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Legal Battle over Custody of ATSF Locomotive 3463

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RME
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Posted by RME on Saturday, May 20, 2017 9:18 AM

Euclid
I would say that applies perfectly to both sides.

Except that it does not.

The court decision went into substantial detail, on every ground involved (I would argue they went a little further to find any potential ground under applicable Kansas law) in determining the 'reincarnated' Petrel scam had no legitimate right to the locomotive at all.

The issue with CSR's purchase is an issue for further action at law ... which is ongoing; it's yet to be decided in a trial whether there is some issue of contract, for example, or adverse possession, or breach of explicit covenant, that might leave CSR in "possession" of the locomotive.  In the meantime, CSR (and, I believe, the Petrel flying circus, and I hope more responsible people in the Topeka area) are proceeding in parallel to work with City government to determine (and do more than a little lobbying, I suspect) should the results of the trial indicate CSR has no rights to 3463.

I think even you can appreciate the very material legal difference between what happened to Petrel et al. and the CSR people so far.

Each side had their claim of ownership found invalid by the court. How can you say that CSR “won” by achieving utter defeat of the opposing group? Both sides achieved utter defeat of their opposition.

You seem sickeningly eager to keep putting words in my mouth that I not only have not said, but keep emphasizing are mistaken.  No one could possibly say with a straight face that CSR has "won" anything; they certainly were not awarded possession or even control of the locomotive.  But their case and claims are ongoing in court.  That is not true of Petrel's organization.  They are out of it until the court proceedings, likely appeals, etc. are exhausted.

Now, if CSR chooses to 'settle' with the City of Topeka, for example by agreeing to stipulate that they recognize the City as the appropriate agent of and for the children of Topeka, they can do so.  Personally, I hope they do something of the sort, so the thing could get resolved without further dollars going to lawyers instead of locomotive restoration or further time for the locomotive to deteriorate.  I have the increasing impression, perhaps quite wrong, that 'the bloom is off the rose' for Project 130 as a poster child and bully pulpit for torrefied renewable fuel, and there is of course no likelihood of 3463 actually going to Minneapolis in the first place, let alone being modified, if the very substantial funds and guarantees that are necessary are not fully assured.  So there may be much more 'foot in the door' for a legitimate Topeka-based organization to arrange for long-term control of the locomotive and further the purposes inherent in the original donation.

One other point:  I do not know how far the UCC extends to Kansas law, but I'd suspect that commercial-law principles might apply to a locomotive just as they currently do to motor vehicles.  Particularly to motor vehicles with unclear titling or an unproven history of ownership.  A slightly longer-term approach would be to have the Kansas legislature pass appropriate laws or amend current Kansas codes to provide either a general or specific avenue to solve this situation "legally" and properly... again, if I lived in Kansas, I'd be pursuing that every legitimate way I could.

If it helps anything: no, I don't personally think GOS had the right to transfer 'ownership' to CSR, and no, I don't personally think there is a way for CSR to claim it is satisfying the original conditions of the donation if it removes the locomotive from Topeka.  On the other hand, I do think that an appropriate resolution to this situation can only be made fairly through legal process, due or otherwise, ideally in open court.  So it will be interesting to see how the argument actually is made and decided.

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Posted by Euclid on Saturday, May 20, 2017 8:02 AM

RME
And that is, indeed, an important point to clarify ... although it should be mentioned that the important thing the court did was establish that the Topeka group didn't have any claim on 3463 whatsoever, which some of the propaganda from 'the other side' had tried to dilute or deny. I think it may be significant that CSR has remained close-mouthed about its upcoming planning and strategy, which may influence (negatively, I think) how the organization is perceived by the Topekans or Kansas judges, whoever they are, who will ultimately decide what will be done with the locomotive. Certainly no one should think that CSR has 'won' (unless winning is defined as the utter defeat of your opposition on completely different grounds).

Well that relates to my main point of this thread, which is to overturn the notion that CSR won and the other side lost.

You say, “And that [ownership] is, indeed, an important point to clarify ... although it should be mentioned that the important thing the court did was establish that the Topeka group didn't have any claim on 3463 whatsoever, which some of the propaganda from 'the other side' had tried to dilute or deny.” 

I would say that applies perfectly to both sides.

Both parties went to court to find out which one owned the locomotive.  The court found that neither one own it.  How can it be said that one side lost and the other side won?  Each side had their claim of ownership found invalid by the court.  How can you say that CSR “won” by achieving utter defeat of the opposing group?  Both sides achieved utter defeat of their opposition. 

Clearly neither side won, and the ball is back in the court of the City who thought they were rid of the responsibility and cost of caring for #3463 several years ago.  I agree that a plan is urgently needed.  Local government does not like safety hazards and their liability. 

RME
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Posted by RME on Friday, May 19, 2017 8:01 PM

Euclid
I am not presenting a court case here, so I have no intention of providing proper documentation for everything I say.

I'm not asking for a brief with ironclad proofs and precedents -- I'm only asking for actual sources that can independently corroborate the things you say.  When you say something I naturally assume that at least part of the reason for you saying it is that you have some facts or opinions to base your saying on, and those are what I'd like to know.

My point of mentioning that CSR does not own the locomotive is to clarify the point that they did not win the legal case in terms of the court deciding that they owned it and the Topeka group did not own it. Considerable commentary following the legal decision has indeed left the impression that CSR won the case by implying that the loss by the Topeka group means that CSR can proceed with their plans. This was clearly implied by the Trains Newswire article and by the CSR

And that is, indeed, an important point to clarify ... although it should be mentioned that the important thing the court did was establish that the Topeka group didn't have any claim on 3463 whatsoever, which some of the propaganda from 'the other side' had tried to dilute or deny.  I think it may be significant that CSR has remained close-mouthed about its upcoming planning and strategy, which may influence (negatively, I think) how the organization is perceived by the Topekans or Kansas judges, whoever they are, who will ultimately decide what will be done with the locomotive.  Certainly no one should think that CSR has 'won' (unless winning is defined as the utter defeat of your opposition on completely different grounds).

You are right that I was not there in 1956 when AT&SF presented the locomotive to the City, but I did talk to someone who was there.

Now see, we are getting somewhere.  Who was that person, and how were they related to the donation or acceptance?

And the general idea was said to be to divide the ownership of the locomotive in order to protect it from any one person deciding its fate. I was told that AT&SF actually sold some sort of shares in the locomotive.

Again, you need to say precisely who told you this, and it would be very helpful if some collateral  material can be sourced either to substantiate or disprove it -- this is historiography, not adversarial advocacy.

This may be all distorted or it may not be true at all, but I certainly did not make it up. Obviously AT&SF had a strong interest in protecting the locomotive from meeting any fate that would have reflected badly on them. They had strings attached to the gift of the locomotive.

That last sentence isn't an opinion: it is phrased and expressed as a fact.  And you must provide some actual, independently verifiable proof when you say something like that.  What were the strings that were attached, how were they to be enforced, how were they documented?  If the 'precursor organization' that was supposedly reincarnated under Kansas law had this information, why did they have zero, zip, nada information to give the court?

Earlier I said this: Some have asked how the Topeka group could revive an earlier caretaker organization that has since expired, and then use that revived organization to make new claims on a gift that was transferred in 1956. The short answer given was that the earlier caretaker group had never expired. It had only become inactive. You reply thus: That would only be ... you. The issue, the legal strategy behind it, the failure of that strategy, and the 'ownership right' of any kind associated with the prior organization have now been officially decided, and it does not matter whether it was inactive or not; they have no right, title and interest in 3463 unless someone else gives it to them. You say I was the only one who asked that question. When I said “Some have asked how…”, I was referring to the question as it was asked prior to the court decision right after it was learned that the Topeka group had claimed ownership based on the revival of the older caretaker organization. Indeed many, many people asked that question in the news articles, the comments after those articles, on forum threads here, on NGDS, and RPN. That was the only available objection to the acquisition being attempted by the Topeka group at that point because nobody knew that there claim of ownership would later be shot down by the court.

It would seem that Mr. Petrel & Co said a great many things that would make it seem as if his 'revived' organization was the rightful owner of 3463.  Most of which have apparently been recognized by the court as, charitably speaking, a tissue of misstatements of fact.  I was to be honest not expecting there to be so much prevarication involved with those folks, and it certainly has hurt the chances of people from that group being taken seriously going forward.

What I am hoping at this point is that enough people in Topeka with 'eyes to see' recognize some of the hints the opinion contains and figure out an appropriate strategy ... legal, civil, it's not my battle or my children's locomotive, so I won't propose what I think should be done as next steps ... to define who or what has control over the asset or is willing to assume full responsibility for its perpetual care, and document the ability and financing to assure that.

I'll move to Topeka if the group that actually did something toward mechanical restoration gets its stuff together.  I'll also happily contribute to move the locomotive out of Topeka if it looks like it'll just be left to decay again... hopefullu, very hopefully, that won't be happening.

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Posted by Euclid on Friday, May 19, 2017 7:23 PM

RME,

I am not presenting a court case here, so I have no intention of providing proper documentation for everything I say.  I think that ought to be clear when I preface sentences with such phrases as “As I understand it…”

My point of mentioning that CSR does not own the locomotive is to clarify the point that they did not win the legal case in terms of the court deciding that they owned it and the Topeka group did not own it.  Considerable commentary following the legal decision has indeed left the impression that CSR won the case by implying that the loss by the Topeka group means that CSR can proceed with their plans.  This was clearly implied by the Trains Newswire article and by the CSR.  So I think it quite pertinent to clarify that CSR was found to not own the locomotive just as the Topeka group was. 

You are right that I was not there in 1956 when AT&SF presented the locomotive to the City, but I did talk to someone who was there.  And the general idea was said to be to divide the ownership of the locomotive in order to protect it from any one person deciding its fate.  I was told that AT&SF actually sold some sort of shares in the locomotive.  This may be all distorted or it may not be true at all, but I certainly did not make it up. Obviously AT&SF had a strong interest in protecting the locomotive from meeting any fate that would have reflected badly on them.  They had strings attached to the gift of the locomotive.

Earlier I said this:

Some have asked how the Topeka group could revive an earlier caretaker organization that has since expired, and then use that revived organization to make new claims on a gift that was transferred in 1956.  The short answer given was that the earlier caretaker group had never expired.  It had only become inactive.

You reply thus:

That would only be ... you.  The issue, the legal strategy behind it, the failure of that strategy, and the 'ownership right' of any kind associated with the prior organization have now been officially decided, and it does not matter whether it was inactive or not; they have no right, title and interest in 3463 unless someone else gives it to them.

You say I was the only one who asked that question.   When I said “Some have asked how…”, I was referring to the question as it was asked prior to the court decision right after it was learned that the Topeka group had claimed ownership based on the revival of the older caretaker organization.  Indeed many, many people asked that question in the news articles, the comments after those articles, on forum threads here, on NGDS, and RPN.  That was the only available objection to the acquisition being attempted by the Topeka group at that point because nobody knew that there claim of ownership would later be shot down by the court. 

So that question that you say only I asked was asked on a near universal basis by everyone interested in the topic.  I never did ask it because I already knew the answer; which was that the original group never dissolved, so their original claim had never been severed.   

 

 

RME
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Posted by RME on Friday, May 19, 2017 5:57 PM

Euclid
But, in this legal action, information has been produced that shows the City legally acquiring ownership of the locomotive from AT&SF.

Where does it say that, in black and white?  Where is the signed acceptance in the name of the City of Topeka, signed by an empowered representtive of the City of Topeka?  (As opposed to the document we have seen.)

My assumption is that the court found that the City did not properly execute their informal, intended transfer of ownership of the locomotive to GOS as they were advised to do by the City Attorney.

Where is the paper trail that indicates the City Attorney saying legal transfer of title ... assuming the City could do that in the first place ... was not being executed properly?  Was actual compensation paid by GOS as part of an acquisition?

... all of that is why the Coalition for Sustainable Rail does not own the locomotive.

Why is anybody still nattering about whether CSR 'owns' the locomotive?  They don't, and neither do any of the other 'usual suspects' -- the discussion has passed on to who will be determined as the best 'keeper' in the interests of the group to which the locomotive was given.  And one thing is certain: the resuscitated organization selfishly pretending to act in the "children's" interest has no right to it whatsoever.  The narrative in the decision points out in some detail why this is so, and why the admittedly-clever attempted use of Kansas corporate law didn't work.  I get the strong impression that the judge doesn't think much of the group's "prepaid-legal" grade representation or the strategies they thought would be so effective.

... [the] earlier group was formed to uphold the commitment to keep and maintain the locomotive for display in Topeka.

I think that is right; part of the current issue is that there is no effective continuity of personnel from the early organization to the new one.

My general understanding, and it may be wrong, is that the intent by AT&SF was to donate the locomotive directly to the residents of Topeka rather than to the City fathers. This is because the point of the donation was to share it with the people of Topeka. So they did not want the retention of the locomotive to be subject to the political whims of the City government which might one day decide to scrap the engine because they regarded it to be unfashionable or lost interest in it. They therefore gifted the locomotive to the “Children of Topeka” who symbolically represented the innocent motive of only enjoying the locomotive with no other pretext such as might be found in City government.

Where the hell you get this diseased stuff is beyond me, unless perhaps you were associated with the ATSF people in the mid-Fifties who were arranging the donation.  I sincerely doubt that anything other than the stated donation -- to the children of Topeka directly -- was considered by ATSF, and I look forward with some glee to any shred of actual documentation you can provide that indicates otherwise.

The purpose was not to put children in charge of doing all of the maintenance on the locomotive using funds from their allowances.

I suspect only you, on this forum, could put a line like this in a discussion.  Of course adults would be expected to maintain the locomotive, in and for the children's best interests, and to keep the locomotive in good condition (I'm not going into issues of child 'safety'; that was a different time with vastly different priorities and values.)

Some have asked how the Topeka group could revive an earlier caretaker organization that has since expired, and then use that revived ...

That would only be ... you.  The issue, the legal strategy behind it, the failure of that strategy, and the 'ownership right' of any kind associated with the prior organization have now been officially decided, and it does not matter whether it was inactive or not; they have no right, title and interest in 3463 unless someone else gives it to them.

The pathetic thing, to me, is that nobody has bothered to get the survivors of the actual group that was working on the locomotive pre-GOS together, incorporated a 501(c)(3) or whatever as 'Friends of ATSF 3463', done a little fundraising, and applied to be the interim caretaker and restorer of the locomotive.  I'd have done that way back when if I lived anywhere near Topeka.

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Posted by Euclid on Friday, May 19, 2017 4:58 PM

Yes I read the decision a couple months ago, and I don’t think its net meaning is particularly obvious. 

As I understand it, the City owns the locomotive and they can sell it to anybody.  However, I have also heard that they made a commitment as part of the transfer from AT&SF, to display the locomotive in Topeka and keep it in good condition for that display.  AT&SF required such commitment as a condition of the donation of 3463 and other locomotives to other recipients.  I had heard about this condition long before it was confirmed in the court decision. 

I have been told that when the City sold the locomotive to GOS, they did so informally on the advice of the City Attorney. Apparently the City Attorney told the City that they had the right to essentially give the locomotive away.  A couple years ago, I sent a written request to the City, the County, and GOS asking if they had any records showing the transfer of ownership from the City to GOS.  The City and County said they checked their records and they found that they had no record of ever receiving the locomotive or selling it.  GOS told me that they had a record of receiving the locomotive from the City, but they could not find that record. 

But, in this legal action, information has been produced that shows the City legally acquiring ownership of the locomotive from AT&SF.  My assumption is that the court found that the City did not properly execute their informal, intended transfer of ownership of the locomotive to GOS as they were advised to do by the City Attorney.  But at the time the city executed the informal transfer of ownership they had no way of knowing that it was not legally binding, and so that is why I say the City thought they had sold the locomotive.         

So all of that is why the Coalition for Sustainable Rail does not own the locomotive.  Their claim of ownership depended on a purchase of the locomotive from GOS, and GOS did not own the locomotive, so they had no right to sell it. 

The reason that the Topeka group does not own the locomotive is that the court found their claim of ownership to be invalid.  The group believed that they had acquired ownership by re-activating an earlier caretaker group that was formed when the locomotive was donated by AT&AF.  That is complicated to explain, but generally, that earlier group was formed to uphold the commitment to keep and maintain the locomotive for display in Topeka. 

My general understanding, and it may be wrong, is that the intent by AT&SF was to donate the locomotive directly to the residents of Topeka rather than to the City fathers. This is because the point of the donation was to share it with the people of Topeka.  So they did not want the retention of the locomotive to be subject to the political whims of the City government which might one day decide to scrap the engine because they regarded it to be unfashionable or lost interest in it.   They therefore gifted the locomotive to the “Children of Topeka” who symbolically represented the innocent motive of only enjoying the locomotive with no other pretext such as might be found in City government.  The purpose was not to put children in charge of doing all of the maintenance on the locomotive using funds from their allowances.   

Some have asked how the Topeka group could revive an earlier caretaker organization that has since expired, and then use that revived organization to make new claims on a gift that was transferred in 1956.  The short answer given was that the earlier caretaker group had never expired.  It had only become inactive.

RME, I don’t see how there can be a speedy restoration to the good condition called for in the deed of gift, as you expect.  I have been told that many of the smaller valve gear parts have been removed, and may not be in Topeka with the locomotive.  There are other parts that have been removed and are with the locomotive, but they would require some heavy assembly to reinstall.  Then after this reassembly work would come the great deal of labor and materials to bring the locomotive up to display condition.   The City does not want to do all of this work, so I suspect they will move quickly to transfer the locomotive to either CSR or the group in Topeka.  The latter would be my preference, and would seem to best match the purpose intended by original deal made by AT&SF and the City. 

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Posted by samfp1943 on Friday, May 19, 2017 3:30 PM

Semper Vaporo

I wonder why the city THOUGHT they had sold it.  What negated that "thought"?  Would that same reason prevent them from selling it "again"?  Do they have to pay the one group back what was paid?  (with interest?)

 

The operative here is the word "Thought"... As Dieselization came to the AT&SF, the railroad 'gifted' (?) surplus steam locomotives to various city entities around the State of Kansas.   {The language of the gifting documentation would be critical to the specific outcome of the case of #3463} 

 The location of that documentation is probably lost in system, as a product of time and shuffling documents around(?) . Some of the archives and files of the AT&SF RR are being held in the custody of the Archives of the Kansas Historical Society, in Topeka.. One has to wonder if anyone has pursued that angle?

Mudchicken, would be a good one to ask about 'former' railroad properties, and how Politicians THINK they know all about those dispositions (Abandonments, gifts, etc.)  Whistling   THings that can turn into pipe dreams, surprises, and disappointments, in a heartbeat.Yeah

 Not living in that area, I am somewhat surprised that the Corporate Shops of the BNSF in Topeka, has not gotten into this situation... They would seem to have a vested interest in the fate of #3463.  Maybe they have, but it is not getting 'out' ?

 

 

 


 

RME
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Posted by RME on Friday, May 19, 2017 1:22 PM

Ron's a couple of months late to the party and I think he has missed much of the interesting stuff in the actual decision (which was linked in the prior thread, and which everyone should carefully read in appropriate context and with appropriate reference to Kansas law).

I have not seen a holograph copy of the original deed of gift from ATSF, but I do not remember it being "to" the City of Topeka as an entity, but rather 'to the children of Topeka' (which, probably not incidentally, is why that phrase was put in the now-discredited organization's name).  Where the "City" comes in is in the clause about that the locomotive should be kept in good order ... the children of Topeka, even Boy Scouts, not being able to do that on their own ... and one of the fun parts of the decision concerned whether the current state of the locomotive constitutes material breach (it clearly does, and on Topeka's part not involving the volunteer group efforts that were the only meaningful work done on the locomotive before CSR's involvement) or what recourse could be taken (ATSF has no recourse, probably by intent, and it will be interesting to see what Kansas law has to say about implied possession if the conditions in a deed of gift are violated by the implied possessor).

I'm pretty sure that GOS will have to refund something to CSR/SRI, and I suspect there may be some request for penalties or costs associated with fraudulent transfer.  (I invite comments from the knowledgeable on here about how much 'due diligence' CSR should have done, or have been expected to do, with respect to the deal.)

Personally, much as I would like to see this locomotive modified to actually realize its design potential -- or even be restored to operation with only 'invisible' functional redesign to make it work right -- I think we have to go back to original intent.  The locomotive belongs, and always has belonged since its donation, to the children of Topeka, and the only real argument is who will become the effective agent on their behalf.  That most certainly does not involve the ability to 'sell' the locomotive absent the kind of legal condemnation that would, say, 'quiet title'.

It is how that argument pans out over the next few months that will be interesting, particularly since regardless of what happens I'd expect a speedy restoration to the good condition called for in the deed of gift to be mandated.

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Posted by Semper Vaporo on Friday, May 19, 2017 11:37 AM

I wonder why the city THOUGHT they had sold it.  What negated that "thought"?  Would that same reason prevent them from selling it "again"?  Do they have to pay the one group back what was paid?  (with interest?)

Semper Vaporo

Pkgs.

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Posted by BaltACD on Friday, May 19, 2017 11:02 AM

Since the City of Topeka 'thought' they sold it to Great Overland Station http://www.greatoverlandstation.com/and court says they didn't; the question, to my mind, becomes Can the City of Topeka actually sell the locomotive to anybody?

Never too old to have a happy childhood!

              

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Legal Battle over Custody of ATSF Locomotive 3463
Posted by Euclid on Friday, May 19, 2017 10:51 AM

There has been a long running legal dispute over the ownership of the historic locomotive given to the City of Topeka in 1956 to become a public display.  The dispute involves the Coalition for Sustainable Rail, a Minneapolis based group that wants to rebuild the historic locomotive into a modern experimental prototype for a highly efficient locomotive that burns torrefied wood pellets as fuel; and a Topeka based group that wants to keep the engine in Topeka and display it as was the original intent. 

Recently, the judge in the case made his decision, and I noticed in the Trains Newswire piece on this subject about a month ago, that they characterized this latest development as a victory for CSR.  Other sources have reported it the same way.

Yet, the fact is that neither side won the dispute in the decision.  The judge ruled that the Topeka group did not own the locomotive as they had claimed.  He also ruled that CSR did not own the locomotive because they had purchased it from The Great Overland Station, who had mistakenly believed that they owned the locomotive.  But GOS failed to prove that they owned #3463, so the CSR does not own the locomotive because the GOS had no right to sell it to them. 

Then, surprisingly, the court found that the true owner was the City of Topeka who had believed they had sold the locomotive to GOS several years ago.  So either side in this case could be considered the winner because the ownership claimed by their adversary was negated.  In actuality, nobody won the dispute because the dispute was unfounded. 

So the next move is for each side to ask the City of Topeka to convey ownership to them.  The City will have to consider the appropriateness of the plans each side has for the locomotive.  The City will have to consider which plan best honors the original intent for the locomotive to which the City had originally committed itself.   

It is easy for railfans to choose the scenario of a totally restored locomotive once again steaming down the mainline as God intended; instead of being “stuffed and mounted,” and rotting away as a piece of playground junk in a city park somewhere.   

But this is actually a false choice portrayed by the CSR group to make the case why they should own the locomotive rather than the Topeka group.  The fact is that there is no basis to conclude that the locomotive will be left to rot in a bad public display if sold to the Topeka group.  There is also no basis to conclude that the locomotive will be restored to operation by CSR, let alone restored to anything resembling the original artifact. It might just as easily be partially disassembled and taken no further by CSR. Parts might be lost or sold in the process.  The CSR may never raise the funds to move it out of Topeka and haul it to Minneapolis. 

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