Moorshead v. United Railways Co.

96 S.W. 261, 119 Mo. App. 541, 1906 Mo. App. LEXIS 263

• Court: Missouri Court of Appeals
• Decided: May 22, 1906
• Status: Published

Opinions

GOODE, J.

Tbe petition alleges that plaintiff was hurt by tbe negligence of defendant’s servants in suddenly and violently starting a street car on which she was a passenger and while she was walking in tbe aisle to a seat. Tbe action was instituted against tbe St. Louis Transit Company and tbe United Railways Company and both are alleged to have owned and been engaged in operating tbe car and line of railway on which it was running. Tbe answers filed by tbe two defendants were both general denials. Evidence was adduced tending to prove tbe plaintiff was injured in tbe manner alleged and that it resulted from tbe negligent conduct of tbe car’s crew. It is conceded by tbe plaintiff that tbe evidence proved tbe car was operated by tbe Transit Company under and by virtue of a written instrument executed by tbe two companies and purporting to be a lease. Tbe only evidence relied on to fasten liability for tbe accident on tbe United Railways Company was this contract. The jury were instructed to return a verdict against both the defendants, ,if they found the issues for the plaintiff. A verdict against both having been returned, the court sustained motions filed by the United Railways Company for a new trial and' in arrest, on grounds equivalent to an express ruling that it was not liable to the plaintiff. Similar motions filed by the Transit Company were overruled. The result was that plaintiff appealed from the order sustaining the motion of the United Railways Company, and the Transit Company appealed from the judgment against it, but after-wards dismissed its appeal. Two ordinances of the city of St. Louis were put in evidence, one of which is relied on as giving the city’s consent to the leasing by the United Railways Company of the line on which plaintiff was hurt, to the Transit Company. The title and two paragraphs of that ordinance will be copied. The title is as follows:

“An ordinance for the greater convenience and further transportation of passengers on the railways of the Cass avenue and Fair Ground Railway Company, Citizens’ Railway Company, Southwestern Railway Company, Southern Electric Railroad Company, St. Louis Railroad Company and Baden and St. Louis Railroad Company, respectively, and for that purpose authorizing change of motive power, the connection of railway tracks respectively, and the running of cars of one or more of said companies on the tracks of one or more of the other companies, and of such companies whose tracks may be intersected by the tracks of either of said companies, with authority to run ambulance, funeral, mail and express cars, also authorizing if found desirable for said purpose, the sale, conveyance or lease of rights, privileges, franchises and property of one or more of said companies, and of the companies whose tracks may be so intersected, to another of said companies or to the St. Louis Transit Company, its successors and assigns, and the acquisition thereof with authority to hold, enjoy and operate the same for a period expiring with the term of the franchise of the Southern Electric Railroad Company, as provided in city ordinance number fourteen thousand, eight hundred and thirty-seven, and to regulate the speed of cars, and authorizing the Southwestern Railway Company to extend its tracks on Gravois avenue from its intersection with the Morganford road to Bates street, and there to connect with the tracks of the Southern Electric Railroad Company, and extending the time for the completion of its tracks from Grand avenue on Chippewa street and Gravois avenue to the Morganford-road, and the Southern Electric Railroad Company to extend its route on Longborough avenue, Gravois avenue and Bates street, and to operate the same.”

The first and third sections of the ordinance read:

“Whereas, it will be to the great advantage of passengers to have the tracks of the Cass Avenue and Fair Grounds Railway Company, Citizens’ Railway Company, Southwestern Railway Company, Southern Electric Railroad Company, St. Louis Railroad Company and Baden and St. Louis Railroad Company, respectively, connected, and the cars of said companies respectively, run on the track or tracks of others of said companies ;

“Therefore, The St. Louis Railroad Company is hereby authorized to connect its tracks on Broadway with the tracks of the Citizens’ Railway Company at Morgan street and Franklin avenue, and to connect its tracks on Broadway and Walnut street with the tracks of the Cass Avenue and Fair Grounds Railway Company, and its tracks at Broadway and Elm street with the tracks a.t that point,’ and to connect its tracks at or near Broadway and Keokuk street with the tracks of the Southern Electric Railroad Company; and authority is given to the Southwestern Railroad Company to connect its tracks with the Southern Electric Railroad Company at Chippewa street and Jefferson avenue; and thereupon with the consent of the St. Louis Railroad Company and said Citizens’ Railway Company, Cass Avenue and Fair Grounds Railway Company, Baden and St. Louis Railroad Company, Southern Electric Railroad Company and the Southwestern Railway Company, respectively, the cars of said companies respectively, may be run on each other of said companies’ tracks respectively, and upon the tracks of any railway company with which any of the tracks of said companies may intersect, and may be agreed upon between them respectively, and with such companies whose tracks may be so intersected, and for that purpose authority is hereby given to make desirable curves and switches and connections therewith, and the cars shall be run at the same rate of speed on the tracks on which they may run as is now provided by ordinance for the running of cars thereon.”

“Sec. .3. For the better effecting the purpose of this ordinance, the said Gass Avenue and Fair Grounds Railway Company, Citizens’ Railway Company, Southwestern Railway Company, Southern Electric Railroad Company, St. Louis Railroad Company, Baden and St. Louis Railroad Company and any company whose tracks may be intersected by the tracks of any of said companies, and their successors and assigns, are hereby severally authorized to sell, convey, or lease, if found desirable, their property, rights, privileges and franchises now owned and held or herein granted, respectively, to any of the said companies named in this section, or to the St. Louis Transit Company, its successors and assigns, the said company and its successors and assigns so acquiring such property, rights, privileges and franchises, is hereby authorized to acquire, hold and enjoy the same during the term of this ordinance; provided, however, that if such acquisition is had, passengers shall be transported over the whole or any part of said railroads or railways, in the city of St. Lonis, so acquired on one continuous ride for one fare, and for that purpose transfers may he made at convenient points.”

It was admitted on the trial that the United Railways Company (sometimes called herein the Railways Company) acquired by purchase all the railroad lines named in paragraph one of the ordinance, that two-thirds of the stockholders of the two corporations passed resolutions authorizing the lease and that the contract of lease was duly executed.

The contract recited that the United Railways Company and the St. Louis Transit Company were at the date of the instrument, corporations organized under the laws of the State of Missouri; that the former owned several lines of railway in the city and county of St. Louis and certain bonds and stocks described in a deed to the St. Louis Transit, Company of date September 30, 1899; that the United Railways Company was willing to lease its railway lines, property and franchises, and all the income from its bonds and stocks to the Transit Company for a period beginning October 1, 1899, and ending April 1, 1939, and that the Transit Company was desirous of acquiring said lines and franchises by lease. The contract then proceeds to say: “Now, therefore, this agreement witnesseth, that United Railways for and in consideration of the convenants and agreement hereinafter contained on the part of the Transit Company, to be by it made, kept and performed, has granted, demised and leased, and by these presents does grant, demise and lease unto Transit Company all the railways,” etc.

The subsequent portion of the instrument may be summarized as follows: The Transit Company acquired from October 1, 1899 to April 1, 1939—

First. All the railroads constructed, owned or operated by the United Railways Company or that it might thereafter construct, own or operate.

Second. All the property real, personal or mixed held by the United Railways as owner or otherwise or that it might acquire.

Third. All the income derived from any bonds or stocks owned by the United Railways or which it might acquire.

Fourth. All franchises belonging to the United Railways or which it might acquire, except the franchise to be a corporation and any other right or franchise necessary to preserve its corporate existence and organization.

Fifth. Exclusive right to usé, manage and operate the railways and fix and collect tolls, but not at higher rates than United Railways was empowered to fix them.

Sixth. All money of the United Railways on hands at the date of the lease or received by it afterwards from any source (par. 9).

The Transit Company as consideration agrees—

First. To pay a net annual rental of five dollars per share on all the preferred stock of the United Railways then outstanding or that might be issued with the consent of the Transit Company; said rental to be paid quarterly on the 10th days of January, April, July and October of each year.

Second. At its own cost and expense and without deduction from the rent (a) to maintain, operate, work, use and run and keep in public use the demised railways in the same manner the lessor, the United Railways, was required to do; (b) keep the demised railways and their property in good repair, working order and condition and supplied with rolling stock and equipment so as to develop the business; (c) make any repairs and replacements on the demised property, and all additions to and improvements thereon, and provide such new and additional rolling stock from time to time as might be necessary for the proper operation and use of the property.

In payment for the additions, acquisition, betterments and improvements made by the Transit Company to the property demised, the contract provided that the United Railways, when requested by the Transit Company or on its order, should deliver to the latter, bonds of the first general mortgage bonds secured on the rented railway at par and authorized to be issued for improvements ; or, in lieu of said bonds, any unissued, preferred or common stock of the United Railways at the option of the Transit Company.

Third. In addition to the regular rental, the Transit Company agreed to pay the United Railways Company $1,000 a year for the purpose of defraying the expenses of maintaining the corporate existence of the United Railways and companies connected with it.

Fourth. Pay all the floating debts of the United Railways Company.

Fifth. Pay all tolls, assessments and water rents assessed against the property of all kinds of the United Railways Company.

Sixth. Pay the interest on the bonds thereon issued by the United Railways and the subordinate companies whose lines had been acquired by the United Railways Company and included in the lease to the Transit Company. Seventeen issues of bonds aggregating about $35,-788,000 are enumerated under this item of the consideration paid by the Transit Company for the lease.

Seventh. Keep the demised property insured at its own expense.

Eighth. Apply all net surplus earnings above six per cent annual dividends on its capital stock, either to the extension and betterment of the leased lines of the railway, or the redemption of the mortgage indebtedness of the leased property.

Ninth. To apply all money not needed for current liabilities or interest turned over to it by the United Railways, or on hand at the date of the lease, or received by the United Railways thereafter, from the rent of useless property, to 'the improvement of the demised property.

A. The Transit Company agreed to “indemnify, save and keep harmless the United Railways during the continuance of the lease from all costs, charges and expenses arising from the management and operation of said railways and all matters incident thereto.” (Par. 1 of lease.)

B. The United Railways agreed in effect to maintain its corporate existence, and when requested by Transit Company, put in force and exercise each and every right it owned or might acquire, and do every lawful corporate act necessary or proper to enable the Transit Company to avail itself of the franchises and property demised; and the Transit Company agreed to indemnify the Railways Company “against all expenses, loss, damage or liability for such exercise of corporate power or performance of corporate acts.”

C. The right of re-entry on the demised property was restored to the United Railways in the event the Transit Company failed to keep any of its covenants. It was provided that a re-entry for non-performance of covenants by the Transit Company should not prejudice the right of the United Railways to recover damages for 'the default.

D. All cars, machinery, tools, appliances and other personal property belonging to United Railways should be turned over to Transit Company as soon as the lease took effect, and, in case of the termination of the demise, should be restored to the Transit Company, or in lieu thereof its value paid; the value to be found by an appraisement.

E. On termination of the contract for breach of covenant, all betterments previously made by the Transit Company became the property of the United Railways.

F. The Transit Company agreed to keep true accounts of its receipts and disbursements, and that its books should be open to inspection by the United Railways.

G-. Differences arising between the two parties regarding the meaning of any part of the lease, and other matters, were to be settled by arbitration.

That the United Railways Company is liable in damages to plaintiff notwithstanding the contract between it and the Transit Company, and the operation of the line and car on which she was hurt by the Transit Company pursuant to the contract, is maintained on three grounds; first, that if the contract is a lease, it is inoperative for lack of consent to the leasing by the' city of St. Louis; second, that the contract is not a lease, but in legal effect is an agreemnt by the Transit Company to operate the railway lines it was put in possession of for the United Railways Company as the latter’s agent, or else is a partnership agreement between the two companies; third, that if a valid lease, the United Railways Company as lessor remained liable for all torts of the Transit Company as lessee, because the statute allowing such leases by street railway companies contains no clause expressly exempting a leasing company from liability for the acts of the lessee.

The Constitution of the State forbids the enactment of a statute granting the right to construct and operate a street railway in any city without first obtaining the consent of the local authorities, and forbids too the transfer of a right or franchise to occupy a street with a street railroad without first obtaining such consent. [Const., art. 12, sec. 20.] The argument for the plaintiff is that the ordinance relied on as giving the consent of the city of St- Louis to the lease in question did not, in truth, give consent, because it only authorized the raihvav companies named in it to lease the lines of railway named, including the one on which plaintiff was hurt, and did not authorize a lease of the properties by tbe United Railways Company, wbicb was not named. It will be seen that the third section of the city ordinance, which we have quoted, expressly authorized the lease of the line on which plaintiff was hurt to the St. Louis Transit Company by its original owner, one of the companies named; which one is not disclosed by the evidence. It is admitted that the United Railways Company acquired by purchase all the lines of railway owned and operated by all the railway companies mentioned in the ordinance. There is no sound reason for saying that the United Railways Company, though the owner of the line pursuant to a valid purchase, could not lease it to the Transit Company just as the original company might, pursuant to the permission given to the latter by the city. The city had authorized the Transit Company to acquire it by lease, and municipal interests could not be helped by permitting the original owner to grant the lease, and refusing to permit a lawful purchaser to do so, when the lessee, in either event would be the same. The decisive fact bearing on this point is not, as plaintiff’s counsel insist, that the United ■ Railways Company received no authority to lease the line of railway-on which plaintiff was hurt to the Transit Company. It is that the latter was authorized to take a lease’ of it. Hence, the argument that the words of the ordinance purporting to empower the street railway companies named and “their successor and assigns,” to lease their several railway lines, did not operate and empower the United Railways Company as purchaser of said railway lines to lease them, is not relevant to the proposition that the lease is void for lack of the city’s consent. The case of the Oregon Railroad Company v. Oregonian Railroad Company, 130 U. S. 1, decides that the words “successors and assigns,” as used in various State statutes in connection with specific grants of power to railway companies, did not necessarily import that the Legislature intended to empower railway companies to lease or sell their entire property. There was no Oregon statute undertaking in express terms to empower a railway company to assign or lease all its property; but an attempt was made to deduce a sweeping power of that kind from general statutes granting authority to do many things to railway companies, “their successors and assigns.” These statutes were said to show the Legislature intended that any power or franchise granted to a railway company in the general laws under which all railway companies must be incorporated in Oregon, might be exercised and enjoyed by an assignee or successor of the original company; that, hence, the statutes, by implication, authorized a company to assign or lease its entire property. It is plain that this argument was far-fetched, and in conflict with the rule universally, enforced that a lease or assignment of all its franchises and assets by a corporation created for public purposes and charged with public duties, thereby disabling it to serve the public, is void unless authorized by statute. [Thomas v. Railroad, 101 U. S. 71; Pennsylvania R. R. v. Railroad, 118 U. S. 290, 309; Beman v. Rufford, 1 Sim. (n. s.) 550; Great Northern Ry. Co. v. Ry. Co., 9 Hare 305; Winch v. Railroad, 5 DeG. & S. 362.] The proposition decided in Oregon Railway Company v. Oregonian Ry. Co. gives no support to the proposition that the lease by the United Railways Company to the Transit Company is void because not assented to by the city, for the city did assent, and in connection with its assent attended to the detail of selecting the lessees which might take; one of them being the Transit Company, which did take. Were it necessary, other cogent reasons could be given against the position that the lease contract under examination is void because in conflict with the constitutional provision we have cited, but the foregoing are deemed sufficient.

Is the agreement between the companies a lease or a contract for the operation of the United Railways Company’s lines by the Transit Company as the agent of the former company and for its benefit? Did it constitute a partnership? We will first deal with the legal effect of the instrument as ascertained from its terms, and not with a possible ulterior motive or purpose which may have prompted its execution. If the agreement was not entered into in good faith and for the purpose declared, but to defeat the creditors of the United Railways Company, or enable its properties and franchises to be held and used for its benefit in a manner that would screen it from judgments and relieve it of responsibility, no doubt the United Railways Company would be held liable without regard to the contract. But such an issue would be' for the jury unless the instrument itself, or facts in evidence, showed the truth beyond dispute. No fact aliunde to cast suspicion on the transaction was shown; and if the agreement is to be ignored on the ground that it was not entered into in good faith, the ground must be established by the contents of the instrument. This matter will be recurred to again. The question to be settled first is as to the legal nature of the agreement as written. It is apparent that.the contract is more than an operating one; for it transferred to the Transit Company other property than the railways and their appurtenances belonging to the United Railways Company, and required the Transit Company to perform other acts besides operating the railway lines. The Transit Company acquired every franchise held by the United Railways Company except the franchise to be a corporation; all the latter company’s property, real, personal and mixed; all the income derived from its bonds and stocks; the money it had on hand at the date of the agreement, and what it might receive afterwards by the sale of unusable property. Besides operating the railways, the Transit Company was bound to do various acts, such as keeping them in repair, making extensions and improvements and meeting the interests on bonded obligations. Therefore, it is obvious that if the agreement between the two companies was one for the operation of the railways, that term in the agreement, though perhaps the principal and most important one, was mingled with others of much importance. We can think of only three conditions on which the Transit Company could operate the United Railways Company’s lines for the benefit of the latter. These are: first, operate them for absolutely no reward and as a mere gratuity to the United Railways Company; second, for compensation either in the form of a regular payment by the United Railways Company for the service or for a percentage of the earnings; third, on a partnership arrangement between the two companies. The agreement certainly did not contemplate that the Transit Company should operate the railways for nothing, nor was it allowed a fixed stipend or a percentage of the receipts in payment for its services. On the contrary, instead of being paid to operate the line, it agreed to pay the United Railways Company for the possession and use of the property during a stated period, payments to be made at regular intervals and bearing all the characters of a fixed rent charge. The agreement did not provide that the Transit Company should conduct the business in the name of or for the benefit of the United Railways Company, except in so far as the latter company was benefited by the consideration to be rendered, by the Transit Company. It would be a very forced construction for us to torture the agreement by which the Transit Company was to yield fixed sums at regular intervals for the use of the property, into a contract of agency which made the United Railways Company principal and the Transit Company agent. All the elements of such a relationship are absent.

Neither did the contract make the two companies partners, either between themselves, or as to third par-, ties. A division of the profits of a business is not alone sufficient to constitute a partnership. The essential test is whether the parties asserted to be in partnership intended to establish that relation. [McDonald v. Matney, 82 Mo. 358; Mackie v. Mott, 146 Mo. 230.] Manifestly the two defendant companies had no thought of becoming partners; and as they did not hold themselves out to the world as such, there is no ground for holding they were. Therefore, we find that neither the relation of principal and agent nor of partnership can be applied with propriety to the contract.

Does the contract possess the elements of a lease? In this connection, it is proper to remark in the first place that goods, chattels and franchises may be leased as well as lands and tenements. [1 Platt, Leases, p. 24; 1 Wood, L. & T. (2 Ed.), sec. 202; 1 McAdam, L. & T. (2 Ed.), p. 258; 1 Taylor, L. & T. (9 Ed.), secs. 17 and 18.] The statutes of the State gave the United Railways Company the right to lease its franchises, railway lines and every other property, and by the same statute the Transit Company had the right to acquire every character of property belonging to the United Railways Company, including its franchises. [R. S. 1899, p. 393, sec. 1187.] •• We need not be troubled about the power of the two companies to enter into a lease covering all the properties mentioned in the instrument. The contract in question divested the United Railways Company of tlie possession and use of the properties during the period named (40 years) in consideration of a specific rent to be paid by the Transit Company, and other duties, in the nature of rent, to be performed by' the latter; provided further, for the reversion of the property to the grantor, the United Railways Company, at the end of the term, and for re-entry if the Transit Company defaulted in the performance of its covenants during the term. Those ingredients in the agreement suffice to constitute a lease. [1 McAdam L. & T., sec. 47, p. 127.] The contract on its face shows it was intended to he a lease and contains elements essential to constitute one. Therefore, there is no reason for hesitating to pronounce it a lease in legal effect and only to he impeached by facts showing it was not executed in good faith. Documents of like teiior have been before courts for construction several times and they were treated as leases. [Mayor v. Railway, 113 N. Y. 311; Miller v. Ry. Co., 125 N. Y. 118; Driscoll v. R. R., 65 Conn. 230; Terre Haute, etc., R. R. v. Cox, 102 Fed. 825.] In fact, most of the cases relied on by the plaintiff accept such contracts as leases; though for different reasons the lessors were held responsible to third parties for torts of the lessees. We are cited to the case of St. Jos., etc., R. R. v. St. Louis, etc., R. R. Co., 135 Mo. 173, 36 S. W. 602, as construing a contract like the one under review to be an agreement by a nominal lessee to operate a railway for the benefit of a nominal lessor, and, hence, in legal effect, not a lease but an operating agreement. But in that case, the terms of the instrument construed were quite different from those of the instrument before us. The decision of the court that it was a mere operating contract, was rested principally upon the fact of there being no stipulation for rent to be paid for the use of the property which was the subject-matter of the contract. In that case the Iron Mountain Railway Company, which was alleged to be a lessee of the lines of railway owned by the Wabash Railway Company, was obligated by the supposed lease to pay nothing in the way of rent except what might be earned by the operation of the roads. That is to say, the Iron Mountain Company simply took over the roads to operate'and apply the earnings for the benefit of the Wabash Company. The Iron Mountain Company did not assume any individual liability of any kind in consideration of the supposed lease, nor bind itself or its assets for any rent. It was for this fact that the contract between the two companies was held not to be a lease but an operating agreement. The opinion says:

“After a careful consideration of all its terms and stipulations, we are constrained to hold that it is not [i. e., a lease]. Its use of the words ‘demise’ and ‘leased cannot be held to be controlling. For want of a better definition it may be styled an operating contract, under the stipulations of which the Wabash retains all the substantial and beneficial interest in its several railroads and leased lines and in which the Iron Mountain railroad, under the power of attorney therein granted, assumes to operate the Wabash system, collect the tolls and freights, and disburse them for the sole use and benefit of the Wabash, subject at all times to the supervision of the board of directors of the Wabash as to its management and the right to inspect its books and the accounts of the earnings and disbursements.

“It will be observed that the Iron Mountain nowhere in said contract binds itself to pay the Wabash a certain rent unconditionally out of its own moneys and revenues. It merely undertakes that out of the earnings of the Wabash it will, so far as they will suffice, pay the fixed charges which the Wabash had already assumed, and if there is any surplus, to pay this over as directed by the board of directors of the Wabash.- Under no circumstances are the earnings of the Wabash system or any part thereof to become the property of the Iron Mountain. All idea of individual liability of the Iron Mountain over and beyond the earnings of the Wabash for any of the obligations assumed is carefully and studiously excluded. There is no right on the part of the Wabash to a certain profit issuing periodically out of its properties as rent reserved.

“Instead of passing to the Iron Mountain a definite determinate estate of which it should be the absolute owner, it seems to us that the true effect of the whole instrument was to leave the beneficial estate in ,the Wabash and to constitute the Iron Mountain its agent to manage and operate the road subject to the supervision of the Wabash and with the right of the Wabash to know at all times that the earnings and receipts were being disbursed for its use and benefit. While it was a perfectly valid contract, it is a misnomer to call it a lease or a sublease. [State ex rel. v. Schweickardt, 109 Mo. 496, 19 S. W. 47; Anglade v. St. Avit, 67 Mo. 434.]

“To transform this carefully guarded undertaking merely to operate the road for the Wabash and account to it for all the earnings and disburse them for its sole use, into the unconditional and absolute liability assumed by the Wabash in the lease from plaintiff to it would certainly be subversive of the clear intention of the Wabash and the Iron Mountain, and as already said, this ought never to be done unless the established rules of law will permit no other alternative.”

By the contract before us the Transit Company’s liability for rent was not confined to the earnings of the leased property. The Transit Company was a corporation with a capita] stock running into the millions, and its property was all subject to the obligation of its contract with the United Railways Company to pay the various charges and items of rent enumerated in the lease.

But it is insisted that paragraph 9 of the lease bound the United Railways Company to turn over to the Transit Company any money received by the former from any source and, therefore, whatever rent the Transit Company paid would be repaid to it; thus showing there was no real consideration for the lease. One item of rent is to he used to maintain the corporate existence of the United Railways Company. Another item, to be paid quarterly, is in the nature of a dividend on the preferred stock of the Railways Company. We hardly think the ninth paragraph intends that those cash items of rent, which are to he paid to the Railways Company, must he returned by it to the Transit Company; but that the fair interpretation of the lease, taking into consideration all its ternas with reference to this point, is that it aimed to transfer all the lessor’s assets of every kind for an agreed rental. The Transit Company became entitled to all the assets of the Railways Company, including cash on hand, or that might come to it from the sale of property or other sources except the rent, which was the consideration to be paid for the transfer to and use by the lessee of the assets. The purpose of paragraph 9 seems to be to bind the Transit Company to use the cash received from the Railways Company in keeping the leased property in good repair. However, we are not called on to construe the ninth paragraph as to this question; because no one wall contend that its language bound the Railways Company to reimburse the Transit Coanpany for money paid by the latter as rentj not to the Railways Company, but to third persons on the obligations of the Railways Company. Now the Transit Company as lessee, agreed to pay all the floating-debts of the Railways Company (par. 4), all its taxes, assessments and water agents (par. 5), the interest on the various issues of bonds secured on the different lines of railway (par. 6), and the insurance premiums on the property (par. 7). These chief items of the rent, running annually no doubt into many thousands of dollars, the lessee was bound to pay to third parties and not to the lessor, and there is nothing in paragraph nine, or any other part of the lease, which bound the lessor to reimburse the lessee for the amount thus paid. And, as said, the Transit Coanpany was bound to pay these and the other items of rent even though the operation of the railways failed to earn enough money to meet the obligations. This contract is, therefore, radically different from the one construed in St. Jos., etc., R. R. v. Iron Mt. R. R. Co., supra, and presents the essential elements of a lease.

The proposition next to be considered is, conceding that the contract was a lease, did the United Railways Company nevertheless remain responsible for injuries to a passenger resulting from the negligence of the Transit Company? In other words, is a leasing railway company so far liable for the torts of the lessee, that it must answer in damages for a tortious injury to the passenger? This question is one on which there is a great diversity of judicial opinion; but it is proper to state, as a circumstance bearing on the weight of authority, that in most of the cases affirming the liability of the lessor, there were dissents. I think the preponderance of authority, and the great preponderance of reason, are against the liability of the lessor in such cases. I think, too, that as a rule of law, the doctrine that the lessor is liable, is at war with the general rules and principles governing the liability of lessors for the acts of their lessees and the settled.canons of statutory construction. As the statutes of this State give a street railway company, poAver to lease all of its property to another street railway company, there was direct statutory authority for the lease in dispute; and only those adjudications are exact precedents wherein statutory authority for the controverted lease existed. • The particular statute authorizing such leases appears in the Revised Statutes of 1899 as a new section (1187).' It is said not to have gone into force until November 1, 1899, and too late to confer authority for the contract we are dealing with, which was dated .September 80, 1899, and took effect on October first, or the next day. But the statute was enacted with an emergency clause and approved June 19, 1899, prior to the contract in question. It is further said that the enactment only conferred the power to lease on corporations formed under the act and that both the United Railways Company and the Transit Company were incorporated nnder prior statutes. But by section 15 of the act, any street railroad company theretofore organized under any general or special law of the State was granted all the powers, benefits and privileges of the act if it would file in the office of the Secretary of State, a resolution of its board of directors, accepting the provisions of the act and paying into the state treasury the fees required by section 13. The present record doe$ not show whether or not the United Railways Company or the Transit Company complied with section 15; but in considering this point it is to be remembered that the United Railways Company did not introduce in evidence the contract with the Transit Company as matter of defense, and hence was not bound to show affirmatively it had power to execute the contract, as would have been incumbent on it, had it sought to evade liability by proving the lease. The instrument was introduced by the plaintiff to fasten liability on the United Railways Company, and there was no contention that the said company was without power to execute it because of failure to take advantage of the act of July 19, 1899, in the manner provided in section 13. The plaintiff relied on an instrument which she contended the United Railways Company had executed to prove said company was liable to her on several grounds; none of which was lack of statutory power to make a lease. Hence, it ought to be presumed, in the absence of proof to the contrary, that the two companies which were parties to the alleged lease, or at least the United Railways Company, had complied with the requirement of the statute authorizing street railway leases and had become entitled to the benefits and powers conferred on complying companies.

Cases affirming the liability of a leasing railway company for torts of the lessee, should be classified with reference to the existence of such a statute when the lease was executed. All courts agree that in the absence of a statute, a lease of its property and franchises by a railway company, does not relieve it of its public duties and responsibilities, and that the lessor remains liable for the torts of the lessee. In other words, there is no common-law authority for such leasing by railroad companies; at least in so far as the contract impairs the right of the public to hold the lessor answerable for the proper discharge of the duties it assumed in consideration of the powers granted to it by the sovereignty. [Railway Co. v. Brown, 17 Wall. 445; Thomas v. R. R., 101 U. S. 71; Chollette v. Id., 26 Neb. 159, 4 L. R. A. 135; Muntz v. Id., 64 L. R. A. (La.) 222.]

Before going into a discussion of the question on principle, it is well to classify the adjudications, so that those directly in point may be studied more readily, and those wherein the proposition affirmed is not identical with the one involved here, may have attached to them the value they merit as containing the lucubrations of judges on the general question and not treated as precedents on the exact question before ns. When the lease is authorized by statute, the leasing company, of course, remains liable for the acts of the lessee if the statute says it shall. [Smith v. R. R., 61 Mo. 17; Markey v. R. R., 185 Mo. 348, 84 S. W. 61; Main v. Id., 18 Mo. App. 388; Brown v. Id., 27 Mo. App. 396; McCoy v. Id., 36 Mo. App. 445; Quested v. R. R., 127 Mass. 204; Daniels v. Hart, Treas., 118 Mass. 543; Bower v. R. R., 42 Iowa 546; Whitney v. R. R., 44 Maine 362; Stearns v. R. R., 46 Maine 95.] When the statute authorizes the leasing, but says nothing as to whether the lessor shall remain liable, a few courts hold that nevertheless the lessor is liable as fully as the lessee itself would be, for the latter’s tortious acts; and in pursuance of this extreme view, these courts have held the leasing company liable for negligent injuries inflicted by the lessee on its own servants. [Chicago, etc., R. R. v. Hart, 209 Ill. 414; Logan v. Id., 116 N. C. 940; Harden v. Id., 129 N. C. ; Singleton v. Id., 70 Ga. 464; Bank v. Id., 25 S. C. 216; Hart v. Id., 33 S. C. 427.] In the case last cited the court went so far as to hold the lessor liable in punitive damages for the wrongful conduct of the lessee. The doctrine of other tribunals is that the leasing company-remains liable to third persons for an injury received because of the improper construction or bad repair of the roadbed, station-houses, or other real property, on the ground that it was the peremptory duty of the lessor to maintain its properties in good condition for the use of the general public, including as part of the public the servants of the leasing company. [Lee v. R. R., 116 Cal. 97, 58 Am. St. Rep. 140.] In certain cases which maintain the doctrine that the lessor is not exonerated by a statutory lease from responsibility for the wrong performance by the lessee of any charter power or duty, it is held that the safe operation of cars and trains on which passengers are carried is a charter duty. [Railway Co. v. Colberson, 72 Texas 375.] We have found no Missouri statute, relating either to the chartering of companies or to their regulation, which undertakes to impose on street car companies by special legislative enactment, the duty of careful operation of cars for the security of passengers, though such companies are under a common-law duty of that sort. There are cases wherein the general principle that the leasing company remains responsible for the proper performance of its charter duties is adhered to, but the operation of trains and cars is declared not to be one of those duties. [Mahoney v. R. R., 63 Maine 68.] And in a note to Ohio, etc., R. R. v. Dunbar, 71 Am. Dec. 291, on page 297, it is said that a case holding the contrary does not accord with sound’ principle or authority. Other decisions repudiate these various distinctions as of no importance and ground the non-liability of the lessor on the grant of statutory power to make a lease; holding that this imports a lease with all the usual incidents and conse.quences of that sort of a contract; one of which is that if the property is in safe and good condition when turned over to the lessee, the lessor is not responsible for subsequent injuries arising from its bad repair. [Fisher v. R. R., 34 Hun 433; Miller v. Id., 125 N. Y. 118.]

The foregoing cases may be classified, too, with reference to the principles on which they hold the leasing company responsible. Some courts profess to do this because public policy requires it, but disagree as to what particular public policy is to be subserved by the rule. Some ground the responsibility, as we have seen, on the fact that a railway company is an artificial person, deriving its powers from the sovereignty and in consideration of those powers, agreeing to perform certain duties for the sovereignty; hence should be held strictly acountahle for their proper performance. Other cases declare that charter duties cannot be transferred and that it is a charter duty to' carry passengers safely. Others that neither charter nor common-law duties can be transferred to a lessee so as to shift responsibility from the lessor; and that if the safe carriage of passengers is not a charter duty of the leasing company, it is at least a common-law duty, for the due performance of which the company that owns the railway is answerable.

Much stress is laid in some decisions on the supposed fact that if one railway company is permitted to lease its property to another, and thereby relieve itself from liability for the lessee’s torts, leases may be made to irresponsible companies and the public left remediless. [Harden v. R. R., 129 N. C. 354.] There is one case— perhaps there may be others — which held the lessor responsible, apparently, on the ground that the lease did not transfer every franchise- possessed by the lessor. [Braslin v. Somerville, 145 Mass. 64.] Still other cases hold the lessor responsible because, by the terms of the lease, it retains control of the management and operation of the leased property. [Driscoll v. R. R., 65 Conn. 230.]

It will be seen from the foregoing analysis that there is a Avide divergence of opinion among courts holding the leasing railway company liable for the misfeasance of the lessee, both as to the extent of the liability (i. e., Avhat instances of tortious conduct it covers) and the principles on Avhich it is founded. A more direct reference to some of the cases may aid in elucidating the doctrines held and the sources Avhence they are derived. The Illinois cases run back to Ohio, etc., R. R. v. Dunbar, 20 Ill. 623, in Avhich a leasing railway company was held ansAverable for breach of a contract by the lessee to carry freight. The point came up on demurrer to a plea of the lease by way of defense. No statute authorizing such a lease was in force at the time and the contract was held to be ultra vires. In later cases, after such a lease had been authorizd by statute, the Supreme Court of Illinois founded the liability of the lessor at first, on the theory that the lessee was its agent for the operation of the railway. [West v. R. R., 63 Ill. 545.] Afterwards this theory Avas discarded as unsound and the notion adopted that public policy forbade the leasing; because an insolvent lessee could be selected and all responsibility to the public evaded by the company to> whom the State had granted franchises. [Chicago, etc., R. R. v. Hart, 209 Ill. 414.] The North Carolina cases are traceable to Aycock v. R. R., 89 N. C. 321, wherein a company Avhich had permitted another company to run trains over its track was made to pay for damage done by fire communicated to adjacent farms, from rubbish permitted to accumulate on the right of way and ignite from sparks from an engine having no spark arrester. There was no lease and it did not appear that the defendant was not actually operating trains on its road. [See dissenting opinion in Harden v. R. R., 129 N. C. 354.] The Massachusetts case of Braslin v. R. R. Co., supra, lays stress on the facts that only a portion of the railroad of the lessor company was leased; that said company was not going out of business and that indemnity was taken by it for the acts of the lessee, thereby showing that both parties understood defendant was not to be released by the contract from the discharge of its public duties. The Georgia cases begin with Singleton v. R. R., 70 Ga. 464, in which the defendant permitted its lessee to do business in its name, and in its name sell plaintiff the ticket on which he was traveling when hurt by the negligence of the lessee. It is apparent that though this was a case of leasing, the defendant lessor was responsible because it had permitted the lessee to hold it out as the principal in making contracts with the public and particularly with the plaintiff. In the Kentucky case of McCabe’s Admr. v. R. R., 112 Ky. 861, we gather from the opinion that the Constitution of the State retained the liability to the public of the original company in the event of a lease or other transfer of its properties. In Muntz v. R. R., 64 L. R. A. (La.) 222, the opinion leaves one in doubt as to whether the lessor was held responsible because there was no legislative authority for the lease, or because all the franchises and property of the leasing company were not transferred, or from motives of public policy: In the Driscoll case (65 Conn. 230) the lessee agreed to indemnify the lessor, not only against costs, charges and expenses in the management of the leased property, as was done in the case at bar, but also against damages incurred in the operating of the property; and moreover it was agreed that the superintendent of the lessee, who was given power to hire employees, must be satisfactory to the lessor. Two judges dissented in that case. The majority opinion said the sole question was whether or not the defendant (lessor) had transferred the property to the lessee. In Lee v. R. R., 116 Cal. 97, a brakeman was hurt because of bad rails and roadbed. The Constitution of the State contained a clause inhibiting the release of the property of a lessor from liability for damages incurred in the construction and operation of the road; but the case was decided against the defendant on the ground that, in the absence of an express statutory exemption, it remained liable, notwithstanding the lease, for the proper construction of the road, station-houses, etc. The opinion approves the doctrine of St. Louis, etc., R. R. v. Curl, 28 Kan. 622, which holds a leasing company liable for the omission of a duty in the construction of the road, but exonerates it from responsibility for torts in the handling of trains and the management of the road. The Kansas opinion was prepared by Justice Brewer, now of the Supreme Court of the United States, and indorsed the NeAV York decisions concerning the liability of lessors for injuries due to defects in leased property, citing Scords v. Edgar, 59 N. Y. 28, and Ditchett v. R. R., 67 N. Y. 425. In R. R. Co. v. Morris, 68 Tex. 49, there Avas no statutory authority for the lease. The South Carolina cases most strongly support the plaintiff’s position; whereas the Massachusetts cases can hardly be said to lend it any support. Opinions holding the lessor liable for the torts of the lessee, when the leasing is authorized by statute, leave the impression that the courts lay hold of various general rules of corporation law, having very remote bearing on the immediate question, in order to enforce what the deciding tribunal happens to think would he a salutary rule. Much stress is laid on the fact that the corporation is an artificial, instead of a natural, person and derives its powers from the State. How this dogma can restrict the right of a. railway company to lease its property Avhen the statute, gives the right in unqualified terms, is not easy to perceive. The proposition that a railway company is bound to perform all its charter duties, and all its primary duties to the public, whether imposed by the charter or the common law, is sound. But the proposition that the Legislature may authorize it to transfer to any other company by lease, the performance of those duties, is equally sound. The mischief which it is supposed would result if leasing railway companies are not held responsible for torts, in that leases to irresponsible companies would be made for the purpose of evading liabilities, is met by two answers; first, if that was the intention, on proof of the fact, the lease would be disregarded like any other fraudulent conveyance and the lessor held responsible; second, our statutes require one-half of the capital stock of a street railway' company to be subscribed, and ten per cent of the subscriptions to be paid up in cash; and to that extent, at least, a lessee company would have to start with assets. [R. S. 1899, sec. 1186.], In the case at bar the capital stock of the Transit Company is $20,000,000 and it must have $1,000,000 of paid up capital.

The policy of the State in regard to such contracts was settled by the Legislature when it authorized the leasing of the property of one street railway company to another. The policy is, of course, to permit such leases; for the very highest evidence of the public policy of any State is its statutory law. But it is said that the true public purpose is to permit the lease, but hold the leasing company answerable for the torts of the lessee. Inasmuch as there is legislation on the subject, the policy of the State must, as said, be derived from the enacted laws. If it appears on a fair interpretation of the statutes authorizing the leasing, that the Legislature contemplated a continuance of the liability of the lessor, the law should be so declared; but if it appears that the Legislature did not construe this liability against the leasing company, but authorized leases of street railway properties with all the legal effects pertaining to lease contracts at common law, then the courts have no right to partially annul the legislative intention, or engraft on the law,an exception in the interest of what they believe would be good policy. This whole question is not one of public policy at all, but of legislative intention — of statutory construction. The pubic-policy notion misconceives and misses the essential inquiry. We have a statute broadly authorizing contracts like the one before us, and the primary inquiry is whether or not the statute discloses an intention on the part of the Legislature to hold a leasing railway company responsible for torts after the lease is executed and the property transferred. The first rule for the interpretation of statutes is that’ their meaning must be collected, if possible, from the language used. Of course, if a certain interpretation would lead to absurd or iniquitous results, it will not be adopted unless compelled by the language. [Bowers v. Smith, 111 Mo. 45; Fosburg v. Rogers, 114 Mo. 122; Christian v. Railway Co., 102 Mo. 373; Lamar, etc., v. Lamar, 128 Mo. 188.] We may allow, therefore, that the court may take into consideration what it believes would be for the common weal to this extent; namely, that, if one construction Avould be mischievous and another beneficial, and the language of the enactment permits either to be adopted, the salutary one avüI be preferred. The statute with which we are dealing, after enumerating other powers of street railway companies organized under the laAV, provides:

“Seventh. To purchase, lease, or acquire by other lawful contract, Avhich shall include the right to purchase the capitel stock and bonds of other street railroad companies, and to hold and dispose of the same, and to hold, use and operate any street railroad or roads, with all and singular its or their franchises and properties of every description belonging to any other street railroad corporation or corporations: Provided, that such purchase, lease or other contract be authorized or approved by the vote of the holders of tAvo-thirds in amount of the capital stock of the company so purchasing, leasing or otherwise contracting therefor at a meeting called for that purpose upon twenty days’ notice published in some newspaper of the city or county where the general office of such street railroad company may be located, or by written notice mailed to the last known address of each registered stockholder twenty days before such meeting; and provided further, such roads connect Avith or intersect each other so as to allow a single passage one way over each road for a single fare.

“Eighth. To sell, lease, or dispose of by any other lawful contract, to any other street railroad company, its railroad rights, franchises, including the right to be a corporation, and all and singular its other properties of every character and description: Provided, that such sale, lease or other contract disposing of its railroad, franchises and other properties, shall be first authorized or approved by the vote of two-thirds in amount of the holders of its capital stock at a regular or called meeting of its stockholders convened pursuant to such notice as is required in the nest preceding clause.” [R. S. 1899, sec. 1187.]

It will be seen that the statute authorizes any railway company to purchase, lease or acquire by other lawful contract, all the franchises and property of every description belonging to any other street railway corporation, including the stock and bonds of the latter, and further authorizes the purchasing or leasing company to hold, use and operate the railway leased. The statute further authorizes any street railway company to sell, lease or dispose of by any other lawful contract, to another company, its railroad rights and franchises, including the right to be a corporation, and all and singular its other properties of every description. We remark emphatically, that as the Legislature granted street railway companies the power to dispose of their franchise to be a corporation, it could never have been the intention to hold such companies responsible for the acts of a company acquiring the franchises. When a company disposes of its right to be a corporation, it practically passes out of existence, and cannot be held responsible in any legal method which occurs to us. Moreover, a company is authorized by said lease or other lawful contract, to dispose of all its property, which show's that the law-malting body did not expect it to still stand responsible for the acts of the vendee; for how could it be held responsible after all its property was gone? But it is argued that those provisions take effect only in the case of sales. The words of the statute are “to sell, lease or dispose of by any other lawful contract.” Take the instance of a lease for a long term of years, covering all the leasing company’s property of every kind and character; in what way would it be practicable to collect judgments from such a company? It is true the reversion of the property might be sold under execution, but that would be of very little value to the purchaser if it was under an unexpired term longer than an ordinary lifetime. To our minds, it is palpable from the statute itself, that the Legislature never thought of holding the leasing company answerable for the torts of the lessee. It fully intended to make the latter responsible; at least for all torts occurring in the operation of the' road. Moreover, it is repugnant to every principle of law or justice to hold one person or company responsible for the negligence of another which it had no power to prevent. The statute empowers the lessee company to operate the road and unless the power of control is reserved by the lessor in the lease, the operation wdll be without any interference by the lessor. Could the Legislature expect that in that contingency the lessor should stand answerable for negligent torts? To so hold would largely annihilate the privileges granted by the statute — would frustrate the purpose of the law-making body. That the lessee company is not responsible is a view strongly enforced by onr statute in regard to the construction of laws; the first clause of which declares that “when technical words and phases, having a peculiar and appropriate meaning in law, are used in a statute, they shall be understood according to their technical import, unless that meaning is plainly repugnant to the intent of the Legislature, or of the context of the same statute.” [R. S. 1899, sec. 4160.] Now, the word “lease” has a settled technical import. It imports a contract by which one person, either natural or artificial, divests himself or itself of, and another person takes possession of lands or chattels for a term. Certain immunities and responsibilities attach to every lease by the well-settled rules of law, unless there are covenants to the contrary. One of these incidents is that if the demised property is turned over to the lessee in good condition, the lessor is not afterwards liable for damages resulting from the negligent use of the property by the lessee. [Ward v. Fagin, 101 Mo. 669, 14 S. W. 738; Gordon v. Pettzer, 56 Mo. App. 599; Mancusi v. Kansas City, 74 Mo. App. 138.] According to the mandate of the statutes for the construction of laws, the word “lease” in the street railway statutes, must receive its ordinary legal meaning, for there is nothing in the context repugnant to that meaning; but, on the other hand, all the contextual language points to a conclusion that the Legislature used the Avord in its usual sense. Hence, we hold that in authorizing a street railway company to lease its property and authorizing the lessee to operate the property thus leased, the Legislature intended that the lessee should be answerable for the manner in which it used the property and the lessor should not be.

Furthermore, it happens that there have been other statutes enacted in this State authorizing a railway company to lease its property, in which the Legislature expressly provided for the retention of liability on the part of the lessor for the proper performance of the duties it owed the public. [McCoy v. R. R. Co., 36 Mo. App. 445.] The same court which decided the McCoy case, stated in Brown v. R. R., 27 Mo. App. 394, 400, that railway companies cannot, “by a lease without the consent of the State, escape responsibility for the acts of the lessee . . . but with such consent it may undoubtedly do so;” citing various cases, including Mahoney v. R. R., 63 Maine 68. The opinion then calls attention to the fact that by section 790 of the Revised Statutes of 1879 (sec. 1060, R. S. 1899) it is provided that any railroad company in this State leasing its road to a corporation of another State, should remain liable just as if it operated the road itself. See, too, Main v. R. R., 18 Mo, App. 388. In Markey v. R. R., 185 Mo. 348, the liability of the leasing company was expressly reserved by the statutes and hence the ease is not in point as an authority on the question before us. But from it and other cases, and from the statutes themselves, we learn that the Legislature of this State has not omitted from enactments authorizing railway leases, clauses reserving liability against a leasing railway company for the torts of the lessee, when the p.urpose was to continue the responsibility of the former. Hence, it is fair to presume that when no reservation of liability was made in the act, either by express words or by implication, the intention was that the lessee alone should be answerable for its torts. '

That this interpretation of the statute is a sound one, is maintained by practically all the elementary treatises and, in our judgment, by the weight of judicial opinion. The following cases are directly in point. Arrowsmith v. Nashville, etc., Co., 57 Fed. 165; Heron v. R. R., 68 Minn. 542; Hayes v. R. R., 74 Fed. 279; Carruthers v. R. R., 44 L. R. A. 737; Mahoney v. R. R., 63 Maine 69; St. L. R. R. v. Curl, 28 Kan. 622; Scziwak v. R. R., 4 Penn. Dist. Ct. 339; Lakin v. R. R., 13 Ore. ; Gwathney v. R. R., 12 Oh. 92; Texas, etc., v. Mangum, 68 Tex. 342; Fisher v. R. R., 34 Hun 433; Ditchett v. R. R., 67 N. Y. 425; Mayer v. R. R., 113 N. Y. 311; Miller v. R. R., 125 N. Y. 118. The reasoning of these cases is, in the main, that when the Legislature by statute confers the authority on a railroad company to lease its properties and on another company to take and operate them, and pursuant to such statute, a lease is made turning over all the property in an unrestricted way to the lessee, the proper view is that the Legislature intended that all the ordinary incidents of a lease should accompany the transaction and the lessor not remain liable for operating torts. In Pinkerton v. Railway, 44 Atl. Rep. 284, the court said:

“The last point made by appellant is that, even if the Pennsylvania Traction Company was incorporated, the lease to it by the Columbia & Donegal Railway did not exonerate the latter from liability. But such a proposition is contrary to> all the established rules of law in regard to lessor and lessee. The latter steps, into the place of the former, is substituted for him, and assumes all subsequent liabilities incurred in the operation of the property leased. That is the very ground on which it is held that a corporation cannot lease or transfer any part of its franchises without express legislative or charter authority. [Nelson v. Railroad Co., 26 Vt. 721.] If a lease did not exonerate the lessor, but left his liability unaffected, and only added the liability of the lessee, no one could possibly be hurt by it, or have any standing to complain. It is conceded that a franchise is a duty imposed as well as a privilege granted, by the State, and the duty cannot be avoided or transferred to another without the State’s authority. But when such authority is shown, as in the act of 1887, to motor-power companies to assume by lease the operation of passenger railway companies, it must be construed as a grant, with ail the ordinary attributes of such authority between lessor and lessee, unless the statute or the contract makes a reservation of continuing liability in the lessor. Neither is alleged in the present case. Neither Van Steuben v. Railroad Co., 178 Pa. St. 367, 35 Atl. 992, nor Hanlon v. Turnpike Co., 182 Pa. St. 115, 37 Atl. 943, have any bearing on the present question. In the former the lessee was a New Jersey company, and it was held that the statute authorizing railroads to lease their lines did not extend to a foreign corporation; and in the latter it was said that there was no evidence of authority to make the lease. The remarks on this subject must, therefore, be taken as applied to the state of facts then before the court. In' other States there is some conflict in the cases, and some difference of opinion among the text-writers as to the weight of authority. But, as is well said in 5 Thompson, Corp., sec. 5884m, after stating the admitted rule that, if the lease is not valid, there is a continuing liability of the lessor: 'Some of the courts state the doctrine loosely, without any apparent regard to the question whether the lease was lawful or unlawful. . . . But by running back through the decisions of these courts on the subject, it will generally be found that in the first case stating the doctrine, stress was laid on the fact that the Legislature had not authorized the railroad company to assign its franchises, or devolve its public duties upon another person or corporation.’ This points out clearly the source of most of the conflict in the cases. Two of them are specially relied on by appellant, and were cited in Hanlon v. Turnpike Co., supra; Nelson v. Railway Co., 26 Vt. 717, and Railway Co. v. Brown, 84 U. S. 445. In the former it nowhere appears that the lease was authorized by law, and in the latter the railroad was operated jointly by the lessee and the receiver of the lessor, and the passage ticket which was the basis of the action was issued in the name of the lessor company. On the general subject, see Booth, St. Ry. Law, sec. 425; Pierce R. R., 283; Patt., Ry. Acc. Law, secs. 130, 131; 19 Am. and Eng. Ency. Law, 891, note. After consideration of both views, we are of opinion that the settled principles of law and the decided weight of authority are in favor of the rule that, where a lease is duly authorized by law, there is no further liability of the lessor for negligence of the lessee in the operation of the road.”

In the Heron case (68 Minn. 542) it is said that in enacting a statute authorizing the lease without retaining the liability of the lessor, the Legislature impliedly relieved it from liability. The same doctrine is maintained in the Carruthers case decided by the Supreme Court of Kansas, and in most of the other cases cited above. The New York courts hold that an unrestricted lease of a railway, made pursuant to a statute which confers on the lessee the right to take and operate the property, stands like any other case of leasing, and that if the lessor turns property over to the lessee without any reservation of control, the latter alone is responsible for the negligent use of it. In the following text-books, the doctrine that the lessor ceases to be responsible is maintained: 2 Elliott, Railroads, sec. 469; Hutchinson, Carriers (2 Ed.), sec. —; Pierce on Railroads, 283, 284; Booth, St. Ry. Law, sec. 425; 5 Thompson, Corporations, sec. 5884; Nellis, Surface Railroads, p. 266, sec. 16; Nellis, St. Ry. Acc. Law, p. 488, sec. 6; Noyes, Intercorporate Relations, sec. 219, particularly p. 316. See, also, comments made by Judge Redfield in his work on Railways on the decision of Nelson v. R. R., 26 Vt. 721. In commenting, he says that the effect of legislative consent to the lease was not met or decided in the Nelson case. [Redfield, Railways, p. 618, note.]

Of course those commentators recognize the division of judicial authority on the question; but every one of them gives his voice in favor of the soundness, on principle, of the proposition that the leasing company is not responsible for damage entailed by the negligence of the lessee in the operation of the road when the leasing is done under statutory authority. Plaintiff’s injury was not caused by a bad roadbed, or by anything but the carelessness of the crew of the car on which she was riding; that is, the carelessness of the Transit Company’s employees, whom the United Railways Company had not the least opportunity to control. Therefore, for the foregoing reasons we think the judgment in favor of the United Railways Company on the present record, was for the right party and should be affirmed.

If evidence was adduced to show that it was contemplated from the first by the incorporation of the two companies that the property should be leased to the Transit Company in order to accomplish a fraudulent purpose, and that the alleged lease was a sham; or any other fact was proved to show it was not made in good faith, but to protect the United Railways Company from debts and judgments, a very different proposition would be presented for decision. The essential fact to be shown to overthrow the lease is that it was not bona fide, but colorable — was a fraudulent conveyance. This, however, is purely a question of fact to be established by relevant evidence in the bill of exceptions touching such an issue. The proposition squarely asserted is that the United Railways Company is responsible, as a matter of law, for the “injuries of the plaintiff, even if its contract with the Transit Company was a lease in legal effect and executed with an honest purpose. We do not assent to that proposition, but think the liability of the Railways Company depends on facts in pais and cannot be established by construing the writing purporting to be a lease.

The judgment is affirmed.

Nortoni', J., concurs; Bland, P. J., dissents.