Kanawha, Glen Jean & Eastern R. R. v. Jean

Dent, Judge: On the 31st day of October, 1895, the Glen Jean, Lower Loup & Deep Water Railroad Company, in accordance with its charter, began to locate the line of its road through the lands of Thomas G. McKell, in the county of Fayette, and continued the same until completed on the 2d day of November. On the 1st day of November, 1895, a certificate of incorporation was issued to the Kanawha, Glen Jean & Eastern Railroad Company, the incorporators being Thomas G. McKell, two hundred and forty-six shares, M. Jackson, one share, R. G. Quarrier, one share, J. F. Brown, one share, and E. W. Knight, one share; making two hundred and fifty shares. The incorporators forthwith held a meeting', and directed subscription books tobe opened under the supervision of E. W. Knight and M. Jackson at the office of Brown, Jackson & Knight, in the city of Charleston, the subscription to be reported to a meeting of the stockholders to be called by them when the subscription should exceed one-twentieth of the capital stock of the company. On the next day the committee reported that T. G. McKell had subscribed ten more shares of stock, and the corporators immediately proceeded to elect themselves a board of directors, without publishing the notices for four successive weeks, as required in section 36, chapter 54, Code. The board of directors passed some by-laws, and proceeded to organize by electing T. G. McKell president, J. W. Bi'own vice president, E. W. Knight secretary, and S. M. Veall, who was neither a director nor stockholder, treasurer. It then being represented that the line of the road would pass through the lands of Thomas G. McKell, Mr. McKell, who was the president and the whole of the corporation except four shares owned by his attorneys, retired from the meeting', 121 which at once appointed E. W. Knight to negotiate with Mr. McKell for the right of way through his lands. This was accomplished, and the meeting reassembled, and the right of way was accepted at twelve thousand three hundred dollars, and other land was bargained for at three hundred dollars per acre, according to the necessities of the company. Mr. McKell signed the deed, and it was immediately forwarded to Fayette County for recordation. There was no public notice of any of these meetings, but they were all held, charter obtained, land purchased and conveyance recorded in the space of two days. On theSth of November, 1895, the Glen Jean, Lower Loup & Deep Water Railroad Company served notice on Thomas G. McKell that it was about to institute proceedings in the circuit court of Fayette County for the condemnation of his land for the use of its road as locatedand platted. Thomas G. McKell appeared, and on his petition the proceedings of condemnation were removed into the circuit court of the United States at Charleston. Mr. McKell therein appeared, and filed a disclaimer as to part of the land proposed to betaken, and alleged the title was in the Kana-wha, Glen Jean& Eastern Railroad Company by virtue of his deed made as aforesaid. The proceedings werethere-upon stayed until the notice required by statute should be 'given the said Kanawha, Glen Jean & Eastern Railroad Company. What further action was taken by the court on this disclaimer does not appear, as only excerpts from the reco’rd are presented on eith er side in this case. Arguments of counsel and oral testimony are not proper in 'support of so important a question, as the record itself is the only sufficient proof thereof. It is plain, however, from the final order filed that the court did dispose of such disclaimer in some manner favorable to the defendant, for the land is condemned and given to it. It cannot be presumed that the court disregarded the statute, and declined to summon a party shown to be interested in the land proposed to be taken, but it must have either summoned the plaintiff, or decided the defendant’s right was the prior and better right to the land. It is not a sufficient answer to this to say that only McKell’s title was condemned, but it is the reserved title of the State, which is paramount 122 thereto, and used to oust McKell’s title; the proceeding-, so far as taking the land is concerned, being in the nature of a proceeding in rem while the assessment of damages is is a proceeding in personam. The right of the defendant to take the land for public use cannot be controverted. So the only question at issue and only reason why the plaintiff was, in. any event, a necessary party to the condemnation proceedings, was that it might receive its proportionate share of the damages assessed. That the court condemned the land, and not the mere title of Mc-Kell, is shown by the latter part of its order, to wit: “The quantity of land to be taken along said outer line is as follows: From station 340 plus 9 of the Loup Creek Branch of the Chesapeake & Ohio Railroad, which station is the O station of the Glen Jean, Lower Loup and Deep Water R. R., as the same is loca,ted and marked by a, stake, to station 40 plus 75 on said center line of the said Glen Jean, Lower Loup & Deep Water R. R., which station is on the line between the lands of Thomas G. McKell and the lands of N. M. Jenkin, and 4,075 feet from the beginning, 50 feet on each side of said center line, except so much as lies without the track and right of way of the Loup Creek Branch of the Chesapeake & Ohio Railroad, and containing in all nine and thirty-seven one hundredths acres (9 37-100) by survey, be, and the same is hereby, vested in fee simple in the applicant, The Glen Jean & Deep Water Railroad Company. * * * And the petitioner is entitled to a writ of possession against the defendant to put it in possession of the land condemned, and such writ is hereby awarded upon the payment of the costs aforesaid.” The plaintiff alleges two grounds for injunction: 1. That the land proposed to be taken is indispensible to it for its purposes, and that it could not be adequately compensated for the loss of the same by the recovery of damages. This appears to be abandoned in the proof and argument, as the statute authorizes the condemnation arid taking of just such property by rival railway companies, and any work or grading by the plaintiff was undertaken and done after it had full actual notice of defendant’s condemnation proceedings, as its officers, directors, and 123 stockholders were either attorneys therein or a party thereto, and was, therefore, done in violation of defendant’s rights acquired by survey and location of its road. 2. That it had not been secured or paid a just compensation for the land taken. It is plain from its order that the circuit court assessed full damages for the whole of the land, and made no reservation of plaintiff’s claim in regard thereto. If it did not require plaintiff notified of the proceedings according to section 8, chapter 42, Code, it may have been because it thought it was the duty of the plaintiff to intervene by petition or other appropriate procedure if it desired to share in the damages, for the reason that it obtained its deed, and placed it on record, after the appropriation proceedings were commenced by survey and location of the route. 3 Elliott, R. R. p., 1450, § 1001. Or it may have been because it considered plaintiff’s deed made with intent to delay and hinder defendant in the acquirement of that which it was lawfully entitled to, and therefore void under section 1, chapter 74, Code, which reads: “Every gift, conveyance, assignment or transfer of, or charge upon any estate, real or personal, every suit commenced, or decree, judgment, or execution suffered or obtained, and every bond or other writing given, with intent to delay, hinder or defraud creditors, purchasers or other persons, of or from what the}'- are or may be lawfully en.titled to, shall as to such creditors, purchasers or other persons, their representatives or assigns, be void.” The circumstances surrounding the incorporation, the organization, and the execution of the deed certainly tend to raise a presumption of an intent to delay and hinder the defendant in lawfully acquiring title to the land. -Such has been, and,'if permitted to stand in the way, such will be, the effect of the deed; and hence its good faith is an open question for determination on a proper case. Every description of contract, and every transfer or conveyance of property, by what means soever it is done is vitiated by such intent. “Whether the contract is oral or in writing, whether executed by the parties with all the solemnities of deeds by seal and acknowledgment, whether in the form of a judgment of a court stamped with a judicial sanction, or carried out by the device of a corporation organized 124 with all the forms and requirements demanded by any statute, if it is contaminated with fraud, the law decrees it to be a nullity. Deeds, obligations, contracts, judgments, and even corporate bodies may be the instruments through which parties may obtain the most unrighteous advantages.” All such devices are nullities and the law disregards them as though they had never been executed. Bump. Fraud. Conv. p. 267, § 228. For a landowner, after he acquires the knowledge that a railroad corporation is about to proceed to appropriate a portion of his land for its uses under the right of eminent domain, to start a rival corporation, and deed to it such land for the purpose of hindering, delaying, and defeating by excessive damages such appropriation, is undoubtedly within the spirit and letter of the statute. If such things were permitted, a landowner, his wife, and three children, without the assistance of others, might become a railroad corporation for damages only. Or it might be that the court, being aware of the fact that Thomas G. McKell owned exceeding ninety eight per cent, of the stock, and his attorneys owned less than two per cent., decided that the Kanawha, Glen Jean & Eastern Railroad Company was but another name for Thomas G. McKell, and that when he stood outside, and waited for the less than two per cent, of the stock to resolve to purchase the land of the exceeding ninety-eight per cent., and then made a deed in accordance therewith,' he was but making a deed from McKell to McKell, and, having the real person in interest before the court in his proper name, it was not necessary to notify him also to be present in his corporate name, and that, in whatever way it might regard him, he was still the true equitable owner of the land in controversy. Such a court of equity, looking through ail forms and devices, would determine. These are mere conjectures, and are only given to illustrate the status of the present litigation, and not as intimations that McKell was guilty of fraudulent intent beyond what may be justly inferred from the facts; such de. termination not being necessary to the decision of this case. A person having indisputable right to land, although there may arise quibbles in regard thereto, may enjoin a railroad company from taking the same until his 125 compensation therefor has been paid or secured. But where a railroad company has condemned land for its location, paid the damages assessed, and been put in possession thereof by the court, a rival railroad company, claiming a prior right thereto adversely, cannot enjoin the railroad so in possession, until it has established the superior right at law. In the case of Railroad Co. v. Blair, 9 N. J. Eq., 635, it is held that it is “not in accordance with the practice of a court of equity upon a mere injunction bill to investigate and decide the legal title of two railroad companies under their respective charters to a conflicting route.’’ Erie Ry. Co. v. Delaware, L. & W. R. Co., 21 N. J. Eq., 283; Canal Co. v. Young, 3 Md., 480. And in the case of Williamsport & N. B. R. Co. v. Philadelphia & E. R. Co., 141 Pa. St., 408, (21 Atl., 646), it was held: “In the absence of the location of its tight of way by corporate action, a railroad company has no standing to ask for an injunction restraining another company from proceeding regularly to appropriate land for a roadway, even though the land in question may be owned by the plaintiff company.” Also: “As to third persons and rival corporations, the action of the company adopting a definite location is enough to give title.” In 3 Elliott, R. R. § 927, the law is stated to be: “When a proposed line has been regularly located and staked off, and the expense thereof has been paid, the corporation by which it is done has a prior claim to the right of way for a reasonable time which cannot be defeated by another company that procures voluntary conveyances from the owners before the proceedings in condemnation instituted by the first company have been terminated.” Pittsburg V. & C. Ry. Co. v Pittsburg, C. & S. L.R.Co., 159 Pa. St., 331, (28 Atl., 155); Sioux City D. M. R. Co. v. Chicago, M. & St. P. R. Co., 27 Fed., 770. Between rival railroad companies the question of priority of location is a legal question, to be determined from the evidence and circumstances of the case. It is one of fact to be inquired into by a jury. The plaintiff claims the land by deed from the landowner; the defendant from the State by virtue of condemnation proceedings, and is in lawful possession under the order of the condemnatory court. • The presumption of right is with the de 126 fendant. Under such circumstances the plaintiff is not entitled to an injunction until it has established the supremacy of its claim at law. The defendant, being in possession, might have answered setting forth the superiority of its right, and attacked the plaintiff’s deed as a cloud on its title, but it preferred to rely upon its legal rights. To do so is its privilege. This conclusion renders unnecessary further consideration of the other questions raised. The decree complained of is reversed, the injunction dissolved, and the bill dismissed.