Weidenfeld v. Sugar Run R. Co.

• Citation: 48 F. 615
• Parties: WEIDENFELD v. SUGAR RUN R. CO. et al.
• Decision Date: 07 January 1892
• Court: U.S. District Court — Western District of Pennsylvania

48 F. 615

WEIDENFELD v. SUGAR RUN R. CO. et al.

United States Circuit Court, W.D. Pennsylvania.

January 7, 1892

C Walter Artz, for complainant.

H. C Dornan and John Ormerod, for defendants.

REED J.

The complainant's bill shows that, in a proceeding in the circuit court for the northern district of New York between the same complainant and the Allegheny & Kinzua Railroad Company, S. S. Bullis, and Mills & Barse, as defendants, a preliminary injunction was granted on the 18th of July, 1891 restraining those defendants from interfering or aiding any interference with the Interior Construction & Improvement Company, in the execution of its duties under certain agreements with the defendants, and from constructing or aiding the construction of any competitive or other line of railroad, in violation of said agreements. That among the lines of railroad proposed to be constructed under said agreements was what is known as the 'Sugar Run Branch of the Allegheny & Kinzua Railroad,' which was designed among other things, to reach certain timber land of Messrs. Bullis and Barse, which they had agreed to place under the lien of a mortgage given to secure the bondholders of the Allegheny & Kinzua Railroad Company, and from which branch the latter company expected to derive a large revenue in transporting the timber and bark coming from said lands. That subsequently, in November, 1891, the Sugar Run Railroad Company, the defendant in this case, was incorporated, and the route of its railroad surveyed and located in greater part over the route of the Sugar Run Branch of the Allegheny & Kinzua Railroad. That the Sugar Run Railroad Company was organized by A. A. Healy and others named as defendants, in collusion with the said Bullis, with the especial purpose of evading the injunction of the said circuit court. The charge of collusion is denied both by the answers of the defendants and by their affidavits, and has not been established by the plaintiff. While there is enough shown to lead to the conclusion that the officers of the Allegheny & Kinzua Railroad, and particularly its president, Mr. Bullis, have regarded with complacency the organization of this rival railroad, and its appropriation of the route and grading of one of the branches of their railroad, and while they have made to effort to protect the interests of their company, yet, so far as shown, the defendant company has been organized and is proceeding with its work as a separate enterprise, and its promoters are acting in independence of Mr. Bullis or the Allegheny & Kinzua Railroad. The injunction cannot be continued on this ground. In this connection it may be said that the defendant Healy is the owner of a large quantity of bark, which he reserved in a sale of timber land to Bullis in 1887, and which the defendants allege he is anxious to transport to his tanneries, and therefore he and his associates are constructing the defendant company's railroad with that object in view; Mr. Bullis and his assignee, the Allegheny & Kinzua Railroad Company, having failed, according to the terms of the agreement between Messrs. Bullis and Healy, to construct said railroad and transport said bark.

So far Mr. Healy seems to be acting for his own protection and in his own interest, and not in the interests of Mr. Bullis.

The plaintiff further contends, however, that, as a stockholder of the Allegheny & Kinzua Railroad Company, he is entitled to ask that its rights in the Sugar Run branch be protected; that it had located this branch, and had graded and cleared several miles of its route, which work the defendant company has appropriated, and is preparing to lay its railroad in part upon this graded road-bed. The defendant company claims priority of location and title as between itself and the Allegheny & Kinzua Company, to the route; and its counsel contend that under the law of Pennsylvania it is entitled to appropriate this route regardless of the work done by the latter company. It appears from the affidavits that the actual location in behalf of the latter company was made by the Interior Construction & Improvement Company, the contractor for the construction of its lines of railroad. The line is located by the contractor was approved by the executive committee of the Allegheny & Kinzua Railroad Company, but was never authorized or approved by its board of directors. The by-laws of the latter company provide for the appointment of an executive committee, and provide 'said committee shall have a general supervision of the operations and policy of the company, and shall have power to authorize the execution by the president, secretary, or treasurer of such contracts or agreements as said executive committee may deem expedient. ' This authorization has reference only to the conduct of the ordinary business and operations of the company, and does not extend to such important acts as the direction and approval of the location of its lines of railroad. The statute of Pennsylvania, (Act Feb. 19, 1849,) under which this railroad company acts in the construction of its railroad, imposes the duty of location upon the president and directors of the company; and this discretion cannot be delegated, nor can the board of directors approve and ratify, the unauthorized action of its officers in making such location, as against the rights of another railroad company, which may have attached to the property in question prior to such ratification. Appeal of New Brighton Ry. Co., 105 Pa.St. 13; Williamsport & N.B.R. Co. v. Philadelphia & E.R. Co., 141 Pa.St. 407, 21 Atl.Rep. 645. This question can only arise between two corporations having the right of eminent domain. If the defendant company has this power, and is entitled to its exercise, then, as between it and the Allegheny & Kinzua Railroad Company, it would seem entitled to the location, because, as appears, its board of directors have proceeded with the location of its line in the manner prescribed by the statute; and this is so, although the other company has actually done work upon the ground. Williamsport & N.B.R. Co. v. Philadelphia & E.R. Co., supra; Titusville, etc., R. Co. v. Warren, etc., R. Co., 12 Phila. 642; Davis v. Railroad Co., 114 Pa.St. 308, 6 Atl.Rep. 736.

It becomes important, then, to ascertain what rights and powers the defendant company possesses. It is organized under the general railroad law of Pennsylvania, being the act of assembly...