Railway Company v. Alling
99 U.S. 463 (1878)

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U.S. Supreme Court

Railway Company v. Alling, 99 U.S. 463 (1878)

Railway Company v. Alling

99 U.S. 463

Syllabus

1. Where the trustees or directors of a corporation have appealed from a decree and directed their counsel to prosecute the appeal, this Court will not dismiss it on the motion of strangers to the decree who, since it was rendered, have become the owners of a majority of the stock of the corporation.

2. Such trustees or directors are in law the managers of the property and affairs of the corporation. As such, they, in all litigation involving its action, represent it, its stockholders and creditors. If they violate their trust, the remedy must be sought in some court of original jurisdiction.

3. An act entitled "An Act granting the right of way through the public lands to the Denver and Rio Grande Railway Company," approved June 8, 1872, 17 Stat. 339, an act amendatory thereof, approved March 3, 1877, 10 Stat. 405, and an act entitled "An Act granting to railroads the right of way through the public lands of the United States," approved March 3, 1870, 18 Stat. 482, considered with reference to the conflicting claims of the Denver and Rio Grande Railroad Company, and the Canon City and San Juan Railway Company, to occupy and use the Grand or Big Canyon of the Arkansas for railroad purposes.

Held: 1. That said act of 1872 granted an immediate beneficial easement in a particular way over which the routes designated in the charter of the Denver Company lay, capable, however, of enjoyment only when such way should actually and in good faith be appropriated for the purposes contemplated by that charter, and then the title thereto would take effect by relation as of the date of the act; 2. that that company finally appropriated the right of way through the canyon April 9, 1878, and was by its prior occupancy entitled to the benefits conferred by said act of 1872; 3. that both companies should be allowed to proceed with the construction of their respective roads through said canyon where it is broad enough for them to do so without interfering with each other; but where, in the narrow portions of the defile, this is impracticable, the court below, while recognizing and enforcing the prior title of the Denver Company, should, by proper orders, secure upon just and equitable terms the right of the Canyon City Company, under said act of 1875, to use, in common with the Denver Company, the same roadbed and track after the same shall have been completed.

These causes involve the conflicting claims of two railroad corporations -- the Denver and Rio Grande Railway Company and the Canyon City and San Juan Railway Company -- to occupy and use the Grand or Big Canyon of the Arkansas for

Page 99 U. S. 464

railroad purposes. For the sake of brevity, the former will be hereafter designated as the Denver Company, and the latter as the Canyon City Company.

The Denver Company was incorporated in the year 1870, in conformity to the laws of the then Territory of Colorado. Its object, expressed in the articles of incorporation filed in the proper office of the territory, was to locate, construct, operate, and maintain certain railway and telegraph lines, viz., the Denver and Rio Grande Railway, the Denver and Southern Railway, the South Park Railway, the Western Colorado Railway, the Morena Valley Railway, the San Juan Railway, the Gallesto Railway, and the Santa Rita Railway. The general route of each line was designated in the articles of incorporation. That of the main line -- the Denver and Rio Grande Railway -- was as follows:

"Commencing at Denver, Colorado Territory, thence running up the valley of the South Platte River, on the southeast side thereof, to a point at or near the mouth of Plum Creek; thence up the valley of Plum Creek, to a point at or near the forks of East Plum Creek and West Plum Creek; thence up the main east branch of Plum Creek Valley to the lake in township 11, range 67 west, on the east of the ridge dividing the waters of Plum Creek and Monument Creek; thence down the valley of Monument Creek to a point at or near the junction of the valleys of the Monument and Fountain qui bouille, or to a point in the Fountain Valley, below the mouth of the Monument, if the detailed survey shall determine the latter to be the most eligible; thence by the valley of the Fountain or across its west tributaries to such a point on the Arkansas River at or above Pueblo as may be found upon a detailed survey to be the most eligible for intersecting the same; thence up the valley of the Arkansas to a point at or near Canyon City; thence continuing up the valley of the Arkansas through the Big Canyon of the same to a point at or near the mouth of the Arkansas River; thence by the valleys or the adjoining slopes of the Arkansas River and of Pueblo Creek to the summit of the divide between the waters of the Arkansas and the San Luis Park (known as Poncho Pass); thence by the most eligible route in a general southerly direction down the San Luis Valley to the valley of the Rio Grande del Norte; thence in a general southerly direction, by the particular route which may be determined upon by a detailed survey to be

Page 99 U. S. 465

most eligible, down the valley of the Rio Grande to the southern boundary of Colorado; thence continuing down the valley of the Rio Grande, on either side of the river, as may be found expedient, or crossing from one side to the other when desirable, to El Paso, in the State of Chihuahua, with the privilege of consolidating or uniting with and operating any connecting railway in the Republic of Mexico."

The remaining seven roads are or were intended to be branches or feeders of the main line.

By an Act of Congress approved June 8, 1872, 17 Stat. 339,

"he right of way over the public domain, one hundred feet in width, on each side of the track, together with such public lands adjacent thereto as may be needed for depots, shops, and other buildings for railroad purposes, and for yard room and sidetracks, not exceeding twenty acres at any one station, and not more than one station in every ten miles, and the right to take from the public lands adjacent thereto stone, timber, earth, water, and other material required for the construction and repair of its railway and telegraph line"

was granted and confirmed unto the Denver Company, its successors and assigns. The act describes the company as a corporation created under the incorporation laws of the Territory of Colorado, and grants, ratifies, and confirms to it all the rights, powers, and franchises conferred by those laws on corporations created thereunder for constructing and operating railroad and telegraph lines, for the extension and operation of its railway and telegraph lines in and through any contiguous territory of the United States, to the northern boundary line of Mexico, subject to the conditions and requirements of the territorial statutes so far as the same were applicable and not inconsistent with the laws of the United States. The act also gave to the company the rights, powers, and privileges conferred upon the Union Pacific Railroad Company by sec. 3 of the Act of July 2, 1864. But the rights thus granted and conferred were accompanied by the proviso that the company should complete its railway to a point on the Rio Grande as far south as Santa Fe within five years after the passage of the act, and complete each year thereafter fifty miles additional south of that point.

Page 99 U. S. 466

By an Act approved March 3, 1875, 18 id. 576, that of June 8, 1872, was corrected by adding thereto a proviso which was declared to have been omitted by mistake of the copyist. That proviso enacts, among other things, that the

"Denver and Rio Grande Railway Company is hereby recognized as a lawful corporation from the date of its incorporation under the laws of Colorado, and all the powers, privileges, and franchises by said laws conferred upon said company are hereby expressly ratified, confirmed, and legalized as existing from the said date of incorporation."

On the same day, Congress passed an act "granting to railroads a right of way through the public lands of the United States.'" 18 Stat. 482. It grants that right to any railroad

"company duly organized under the laws of any state or territory except the District of Columbia or by Congress which shall have filed with the Secretary of the Interior a copy of its articles of incorporation, and due proofs of its organization under the same, to the extent of one hundred feet on each side of the central line of said road; also the right to take from the public lands adjacent to line of the road, material &c. necessary for the construction of the road, and grounds for station buildings, depots, machine shops, side tracks, turnouts, and water station,"

&c.

The second section provides:

"That any railroad company whose right of way or whose track or roadbed upon such right of way passes through any canyon, pass, or defile, shall not prevent any other railroad company from the use and occupancy of said canyon, pass, or defile for the purposes of its road in common with the road first located or the crossing of other railroads at grade. And the location of such right of way through any canyon, pass, or defile shall not cause the disuse of any wagon or other public highway now located therein, nor prevent the location through the same of any such wagon road or highway where such road or highway may be necessary for the public accommodation, and where any change in the location of such wagon road is necessary to permit the passage of such railroad through any canyon, pass, or defile, said railroad company shall, before entering upon the ground occupied by such wagon road, cause the same to be reconstructed at its own expense in the most

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favorable location and in as perfect a manner as the original road, provided that such expenses shall be equitably divided between any number of railroad companies occupying and using the same canyon, pass, or defile."

Section 4 declares that any railroad company desiring to secure the benefits of that act shall,

"within twelve months after the location of any section of twenty miles of its road, if the same be upon surveyed lands, and, if upon unsurveyed lands, within twelve months after the survey thereof by the United States, file with the register of the land office for the district where such land is located a profile of its road, and upon the approval thereof by the Secretary of the Interior,"

the same was required to "be noted upon the plats in said office, and thereafter all such lands over which such right of way passes should be disposed of subject to such right of way." All rights thereby granted to be forfeited as to any section located but uncompleted within five years after such location.

On Feb. 15, 1877, Alling, Locke, and Megrue became incorporated under the laws of Colorado as "The Canyon City and San Juan Railway Company," with a capital stock of $100,000, for the purpose of constructing and maintaining a railroad from Canyon City, thence up the valley of the Arkansas River through the Grand Canyon thereof, thence, by the most practicable route, following that river to South Arkansas Post Office in Lake County, Colorado. The articles of incorporation were filed in the office of the Secretary of State of Colorado Feb. 19, 1877. The Secretary of the Interior, in an official communication, declared, June 22, 1877, his approval of the proofs of organization filed by that company and of the map showing the line of its road for a distance of twenty miles.

Congress, March 3, 1877, passed an act amending that of June 8, 1872, so as to read that the Denver Company should have ten years from the passage of the original act to complete its road as far south as Santa Fe, in default of which, as to the unfinished part of it, the rights and privileges granted should be null and void.

The Canyon City Company filed, April 20, 1878, its complaint against the Denver Company, in the Third Judicial District

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Court of Colorado, Fremont County, claiming that it had complied in all respects with the Act of Congress of March 3, 1875, and acquired a prior right to construct its road through the Grand Canyon, one hundred feet on each side of its line as surveyed in 1877, and charging that the defendant was interfering with the construction of its road upon that line.

In accordance with the prayer of the bill, an injunction was granted by the state court restraining the defendant from interfering with its further operations in the canyon. That suit, upon the petition of the defendant, was, April 22, 1878, removed into the Circuit Court of the United States for the District of Colorado.

The Denver Company, April 27, 1878, filed its bill in the latter court against Alling and others, who are designated in the charter of the Canyon City Company as its trustees for the first year, and against the Atchison, Topeka, and Santa Fe Railway Company, charging that the Canyon City Company was not a legally constituted corporation; that the individual defendants, wrongfully claiming to be such corporation, had, by force, occupied the Grand Canyon, and were proceeding to locate their road upon a line in that canyon which the complainant had surveyed in 1871-72, and upon which it had made preparations to resume active work on the 19th of April, 1878; that although it was in the occupancy of the narrow portion of the canyon, where only one road could be located, the defendants threatened by force to drive away its engineers and servants then working in said canyon, and thereby dispossess it of its located line and grade in the narrow part of said canyon; that the defendants were aided and abetted in said course by the Atchison, Topeka, and Santa Fe Railway Company, who, seeking to build a road from Pueblo, by the valley of the Arkansas and through said canyon, had to that end confederated with the defendants to compel the complainant to abandon the extension of its railway as authorized by its charter and the act of Congress. The complainant, by its bill, claimed an exclusive right of way through the Big Canyon, upon the line of its survey, and one hundred feet upon each side of its road, and to that effect relief was asked by final decree. In that suit, a temporary injunction was granted against the Canyon City Company restraining it

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from occupying or attempting to occupy the Big Canyon and from in any way or manner constructing or attempting to survey, locate, or construct their line of railroad through the canyon, which, for the purposes of that suit, was taken and decreed to begin at what is known as the "Point of Rocks," at the mouth of the canyon, and extending to the twelve-mile bridge. That injunction was subsequently modified and limited in its operation to that part of the canyon known as the Royal Gorge, and the defendant was allowed to enter upon that part of the canyon and grade the same for a railroad, but not to lay ties or rails on any part thereof until the future order of the court.

In the suit instituted by the Canyon City Company, the Denver Company filed a cross-bill, setting up substantially the same facts as in its original bill against Alling and others, and a decree was rendered which, among other things, recognized the prior right of the former to proceed in the construction and operation of its road through the Grand Canyon without interference or obstruction in any way by the Denver Company, but with liberty to the latter to exhibit its bill in any court of competent jurisdiction to compel the Canyon City Company to so change, locate, and construct its road as to permit the convenient and proper location by the Denver Company of its own road or to compel the Canyon City Company to permit the Denver Company to occupy the track and roadway of the former company if at any point in that defile it should be impracticable to conveniently lay down or safely operate two distinct lines of railway. From that decree the Denver Company appealed, and it also appealed from the decree in its own suit, dissolving the preliminary injunction granted to it, and dismissing its bill.

Page 99 U. S. 470

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