Chicago & Northwestern Railway Co. v. Crane

Last updated

Chicago & Northwestern R. Co. v. Crane
Seal of the United States Supreme Court.svg
Supreme Court of the United States
Argued January 20, 1885
Decided March 2, 1885
Full case nameChicago & Northwestern R. Co. v. Crane
Citations113 U.S. 424 ( more )
5 S. Ct. 578; 28 L. Ed. 1064
Court membership
Chief Justice
Morrison Waite
Associate Justices
Samuel F. Miller  · Stephen J. Field
Joseph P. Bradley  · John M. Harlan
William B. Woods  · Stanley Matthews
Horace Gray  · Samuel Blatchford
Case opinion
MajorityMatthews, joined by unanimous

Chicago & Northwestern R. Co. v. Crane, 113 U.S. 424 (1885), was a suit brought by a taxpayer and resident in the Town of Polk City, Iowa, on behalf of himself and all other resident voters, taxpayers and property holders, commenced suit in a state court of Iowa against two companies, praying for a peremptory writ of mandamus to compel the reconstruction and operation of the old line after the Chicago and North Western Railway, an Illinois corporation. changed the line and made it avoid the city, constructing a branch to the latter. C&NW Railway was leased the line by the D&M Railroad Company, an Iowa Corporation, who had received from a township in Iowa, in consideration of its agreement to construct and maintain a railroad to a city in the township, the proceeds of a special tax and a conveyance of a large amount of swamp lands. It constructed the railroad and operating it for a time before leasing it to C&N Railway. [1]

Contents

The Chicago and Northwestern Railway Company filed its petition for a removal of the cause to the circuit court of the United States. After setting out that the matter and amount in dispute, exclusive of costs, exceeds the sum or value of $500 and that the petitioner is a corporation and citizen of Illinois.

Justice Matthews delivered the opinion of the Court. He recited the facts as stated above and continued:

The right of removal from the state court which is contested in this case is founded on the last clause of the second section of the Act of March 3, 1875, 18 Stat. 470, Richardson's Supplement 173:

"And when in any suit mentioned in this section there shall be a controversy which is wholly between citizens of different states, and which can be fully determined as between them, then either one or more of the plaintiffs or defendants actually interested in such controversy may remove said suit into the Circuit Court of the United States for the proper district."

It is accordingly argued in its support that the sole and real controversy disclosed by the pleadings is between the plaintiff below and the plaintiff in error, to which the Des Moines and Minneapolis Railroad Company is a merely nominal party. The action, it is said, is brought in pursuance of § 3373 of the Iowa Code, which is as follows:

"The action of mandamus is one brought in a court of competent jurisdiction to obtain an order of such court commanding an inferior tribunal, board, corporation, or person to do or not to do an act, the performance or omission of which the law enjoins as a duty resulting from an office, trust, or station."

And by § 3379 it is further provided that

"The pleadings and other proceedings in any action in which a mandamus is claimed shall be the same in all respects as nearly as may be, and costs shall be recovered by either party as in an ordinary action for the recovery of damages. "

It is also declared in § 3375 that

"The plaintiff in any action, except those brought for the recovery of specific, real, or personal property, may also, as an auxiliary relief, have an order of mandamus to compel the performance of a duty established in such action. But if such duty the performance of which is sought to be compelled is not one resulting from an office, trust, or station, it must be one for the breach of which a legal right to damages is already complete at the commencement of the action, and must also be a duty of which a court of equity would enforce the performance."

The proposition that the Des Moines and Minneapolis Railroad Company is a merely nominal and not a real and substantial party to the controversy is maintained on two grounds, (1) that the relief sought against it rests upon the force of the alleged agreements in reference to the location of its line, which constitute the conditions of the taxes voted, lands granted, and stock subscriptions paid to it, and that mandamus will not lie for the purpose of enforcing the specific performance of personal contracts, (2) and that the Des Moines and Minneapolis Railroad Company is not only exonerated but disabled from the performance of the duty sought to be enforced against it, if for such it were amenable to the process of mandamus, by virtue of the lease of its road, property, and franchises to the plaintiff in error, that lease being authorized by § 1300 of the Code of Iowa, as follows:

"Any such corporation may sell or lease its railway property and franchises, or make joint running arrangements with any corporation owning or operating any connecting railway, and the corporation operating the railway of another shall in all respects be liable in the same manner and extent as though such railway belonged to it, subject to the laws of this state."

But to sustain the first point it is necessary to decide the controversy in favor of the Des Moines and Minneapolis Railroad Company, one of the defendants sought to be charged, upon its merits. That necessarily affirms that such a controversy exists, and that, in its turn, proves that the circuit court did not err in holding that it had no jurisdiction to entertain it.

It may be a question whether the remedy by mandamus is not larger and more extensive under the Iowa Code than the plaintiff in error admits. And at any rate, we cannot strike from the record parts of the plaintiff's case as immaterial without assuming the point to be proved that we have a right to consider its merits at all, for whether they are material may be the substance of the controversy. It may well be that the scope of the plaintiff's case includes the claim that the railway company, having, on the faith of the alleged agreements, made a location of its line, exhausted its corporate power in reference to its establishment, or that even if it still had corporate discretion to change it, the circumstances alleged, including the agreements made on condition of its original location, may not have created a corporate duty, enforceable by mandamus, to maintain and permanently operate it. These are questions certainly which the plaintiff in the action has the right to raise and have tried in any court of his own selection having proper jurisdiction, and they raise a controversy with the Des Moines and Minneapolis Railroad Company, to which it is a necessary party, unless it is relieved from it by the substitution in its place of its lessee by the law under which it transferred its property and franchises to the plaintiff in error.

But that section of the statute already quoted has no such effect. The court found that It does not discharge the lessor company from any of its corporate liabilities. It merely imposes a liability upon the lessee while operating it, and if this liability extends, as is claimed, to obligations of the lessor antecedent to the lease, such as that sought to be enforced in the present proceeding, there is nothing in the statute to exclude the idea that it is a joint liability, enforceable against both.

If it be said that the liability is that of the lessor, but that it is disabled by the lease from its performance, and that that duty is cast by the lease and the law upon the lessee, then the necessity for a joinder in the action is still more apparent for, to obtain a judgment against the plaintiff in error, requiring it to per form a duty devolved upon it merely because it has assumed under the law to perform the duties of another, makes it necessary, upon well settled rules of pleading, also to obtain a judgment against the latter to declare and determine with conclusive force the existence and limits of the duty to be enforced against its guarantor and substitute.

In any view we are justified in taking of the nature of the controversy disclosed by the pleadings in this proceeding, we conclude that both the original defendants are necessary parties to its determination, and that consequently the plaintiff in error was not entitled to remove the suit from the jurisdiction of the state court.

The judgment of the circuit court was accordingly affirmed.

See also

Related Research Articles

Mandamus is a judicial remedy in the form of an order from a court to any government, subordinate court, corporation, or public authority, to do some specific act which that body is obliged under law to do, and which is in the nature of public duty, and in certain cases one of a statutory duty. It cannot be issued to compel an authority to do something against statutory provision. For example, it cannot be used to force a lower court to take a specific action on applications that have been made, but if the court refuses to rule one way or the other then a mandamus can be used to order the court to rule on the applications.

A waiver is the voluntary relinquishment or surrender of some known right or privilege.

Assignment is a legal term used in the context of the laws of contract and of property. In both instances, assignment is the process whereby a person, the assignor, transfers rights or benefits to another, the assignee. An assignment may not transfer a duty, burden or detriment without the express agreement of the assignee. The right or benefit being assigned may be a gift or it may be paid for with a contractual consideration such as money.

Railway companies can interact with and control others in many ways. These relationships can be complicated by bankruptcies.

<span class="mw-page-title-main">Accounting for leases in the United States</span> US accounting standard

Accounting for leases in the United States is regulated by the Financial Accounting Standards Board (FASB) by the Financial Accounting Standards Number 13, now known as Accounting Standards Codification Topic 840. These standards were effective as of January 1, 1977. The FASB completed in February 2016 a revision of the lease accounting standard, referred to as ASC 842.

A finance lease is a type of lease in which a finance company is typically the legal owner of the asset for the duration of the lease, while the lessee not only has operating control over the asset but also some share of the economic risks and returns from the change in the valuation of the underlying asset.

<i>Paradine v Jane</i>

Paradine v Jane [1647] EWHC KB J5 is an English contract law case which established absolute liability for contractual debts.

Peevyhouse v. Garland Coal & Mining Co., 382 P.2d 109, is a US contract law case decided by the Supreme Court of Oklahoma. It concerns the question of when specific performance of a contractual obligation will be granted and the measure of expectation damages.

<span class="mw-page-title-main">Canadian contract law</span> Overview of contract law in Canada

Canadian contract law is composed of two parallel systems: a common law framework outside Québec and a civil law framework within Québec. Outside Québec, Canadian contract law is derived from English contract law, though it has developed distinctly since Canadian Confederation in 1867. While Québecois contract law was originally derived from that which existed in France at the time of Québec's annexation into the British Empire, it was overhauled and codified first in the Civil Code of Lower Canada and later in the current Civil Code of Quebec, which codifies most elements of contract law as part of its provisions on the broader law of obligations. Individual common law provinces have codified certain contractual rules in a Sale of Goods Act, resembling equivalent statutes elsewhere in the Commonwealth. As most aspects of contract law in Canada are the subject of provincial jurisdiction under the Canadian Constitution, contract law may differ even between the country's common law provinces and territories. Conversely; as the law regarding bills of exchange and promissory notes, trade and commerce, maritime law, and banking among other related areas is governed by federal law under Section 91 of the Constitution Act, 1867; aspects of contract law pertaining to these topics are harmonised between Québec and the common law provinces.

The Manhattan Railway Company was an elevated railway company in Manhattan and the Bronx, New York City, United States. It operated four lines: the Second Avenue Line, Third Avenue Line, Sixth Avenue Line, and Ninth Avenue Line.

Oil and gas law in the United States is the branch of law that pertains to the acquisition and ownership rights in oil and gas both under the soil before discovery and after its capture, and adjudication regarding those rights.

Findlay v. McAllister, 113 U.S. 104 (1885), was a suit brought against Thomas McAllister and 14 other defendants, to recover damages as follows:

Sully v. Drennan, 113 U.S. 287 (1885), was an appeal from an order of the Circuit Court for the Southern District of Iowa in the United States remanding to the state court a case which had been removed from the state into the circuit court.

Chase v. Curtis, 113 U.S. 452 (1885), was a suit brought under the provisions of §12 of the Act of the Legislature of New York of February 17, 1848, as amended June 7, 1875, where trustees of corporations formed for manufacturing, mining, mechanical, or chemical purposes are made liable for debts of the company on failure to file the reports of capital and of debts required by that section, is penal in its character, and must be construed with strictness as against those sought to be subjected to its liabilities. Suit was brought to recover from the trustees of such a corporation the amount of a judgment against the corporation, the judgment roll is not competent evidence to establish a debt due from the corporation to the plaintiff.

A claim in tort against a corporation formed under that act, as amended, is not a debt of the company for which the trustees may become liable jointly and severally under the provisions of the Act. In a proceeding to enforce a liability created by a state statute, the courts of the United States give to a judgment of a state court the same effect, either as evidence or as cause of action, which is given to it in like proceedings in the courts of the state whose laws are invoked in the enforcement.

The complaint in this action, after alleging that the plaintiff in error was a citizen of Pennsylvania, and the defendants citizens of New York, proceeded as follows:

"Wherefore the plaintiffs demand judgment against the above-named defendants in the sum of $40,828.97, with interest on $40,500.00 from the 30th day of July, 1874, and on $328.97 from the 3d day of October, 1874, besides the costs and disbursements of this action."

To this complaint the defendants severally demurred on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained and judgment rendered in favor of the defendants dismissing the complaint, to reverse which this writ of error is prosecuted.

The statute on which the action is founded is as follows:

"SECTION 1. The twelfth section of the 'Act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes,' passed February 17, 1848, as said section was amended by chapter 657 of the Laws of 1871, is hereby further amended, so that section 12 shall read as follows:"

"§ 12. Every such company shall, within twenty days from the first day of January, if a year from the time of the filing of the certificate of incorporation shall then have expired, and if so long a time shall not have expired, then within twenty days from the first day of January in each year after the expiration of a year from the time of filing such certificate, make a report, which shall be published in some newspaper published in the town, city, or village, or, if there be no newspaper published in said town, city, or village, then in some newspaper published nearest the place where the business of the company is carried on, which shall state the amount of capital, and of the proportion actually paid in, and the amount of its existing debts, which report shall be signed by the president and a majority of the trustees, and shall be verified by the oath of the president or secretary of said company, and filed in the office of the clerk of the county where the business of the company shall be carried on, and if any of said companies shall fail so to do, all the trustees of the company shall be jointly and severally liable for all the debts of the company then existing, and for all that shall be contracted before such report shall be made. But whenever under this section a judgment shall be recovered against a trustee severally, all the trustees of the company shall contribute a ratable share of the amount paid by such trustee on such judgment, and such trustee shall have a right of action against his co-trustees, jointly or severally, to recover from them their proportion of the amount so paid on such judgment, provided that nothing in this act contained shall affect any action now pending.

It is finally insisted that a judgment against the corporation, although founded upon a tort, becomes ipso facto a debt by contract, being a contract of record or a specialty in the nature of a contract. But we have already seen that the settled course of decision in the New York Court of Appeals rejects the judgment against the corporation as either evidence or ground of liability against the trustees, and founds the latter upon the obligation of the corporation on which the judgment itself rests. And it was decided by this Court in the case of Louisiana v. New Orleans, 109 U. S. 285, that a liability for a tort, created by statute, although reduced to judgment by a recovery for the damages suffered, did not thereby become a debt by contract in the sense of the Constitution of the United States forbidding state legislation impairing its obligation, for the reason that the term 'contract' is used in the Constitution in its ordinary sense as signifying the agreement of two or more minds, for considerations proceeding from one to the other, to do or not to do certain acts. Mutual assent to its terms is of its very essence."

The same definition applies in the present instance, and excludes the liability of the defendants, as trustees of the corporation, for its torts, although reduced to judgment.

The court found no error in the judgment of the circuit court, and it was accordingly affirmed.

The following is a brief history of the North American rail system, mainly through major changes to Class I railroads, the largest class by operating revenue.

The following is a brief history of the North American rail system, mainly through major changes to Class I railroads, the largest class by operating revenue.

Gregory v. Hartley, 113 U.S. 742 (1885), was a case in error to the Supreme Court of the State of Nebraska where it was decided and reaffirmed that the words "term at which said cause could be first tried and before the trial thereof," Act of March 3, 1875, c. 137, § 3, 18 Stat. 471, mean the first term at which the cause is in law triable, i.e., in which it would stand for trial if the parties had taken the usual steps as to pleadings and other preparations. Babbitt v. Clark, 103 U.S. 808, and Pullman Palace Car Co. v. Speck, ante, 113 U.S. 87.

The South African law of lease is an area of the legal system in South Africa which describes the rules applicable to a contract of lease. This is broadly defined as a synallagmatic contract between two parties, the lessor and the lessee, in terms of which one, the lessor, binds himself to give the other, the lessee, the temporary use and enjoyment of a thing, in whole or in part, or of his services or those of another person; the lessee, meanwhile, binds himself to pay a sum of money as compensation, or rent, for that use and enjoyment. The law of lease is often discussed as a counterpart to the law of sale.

In Pete's Warehousing and Sales CC v Bowsink Investments CC, an important case in the South African law of lease, Pete's Warehousing and Bowsink Investments entered into an agreement of lease in terms of which Pete's Warehousing hired certain premises from Bowsink Investments for use as a storage warehouse.

In Sishen Hotel (Edms) Bpk v Suid-Afrikaanse Yster en Staal Industriële Korporasie Bpk, an important case in the South African law of lease, the parties had concluded a twenty-year lease for a hotel. The lodge was next to a national road; because of this, it attracted considerable business.

References

  1. ↑ Chicago & Northwestern R. Co. v. Crane, 113 U.S. 424 (1885).
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.