State ex rel. Little v. Martin

51 Kan. 462

• Court: Supreme Court of Kansas
• Decided: January 15, 1893
• Status: Published

Opinion

The opinion of the court was delivered by

Johnston, J.:

This proceeding challenges the corporate existence of the Union Terminal Railroad Company, and the right of the defendants to exercise the privileges, powers and franchises of a railroad corporation, and especially the power of eminent domain. The defendants organized, and obtained a charter, and are assuming to possess the privileges and powers of a legally-incorporated railroad company. It is contended that there is no express authority for the incorporation of circular or belt railroads, or spurs or short lines by which one railroad may be connected with another, and that, from the statements contained in the charter of the defendant company, it is apparent that it cannot be incorporated as a railroad company under the laws of this state upon which the power of eminent domain can be conferred. In § 4 of the act concerning private corporations, it is provided that they may be created by the voluntary association of five or more persons, for the purposes and in the manner mentioned in the following sections of the article: In § 5, the purposes for which corporations may be formed are stated, and, among others, provision is made for “the construction and maintenance of a railway and a telegraph line in connection therewith,” and also for “the construction and maintenance of a street railway.” In § 6, it is provided that “a charter must be prepared setting forth: First, the name of the corporation; second, the purposes for which it is formed; third, the place or places where its business is to be transacted; fourth, the term for which it is to exist; fifth, the number of its directors or trustees, and the names and residences of those who are appointed for the first year; and, sixth, the amount of its capital stock, if any, and the number of its shares into which it is divided.” In § 7, it is provided that the charter of a road company shall state: “Eirst, the kind of road intended to be constructed; second, the places from and to which the road is intended to be run; third, the counties through which it is intended to be run; and, fourth, the estimated length of the road.” In § 47 some additional powers are conferred, among which is the right to carry persons and property on the railroad by the power of steam or of animals or of any mechanical power, and to receive compensation therefor-Section 234 of the act provides that any duly-chartered and organized railway corporation may exercise the power of eminent domain.

of railroad — public use.

We have been referred to these provisions, and also those of the charter, to show that the defendant company does not possess the character and rights of an ordinary railroad corporation. It is said that the charter contemplates the building of a circular railroad around Kansas City, Kas., which can have neither initial point nor terminus, and that before a company can exercise the privileges of a railroad corporation, the termini must affirmatively appear in its charter. The argument is that, as § 7 requires the charter to state the places from and to which the road is intended to be run, the road must be longitudinal rather than circular, extending from one place or neighborhood to another, so as to have at least two termini. It is true that there is no express provision for the building of circular railroads, nor do we find any requiring that only longitudinal lines shall be projected and constructed. We find no limitations in the statute with reference to the direction or course in which, railroads shall be built, nor do we think that any such limitation can be reasonably inferred from the provisions of § 7. Chartered privileges and powers are conferred upon railroad companies in order that they may contribute to the conveniencies and necessities of the people of the state, and if a circular or belt railroad will serve these purposes, no reason is seen why it may not be so constructed. The statute does not provide that the road shall be built from a town or city in one county to a town or city in another county, nor does it require that the road shall be of a prescribed length. It simply provides that the places where it is intended that the road shall begin and end shall be stated in the charter. The same section provides that the counties through which the road is intended to be run shall be stated. But notwithstanding this provision, the counsel for the state disclaim the contention that a company may not be incorporated for- the purpose of constructing and operating a railroad in a single county. This must be correct, as there is no limitation as to the length of the projected road. It may be long, or it may be short at the option of the promoters, provided it is built in good iaith for a public use, and within the con-it * templated purposes of the statute. Looking at the provisions of the charter as set forth in the plaintiff’s petition, we see that the company was organized to construct and operate a standard-gauge railroad for the transportation of persons and property by the use of steam or other motive power. The route of the proposed road is definitely described, and one portion of it is projected so as to substantially encircle the city of Kansas City, in the county of Wyandotte. Provision is also made for the further extension of the line so as to connect it with other railroads in Kansas and Missouri. The main line is estimated to be 22 miles long, and the plaintiff avers that that part which is proposed to be built from the Missouri state line westwardly to Argentine is about five miles long. The whole of the proposed road is within Wyandotte county; but if the termini of the road were within the limits of Kansas City, it would hardly be a valid objection to the charter. (Long Branch Comm’rs v. Railroad Co., 29 N. J. Eq. 566; Railroad Co. v. Railroad Co., 32 id. 755.) The fact that the road when constructed will have a connection with other railroads does not impair the legality of the incorporation. Such connections are not only in the interest of the incorporators, but subserve the interest and convenience of the public. In fact, the legislature has given encouragement to the consolidation and connection of railroads (Gen. Stat. of 1889, ¶ 1268), and, where the convenience and accommodation of the public require, it, provision has been made to compel the construction of connections and switching facilities. (Gen. Stat. of 1889, ¶¶ 1352-1364.)

*• Company— -fei™inain

s' ftrfeitufeof ■

It is further contended, that because the road proposed to be built by the defendant company is mainly for terminal purposes, as stated in plaintiff’s petition, its character is not so far public as to entitle it to exercise the power of eminent domain. This power cannot be exercised by a road designed alone for private enterprise, but only by such as are intended for public use and benefit. The purposes declared in the charter of the defendant railroad company meet every requirement of the statute in this respect. It is therein stated that the object for which the company was formed was to acquire, by purchase or lease, or to construct, maintain, and operate, a standard-gauge railroad for the transportation of persons and property. Nothing in the charter indicates a purpose to discriminate against anyone or to restrict the business of the corporation to anything less than is performed by the ordinary railroad company. It is alleged that the persons who organized this corporation were interested in Missouri corporations which were owning and operating railroads in Kansas City, Mo., which is contiguous to Kansas City, Kas. These corporations, it is stated, were organized for the purpose of doing a general switching and transfer business in car-load lots from one railroad to another, and to transfer cars from elevators and other industries to railroad companies, as well as to lease their road to railroad companies for terminal facilities. It is, then, averred that theUnion Terminal Railroad Company is intended to form a part of this Missouri system for switching and terminals, and for no other purpose. The allegation that a railroad company organized under the general law intends at some future time to shirk or avoid some of its public duties does not warrant a forfeiture, nor can the good faith of the purposes expressed in its charter be made the subject of inquiry in this proceeding. Even the averments of the plaintiff do not show that the proposed use of the road is not a public one. Besides switching cars from one part of the city to another, it is alleged that the road is to be leased to other railroad companies for terminal facilities. Nothing is stated which shows that the companies to which the road is intended to be leased will not afford transportation to all who may apply or to all who under ordinary circumstances would be entitled to such service. The convenience and necessity of belt or terminal roads in crowded and populous cities is well understood and has been frequently demonstrated. A single road which reaches a union and other depots, as well as warehouses, elevators, and other places in the city, is made to serve all the railway companies operating to and from the city/when it would be impracticable and perhaps impossible for each of the companies to secure an entrance and build its own line to the depots, stations and storehouses in all parts of the city where railroad service is required. By this means unnecessary roads and expenses are avoided, and the facilities and convenience of the public are greatly enlarged. Every unnecessary mile of railroad track adds to the cost of transportation; and as the public which uses these roads is required to bear the burden of this extra cost, it is clearly in the interest of the public that a terminal road, which affords transportation to all companies and people, should be constructed and maintained. The fact that this proposed road is to unite at the state line with a Missouri corporation gives no ground for complaint. The legislature has given express authority by which railroad companies in this state may connect and consolidate with railroad companies of other states, where their lines connect at the state line. (Gen. Stat. of 1889, ¶ 1268.)

Neither is the alleged purpose of the defendant company to lease its line to other railroad companies a valid objection to its exercise of the powers and privileges of a railroad corporation. In the General Statutes of 1889, ¶ 1269, provision is made that any railroad company of this state may sell or lease the whole or any part of its railroad or branches, constructed or to be constructed, to any other railroad company organized under the laws of this or any other state or territory of the United States. [Railroad Co. v. Fletcher, 35 Kas. 236; Lower v. Railroad Co., 59 Iowa, 563.) The Atchisou Union Depot & Railroad Company has only a short terminal line, designed aud constructed for the purpose of furnishing the railroad companies which enter the city with access to the union depot and facilities for the interchange of traffic. It was contended that such a corporation was not a railroad company within the meaning of the statute which might exercise the right of eminent domain. The validity of the corporation and its right to exercise the power of eminent domain has been sustained. (Reisner v. Strong, 24 Kas. 410.) The declarations in the charter of the defendant company and the allegations of the petition sufficiently show that it was organized as a railroad company under the general law, and that it is designed mainly to serve the public as a common carrier. It is not necessary at this time to determine whether such a company operating through a city must accept passengers at every street crossing and furnish the facilities which street railroads are designed to furnish; neither need we determine whether all of the company’s line and branches must be designed and used for the transportation of both passengers and property. The corporation being public, it cannot avoid the performance of any duty which it owes to the public. If, from the allegations of the petition, it can be inferred that the defendant company intends at some future time to neglect the performance of its full duty to the public, it cannot be held a sufficient ground for forfeiture. The company, having been invested with the powers, privileges and franchises of a railroad corporation, is subject to all the duties and liabilities of such corporation, aud there is ample power to compel the performance of any duty which it may neglect. (Gen. Stat. of 1889, ¶ 1217.) In The State, ex rel., v. Kingan, 51 Ind. 142, a proceeding in the nature of quo warranto was brought, challenging the right of the railroad company to exercise the privileges of a corporation, aud especially the power to condemn and procure a right-of-way. It was alleged that the incorporators had organized a company for fraudulent purposes, and mainly to obtain a right-of-way for its road. It was alleged that the company did not intend to carry out some of the purposes of its organization, and it was held, that the mere intention to neglect a duty or prospective misuser would not warrant the maintenance of a quo warranto pro-' ceeding.

The State, ex rel., v. Beck, 81 Ind. 500, was a proceeding in quo warranto, where á question arose as to whether the railroad company had obtained the charter in good faith and with the intention of carrying out the rights and privileges granted to the corporation, but the court held that the question of prospective misuser, and whether the incorporators intended in good faith to carry out the objects of their organization, cannot be inquired into in quo warranto proceedings. The same question was before the supreme court of Pennsylvania, which held that

“No mere intention or purpose in a corporation to violate its duty can constitute a cause of forfeiture. . . . The design, clearly evinced, to do an unlawful act may justify the interposition of a court of equity by a process of injunction, but it would be unjust, before the act was consummated, to visit the' corporate body itself with the extreme penalty of civil death and confiscation.” (Commonwealth v. Railroad Co., 58 Pa. St. 26.)

These authorities sufficiently show that nothing can be built upon the allegations that the company intends to ignore or neglect some of the duties which it owes to the public. It cannot, if it would, rid itself of any public duty, and if an attempt was made there is no lack of power in the state to compel performance.

The allegation with reference to the issue of an unnecessary and excessive amount of stock, as well as that full payment for the same had not been made, is not a proper subject of inquiry in this proceeding.

We conclude that the petition fails to state a cause of action, and that defendant’s demurrer should be sustained. This will be the judgment of the court.

All the Justices concurring.