Smead v. Indianapolis, Pittsburgh, & Cleveland R.R. Co.
| Decision Date | 23 November 1858 |
| Citation | 11 Ind. 86 |
| Parties | Smead and Others v. The Indianapolis, Pittsburgh, and Cleveland Railroad Company |
| Court | Indiana Supreme Court |
From the Marion Circuit Court.
The judgment is reversed with costs. Cause remanded for further proceedings in accordance with this opinion, with leave to the parties to amend the pleadings.
J Morrison and C. Ray, for appellants.
O. H Smith, S. Yandes and C. C. Hines, for appellee.
Suit by Smead & Co., assignees of the Greenville and Miami Railroad Company, against the Indianapolis and Bellefontaine Railroad Company, upon five bills of exchange for 2,000 dollars each, of the following tenor:
The bill was indorsed-- "
The defendants answered "that said bills of exchange in the complaint mentioned were accepted by said defendants and their agents without any legal authority or power whatever under the charter of said defendant, and said acceptances were ab initio, and still are, void in law, in this, that on the 22d day of June, 1854, the defendants and the Greenville and Miami Railroad Company, of Ohio, entered into the following agreement:
'Indianapolis, Indiana, June 22, 1854. The Indianapolis and Bellefontaine Railroad Company, of the state of Indiana, and the Greenville and Miami Railroad Company, of the state of Ohio, bodies corporate created by the laws of the states of Ohio and Indiana, contract and agree with each other as follows:
'1. The Indianapolis and Bellefontaine Railroad Company agrees to accept drafts of the Greenville and Miami Railroad Company, ninety days from date for the aggregate sum of 15,000 dollars, to be drawn at such time as the necessities of the Greenville and Miami Railroad Company may require; in consideration of which the said Greenville and Miami Railroad Company hereby covenants and agrees to adopt and maintain on their road from Union to Dayton the Ohio gauge of four feet, ten inches.
'2. It is further agreed that the contract made and entered into, &c. (This section simply provides that some previous contracts remain in force.)
'3. It is further agreed that at least one daily passenger train each way shall be run through, over the Indianapolis and Bellefontaine and Greenville and Miami railroads, without change of cars between Indianapolis and Dayton, through-tickets over both roads being sold at each end of the line, at such prices as may be mutually agreed on; other trains being arranged, as far as practicable, in such manner as to form suitable connections at Union.
'4. The superintendents of the two roads, parties to this agreement, shall, from time to time, make and establish a tariff of prices for the transportation of freight between Indianapolis and Dayton, such company to receive its pro rata share of all such freight, in proportion to the length of road over which the same may be carried; and at least one through freight train per day, each way, shall be run between Indianapolis and Dayton, in connection with the Cincinnati, Hamilton, and Dayton road, unless the superintendents of the roads shall otherwise agree.
'S. Witt and Jas. H. Godman, executive committee of Indianapolis and Bellefontaine Railroad Company.
'E. B. Taylor and W. A. Weston, special committee of the Greenville and Miami Railroad Company.'
And the defendants say that said two acceptances specified in said bill of particulars, [of 5,000 dollars each, dated July 1, 1854,] were acceptances made by said defendants, under said contract, which was and is void in law, and for no other consideration whatever; and the proceeds thereof went to the use of said Greenville and Miami Railroad Company. And the defendants further say that the said other acceptances of the said other five bills of exchange specified in the said special paragraphs in said complaint, were given and executed upon the renewal of said two acceptances of said two bills, and for no other consideration, of which facts the plaintiffs had notice. And the defendants say that they had no legal power to make said contract or acceptances under their charter, nor to give the said S. Witt and Jas. H. Godman, nor either of them, any power or legal authority whatever to make said contract. And the defendants further say that said acceptances were for the use and benefit of the Greenville and Miami Railroad Company, and the whole proceeds thereof went to the sole use of said company, and not to the use of defendants, of which plaintiffs had notice."
The plaintiffs replied, "that the defendants, the Indianapolis and Bellefontaine Railroad Company, not known by the name in which the defendants are sued, had lawful power to make said contract," &c.
Demurrer to this reply sustained; exceptions taken; and final judgment for the defendants.
There were other pleadings; but they need not encumber this opinion, as all the questions in the cause fairly arise upon those copied.
The demurrer, as to substance, reaches back through the previous pleadings.
The charter of the Indianapolis and Bellefontaine Railroad was granted in 1848; and the undertaking specified was to build a railroad from Indianapolis through Winchester to the Ohio state line, "for the purpose of connecting with a railroad proposed to be constructed from Bellefontaine, in Ohio, to the state line."
The charter contained this section:
In 1853, the legislature, under a proper title, enacted as follows:
"That any railroad company heretofore organized, or which may hereafter be organized, under the general or special laws of the state, and which may have constructed, or commenced the construction of their road, so as to meet and connect with any other road in an adjoining state, shall have the power to make such contracts and agreements with any such road, constructed in an adjoining state, for the transportation of freight and passengers, or for the use of its road, as to the board of directors may seem proper." Laws of 1853, p. 105, § 3.
In June, 1854, the article of agreement for a connection of roads was entered into between the Indianapolis and Bellefontaine and the Greenville and Miami companies, and bills of exchange pursuant thereto were drawn by the latter upon the former, by which company they were accepted.
In December, 1854, said bills were renewed.
In 1857, the bills upon renewal were unpaid, and this suit upon them was commenced.
The defense set up is, want of power in the corporation to enter into the agreement and accept the bills in question.
Under the original charter of the Indianapolis and Bellefontaine Railroad Company, that corporation did not possess a general power to execute promissory notes and bills of exchange. The company was created for the specific purpose of constructing a railroad from Indianapolis to the Ohio state line,...
To continue reading
Request your trial