Williard v. Spartanburg, U. & C.R. Co.

• Decision Date: 17 August 1903
• Parties: WILLIARD v. SPARTANBURG, U. & C. R. CO. et al.
• Court: U.S. Court of Appeals — Fourth Circuit

124 F. 796

WILLIARD v. SPARTANBURG, U. & C. R. CO. et al.

United States Circuit Court, D. South Carolina.

August 17, 1903

V. E De Pass and Stanyarne Wilson, for plaintiff.

C. P Sanders, for defendants.

SIMONTON Circuit Judge.

This action was originally brought in the court of common pleas of the state of South Carolina for Union county, some time in the year 1902, apparently in the month of August. The defendant the Southern Railway Company answered the complaint, and at the same time filed its petition, with bond, for removal into this court, upon the ground that it was the only real defendant in the suit; that the true controversy was with it; and that the plaintiff is a citizen and resident of the state of South Carolina, and it is a corporation of the state of Virginia. The cause having been removed into this court, it now comes up on a motion to remand. This motion presents issues of fact and of law upon the determination of which the result depends.

The plaintiff alleges that the Spartanburg, Union & Columbia Railroad Company, one of the defendants, was and is the owner of the railroad extending from Columbia to Spartanburg, in said state, and passing through the town of Union; that at the time hereinafter mentioned-- the date of the cause of action-- the Southern Railway Company, the other defendant, a corporation of the state of Virginia, was and is now a common carrier leasing and operating said line of railway together with the tracks, cars, locomotives, and other appurtenances thereto belonging; that the plaintiff was a brakeman of a switch engine train usually operated in or near the depot yards of the Spartanburg, Union & Columbia Railroad Company in the employ of the defendants (in the plural), and was injured on the 5th August, 1902, by reason of the negligence of the conductor of said train, said conductor being then and there the agent and representative of the defendants. He lays his damages at $15,000. The defendant the Southern Railway Company, in its answer, denies the existence of any such corporation as the Spartanburg, Union & Columbia Railroad Company, denies that it held or operated this road under a lease from that company, admits that plaintiff was in its employment at the date of this accident, and denies any liability therefor. At the hearing of this motion the following agreed statement of facts was submitted and used in argument:

'That several years prior to the 5th day of August, 1902, the Spartanburg, Union & Columbia Railroad Company mortgaged its entire property, including its franchises, railroad tracks, roadbed, rights of way, depots, engines, cars, and rolling stock of every description to the Central Trust Company of New York, and that thereafter, but prior to the 5th of August, 1902, the said Spartanburg, Union & Columbia Railroad Company sold and conveyed all of its property, including its franchises, rights of way, roadbed and tracks, station houses, cars, engines, and rolling stock, to the Asheville & Spartanburg Railroad Company, which sale and conveyance was duly authorized by its stockholders; and that thereafter, and prior to the 5th day of August, 1902, the Asheville & Spartanburg Railroad Company consolidated with the South Carolina & Georgia Railroad Company, the Carolina Midland Railway Company, and the South Carolina & Georgia Extension Railroad Company, and on the . . . day of . . ., 1902, leased such consolidated property, including the roadbed, track, station houses, switch tracks, cars, engines, and all rolling stock, belonging to such consolidated company, to the Southern Railway Company; and that prior to and on the 5th day of August, 1902, the Southern Railway Company, as lessee, was in the exclusive use, control, and operation of all of such property. It is further admitted that the Spartanburg, Union & Columbia Railroad Company has not been in the possession or control of any part of the tracks, roadbeds, switches, station houses, or of any of its cars, engines, or rolling stock since the sale and conveyance to the Asheville & Spartanburg Railroad Company, nor was it operating or controlling any of said tracks, roadbeds, switches, station houses, cars, or engines on the 5th day of August, 1902. It is further admitted that there has been no decree of court, or any legal winding up or dissolution of the Spartanburg, Union & Columbia Railroad Company, but that the organization of said company has not been preserved by annual meetings and elections of officers. It is further admitted that the plaintiff and the conductor, by whose alleged negligence the plaintiff is alleged to have been injured, were prior to and at the time of the alleged injury in the sole and exclusive employment of the Southern Railway Company, and that they were at work in the service of the said Southern Railway Company, and not in the service of the Spartanburg, Union & Columbia Railroad Company, at the time of such alleged injuries.'

The solution of this case will depend upon these questions: First, Is the Spartanburg, Union & Columbia Railroad Company an existing corporation? Second. If it is, is it a necessary or proper party in this case having any interest in the issues involved therein? Third. If it has any interest in these issues, is that interest such that the controversy between it and the plaintiff is the same as that between the plaintiff and its codefendant the Southern Railway Company, or is the controversy between these two defendants separable?

The Spartanburg, Union & Columbia Railroad Company was incorporated by an act of the General Assembly of South Carolina. The act not only created the artificial being, the corporation, but it clothed it with certain franchises; among these, to operate its road as a common carrier of passengers and merchandise between its termini, to lease its road, and to mortgage all its property, and to include therein its franchises. Pursuing its powers under its charter, this company did mortgage its entire property, including its franchises, and by a foreclosure in pais in satisfaction of the mortgage it conveyed all the property mortgaged to the Asheville & Spartanburg Railroad Company. This latter company consolidated with certain other companies, which consolidation was approved by the General Assembly of South Carolina. The Southern Railway Company, at the time of the accident complained of, under a lease from the consolidated companies, was in the exclusive possession and operation of the track theretofore of the Spartanburg, Union & Columbia Railroad Company, and the sole owners of the rolling stock thereon. The act incorporating the Spartanburg, Union & Columbia Railroad Company has not been repealed, nor has this corporation been legally dissolved. As a legal entity, it exists.

Under these circumstances is it proper or necessary party to this suit, having any interest in the issues involved therein? The charter of this company gave to it the right to mortgage its entire property, including its franchises; that is to say certainly its franchise to operate its road between its termini. This right to mortgage involved all the incidents of a mortgage; that is to say, the mortgagor gave, and the mortgagee took, not only the security of the mortgage, but also the right to enforce it by foreclosure and sale. To this right was essential the power under sale to give clear title to a purchaser. The railroad company exercised this power of mortgage. The mortgage was enforced and foreclosed. A sale was had thereunder, and all of the property of the Spartanburg, Union & Columbia Railroad Company; that is to say, its roadbed, side tracks, plant, and rolling stock ceased...