Oregon Short Line R. v. Postal Tel. Cable Co. of Idaho

111 F. 842, 49 C.C.A. 663, 1901 U.S. App. LEXIS 4438
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 7, 1901
DocketNo. 680
StatusPublished
Cited by29 cases

This text of 111 F. 842 (Oregon Short Line R. v. Postal Tel. Cable Co. of Idaho) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oregon Short Line R. v. Postal Tel. Cable Co. of Idaho, 111 F. 842, 49 C.C.A. 663, 1901 U.S. App. LEXIS 4438 (9th Cir. 1901).

Opinion

GILBERT, Circuit Judge,

after stating the case as above, delivered the opinion of the court,

It is urged that the court erred as to fact and law in finding that' .the defendant in error was a corporation duly and regularly incorporated under the laws of Idaho, and in ruling that the contention that it was organized to enable a foreign corporation to condemn a, right of way “cannot be considered in this case.” In the answer it was denied that the defendant in error was a corporation incorporated under the laws of Idaho, or that it had the power to exercise the right of eminent domain, and it was alleged that the Postal • Telegraph Cable Company, a corporation of New York, in order to circumvent the policy of the state of Idaho which denied the right of foreign corporations to condemn such right of way, caused certain of its employés to organize a nominal and pretended corporation under the laws of Idaho, and that thereupon the defendant in error was incorporated; that it has no separate existence from said New York corporation; that all its expenses are paid and its business policy dictated by the latter; and that the sole purpose of its organization is to enable the New York corporation to exercise in the state of Idaho the right of eminent domain. The evidence is that the defendant in error was incorporated, and a meeting of its incorporators was held, on July 22, 1899, and that on the same day its incorporators became directors and held a meeting; that the directors consisted of four citizens of Idaho, and E. J. Nally, who was a resident of Illinois and an employé of the New York corporation; that a resolution was duly adopted authorizing the construction of a telegraph line substantially as described in the complaint, and authorizing . the institution of the present suit; that the capital stock of said cor- • poration is. $250,000, divided into 100 shares, of which E. J. Nally subscribed 96 shares, and the other directors 1 share each. It was ■ shown that no money on account of any of these subscriptions had been paid to the treasurer of the defendant in error, and that the business of the corporation had been conducted under the direction of the New York company. There is nothing in these facts to indicate that the defendant in error was not a corporation de facto. It was duly incorporated according to the laws of Idaho. Four of its five incorporators and directors were citizens and residents of that state. Its right to maintain the present suit is not abridged by the fact tliat the stock subscribed had not been paid for, and that the majority of the stock was owned by another corporation, which conducted its 1 business and controlled its movements. Day v. Telegraph Co., 66 Md. 354, 7 Atl. 608; Lower v. Railroad Co., 59 Iowa, 563, 13 N. W. 718; Kansas & T. Coal Ry. Co. v. Northwestern Coal & Mining Co. (Mo.) 61 S. W. 684, 51 L. R. A. 936; Exchange Bank of Macon v. Macon Const. Co., 97 Ga. 1, 25 S. E. 326, 33 L. R. A. 800. In the case last cited it was held that the fact that “one corporation owns the entire capital stock of another does not vest in the former the legal title to the property of the latter, nor render the two corporations identical; on the contrary, they are separate and distinct legal entities.” The plaintiff corporation, in a suit to condemn land to public use, must show its authority to exercise the right of eminent do[845]*845main, and prove that it has strictly complied with the law. The defendant in such a suit may- deny that the plaintiff is duly incorporated, and may cast upon it the burden of proving its corporate existence, but, if the latter show that it is a corporation de„ facto, it is sufficient. The right to further contest its authority to condemn land or to prosecute the objects of its organization belongs only to the state. McAuley v. Railway Co., 83 Ill. 348; National Docks Ry. Co. v. Central R. Co. of New Jersey, 32 N. J. Eq. 755; Railroad Co. v. Miller, 56 Ind. 88; Wellington & P. R. Co. v. Cashie & C. R. Lumber Co., 114 N. C. 690, 19 S. E. 646; Kansas & T. Coal Ry. Co. v. Northwestern Coal & Mining Co. (Mo.) 61 S. W. 684, 51 L. R. A. 936; Peoria & P. Union Ry. Co. v. Peoria & F. Ry. Co., 105 Ill. 110; Chicago & N. W. Ry. Co. v. Chicago & E. R. Co., 112 Ill. 589; Reisner v. Strong, 24 Kan. 410; Turnpike Co. v. Bobb, 88 Ky. 226, 10 S. W. 794; Day v. Telegraph Co., 66 Md. 354, 7 Atl. 608. In the case last cited -it was held that foreign corporations, and especially telegraph-companies, may do business within the state, and acquire and hold necessary property therein, to enable them to prosecute and conduct their business, and to hold such property in their own names, or in the name of an auxiliary local corporation organized for that purpose. In the case at bar no question is made that the defendant in error holds the title to whatever right has been acquired in the condemnation suit. Although it may he a corporation auxiliary to the New York company, formed for the purpose of acquiring and holding a right of way in Idaho under the laws of that state, to be used as part of a telegraph line which traverses many states, it is nevertheless a distinct corporation. It may at any time assert its right to conduct and manage its own business affairs, and the payment of the 'subscriptions to its capital stock may be enforced whenever it shall.become necessary for the protection of its creditors or for other purposes. The plaintiff fn error cites certain cases which it is said lead to a conclusion the reverse of that which we have reached.. A case much relied on is Koenig v. Railroad Co., 27 Neb. 699, 43 N. W. 423. The constitution of Nebraska having provided that no foreign corporation shall be entitled to exercise the right of eminent domain, or “to acquire the right of way,” etc., unless certain conditions be complied with, it was held in that case that the prohibition to acquire a right of way prevented such a corporation from doing indirectly what it was prevented from doing directly, or, in other words, prevented it from availing itself of the services of another corporation to accomplish the desired result. The suit was brought to obtain an injunction against the foreign corporation. The latter in its answer pleaded and relied upon a right of way acquired in condemnation proceedings “in its behalf,” instituted by a certain other railway corporation of the state of Nebraska, and a transfer of such right from the domestic corporation. It was with reference to these facts and to the constitutional prohibition that the language of the opinion was adopted. There is no prohibition in the laws of Idaho against a foreign telegraph company acquiring a right of way in that state, nor has the New York corporation acquired the right of way in the present case. There has been no [846]*846transfer of the right of way from the defendant in error. The title remains in that corporation. Other cases are cited which sustain the general propositions which are not here, disputed, that in a condemnation proceeding corporate organization is an issuable fact, that the condemnor must show that the condemnation sought is for public purposes, and that the court may go behind the allegations of the complaint, and try the question whether the real purpose of the condemnation is private or public.

It is said that the court erred in ruling that property already condemned to a public use under the right of eminent domain cannot, in the absence of express legislative authority, be condemned to a second public use; that the judgment in the first condemnation proceeding is an adjudication of the question of the necessity of that use, and that no second judgment can be had subversive of the judgment so rendered.

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Bluebook (online)
111 F. 842, 49 C.C.A. 663, 1901 U.S. App. LEXIS 4438, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oregon-short-line-r-v-postal-tel-cable-co-of-idaho-ca9-1901.