Kuhn, Arbuckle et al. v. The Woolson Spice Co. et al.

another person whose interests may be utterly averse to those of the company, is in a position to control the proceedings. What the court looks to is this: Is the suit bona fide, the plaintiff's own suit, or is he merely the hand by which some one else acts? And there is no ingredient entitled to greater weight in arriving at a conclusion on this point than the question, who is responsible for the costs of the suit? Nor are we without authority to the same point in our own state. The court, in 55 Barb., 157, said: 'In the answer it is alleged with great distinctness, on the information and belief of the defendants, that the plaintiff is not the real party in interest, but that the suit is prosecued wholly at the instigation and in the interests of the rival express companies, which are the real and actual plaintiffs in the controversy. An illusory suit in the name of the share holder, but really prosecuted by and in the interest of a rival and competing company, cannot be maintained for the purpose of dissolving or restraining another association or company, of which the nominal plaintiff may be a member."

That opinion cites another case—which has also been cited here several times--and, as it is an important one, I will refer to it. It is the case of Forest v. Manchester, etc., Ry. Co., 4 DeGex, Fisher & Jones Rep., 125. In that case, the plaintiff, on behalf of himself and other shareholders, sought an injunction to restrain the company from running steam vessels in a manner alleged to be ultra vires, but he admitted, on cross-examination that he was a shareholder in a rival company, and instituted the suit by direction of the latter company, who indemnified him against costs. I will read a little from page 129, which I think is very profitable reading:

"But the ground upon which I proceed is entirely that of personal exception to the character of the plaintiff, and the foundation of my decision is contained in this passage of the plaintiff's own examination, not attempted to be qualified or questioned. He says in that examination: 'The directors of the packet company directed the institution of this suit and indemnify me against costs.' It is not that they persuaded him to institute the suit, not that they instigated the suit, but that the directors of the other company have 'directed the suit' and are to indemnify the plaintiff against the costs of it. To use a familiar expression, the plaintiff is the puppet of that company. It has been a very wholesome doctrine of this court that one shareholder having in view the legitimate purposes of the company, may be permitted in this court to maintain a suit on behalf of himself and the other shareholders of the company, but the principle upon which that constructive representation of the shareholders is permitted indisputably requires that the suit shall be a bona fide one, faithfully, truthfully, sincerely directed to the benefit and the interests of those shareholders whom the plaintiff claims a right to represent. But can I permit a man who is the puppet of another company to represent the shareholders of the company against whom he desires to establish the interests and benefits of a rival scheme? That would be entirely contrary to the principle upon which this constructive representation has been permitted to be founded. When the plaintiff sues in that capacity any personal exception to the plaintiff remains, and it would be a direct contradiction of every principle of truth and justice if I permitted a man to come here clothed in a garb of a shareholder of Company "A," but who is in reality a shareholder in Company "B," and has no sympathy whatever with, no real purpose of promoting the interests of the other company? Such a thing would be so much at variance

Lucas Circuit Court.

with the principles of a court of equity that it would be impossible for it to entertain a suit of that description, which is mere mockery, a mere illusory proceeding."

These authorities come nearer to the question at issue than any others that have been cited. The only distinction which can be pointed out between the reported cases and the one at bar is, that the former were brought by an individual, whom it is asserted had been procured to institute the action by an agreement to indemnify as to costs, while in the latter, the plaintiff, partnership, has brought the suit directly. The distinction is not important. The reasoning in both cases referred to rests upon the fact that the real instigator of the suit was a rival business concern. We have so far failed to find any reported case furnishing an exact parallel to the one before us; perhaps because no business house, in its own name, has hitherto sought the aid of a court of equity to enjoin a competitor from managing its own business. In the cases cited that was the real attempt, but they gracefully put another's name forward as plaintiff. We fail to observe any distinction of importance, and the reasoning of the decisions is entirely applicable to the case before us. The plaintiffs here frankly allege that having been a long time establishing a large and profitable business in the coffee line, it occurred to them that they would become competitors of the American Sugar Refining Company in the sugar line, and they started out to erect a refinery; that thereupon they say, The American Sugar Refining Company, to offset this attempt at competition in the sugar business and to drive plaintiffs out of it, have embarked in the coffee business, and in this latter attempt the hand of the court should be laid heavy upon them. We do not think that the plaintiffs are in a position to ask a court of equity to interfere in this matter. There is nothing shown indicating anything different in the conduct of the Woolson Company's buainess than might be anticipated or expected at any time from the managers of a similar concern. It will not do for a court of equity to take charge of this plant, undertake to control it by injunction substituting the judgment of the court for the discretion of its directors. If as alleged, the management of the Woolson Company are selling its product for less than cost, they had only recently entered upon that policy, and it may be a part of the wisest business sense that has prompted its management to reduce the prices of its products.

It is claimed that defendants should be enjoined for selling their products at such unprofitable price. We are not satisfied from the evidence that they are making such sales. The evidence taken after the business had been operated under its new management for about three months tends to show that the corporation is doing business at a profit, but if it were not, for the reasons already given, the court will not inter fere at the suit of a competitor in business to restrain the directors from exercising their judgment in the matter of prices. For aught that appears the reduction in price is a temporary expedient, having for its purpose an enlargement of the trade and business, and may, if it does not already, ultimately result in increased profits. However that question is one in the control of the directors, and a court of equity cannot interfere with the discretion unless the proof clearly shows an abuse of it. For these reasons the court are of the opinion that the motion to suspend the order dissolving the injunction should be and it is overruled.

A. L. Smith, John Kumler and E. J. Marshall, Attorney's for Plaintiff.
Messrs Doyle & Lewis, Attorney's for Defendants.

The W. & L. E. Ry. Co. v. Fries and The W & L. E. R. R. Co.

APPROPRIATION OF LANDS-EVIDENCE-
LIMITATIONS.

[Huron Circuit Court, 1897.]

King, Haynes and Parker, JJ.

*THE W. & L. E. Ry. Co. v. ValentINE FRIES AND THE W. & L. E R. R. Co.

1. A DEMURRER TO THE ANSWER SEARCHES THE RECORD..

In an action by a party to recover compensation for lands that have been entere upon by a railway company without the consent of the owner in writing, the defendant filed an answer claiming that the cause of action did no accrue within six years next before the action was begun; to this defense plaintiff demurred: Held, that the demurrer to the answer searches the record and the court is warranted to look back to the petition and see when the cause of action did arise, and if it finds that it arose within six years prior to the commencement of the suit, it will not be error in the court in sustaining the demurrer to this defense.

2. THE CAUSE OF ACTION ACCRUES AT THE TIME THE OWNER TRANSFERS THE DEED TO THE COMPANY.

Where a railroad company has taken possession of land for its right-of-way without the owner's consent, such property belongs to the owner up to the time that he tenders the deed, and, if, at the time of tendering the deed for such property, the owner elected to hold the company for the land and receive for it the compensation which was due him for the value of the land: Held, that by that election the owner's cause of action arose, and he had the right to bring and maintain his suit, and damages should be awarded of the date when the title of property passed, that is, for the value of the land to the owner at that time.

8. EVIDENCE AS TO THE VALUE OF THE LAND APPROPRIATED.

In such case it is error for the court to allow testimony to be offered as to the value of the land when the railroad company went into possession, in that it was offered and directed to a point of time prior to the time when the cause of action accrued. Such testimony should have been confined to the time when the deed was delivered.

4. DAMAGES IN SUCH CASE IS RESTRICTED ONLY TO LAND TAKEN.

It is error for the court to refuse to charge the jury that in such case the plaintiff is not entitled to recover damages to land not taken by the railroad company, but is restricted to compensation for land taken

HAYNES, J.

In the case of The Wheeling & Lake Erie Railway Company, plaintiff in error, v. Valentine Fries and the Wheeling & Lake Erie Railroad Company, defendants in error, the original petition in error was filed in this court for the purpose of reversing the judgment of the court of common pleas in a certain case pending in that court wherein Valentine Fries was plaintiff and the Wheeling & Lake Erie Railway Company was defendant; also The Wheeling & Lake Erie Railroad Company.

After the case was passed upon by the circuit court, it was taken to the supreme court, and the judgment of the circuit court was there reversed by the supreme court and the cause remanded to this court for further proceedings. The decision of this court in this case which was before us at the former trial here, may be found in volume 2, of the Ohio Decisions, at page 393, and therein the facts of the case are very fully set forth so that it will not be necessary to recite the case here.

*This decision was affirmed by the Supreme Court, 60 O. S..598, because one ground of reversal was that the court of common pleas erred in overruling the motion for a new trial, and it appears that one ground for a new trial stated in the motion, was that the verdict was against the weight of the evidence. Unreported.

For previous decision in this case. which was reversed by the Supreme Court, 56 O. S., 135, see 6 Circ. Dec., 204.

Huron Circuit Court.

It is sufficient to say that at that time, the judgment of the court of common pleas was reversed because it refused to sustain the demurrer to the petition of the plaintiff, the point of law being that the action was barred by the statute of limitations.

The other questions that were raised in the case this court did not pass upon, and the supreme court, in reversing the case, passed only upon the question passed upon by this court and remanded the case here with instructions to this court to pass upon the remaining errors assigned in the case. Those remaining errors are the ones that are before us and upon which we are called upon to pass.

The action, as it will be remembered, was brought by Fries against the railway company for that it had taken possession of about three and one-half acres of land of a certain farm in this county, for railroad purposes, having entered upon the land without any grant or conveyance from, or agreement in writing with the owners thereof, with only verbal consent of the plaintiff, "on condition of compensation never performed;" so that the entry, whatever it was, upon the land was never made under any agreement in writing, nor under any proceeding for the appropriation of property, but was made, as the supreme court say, with the consent of the party, but not in writing.

The supreme court have made two points in the case that should be referred to by us in entering upon the decision of this case. In the first place, the supreme court discussed the question as to the remedy which the party was entitled to, and in doing that, they discussed section 6448, and also section 6449, which provides that in certain cases, a party whose land has been entered upon by a railway company without the consent of the owner in writing, it may be compelled to proceed and appropriate the property by regular appropriation proceedings.

In passing upon that, they say, after discussing it at considerable length: "If the conclusions herein before stated are correct, the plaintiff had an election to proceed under the statute and compel an appropriation, or, accepting the acts of the company as an appropriation, sue for compensation. If he resorted to the former remedy, the inquiry might include as well damages to remaining lands as compensation for the land taken, and would be conducted in the probate court, inasmuch as that court alone (save under exceptional conditions named in the statute), has jurisdiction in appropriation proceedings. If, however, he preferred the latter remedy, his action might be instituted, as it was, in the common pleas. But the remedy in the latter court could go no farther than compensation for land actually taken.

"To broaden the injury in such case into an assessment of damages to other lands would, practically, make an appropriation case of it, and we think it clear that the statute implies that jurisdiction to entertain such inquiry shall (save in the exceptional instances), be confined to the probate court."

It will be observed that the court clearly decide there, that compensation must be for land actually taken, and the land actually taken here was three acres aud a fraction of an acre.

Secondly-"Having a choice of remedies the plaintiff would not be held to have elected until some steps were taken looking to an enforcement of the particular remedy chosen. The defendant's argument upon the statute of limitation seems to proceed upon the theory that the plaintiff's consent to the entry by the company was, of itself, an election to proceed for compensation only. We cannot so regard it. It is mere

The W. & L. E. Ry. Co. v. Fries and The W. & L. E. R. R. Co.

assumption at best, unreasonable and illiberal. We should not presume, in the absence of proof tending to establish it, that a party has selected his least valuable alternative. But, aside from this, the assumption is utterly inconsistent with the conclusion already announced that the plaintiff had a choice of remedies, since it makes the very act which clothes him with a right to a choice of two remedies, determine conclusively that he has but one. It is not important to consider here what would amount to an election, though we would suppose that it should be some unequivocal act not consistent with any other conclusion. Therefore, if the six years' limitation applies to the remedy of compensation (and we do not find it necessary to determine whether it does or not), a demurrer setting up that statute would not be well taken unless it appeared by the pleading that six years had elasped after election made and before suit. And, applying that conclusion to the plaintiff's second amended petition, it does not appear to be open to that objection. Hence, the demurrer to that pleading was properly overruled."

It will be observed there that the court decide the statute of limitation does not commence to run until the tender of the deed, until election is made, and inasmuch as it did not appear upon the face of the petition that that was more than six years before the commencement of the suit, even assuming that the circuit court had found that the limitation was six years, that the limitation had not expired. With this light before us, we must proceed to the decision of the remaining errors assigned, and they are:

That the court erred in sustaining the demurrer to the second and third defenses in the amended answer to the second amended petition. Said court erred in the admission of evidence offered by the plaintiff. Said court erred in the rejection of evidence offered by the defend

ant.

Said court erred in its charge to the jury.

Said court erred in refusing to charge the jury as requested by the defendant.

Said court erred in overruling the motion for a new trial.

Said court erred in overruling the motion of the defendant to arrest the judgment.

First, in regard to the sustaining of the demurrer: The second amended petition having been filed, an amended answer was filed, setting up various facts as a first defense; and then for a second defense: "This defendant says that the cause of action in said second amended petition set forth, accrued in the year 1880, and that said cause of action did not accrue within six years next before this action began.

For a third defense: "This defendant says that the cause of action in said second amended petition set forth, accrued in the year 1880; and that said cause of action did not accrue within ten years next before said second amended petition was filed."

If it were necessary, I think we should hold to our original position until the supreme court has decided one way or the other as to whether the six years' statute applies or not; we should hold to our original decision that the six years' statute applies to this case.

Suffice it to say that the pleadings show this: That the defendant railway company took possession of the land succeeding the railroad company sometime in the year 1886.