I wonder who warranted to Valley that the seller had good title? Who did the research and legwork on behalf of the estate or Oregon Scenic? Articles indicate that parties other than Kepner owned a 1/3 interest in the locomotive. Was this conveyed by the Kepner estate's attorney to Oregon Scenic? Did Oregon Scenic know and convey that to Valley? Did VRR know they were only buying at most 2/3 of an ownership interest in the locomotive?

Messy. Messy. Messy.

Messy for sure!

I have a feeling that the VRR will end up selling their share of the locomotive to the City at some point in time. The VRR's cost for acquiring the locomotive just tripled, and it is not guaranteed that they will ever get full, clean title to the locomotive. The City has at least one "hook" (if not two) in the the asset. If taxpayer funds were used to cosmetically restore the locomotive, the City has an interest in the locomotive sufficient to make removal very difficult for the VRR.

If the City has, in fact, acquired good title to a 1/3 interest in the locomotive, I would suspect that no court in MS is going to rule against the City and allow the asset to leave without a complete repayment of ALL the expenses that the taxpayers have laid out. In short, the VRR would have to buy out the City's 1/3 interest, fully refund the cost of the cosmetic improvements, plus fully cover the costs of the litigation for not only itself, but for the City as well. I think the VRR would wisely walk away at that point in time. Even if the Court ruled that the VRR had a majority interest in the asset, it would likely set terms and conditions on the asset that would make it very problematic to justify the costs associated with bringing the locomotive back to life.

I see this transaction as being a quagmire for years to come. While I love a legal challenge, even I find this situation very problematic and highly uncertain. Settlement is likely the best option. The question becomes: Can the VRR successfully recover all its costs?

Just my two cents.

Since the OP's article mentioned $55,000 being spent to restore the outside of the locomotive, here's the contractor's page for that project with a few before and after photos.

http://www.gsppaint.com/project/bonhomi ... -southern/

If you haven't visited Hattiesburg (MS), try to stop if you are in the area. The old station was built in 1910 for the New Orleans & Northeastern Railroad. Hattiesburg acquired the station about 2000 and has beautifully restored it, adding covered walkways and platforms for Amtrak passengers. There are also some nice gardens around the station as well as the railroad displays. The Norfolk Southern rail yard is located across the mainline from the station and there are several diamonds just to the south, all providing plenty of activity. Its an excellent job of preservation and using a station as a focal point for a downtown restoration effort.

I guess the question is.... If you put money into a cosmetic restoration on something you "think" is abandoned, does that somehow entitle you to ownership, or some share thereof? And as another contributor noted, the city was obviously questioning their own position at some point when they purchased this "alleged" 1/3rd share of this locomotive. Why would they do that, and wouldn't such action cause them to immediately question WHO owned the other 2/3rds? If they were so successful at finding this obscure part owner, how did they not also discover Mr. Kepner, whose collection has been quite well-known in railroad circles for many years.

/Kevin Madore

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Kevin,

Forget about the concept of "abandonment". That argument put forth by the City will not go anywhere.

The legal concept at issue here is called unjust enrichment. The legal issue is over equitable considerations, not title. The City invested taxpayer money into an asset (the cosmetic restoration) with an expectation that the community would receive a benefit for its investment. The Court will resolve the issue over the exchange of consideration (money for a cosmetic restoration) and whether the City received the benefit which it reasonably expected to receive in exchange for its investment in the locomotive. That is the heart of the issue before the Court.

Since the consideration for the restoration came from the taxpayers, and not a private party, the controversy is sufficient to shift the legal dynamics in the case substantially. In short, there is now a substantial public interest in the asset. When the City went and acquired an additional legal interest (if that interest proves to be valid) in the locomotive, the City further cemented a second hook into the asset.

The VRR may well be the majority owner, but if the City did buy a 1/3 interest in the locomotive, the Court will give substantial deference to the public's investment in the asset and will not allow the VRR to exercise complete dominion and control of over an asset in which the State of Mississippi partially owns the asset without some arrangement in place to protect the State's interest.

You will note I said "the State of Mississippi". County and local governments are political subdivisions of the State. The VRR is fighting a governmental entity, not a private party. At some point, I would expect that the VRR should raise the argument of a constitutional "taking" of their property (their 2/3 title in the locomotive) by means of the State's efforts to protect their legal interest in the locomotive. That will begin the process of laying out the legal groundwork for the State to buyout the VRR's interest in the locomotive.

Needless to say; This is going to be one hell of a mess to clean up.

Sad, but true...

I think that there are no less than three issues in play here:

1) the adverse-possession claim (the point about not being able to find Mr. Kepner is going to be an interesting part of this...)

The ⅓ interest, which had to have been assigned by Mr. Kepner at some point, and how and when this was done will be of great interest to Valley and its lawyers, both here and in what will surely be actions against Oregon Scenic;

3) this new business about 'unjust enrichment' -- either way it goes.

If you find an apparently-abandoned house, but never bother trying to find the owner, and you repaint the walls, are you entitled to your money back if the owner wants to sell or rent out the property? You wouldn't be in Manhattan; you wouldn't be in Arkansas; you wouldn't be under Napoleonic code of Louisiana.

Now, if the City indeed owns one-third interest fairly, then it is entitled to a ONE-THIRD SHARE of its depreciated improvement expenses together with its ownership stake. I suspect for purposes of argument Valley and the City can use the (probably not disclosed) agreed price between Valley and Oregon as "fair market value" to calculate that ⅓ ownership, too.

Be interesting to see if it can be made to work out fairly for everyone. I still think that restoring the engine to steam would be delightful, however that might be arranged.

Oregon Scenic and the Kepner estate shared the same lawyer who personally brokered that transaction.

You typically cannot represent both sides of a transaction. Depending on the state, that conflict may be waivable, but even then, it's not advisable. As an attorney, your first duty is to your client, often above your own personal interest. Who got the better deal, especially now that title and ownership problems reared their head?

Is the rest of the equipment stored at the station still owned by the Mississippi Great Southern Chapter of the National Railway Historical Society? If so, is the city going to take ownership of all the equipment? If Kepner had an agreement with the Mississippi Great Southern Chapter then it seems like the city's beef is with them not the Kepner estate.

It also sounds like the city got taken on their 1/3 share. How could the lady own 1/3 of a locomotive? An explanation of how the lady got the 1/3 share and how the city bought it would be interesting to hear.

From the University of Southern Mississippi Library:


“In 1923 W.S.F. Tatum, owner of the Tatum Lumber Company of Hattiesburg, Mississippi, established the Bonhomie & Hattiesburg Southern Railway Company in order to purchase the Hattiesburg Branch from the Gulf, Mobile, & Ohio Railway. This twenty-seven mile branch connected Hattiesburg to the GM&O main line at Beaumont, Mississippi. Using the Hattiesburg Branch Tatum would be able to gain access to a new logging operation near Denco, Mississippi and transport lumber from Bonhomie, Mississippi, where Tatum owned a sawmill, to the GM&O junction at Beaumont where there was a connection to Mobile, Alabama.

The Interstate Commerce Commission approved the sale on January 5, 1925, and the Bonhomie & Hattiesburg Southern Railway went into operation on January 17, 1925. The entire capital stock of $335,000 was sold to the Tatum family, and all equipment for the railroad was leased from the Tatum Lumber Company including five locomotives, three of which were new Baldwin locomotives. “

https://lib.usm.edu/spcol/collections/m ... /m347.html

I anticipated this fight when looking over the offering from OCSR. The town had upgraded the parking spot and appeared to think it was theirs.

Greetings everyone,

I figured I would share a link to these news articles regarding the fate of the locomotive. As expected, the Judge in the matter ruled in favor of the City. I'm curious to know what, if any, action the Valley RR might take to recoup its investment in the locomotive?

Here are a few links to some of the reporting on the verdict.

https://www.hubcityspokes.com/local-con ... locomotive

https://www.wjtv.com/news/pine-belt/jud ... in-engine/

Hopefully these links will work for everyone.

Well, that's a local court. Does the Valley RR have options available to go to higher courts? So basically the city would rather have possession of it, and watch it dissolve into the ground there, than see it go somewhere where it would be lovingly restored and operated.