McCandless's Appeal

| Pa. | May 13, 1872

The opinion of the court was delivered, May 13th 1872, by

Read, J.

The road which is the subject of the present controversy was before this court, upwards of four years ago, in Stewart and Foltz’s Appeal, 6 P. F. Smith 413, and the court then held it was built without authority of law, and enjoined “ the defendant (James Rhodes) his servants and agents from running cars on the railroad of the defendant, and along the alley in the bill mentioned, or by and along the premises of the plaintiff, and to remove the rails, cross-ties and embankments in said alley therefrom, leaving the same in as good repair as an ordinary passage-way as it was in, when and immediately before the said road of the defendant was constructed, and that the respondents pay all costs of suit and of this appeal.”

The opinion of the court was delivered by the present Chief Justice, and it treated the road as a private road of James Rhodes, invested with no right of eminent domain, and entirely unauthorized to take private property for private use, as it was clearly intended solely for the use of his mills and machinery, and in which the public could have no advantage whatever. It was simply a private railway, constructed under no law of the Commonwealth, and of course a nuisance. This opinion was delivered on the 7th January 1868, and on the 24th January, when the court below made the decree for an injunction agreeably to the order of this court, and before it could be fully enforced, the legislature passed an Act on the 31st January, seven days after-wards, to incorporate the “ Neshannock Railroad, Coal and Ore Company.”

The corporation was organized on the 3d Eebruary, three days afterwards, and on the 25th Eebruary filed a bond to secure the plaintiff his damages in the Court of Common Pleas of Lawrence county, which was on the same day approved by the court. The corporation was organized before any stock was subscribed. Under the decree of the 24th January, a small portion of the road ■in the alley was taken up, but was relaid immediately after the filing of the bond.

The seven corporators named in the bill, including Joshua Rhodes and James Rhodes the defendant, were created a body politic in law, with power to hold coal or other mineral lands not exceeding one thousand acres. By the second section “ said company shall have power and is hereby authorized to locate, build and operate for the purpose of carrying coal and other minerals, and articles of merchandise, a railroad within the county of Lawrence, from a point on the north line of said county to any point on or intersecting with the Erie and Pittsburg, or the New Castle and Beaver Valley Railroad, or both, at or near New Castle, or to intermediate points; and said company shall have power to purchase any railroad or part of a railroad, and the right to use the same, within the said county, whether built and constructed, or partly built and constructed, and shall have the right to use the same for the purposes aforesaid, as if originally built or constructed by virtue hereof, and the owner or owners of any such railroad, built or partly built, are hereby authorized to sell and convey such road, or any part thereof, with rights of way, &c.”

The 8d section authorizes a contract with The New Castle and Franklin Railroad Company, “ a corporation which had not yet built any road, and having no immediate prospect of building any.”

By the 4th section the damages áre to be ascertained and paid in the manner provided in the General Railroad Law of February 19th 1849, and the several supplements thereto, “and in case legal proceedings shall be pending for damages, occasioned by any railroad which shall be purchased as aforesaid by such company, such proceedings shall not abate, but may be pursued to completion, and the said company shall be liable to pay the amount of damages so determined.”

By the 5th section the capital stock is to be $100,000, divided into 2000 shares of $50 each, with power to increase said stock to $250,000, with power to borrow money for the purposes of the company, and to secure the payment of the same by bond and mortgage upon the property and franchises of the company. The amount of money so borrowed shall not exceed, at any one time, the amount of $12,000 per mile, and the rate of interest not to exceed 7 per centum per annum.

The directors shall be five in number, of whom one shall be president, to be elected annually, each share to be entitled to one vote, and in all other respects, except as herein otherwise provided, said company shall be subject to the provisions of the several laws of this Commonwealth relating to lateral railroads.

It will be observed that this was a close corporation of seven individuals and three associates, and that' it would be controlled and managed by whoever held the whole or a majority of the stock, and it is in evidence that no part of the capital was ever subscribed or paid for in money. The capital did not consist of money. The master reports that on the 9th March 1860 articles of agreement in writing were entered into between James Rhodes and the defendant corporation, by which Rhodes, in consideration that the company would pay to him $100,000 in the stock of the company, at its par value, and deliver the same to him on demand, granted and sold to the company his railroad from the Peebles coal-mines to the rolling-mill of Reis, Brown & Berger, about four and one quarter miles in length, together with the switches, sidetracks, locomotives (2), cars (50), shutes, ties, timbers, rails, &c., including all the property, rights and privileges, and lands and his coal-lease, and everything belonging to him connected with the railroad ; and also made over the contract with Reis, Brown & Berger for supplying their mill with coal, and assumed the payment of damages which might become payable to George S. McOandless and others for rights of way.

It appears, therefore, that the capital stock consisted of this private railroad of James Rhodes, and as the whole of the capital belonged to him, he was as much the sole owner of it after the agreement as he was before it was entered into. The company therefore did not locate and operate a railroad, but under another provision of the 2d section purchased this private road, built, as this court has decided, without authority of law, and which it declared to be a nuisance which never could have been intended by the legislature. •

On the 3d February 1868 the company adopted a resolution that “ the route of the New Castle and Franklin Railroad Company, from the extreme south end thereof to the mouth of Pyle’s run (said company consenting thereto), was adopted as a part of this railroad, the connection with the Beaver Yalley Railroad and the Erie and Pittsburg Railroad, and the more northerly portions to be determined hereafter.” The company, after their purchase from Rhodes, made no resurvey of route, but they did accept and adopt the route as then had and laid by him.

The company “ did no act resurveying the road or locating the same, or relating to the appropriation of private property,” says the master.

It is clear, therefore, that this is still a private road, terminating really at the rolling-mill of Reis, Brown & Berger, and is not covered by the alleged Neshannoclc charter, which if examined into by the Commonwealth in a quo warranto, might end in a judgment of ouster. This power of inquiry by the first section of the Act of 19th June 1871 (Pamph. L. 1360), may be exercised by this court, where, as in this case, the private right of an individual is injured and invaded by this corporation, claiming to have a right or franchise to do the act from which such injury results.

The private road thus purchased was wholly built and constructed from the mines to the rolling-mill, and does not come within the description of a partly built road. The fourth section says: “The damages occasioned by the building and construction of said railroad,’.’ which means a railroad built and constructed by the company created by the act, “ or of any partly built road which may be purchased by said company to the owners of private property on which the same may be located, and which shall not have been settled with or secured to said owners by agreement, shall be ascertained and paid in the manner provided in the General Railroad Law of February 19th 1849, and the several supplements thereto,” which clause does not apply to a built and constructed railroad like the present road purchased by the company, and there is therefore no provision for the ascertainment of damages in the case before us.

The court therefore erred in denying the injunction and dismissing the bill.

The decree of the court below dismissing the plaintiff’s bill is reversed and the bill is ordered to be reinstated, and the court below is directed to enter a decree in favor of the plaintiff, enjoining the defendants, their servants, agents and workmen from operating and running any locomotive or coal or other car laden or unladen to and fro upon said railroad, built as aforesaid, in and upon said alley, or by and along the premises of the plaintiff, and to remove the cross-ties, iron rails, fastenings and embankments in said alley therefrom, and leaving the same in as good repair as an ordinary passage-way as it was in when and immediately before the said road of defendants was constructed, and that the respondents pay all costs of suit and of this appeal.

Agnew, J., dissented.