Case Name: The State of Washington, on the Relation of Henry J. Biddle et al., Plaintiff, v. The Superior Court for Clarke County, Respondent
Court: Washington Supreme Court
Jurisdiction: Washington
Decision Date: 1906-09-27
Citations: 44 Wash. 108
Docket Number: No. 6301
Parties: The State of Washington, on the Relation of Henry J. Biddle et al., Plaintiff, v. The Superior Court for Clarke County, Respondent.
Judges: 
Reporter: Washington Reports
Volume: 44
Pages: 108–116

Head Matter:
[No. 6301.
Decided September 27, 1906.]
The State of Washington, on the Relation of Henry J. Biddle et al., Plaintiff, v. The Superior Court for Clarke County, Respondent.
Eminent Domain — Corporations—Statutory Requisite of Subscriptions to Stock — Evidence—Stock Books The properly identified stock books of a railway corporation, showing the names of the subscribers of all tne capital stock, is presumptive evidence that all the stock was subscribed, as required by Bal. Code, § 4250, to entitle the railway to condemn land for right of way.
Same — Subscription by Trustee. A subscription to the capital stock of a corporation by one subscribing as trustee,’ shows a liability to pay therefor and is a sufficient subscription, in the absence of want of good faith or insolvency, to entitle a railway to condemn land for a right of way.
Railroads — Location of Line — Corporations—Extra-Territorial Acts — Adoption, Where a domestic railway corporation adopted its line of location at a meeting of the directors held in another state, the subsequent bringing of condemnation proceedings in this state for a right of way along the same line amounts to an adoption of the corporate action taken outside of the state.
Eminent Domain — Damages — Assessment — Entire Tracts. Where, in a condemnation proceeding, the defendants expressly raise the point that the tract across which condemnation is sought is only part of an entire farm used as one tract, they are entitled to have the entire tract considered as a basis for estimating their damages.
Certiorari to review a judgment of the superior court for Clarke county, McCredie, J., entered June 15, 1906, after a hearing on the merits, adjudging a public use etc., and directing the assessment of damages for a railroad right of way.
Modified.
Donald McMaster, Teal 8f Minor, and J. W. Robinson, for relators.
James B. Kerr and Geo. T. Reid, for respondent.
Reported in 87 Pac. 40.

Opinion:
Hadley, J.
An order to show cause why a writ of review shall not issue to review the proceedings of the superior court of Clarke county in certain railway condemnation proceedings was made by this court July 11, 1906. The petitioner for the condemnation is the Portland & Seattle Railivay Company, a corporation organized under the laws of this state. The petitioner seeks to condemn a strip of land one hundred feet in width across the lands of Henry J. Biddle and wife for right of way purposes. Certain lands are described in the petition as comprising the entire tract of the defendants through which the railway line has been located. The defendants' answer admits the ownership of the land described in the petition, but alleges that they are the owners of a larger tract which is described as including what is mentioned in the petition, and that the whole of the larger tract described in the answer is owned and occupied by them as an entire tract as their farm and home. They allege that in order that their compensation may be fully ascertained, it is necessary to determine the damage to the entire tract owned by them considered as a whole. The answer also puts in issue the averments of the petition with reference to the legal capacity of the petitioner to condemn. A hearing was had, testimony was submitted upon the question of public use and necessity, and the court found that the contemplated use for which the land is sought to be appropriated is a public use, and that the public interests require its appropriation. An order was entered condemning a strip of land one hundred feet in width, the same being fifty feet in width on either side of the center line of the petitioner's location as staked out over and across the land described in the petition. It was also ordered that the damages should be ascertained by a jury, in July, 1906. Before any hearing was had upon the subject of damages, the order to show cause herein was issued, and further proceedings were stayed. The record was certified to this court, together with a bill of exceptions. A hearing was had thereon, and this court finds that the record presents a proper case for the writ of review.
The defendants first contend that the petitioner did not show that it is authorized to prosecute a condemnation proceeding. The proof showed the regular incorporation of the petitioner as a railway company. It is contended, however, that the evidence did not show compliance with the following provision in Bal. Code, § 4250: "Provided, that no such corporation shall commence business or institute proceedings to condemn land for corporate purposes until the whole amount of its capital stock has been subscribed." The books of the corporation, properly identified, were introduced to show that the entire capital stock had been subscribed. The evidence offered we think was competent for that purpose. It is generally held that when one's name appears upon the books of a corporation as a subscriber for stock it is presumptive evidence that he is such, in the absence of other evidence to rebut the presumption.
"The records of a corporation are competent and sufficient evidence to prove subscriptions to its capital stock and to show whether or not the number of shares required by its charter have been subscribed, where no proof is introduced to destroy their effect. If it is shown that a person's name appears on the subscription or stock book of a corporation as a subscriber or stockholder, or upon the books of commissioners appointed to receive subscriptions, this is prima facie proof that he is a subscriber or stockholder." 2 Clark & Marshall, Private Corporations, § 454.
In Turnbull v. Payson, 95 U. S. 418, 24 L. Ed. 437, the court said:
"Taken as a whole it is clear that the evidence offered was amply sufficient to warrant the jury in finding that the defendant was a stockholder as alleged. Where the name of an individual appears on the stock book of a corporation as a stockholder the prima facie presumption is that he is the owner of the stock in a case where there is nothing to rebut that presumption; and in an action against him as a stockholder, the burden of proving that he is not a stockholder, or of rebutting that presumption, is cast upon the defendant."
The above-stated rule is also supported by the following authorities : Glenn v. M'Allister's Executors, 46 Fed. 883: Glenn v. Orr, 96 N. C. 413, 2 S. E. 538; Liggett v. Glenn, 51 Fed. 381; Marlborough Branch R. Co. v. Arnold, 9 Gray 159, 69 Am. Dec. 279; Rockville etc. Turnpike Road v. Van Ness, Fed. Cas. No. 11,986: 1 Cook, Corporations (5th ed), § 55 and cases cited.
It is further contended that the records of the corporation admitted in evidence did not sufficiently show a subscription for all the capital stock. The articles of incorporation show the capital stock to be $5,000,000, divided into fifty thousand shares of $100 each. The subscription for the stock, as shown by the records, is as follows:
"We, the undersigned, hereby severally subscribe for the number of shares of the capital stock of the Portland and Seattle Railway Company set opposite our respective names and signatures, and agree to pay to the Portland and Seattle Railway Company one hundred dollars upon each share so subscribed.
Name of Subscriber. No, of Shares. Amount.
C. M. Levey, Trustee 49,995 $4,999,500.00
J. C. Flanders...... 1 100.00
C. F. Adams....... 1 100.00
S, B. Linthicum . 1 100.00
John S. Baker . 1 100.00
James D. Hoge..... 1 100.00"
It will be observed that the subscription for the entire capí tal stock except $500 was made by C. M. Levey, trustee. It is contended that the subscription by Mr. Levey as trustee is not binding upon him personally, and is not a compliance with the requirements of the statute. The case of Livesey v. Omaha Hotel Co., 5 Neb. 50, is cited. That case was, however, decided upon the theory that it was not shown that a condition precedent necessary to bind the subscriber had been performed. That condition was that a given amount of stock should be subscribed before liability attached. The same was true in Oldtown etc. R. Co. v. Veazie, 89 Me. 571. also cited. Penobscot R. Co. v. White, 41 Me. 512, 66 Am. Dec. 257, is cited. It was held in that case that, in order to show the absence of a full subscription, testimony on the part of a subscriber was admissible which tended to show that the subscriptions were not made in good faith, Lewey's Island R. Co. v. Bolton, 48 Me. 451, 77 Am. Dec. 286, is also cited. That case was decided upon the theory that certain statutory regulations must be observed before collection may be enforced against the subscriber. The statute required that notice of assessments should be given, and if any subscriber or stockholder, neglected to pay for the space of thirty days after notice, the shares should be sold at public auction to the highest bidder, and the delinquent, subscriber was accountable to the corporation for the deficiency. The last case cited by the defendants upon this subject is Phillips v. Covington etc. Bridge Co., 2 Met. (Ky.) 219. It was held in that case that, in determining whether the full amount of capital stock had been subscribed, the unpaid subscriptions of persons who were insolvent, or infants, or married women, at the time of making them, should be excluded from the computation.
The above decisions do not reach the point presented in the case at bar. The evidence shows subscriptions for the full amount of the capital stock, and there is neither evidence of want of good faith nor that any of the subscriptions were made by or in behalf of persons who were insolvent or under disability. Does the stock subscription show a liability to pay for all the stock? We think it does. In Cole v. Satsop R. Co., 9 Wash. 487, 37 Pac. 700, 43 Am. St. 858, it was held that, when the subscription to the stock is made by one as trustee, an action to recover may be maintained against the real parties in interest when the subscription is made by the trustee as agent for others. It is also the rule that, when an agent contracts for or on behalf of an irresponsible principal who does not possess the attributes of a legal entity, or when he signs a contract professing to be signing as agent when he has no principal existing .at the time, the agent is himself liable on the contract. 1 Am. & Eng. Ency. Law (2d ed.), 1122. In Johnston v. Allis, 71 Conn. 207, 41 Atl. 816, it was held that, where one had subscribed for stock as trustee and it transpired that the undisclosed principal was not bound, the subscriber himself was personally bound. To the same effect are the following cases: State ex rel. Page v. Smith, 48 Vt. 266; National Commercial Bank v. McDonnell, 92 Ala. 387, 9 South. 149. It follows that Mr. Levey's undisclosed principals must be liable on this subscription, or that he himself must be liable. As bearing upon the question of responsibility and good faith, the evidence shows that about $2,000,000 has already been expended by this corporation in construction work. Since the aggregate liability outside of Mr. Levey's subscription is but $500, it is therefore manifest that either the undisclosed principals or the trustee must have already paid large sums on the subscription.
It is argued that sufficient adoption of the line of location has not been shown'to enable the petitioner to condemn. The petitioner is a Washington corporation, and the proof showed that the line of location was first adopted by a meeting of the board of trustees held in the city of Portland, Oregon. It is contended that the corporation could not thus act without the boundaries of the state of Washington, and many authorities arc cited to sustain the argument. Whatever might be said upon the merits of this question in some cases, yet the evidence in the case at bar shows that the line of location as adopted at the Portland meeting includes the route now sought to be condemned, and the bringing of this condemnation proceeding by the corporation itself within this state is such an act of the corporation as amounts to an adoption, and we think eliminates any question of extra-territorial acts in that regard.
It is also urged that the line of location of the railway across, the defendants' land is not shown with sufficient definiteness. We think the testimony of the chief engineer and the maps and charts in evidence show the location with sufficient certainty. It is also insisted that the testimony does not show the necessity for appropriating a strip one hundred feet in width, and that not to exceed sixty feet in, width is required. We think it reasonably appears that one hundred feet is necessary, and that the court did not err in ordering the condemnation of that amount.
It is next insisted that the court erred in its description of the land, in its order adjudicating the necessity for appropriation and calling a jury. It will be-remembered from the statement of the case that the order describes the land, damages to which are to be ascertained, as the same tract which is described in the petition for condemnation. The answer, however, avers that other land not described in the petition is a part of the same tract, and that all of the land is occupied and used by the defendants as an entirety for their home. The testimony shows that the defendants own all the land described in their answer, and that it constitutes their farm. A public highway crosses the farm, running in an easterly and westerly direction. The residence and a part of the farm buildings are situate on the south side of the highway, but a barn is located on the north side. The railway company in its petition described only the land on the north side of the road, and the order of condemnation describes the same. We think it manifest that the defendants use and occupy all the land as a whole as one undivided farm. The uses to which they put all this land situate in one body except that it is crossed by the highway, comprise all the combined arrangements for carrying on the business of a single farm. Inasmuch as the defendants expressly raised this question by their answer, and described the whole tract as the damaged one, we think they are entitled under the evidence to have the entire tract described in the answer considered as one, as a basis for estimating their damages, within what was said by this court in Northern Pac. etc. R. Co. v. Coleman, 3 Wash. 228, 28 Pac. 514. At the hearing the court was asked to describe the entire tract in the order of condemnation as the land to be considered in the ascertainment of damages. Thereupon the court remarked as follows: "Without passing on that now particularly, I would say that if it is one contiguous tract it will have to be included. I presume it is one tract of land." The order entered, however, described the smaller area only. The court seems to have inclined to the view that the larger area is the tract to be considered, but must have been of the further opinion that the matter presented involved a mere rule of evidence to be determined upon the trial for the ascertainment of damages. Otherwise it would seem that the court would have passed upon the question, as it was squarely presented by the pleadings and evidence upon the hearing for the condemnation. While it does involve a rule of evidence, yet the order of condemnation as made would at least afford the basis for the contention that the inquiry as to damages must be confined to the smaller area. We therefore think the court should have passed upon the point directly and should have made its order accordingly. In this particular the order should be modified, but in all other respects it is affirmed, and the defendants are entitled to recover their costs upon this review.
The cause is remanded with instructions to proceed in accordance with this opinion, and to ascertain the damages.
Mount, C. J., Dunbar, Root, and Crow, JJ., concur.
Fullerton, J., concurs in the result.