Chapter 4969: RAILROAD SALES; RAILROAD RECEIVERS

4969.01 Sale of roadbed and right of way.

A company, owning in whole or in part a roadbed and right of way for a railroad within this state, including those acquired by purchase at judicial sale, which, from lack of means or other cause, is unable to complete the construction of the proposed railroad thereon, may sell, assign, and transfer it, or a part thereof, to any other company incorporated under the laws of this state, with authority to construct and operate a railroad over the same route, or any part thereof. The transfer shall include all work done upon such railroad, with all material furnished therefor, not exempted by the terms of the grant, and all rights, privileges, and easements, as fully as they are or may be possessed by the company making the transfer, and to the same extent, vest the title of and the right to enjoy them in such grantee. Such transfer shall be by deed, executed by the president of the company which is the grantor, in the manner provided for the conveyance of real estate, and for such consideration as the parties agree upon.

Effective Date: 10-01-1953

4969.02 Consent to sale by stockholders.

Before a transfer as provided by section 4969.01 of the Revised Code may be made, the president of the company shall call a meeting of its stockholders, at some convenient point on, or at a terminus of, the railroad, of which meeting he shall cause at least thirty days' notice to be published in a newspaper published in or in general circulation in each county in which such roadbed and right of way are situated. By a concurrent vote of two thirds in interest of the stock represented at such meeting by the owners thereof, in person or by proxy, the meeting may declare by resolution the inability of the company to complete its railroad, prescribe the terms of the proposed transfer of its roadbed and right of way, and direct the president of the company to execute the deed. All such proceedings, resolutions, and directions shall be recited in the deed and be recorded in the proper record of the company, and a copy of such record shall be delivered to the grantee.

Effective Date: 10-07-1977

4969.03 Dissenting stockholder may retain interest.

No transfer shall be made under section 4969.01 of the Revised Code against the dissent of any stockholder, expressly declared and filed in writing at the meeting provided by section 4969.02 of the Revised Code, without the guaranty of the grantee company that it will issue to him certificates of its capital stock, equal in amount to his pro rata interest as a stockholder of the grantor, in the amount for which the property is sold.

Effective Date: 10-01-1953

4969.04 Title vests in grantee.

The title to the property transferred, with the right to use, occupy, and enjoy it for all purposes proper in the construction, maintenance, and operation of a railroad thereon, shall pass to and vest in the grantee company, by the execution of the deed referred to by section 4969.01 of the Revised Code, to the same extent as the granting company might or could use, occupy, and enjoy it.

Effective Date: 10-01-1953

4969.05 Certain contracts of sale void unless recorded.

No contract for the sale of railroad equipment, rolling stock, or other personal property to be used in or about the operation of a railroad, by the terms of which the purchase money, in whole or part, is to be paid in the future, and in which it is stipulated or conditioned that the title to the property sold shall not vest in the vendee, but shall remain in the vendor until the purchase money has been fully paid, is valid against creditors or innocent purchasers for value, unless such contract is recorded, or a copy thereof is filed in the office of the secretary of state. When the contract is so recorded, or a copy thereof so filed, the title to the property sold, or contracted to be sold, shall not vest in the vendee, but remain in the vendor until the purchase money has been fully paid. Such stipulation or condition is and shall remain valid, notwithstanding the delivery of the property to and its possession by the vendee. The secretary of state, upon being paid the proper fees shall record any such contract, and shall file in his office a copy of any such contract, when it is delivered to him for that purpose. For every copy so filed he shall receive one dollar.

Effective Date: 10-01-1953

4969.06 Parties may provide for a conditional sale in a lease.

Any written contract for the renting, leasing, or hiring of railroad equipment, rolling stock, or other personal property to be used in or about the operation of a railroad, may stipulate or provide for a conditional sale of the property at the termination of such renting, leasing, or hiring, and may stipulate or provide that the rental reserved as paid, or when paid in full, shall be applied and treated as purchase money. Such contract may stipulate or provide that the title to such property shall remain in the lessor or vendor until the purchase money has been fully paid, notwithstanding delivery to and possession by the other party, subject to the requirement as to recording or filing contained in section 4969.05 of the Revised Code.

Effective Date: 10-01-1953

4969.07 Sale of equipment.

Sections 4969.05 and 4969.06 of the Revised Code apply, not only to contracts made with a railroad company as vendee or lessee, but also apply to all contracts which may be made with any interurban railroad or street railway company, or other company, corporation, or person as vendee or lessee, by which any such interurban railroad or street railway company, or other corporation, company, or person undertakes to purchase, rent, lease, or hire any railroad, or interurban railroad, or street railway equipment, cars, rolling stock, or other personal property, designed for use on, or in connection with a railroad or interurban railroad, or street railway in this or other states.

Effective Date: 10-01-1953

4969.08 Receiver.

Where a railroad, the whole or part of which lies within this state, has been placed by order of a court in the hands of a receiver who has taken charge of and is operating it for the purpose of carrying passengers, freight, and doing such other things as ordinarily belong to the running and management of railroads, in his official capacity, such receiver may sue or be sued in the courts of this state without leave previously granted. No person shall act as such receiver unless he is a resident citizen of this state.

Effective Date: 10-01-1953

4969.09 Application of funds - lien.

The earnings of a railroad in the hands of a receiver, and all other money which comes into his hands as receiver, shall be applied first to pay:

(A) Costs and expenses of the suit in which he was appointed;

(B) The expenses of operating and managing the railroad, including materials and supplies procured by him for it;

(C) The liabilities incurred by him in such operation and management. Judgments recovered against a receiver for injuries to person or property, for wages of employees, for work done, or for materials furnished while he is operating or managing the railroad, shall be a lien on the funds in his hands as receiver, but shall affect him only in his trust capacity and not individually.

Effective Date: 10-01-1953

4969.10 Receiver must deposit money.

When a railroad operated by a receiver is wholly within this state, all money which comes into his hands, whether from operating the railroad or otherwise, shall be kept and deposited in such place within this state as the court directs, until properly disbursed. If a part of the railroad lies in another state, the receiver shall deposit in this state at least such share of the funds in his hands as is proportioned to the value of the property of the railroad company within this state.

Effective Date: 10-01-1953

4969.11 Venue - service.

Actions may be brought against the receiver of a railroad, street railway, or an interurban railroad, in any county through or into which such railroad, street railway, or interurban railroad is constructed. Service of summons may be made on the receiver or superintendent of the railroad, street railway, or interurban railroad, or a ticket or freight agent in the employment of or acting for the receiver. No service made upon such agent is valid unless his office or place of business is in the county where the suit is brought.

Effective Date: 10-01-1953

4969.12 Certain railroads may be sold at judicial sale.

The real and personal property, roadbed, right of way, fixtures, and franchises of a railroad company in this state which has not completed, nor conveyed by deed of trust or mortgage, any part of its railroad, and which is insolvent, and whose property is in the hands of a receiver appointed by a court of competent jurisdiction, may be sold at judicial sale, and title thereto, with all the rights, liberties, faculties, and franchises, shall pass by such sale, and vest in the purchaser thereof, as fully as they had been possessed, exercised, and enjoyed by such company.

Effective Date: 10-01-1953

4969.13 Receiver must petition for sale.

Before a sale under section 4969.12 of the Revised Code is ordered, the receiver shall file in the court his petition therefor, in which he shall set forth the names of the creditors of the company, with the sums due to each as nearly as can be ascertained, a statement of the company's assets, exclusive of its roadbed, rights of way, and franchises, and a pertinent description in general terms of the roadbed, right of way, and property so sought to be sold, and cause notice thereof to be published, for six consecutive weeks, in a newspaper published in and of general circulation in each of the counties in which any part of the roadbed is situated. Before the distribution of the proceeds of the sale any creditor may appear and set up his claim by answer, and have it determined by the court, if it is omitted from or inaccurately stated in the petition.

Effective Date: 10-07-1977

4969.14 Order for appraisement.

On proof of the publication of the notice required by section 4969.13 of the Revised Code, and being satisfied that a sale is necessary to pay the indebtedness of the company, the court shall order the sale of such railroad, roadbed, rights of way, property, and franchises, on such terms of payment as it deems proper, and issue its order to the receiver commanding that he cause them to be appraised by commissioners, selected by the court, skilled in the construction and value of such roadbeds as they may be called upon to appraise, having the qualifications of a freeholder, not less than three in number, and consisting of at least one from each county in which any part of the roadbed is situated. Such proceedings shall be had under the order as are provided in sales of real estate made by judicial order in other cases, so far as they are applicable.

Effective Date: 10-01-1953

4969.15 Notice of sale to be published.

Before a sale referred to in section 4969.12 of the Revised Code is made, notice thereof shall be given by publication, for six consecutive weeks, in some newspaper published and of general circulation in each of the counties through or in which such railroad is located, and also in some newspaper published and of general circulation in each of the cities of New York and Cincinnati, for at least thirty days prior to the day of sale. The sale shall not be made for less than two thirds of the appraised value of the property and rights, unless, upon their having been twice offered and not sold, the court orders a reappraisement.

Effective Date: 10-01-1953

4969.16 Confirmation of sale and deed - distribution of proceeds.

When a sale referred to in section 4969.12 of the Revised Code is made and reported to the court, if satisfied that it was conducted according to law and its order, the court shall confirm the sale and order the receiver to execute and deliver to the purchaser a deed of conveyance for the railroad, roadbed, rights of way, real estate, fixtures, and franchises so sold. The proceeds of the sale, after paying the costs and expenses thereof and the unpaid expenses of the trust against the company, shall be distributed pro rata among all the creditors of the company.

Effective Date: 10-01-1953

4969.17 Who may purchase property.

A company organized under the laws of this state may purchase the property referred to in section 4969.12 of the Revised Code. Any number of persons not less than five may purchase such railroad, roadbed, rights of way, property, and franchises at such sale. On filing a transcript of the decree of confirmation in the office of the secretary of state, they shall become a corporation of this state, amenable to its process and, with perpetual succession by such name as they assume, shall be subject to the law regulating such corporations, and shall hold the property, rights, and franchises so purchased free from liability for the debts of the original corporation.

Effective Date: 10-01-1953

4969.18 Purchaser may acquire franchise.

The purchaser of a railroad situated wholly or partly within this state, sold pursuant to judicial proceedings, may acquire the franchise originally vested in the company which held the railroad prior to such sale, by grant of such company, under such terms as are agreed upon by the directors of the company with the consent of stockholders owning two thirds of the stock. Such grant shall be in the form required to convey real estate, and shall pass such franchise to the persons or company becoming the owner by the purchase of such railroad. No grant may be made unless provision is made for granting to the stockholders in the original company stock in the reorganized company, upon equal terms with the stockholders of such reorganized company, and unless it is acceptable to the directors making it.

Effective Date: 10-01-1953

4969.19 Purchaser at judicial sale may sell railroad.

The purchaser of the property, roadbeds, rights of way, fixtures, and franchises of a railroad company in this state, situated wholly or in part in this state, sold pursuant to judicial order, judgment, or decree, and which sale is confirmed by the court making the order of sale, may sell all or any part of such property. The title thereto, with all the rights, liberties, faculties, and franchises shall pass by such sale and vest in the purchaser of such property, as fully as if they had been possessed, exercised, and enjoyed by such railroad company. The grant thereof, in the form required to pass real estate, shall be recorded in the record of deeds of the counties in which such property is situated and the rights and franchises are or may be exercised.

Effective Date: 10-01-1953

4969.20 Any number of persons may purchase and incorporate.

A railroad company organized or existing under the laws of this state may purchase the property as provided in section 4969.19 of the Revised Code. Any number of persons may purchase such railroad, roadbeds, rights of way, property, and franchises either directly at such judicial sale or by grant from the purchasers at such sale. On filing a copy of such deed or grant in the office of the secretary of state, with articles of incorporation executed in accordance with the law respecting the creation of corporations for profit, they and such persons as associate with them, not less than five in number, shall become a corporation with perpetual succession by such name as they assume, with capacity to maintain and operate such railroads, whether located wholly within this state, or partly within this state and partly in another state.

Effective Date: 10-01-1953

4969.21 May issue stock and bonds to pay purchase price.

A corporation may provide for the purchase price of the railroad and other property bought as provided in section 4969.20 of the Revised Code by the issue of its capital stock, preferred or common, and bonds secured by mortgage or otherwise, bearing interest at a rate not exceeding seven per cent per annum. Stock and bonds issued as such purchase price, in amounts the incorporators in good faith agreed on, shall be valid, and taken as fully paid for by the transfer to the corporation of such railroad and property. The corporation may also by such issue of stock or bonds raise the necessary means suitable to improve such railroad property and equipment for the uses and purposes for which it is employed. In the operation and maintenance of its railroad, such corporation is entitled to all the rights and is subject to all the obligations and restrictions imposed upon railroad companies by the laws of this state.

Effective Date: 10-01-1953

4969.22 Certain rights of way forfeited.

Where a right of way, or part thereof, upon an unfinished railroad remains for ten years unused for railroad purposes, it shall be held forfeited and shall revert to the owner of the land, unless at least twenty miles of the railroad have been completed by the company during that period, or unless an average of one thousand dollars per mile has been expended for construction before the expiration of such period.

Effective Date: 10-01-1953