of the state, neither could take nor hold any interest in land or its appurtenances, except for the necessary uses of a railroad company as such, the plaintiff has no right or authority to have condemned to its use any other property than land for its railroad. Railroads are not built on water; and the statute authorizing a railroad company to condemn property to its use has reference to such lands and property only as a railroad company may employ for trackage, switch grounds, station or depot houses, and the like. Section 1272 of the Revised Statutes of Missouri of 1899, which provides for condemnation proceedings when the property is held by a corporation, says:

'In case the lands sought to be appropriated are held by any corporation, the right to appropriate the same by a railroad company shall be limited to such use as shall not materially interfere with the uses to which, by law, the corporation holding the same is authorized to put said lands.'

If the plaintiff can condemn for its use what the petition calls 'riparian rights,' as against the defendant railroad company, it was property held by the defendants as railroad companies, and it passed to and vested in the grantee by the all-comprehensive language of the grant. grant. Furthermore, the allegation of the petition, in its legal effect, being that the two defendant companies jointly own the property sought to be condemned, the interest therein of the Burlington Company confessedly being derived under its grant from the Council Bluffs Company, with what consistency can it be maintained that the Burlington Company, under the grant, obtained only a joint interest with the grantor in the riparian rights? If the deed to the Burlington Company conveyed any riparian rights, it conveyed all that the Council Bluffs Company had.

It is a universal rule of law that every person is presumed to know the law. The conclusion, therefore, is inevitable that when the plaintiff joined the local company as a party defendant it knew it was not an indispensable party to this proceeding. It furthermore knew that the very statute ...