Case ID: ohio-st_50/html/0239-01.html
Source: Caselaw Access Project
Author: {"author": "Minsharr, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

State ex rel. v. Railroad Company et al.
    
      Qtio warranto—Object of, against a corporation—Statute of limitations.
    
    
      3. The object of a proceeding in quo warranto against a corporation, is to determine its right to the exercise of any or all of the franchises it may claim the right to use and possess, not to divest it of the ownership of property unless acquired by a usurpation of the proprietary rights of the state.
    2 A prayer that the defendant, a corporation, be ousted from the right to use the lands of the relator for a private purpose, is, in effect, a prayer that the company be ousted from the possession of the lands, and not within the purpose of a proceeding in quo warranto.
    
    3. The ouster of a company from the right to be a corporation, for the misuse of a franchise, is limited to five years from the commission of the offense. § 6789 Revised Statutes; State ex rel. v. Standard Oil Co. 49 Ohio St., 137.
    (Decided April 25, 1893.)
    Error to tbe Circuit Court of Mahoning county.
    The action below was a proceeding in quo warranto, commenced in Mahoning county by the prosecuting attorney, on the relation of Alexander F. C. Waddell, against The Pittsburgh, Youngstown & Ashtabula Railroad Company .and The Pennsylvania Company, asking that, upon the facts stated in the petition, the defendants “be ousted from the exercise of the corporate rights, franchises and privileges of using the private property of the relator and the relator’s wife, Caroline N. Waddell, and others.” Issues of fact having been made by the pleadings, were tried to the court, which, at the request of the plaintiff, found its conclusions of law and fact separately—the finding of facts being substantially the averments of the petition, and is as follows:
    “On the 1st day of July, A. D. 1872, articles of incorporation were filed with the secretar}' of state of Ohio, and a corporation formed to be known as The Youngstown & Canfield Railroad Compaq*-, for the purpose of locating, constructing and operating a public- railroad. The names of the places of termini of which, and the county through and in which said railroad should pass, were as follows, to-wit: Said railroad was to begin in the township of Youngstown, county of Mahoning and state of Ohio, at a point on the south side of the Mahoning river near Haselton, connecting with the Cleveland & Mahoning railroad, or the Eawrence railroad, and was to be located or constructed from thence westerly and south-westerly by the most advantageous route to the Niles & New Eisbon railroad at or near the village of Canfield, a distance of about twelve miles, all in said Mahoning county. The amount of capital stock of said railroad company was two hundred thousand dollars, in shares of fifty dollars each. That the said The Youngstown & Canfield Railroad Company, beginning at a point on the Eawrence railroad on the south side of the Mahoning river near Haselton, being the eastern terminus of the proposed railroad, entered upon the locating and constructing of the Youngstown & Canfield railroad, and by proceedings in the probate court of Ma-honing county, condemned and appropriated private lands upon which to build, and did build a part of said railroad, and exercised other powers and privileges and franchises which were granted to it as a public railroad company by the state of Ohio. That afterwards, to-wit: On the 26th day of May, A. D. 1873, The Eawrence Railroad Company and The Youngstown & Canfield Railroad Company were consolidated under the laws of the state of Ohio, forming one company to be known as The Eawrence Railroad Company. That the said The Eawrence Railroad Company immediately thereafter entered upon the location and construction of the Youngstown & Canfield railroad, and during the year 1874 completed the construction of said railroad from the western end of the part already built as far westerly and south-westerly as the Foster coal bank, a distance of about four miles from the place of beginning, or eastern terminus thereof, on the Eawrence railroad, and operated the same in the manner hereafter stated. That afterwards, to-wit: On the 2nd day of June, A. D. 1887, The New Brighton & New Castle Railroad Company, a corporation of the state of Pennsylvania, and said The Eawrence Railroad Company were consolidated under the laws of Ohio, under the name of The Youngstown, Eawrence & Pittsburgh Railroad Company; that afterwards, to-wit: On the 22nd day of July, A. D. 1887, The Ashtabula, Niles & Youngstown Railroad Company, a corporation organized under the laws of Ohio, was consolidated with The Youngstown, Eawrence & Pittsburgh Railroad Company, thereby forming a corporation of the state of Ohio, to be known as The Pittsburgh, Youngstown & Ashtabula Railroad Company, with its principal office in the city of Youngstown, Ohio; that about the first of the year, 1890, and more than two years after the coal had all been removed from the Kyle and Foster coal mines, the defendants herein pulled up the track, ties, bridges and bridge abutments of the Youngstown & Canfield railroad from the western end thereof (as constructed) at Foster coal bank, and removed the same back as far as the west line of lands owned by the relator, Alexander F. C. Waddell in said township, and has not since used the road bed and right of way of said Youngstown & Canfield railroad, except one mile and a third thereof, which the defendants retained and used, and are still retaining and using, substantially as a switch over which to reach the works of The American Tube & Iron Company, and The Smith Brick Works, with its cars and engines. That for at least two years prior to the time of the taking up of said track, ties, bridges and bridge abutments, no business was done or offered to said company over the portion of the road thus taken up, nor was any in prospect.
    “That said ties, bridges and abutments had been condemned by the engineers of the company operating the road, and they and the rails were insufficient to safely carry the engines and loaded cars then in ordinary use on the division of which this road is a part. That said track and structures were taken up at the instance and request of the superintendent of the said division, for the purpose of having the available material used elsewhere. That said Youngstown & Canfield railroad was never constructed to Canfield, and never connected with the Niles & New Eisbon railroad at or near Canfield or anywhere else. That no passenger cars were ever put upon said railroad, and no depots or freight houses were ever built bjr either of said companies, or any person or persons on or along the line of said railroad. That the Youngstown & Canfield railroad was never constructed further than said Foster coal bank by either of said companies into whose hands it came. And said original company, .and neither of the companies with which said original company was consolidated, ever intended to build said Youngstown and Canfield railroad to Canfield, and connect the same with the Niles & New Eisbon railroad. That the object and intention of said original company and the said The EawrenceRailroad Companj"-, was to secure the right of wajq locate and construct, and maintain a private railroad to the Kyle and Foster coal mines, for the purpose of transporting coal from mines of which the stockholders of said original company and said consolidations were the owners, to Haselton and elsewhere to market, and which object and intention were known to the said subsequent consolidating companies and acquiesced in and continued by them. That The Pittsburgh, Youngstown & Ashtabula Railroad Company is now occupying land that was appropriated by proceedings had in the probate court of Mahoning county, Ohio, as a part of the right of way of said Youngstown & Canfield railroad» the fee in which land belongs to this relator and this relator's wife and others, and has been and is now maintaining said railroad over the same for the purpose of running its cars and engines to and from the works of The American Tube & Iron Company and said Brick Company and for no other purpose.
    “CONCLUSIONS OP LAW.
    “.Upon the facts above found, the court holds the law to be: ‘That the cause of action herein is founded upon the facts that said railroad companies did not intend to and did not build a public railroad, but did intend to and did build a private railroad for the private benefit of the stockholding mine owners, and the facts that no passenger cars were put upon said road, and no passenger or freight houses built, and that the operating company took up the rails, ties, bridges, and bridge abutments, as found by the court, are evidential facts tending to prove said cause of action, and do not in and of themselves constitute any ground for independent separate relief herein, and that said cause of action is barred by the five year limitation contained and provided for in section 6789, of the Revised Statutes of Ohio, and that the-plaintiff is not entitled to any relief in this action.’ To> which conclusions of fact found from the evidence and to which conclusions of law plaintiff then and there excepted. And it appearing to the court that The Pittsburgh, Youngstown & Ashtabula Railroad Company did not in its original answer plead said limitations contained in said section of the Revised Statutes of Ohio, said defendants upon this application made during the hearing of the cause are granted leave to file an amendment to their said original answer and therein plead said limitation, and said plaintiff excepts thereto. The court grants leave to the plaintiff to reply instanter to said amendment, which is accordingiy done.
    “It is therefore ordered, adjudged and decreed by the court that this action be and the same is hereby dismissed, and that said defendants go hence without a day and that they recover their costs of said plaintiff, and that said plaintiff pay its own costs to be taxed at $-. To all of which holdings, judgment, order and decree said plaintiff excepts.”
    
      George F. Arrel and W. T. Gibson, for plaintiff in error.
    I. Under the former holdings of this court there was created, by direct grant from the legislature of Ohio, a new corporation, whose existence began on the 22nd day of July, A. D. 1887, with power to construct and operate a public railroad from a point on the south side of the Mahoning River, near Haselton, connecting with the Cleveland & Mahoning railroad or the Eawrence railroad, to the Niles & New Eisbon railroad, at or near the village of Canfield. 
      The State of Ohio v. Sherman et al, 22 Ohio St., 411; Shields v. The State, 26 Ohio St., 86. This action was commenced in the court below in August, 1890, and hence within five years of the incorporation - and organization of The Pittsburgh, Youngstown & Ashtabula Railroad Company. The same case was before the Supreme Court of the United States. Shields v. Ohio, 95 U. S., 319.
    The doctrine of the cases cited above clearly is that, by the consolidation of railroad companies under the statutes of Ohio, there is formed a new corporation which .takes and enjoys its franchises,' powers and privileges, by grant directly from the legislature, and that the individual charters of the constituent companies are surrendered and relinquished. If such be the law,'then the-question is, whether or not, where one of the constituent companies has usurped, and for a period of more than five but less than twenty years, has, in fraud of the law, exercised the privileges of operating a purely private railroad, and for purely private purposes, the consolidated company can, in perpetuity, continue such usurpation and the exercise of such privilege. It is submitted that to ask such a question is to answer it.
    The right to become a corporation was obtained by false pretenses and fraud on the part of the stockholders of said original company. The right to exercise valuable privileges and franchises was continued and enforced by the false pretenses and fraud of the subsequent consolidating companies, into whose possession and control said railroad came.
    In the case of The State v. The Haselton & Leetonia Railway Co., 40 Ohio St., 504, the court found that there had been not only a non-user of the powers, privileges and franchises conferred, but there had been a palpable misuser of them. In that case the court reversed the decision of the district court, and remanded the case back without a decree. But, judging from the language used by the court in the opinion, if there had been a decree it would have been one of ouster, under Section 6761, Revised Statutes. On the 2nd day of July, 1877, there had been a misuser and non-user for five years, and an action could have been maintained then to oust The Eawrence Railroad Co., and under their holding it would have been the duty of the court to enter judgment of ouster therein. Revised Statutes of Ohio, sec. 6780. Did the misuser and non-user of the rights, privileges and franchises granted to The Youngstown & Can-field Railroad Company, cease at the end of five years from the date of incorporation? If it did, then at the end of five years more, if the five 3>-ears limitation is applicable, the time within which the action could be brought, would have expired. But the consolidated companies did not cease to exercise the rights, privileges and franchises at the end of five years, and they are still exercising them.
    Was not the laying of the last tie and the running of the last engine over this railroad as plain a misuse as the laying of the first tie or the running of the first engine over it ? Was not the operation and maintenance of this railroad for four miles, and no more, as plain a non-user of the rights, privileges and franchises granted to the Youngstown & Canfield railroad in 1888, as the failure to use the same from 1872 to 1877? In other words, the five years limitation begins to run from the time the act complained of was done or committed. Revised Statutes, sec. 6789. The acts complained of in this case were done and commited up to the time the railroad was abandoned in 1890. And as the defendants are still occupying and using about one mile of this railroad as a switch, under and by virtue of their articles of incorporation, there is still a non-user and active misuser of the rights, previleges and franchises granted. At the time of the commencement of this action these defendants were, aud they now are, operating and maintaining a private railroad over private lands; that is, they are occupying lands obtained by the exercise of the right of eminent domain in 1872. Can it be that the legislature intended that the words done or committed, in Section 6789, Revised Statutes of Ohio, should refer to the first acts of misuser or non-user only ? And that after a corporation has continually misused and failed to use the rights, privileges and franchises granted to it as a corporation for five years, it has a right to do so?
    II. The object and intention of The Youngstown & Can-field Railroad Company, and The Lawrence Railroad Company, was to secure the right of way, locate, construct and maintain a private railroad to the coal mines, for the purpose of taking coal from these mines to Haselton and elsewhere to market. The stockholders of the original companies, and of the consolidations were the owners of these mines. And this original object and intention was known to all of these companies, and continued by them. The principal defendant in error is occupying and using land which belongs to the relator, and the relator’s wife and others, and which was appropriated by The Youngstown & Canfield Railroad Company, by proceedings in Probate Court of Mahoning county had lor that purpose, and it is now maintaining a railroad over these lands for the purpose of running its cars and engines to and from the works of The American Tube & Iron Co. and The Smith Brick Co., and for no other purpose. All of these things the principal defendant in error claims to have done and to be doing under and by virtue of its charter. Indeed, no other claim can be made in its behalf. It clearly claims and holds, and has exercised and is exercis. ing, a franchise, privilege or'right, in contravention of lawr within the meaning of paragraph 4 of sec. 6761, Revised Statutes of Ohio. Its right to do these things cannot be secured to it under Section 6789, Revised Statutes of Ohio, until the lapse of twenty years. The power or' franchises must have been used and exercised under its charter for the full period of twenty years before the action below was barred. Even if time began to run in its favor on the 1st day of July, 1872, when The Youngstown & Canfield Railroad Co. was incorporated, and which was fifteen years and twenty two days before The Pittsburgh, Youngstown & Ashtabula Railroad Co. was born, the action was not barred. Ohio ex rel. the Attorney General v. The Standard Oil Co., 49 Ohio St., 137.
    
      J. R. Carey, W. C. Boyle and A. W. Jones, for defendant in error.
    Brief of A. W. Jones.
    
    The circuit court found, that while the paper road was apparently a public road, that the company never had any other intention than to build a private road four miles in length for the accommodation of certain stockholders who were owners of the mines, to enable them to take their coal to market.
    If this was true, as found by the circuit court, there can be little doubt but that at one time it would have authorized a proceeding to oust the defendant of its rights to be a corporation. Revised Statutes, sec. 6761; Ohio v. P. & O Canal Co., 23 Ohio St., 126, 127; States. Railway Co., 40 Ohio St., 504; State v. People's Association, 42 Ohio St., 579.
    All that was ever done by way of construction was completed in the year 1874, so that the offense against the law of its creation occurred in that year. Waddell’s land was appropriated December 17, 1872, for the sum of $2,985.00. This action was not commenced until August 16, 1890; therefore, by leave of the circuit court, defendants interposed the bar of the statute of limitations. Revised Statutes, 6789.
    Judge Eaubie in delivering the opinion of the court has more ably discussed the question presented than we are able to do, and we therefore adopt his opinion as our argument upon the subject.
    Counsel for plaintiff in error in their brief, seem to admit the force of the bar, unless they can avoid it in one of the ways pointed out by them.
    They say that by the consolidation of the several corporations into the one, there is formed a new corporation, which takes and enjoys its purchases by grant directly from the legislature, and that the individual charters of the constituent companies are surrendered and relinquished.
    While they do not in words say it, the inference they desire the court to draw is, that although The Youngstown & Canfield R. R. Co., or The Lawrence R. R. Co., had they remained unconsolidated, might have pleaded the bar of the statute; still, by force of the consolidation, The P., Y. & A. R. R. Co. is precluded from so doing. The argument proves too much, because, if by the consolidation -the atonement was wiped out, the sins of the deceased ought to be wiped out also, and not charged against the new creation. If the court will examine the evidence it will be found that all the acts of offense charged or proven were done by these old companies. The same argument would apply if the company had been in adverse possession of depot grounds, claiming title for twenty-one years; the consolidation would dispose of the bar and defeat the title. Indeed, if the claim is well founded, Waddell could easily have obtained his land by an ordinary action of ejectment. Sec. 3384, Revised Statutes.
    One of these rights, so transferred, was the right to plead this statute of repose. In other words, all the property, rights, privileges, franchises, and every thing else, under whatever name it may be known, goes to the new company, in the same manner, and under the same conditions,Noth as. to rights and liability, as though the old company'had continued to remain.
    If what Judge Arrel is pleased to term a “usurpation’’, had ripened into a right in the old company, either by virtue of the bar of the statute or otherwise, before the consolidation, it would remain a right in the new company unaffected by the consolidation. Neither would a consolidation have the effect to stop the running of the statute; if half the time had run while the old company was in existence and the other half accrued under the new, we submit that the bar would be complete.
    A proceeding in quo warranto to forfeit a charter must, under sec. ,6789, be commenced within five years after the act complained of was done, whether commenced by the state on relation of the attorney-general or otherwise. Ohio ex rel. v. Standard Oil Co., 49 Ohio St., 137.
   Minsharr, J.

The original action was brought in the circuit court of Mahoning county against the defendants, in August, 1890, by the prosecuting attorney on the relation of a private person, Alexander F. C. WaddeJl, for the purpose, as appears from the prayer of the petition, of ousting The Pittsburgh, Youngstown & Ashtabula Railroad Company from the right, franchise and privilege “of using and occupying the private property of the relator” and his wife. The Pennsylvania Company being simply the lessee of the road of that company. The company named acquired its right to the use of the land in question as a right of way, through a series of consolidations—the condemnation having been made in 1872, by The Youngstown & Canfield Railroad Company, incorporated under the laws of this state in that year. Subsequently this company and its road were merged in and became a part of The Lawrence Railroad Company, formed by proceedings in consolidation completed August 26, 1873, between it and another company; by like proceedings this company was merged in and became part -of The Youngstown, Lawrence & Pittsburgh Railroad Companj1- formed June 2, 1887; and then this company was merged in and became a part of the defendant, The Pittsburgh, Youngstown & Ashtabula Railroad Company formed by proceedings in consolidation, completed July 22, 1887.

The court finds in substance that the road from Haselton to Canfield never was constructed, nor was intended to be, by any of the companies; and that the object and intention of the original company and of The Lawrence Railroad Company, was to secure the right of way, locate and construct a private road to certain coal mines about four miles from Haselton, in which the stockholders of these companies were interested, and to which the road was constructed and operated in shipping coal from the mines for private purposes and none other, until in 1890, and sometime after all the coal had been removed from the same mines, when the track was torn up and abandoned back to the west line of the relator’s land, something over a mile from Haselton, from which point the remainder of the road is used as a switch to The American Tube & Iron Company and The ■Smith Brick Works.

The question now arises whether upon the facts as found by the court, the relator has a right to the relief prayed for. It may well be conceded, that the condemnation of private property for a private use, and its use for such purpose only, constitutes a flagrant abuse of the power of eminent domain, and that a company guilty of such abuse of its powers should be deprived of its corporate franchises and be dissolved. The State v. Railway Company, 40 Ohio St. 504. But our statutes limit the time in which this drastic remedy may be applied by the courts to an offending company, to five years from the commission of the offense. § 6789, Revised Statutes. Whether it was wise in the legislature to prescribe such a limitation, is not open to question here; nor can we say that the court erred in permitting the defendants to plead the statute after the parties had gone to trial; and it follows that the court was right in holding that, as a matter of law, no judgment ousting the company from its corporate rights and dissolving it, could be entered in the case. And, indeed, it should be observed that the present compan}'- committed none of these offenses. The property for the roadway was condemned by the original company in 1872, and the road was constructed over the way as condemned, by The Eawrence Railroad Company in 1873 and 1874. All the present company has done, has been to take up the track, bridges and so forth, and abandon the road to the west line of the relator, and continue the use of the remainder as a switch to certain private industries. So that there remains only the question whether any relief can, in this proceeding, be given the relator as against the present consolidated company. We say the relator, for it has been shown that none can be given the state, by reason of the statute of limitations, for any abuse of the power of eminent domain. The present company has, as a matter of fact, been guilty of no such abuse. It, so far as appears, has condemned no property for any purpose; and if it could be punished for what was done by some one or more of the companies now merged in it, certainly it could not be after the offense had been condoned by lapse of time in favor of the offending company. The only claim that can now be asserted against it is, that without any authority of law and against his consent, it is wrongfully occupying the property of the relator. Is it within the jurisdiction conferred on the courts in a proceeding in quo warranto 'to afford relief of any kind in such a case? We think not. Except where the proceeding is brought to try title to an office, in which the defendant may be ousted and the claimant inducted, or where it is brought to determine the title of a corporation to property claimed by the state, it is always limited to a determination of the right of a corporation to the exercise of certain powers and franchises which can only be derived from the grant of the state. It is not a remedy to determine disputes between it and private persons as to the ownership of property. Where the power, of eminent domain has been conferred on a corporation by the state, it is not a matter to be determined in quo warranto, whether the corporation in the exercise of the power has perpetrated a fraud, and wrongfully or unjustly acquired the property of a private person, and if found guilty to oust it therefrom. Other and more appropriate civil remedies are provided the citizen for the assertion and protection of his rights of property in such cases. He may adopt any of the remedies he would have under like circumstances against a natural person. A corporation enjoys no immunity in this regard. It can no more wrongfully take and occupy the property of another, than can a natural person; and it is subject to the same remedies in such cases. If the facts found constitute an adandonment of the way through the relator’s land, he could certainly recover it in an action for the possession; or, if it was fraudulently acquired and used for a private purpose, I am unable to see why the owner, if without knowledge of the fraud at the time of the appropriation, might not, on discovering the fraud and returning or offering to return the money received as compensation and damages, cause the appropriation to be set aside, as any other judgment obtained by fraud, and have a writ of possession awarded.

To sum up, the object of a proceeding in quo warranto against a corporation, is to determine by what right it exercises a certain franchise—a franchise as here understood, being, as defined by Kent, a particular privilege conferred by the grant of the government and vested in individuals; or, as defined by Blackstone, a branch of the king’s prerogative subsisting in the hands of a subject. 3 Kent, 458; 2 Bla. Com. 37. Or it may be to oust it from the right to be a corporation for an abuse or non-user of franchises granted. Hence it is, that the state must always be the plaintiff, as it alone can complain of such usurpation of its authority, or abuse of privileges granted. It is not then a suit for the vindication of the proprietary rights of the individual as against the claims of a corporation; the remedies of the individual against a corporation for the recovery of property being the same as against a natural person.

Judgment affirmed.