# Consolidated Turnpike Company v. Norfolk & Ocean View Railway Company

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United States Supreme Court
228 U.S. 326
Consolidated Turnpike Company v. Norfolk & Ocean View Railway Company
Argued: January 28 and 29, 1913. --- Decided: April 14, 1913
Certain facts essential to the presentation of the questions of law upon which the judgment must turn will be preliminarily stated.
The Consolidated Turnpike Company, a corporation of the state of Virginia, acquired and united two or more toll roads, extending from Norfolk to Ocean View, on the seashore. The land acquired was somewhat more than was needed for a turnpike, and so the turnpike company, by warranty deed, conveyed a strip 18 to 25 feet wide to the Bay Shore Terminal Company, also a Virginia corporation, upon which the latter company constructed a line of electric railway, with the necessary power houses and stations. This conveyance was made subject to two prior mortgages. These mortgages were for the purpose of securing bonds, and the plaintiff in error Taylor is trustee in both, and the plaintiff in error Depue a holder of some of the bonds.
The Bay Shore Company in time became insolvent, and a creditors' bill was filed in the circuit court of the United States at Norfolk, and its road and assets of every kind placed in the hands of a receiver. In that proceeding it appeared that its property was encumbered by the two mortgages before referred to and other liens. To clear the title before sale, the circuit court directed its receiver to file a proper proceeding in a court of the state for the purpose of condemning any adverse title and all outstanding claims or liens against the land occupied by its tracks and appliances. Such a proceeding was accordingly filed, and Taylor, as trustee under the two deeds in trust, was made a defendant, together with certain others claiming other interests or liens. Depue, as a holder of bonds secured by the deeds in trust, intervened in behalf of himself as a beneficiary. The final decree in that proceeding is the decree here under review. Pending the condemnation proceedings, the property of the Bay Shore Terminal Company was sold under a decree made in the original winding up suit in the United States circuit court, and purchased by the defendant in error, the Norfolk & Ocean View Railway Company, and conveyed to that company, 'with the benefit of and subject to all suits and proceedings which have been or may be instituted by said receiver.'
Pending this condemnation proceeding, Taylor, as trustee, and Depue, as a beneficiary, although parties to the pending condemnation case, began, in a state court, a proceeding against the turnpike company to foreclose the mortgages referred to. The Ocean View Company, as purchaser of the property of the Bay Shore Company under the decree of sale made by the circuit court of the United States, applied to that court by petition and supplemental bill to enjoin the foreclosure suit until the proceeding to condemn the mortgagee interest pending in another state court should be decided. It was accordingly enjoined, and upon appeal by Taylor, trustee, to the circuit court of appeals, the injunction decree was upheld. 89 C. C. A. 338, 162 Fed. 452.
Recurring now to the condemnation proceeding: Commissioners were appointed and directed to ascertain 'a just compensation for the interest of all persons or corporations having any interest in or claim against or lien upon said land, either by deed in trust or mortgage.' They were directed to report the present value of the land with and without improvements and the value thereof on May 1, 1902, the date of the conveyance of same by the Consolidated Company to the Bay Shore Company. The Commissioners' report was as follows: "If valued as of the 1st day of May, 1902................ $5,000
Will be a just compensation.
If valued as of the date of this report, without improvements...................................... 6,200
Will be a just compensation.
Page 329 For the land, with improvements........................... 7,200 For the steel rails...................................... 15,000 For the railroad ties..................................... 1,250 For the poles............................................. 1,250 For the overhead construction............................. 2,500 For the machinery in power house......................... 25,000 For the buildings on tract No. 2.......................... 5,000
Making a total of .......................................$57,200
Will be a just compensation."
Will be a just compensation.'
Later the report came on to be heard upon exceptions filed thereto by Depue, as representing the beneficiaries under the Taylor mortgages. Taylor, as trustee, had all along been a party, and when Depue waived and withdrew nine of his exceptions to the report, Taylor joined him in such waiver of exceptions. The exceptions which remained included exceptions to the valuation reported as of May 1902, and the valuation reported as of the date of the report, May 15, 1906.
As the report was in the alternative, the question was whether that part of the report which fixed the value without improvements, or that part which fixed the value with improvements, should be adopted. The trial court fixed the just compensation at $57,200, which included the value added by the railway and stations which had been placed thereon by the Bay Shore Company, the predecessor in title of the Ocean View Company, and directed the latter company to deposit that sum in bank, subject to the court's order.
From this decree an appeal was taken to the supreme court of appeals of Virginia, where it was held that the compensation for the mortgagee interest should have been limited to the present value of the property without improvements placed thereon by the Bay Shore Company.
Mr. Justice Lurton, after making the foregoing statement, delivered the opinion of the court: Mr. Charles H. Burr for plaintiffs in error.

## Notes

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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