Evansville, I. & C. S. L. R. Co. v. City of Evansville

• Decision Date: 19 December 1860
• Citation: 15 Ind. 395
• Parties: The Evansville, Indianapolis and Cleveland Straight Line Railroad Company v. The City of Evansville
• Court: Indiana Supreme Court

15 Ind. 395

The Evansville, Indianapolis and Cleveland Straight Line Railroad Company v. The City of Evansville

Supreme Court of Indiana

December 19, 1860

APPEAL from Gibson Circuit Court.

The judgment is reversed, with costs. Cause remanded.

Jer. Smith, D. McDonald and A. G. Porter, for appellant.

(1.) The counsel for appellant cited the following authorities, in support of the several points made by them:

The subscription copied into the complaint is an estoppel by deed, as to all its recitals; and the only mode, in any case of denying such recitals, is by non est factum, pleaded under oath. Ang. and Am. on Corp., § 223; Clark v. The Woollen Manuf. Co., 15 Wend. 256; Wood v. Thomas, 5 Blackf 553; Reeves v. Andrews, 7 Ind. 208; Bowman v Taylor, 29 E. C. L. Rep. 90; Carver v. Jackson 4 Pet. 83; Crane v. Morris, 6 id. 611; Trimble v. The State, 4 Blackf. 435; Love v. Kidwell, id. 553; Becket v. Bradley, 7 Mann. and Gr. 994; S. C. 49, E. C. L. R. 993; Miller v. Elliott, 1 Ind. 483.

The city is estopped by the record of the common council, which declares that more than two-thirds of the resident freeholders of the city petitioned, &c. Ang. and Am. on Corp., § 281; 1 Salk. 191; McCulloch v. The State, 11 Ind. 424; The People v. Rochester, 21 Barb. 656; Pickard v. Sears, 33 E. C. L. R. 115; 1 Greenl. Ev. §§ 22, 207; Clapp v. The County of Cedar, 5 Ia. 15; Royal British Bank v. Turquand, 6 Ellis and Blackburn, 327.

The city could negotiate her bonds to the railroad company, as properly and legally as to any other person. But if that part of the contract was against public policy, it leaves the subscription a money subscription, and does not make the whole contract void. 1 Redfield on Railways, § 58, p. 99; Henry v. Vermillion and Ashland Railway Co. 17 Ohio 187; Western Plank Road Co. v. Stockton, 7 Ind. 500; Fleece v. Indiana and Illinois Railroad Co., 8 id. 460.

J. G. Jones, Conrad Baker and J. E. Blythe, for appellee.

(2.) Counsel for appellee cited the following, among other authorities: That the city had no power to make her bonds payable, with 7 per cent. interest. Ang. and Am. on Corp., p. 232 to 236; 4 Cond. R. 396; 5 Ind. 38.

The contract, being illegal, was void. Craig v. Missouri, 4 Peters 436; 13 Peters 65; McClure v. Purcel, 3 Marshall 65; Hanson v. Power, 8 Dana 95; Armstrong v. Toler, 6 Cond. R. 298; Wilhite v. Roberts, 4 Dana 174. 382; State v. Curle, 15 Mass. 35; Cooledge v Blake, id. 429; 2 Parsons on Contracts, 94, 99; 4 Bibb. 319; 5 J. J. Marshall, 268.

OPINION

Worden, J.

This was a suit by the railroad company against the City of Evansville, upon a stock subscription.

The complaint in the case was as follows, viz.:

"The Evansville, Indianapolis and Cleveland Straight Line Railroad Company, a corporation created by the laws of the State of Indiana, plaintiff, by O. H. Smith, her attorney, complains of the City of Evansville, defendant, and says that said defendant heretofore, to wit, on the 28th day of May, in the year 1853, by her certain subscription in writing, with full power to make the same, a copy of which is herewith attached and filed, subscribed to the capital stock of said railroad company, four thousand shares of fifty dollars each, making two hundred thousand dollars, upon the terms and conditions stipulated and expressed in said written subscription, which said subscription was, and is, in the words and figures following; that is to say:

"Whereas, The common council of the city of Evansville, on the 7th day of May, 1853, passed and adopted an order authorizing and empowering the mayor of said city to subscribe for, and take, upon the books of the Evansville, Indianapolis and Cleveland Straight Line Railroad Company, on behalf of said city, four thousand shares of fifty dollars each, of the capital stock of said Evansville, Indianapolis and Cleveland Straight Line Railroad Company, upon the terms and conditions hereinafter mentioned; now, in pursuance of said order, I, John S. Hopkins, mayor of the city of Evansville, for and on behalf of said city, do hereby subscribe to, and take, four thousand shares of fifty dollars each, of the capital stock of the Evansville, Indianapolis and Cleveland Straight Line Railroad Company, upon the following terms and conditions, mentioned in the said order of said common council, directing the subscription to be made; that is to say:

"First. Upon condition that the said railroad company shall and will receive at par, in payment of said four thousand shares, the coupon bonds of the city of Evansville, bearing interest at the rate of seven per centum per annum; the principal of said bonds to be payable in not less than twenty years from the 1st of July, 1853, and the interest to be payable semi-annually, in the city of New York.

"Second. Upon condition that the bonds, so to be issued by the city, are not to be converted, nor convertible, into the capital stock of said railroad company, and that the issuing of said bonds by the city, and the issuing of certificates of stock for said four thousand shares, by the railroad company to the city, are to be concurrent acts.

"Third. Upon condition that the said certificates of stock, so to be issued to the city by said railroad company, shall bear interest at the rate of seven per centum per annum from the time they are issued, until such time as the said railroad shall be completed from Evansville to Indianapolis.

"Fourth. Upon condition that the city may issue certificates, or receipts, for all taxes levied and collected by the city to pay the interest which may accrue upon said bonds, and that the holders of said receipts or certificates, upon the presentation of such receipts or certificates, to the amount of fifty dollars or upwards, at the office of said railroad company, in Evansville, shall be entitled to receive from said company an equal amount of the capital stock of said company, for which certificates of stock shall be issued by said company to the persons entitled thereto, and said certificates shall bear interest at seven per centum per annum from date thereof, until said road shall have been completed from Evansville to Indianapolis: Provided, however, that said railroad company shall not be required to issue any certificate of stock for any fractional part of a share of the capital stock thereof.

CITY SEAL.

"In Witness Whereof, I, John S. Hopkins, mayor of the city of Evansville, have hereunto subscribed my name, and affixed the corporate seal of said city, this 28th day of May, A. D. 1853.

"J. S. Hopkins, Mayor."

"And the plaintiff says, that, after the making of said subscription by said defendant--by John S. Hopkins, her said authorized agent--the said defendant ratified and confirmed the same, and paid of said subscription the sum of one hundred thousand dollars, in said bonds, to said plaintiff, running twenty years from their date, payable in New York; and said defendant, by her authorized proxy, voted at the subsequent elections for directors, the number of votes her said stock was entitled to, up to the July election, 1857, inclusive, and received her certificate of stock for said two hundred thousand dollars. And the plaintiff further says, that she has complied with, and performed, all the conditions of said subscription, on her part to be kept and performed, and that one hundred thousand dollars of said subscription remains wholly unpaid. And the plaintiff further says, that, after the making of said subscription, and after the payment by said defendant of one hundred thousand dollars thereof in said bonds, in pursuance of the tenor and effect of said subscription, that is to say, heretofore, to wit, on the 12th day of December, 1855, she duly demanded of said defendant the payment of the said sum of one hundred thousand dollars of said subscription, the balance then due and unpaid, in their bonds, in pursuance of the terms, tenor, and effect of said subscription; and upon such demand, the said defendant failed and refused to issue and deliver said bonds, or in any other manner to pay said one hundred thousand dollars of said subscription, whereby the said defendant became liable to pay said plaintiff said sum of one hundred thousand dollars in money; and being so liable, the said defendant, afterward, to wit, on the day and year aforesaid. at the county aforesaid, in consideration thereof, undertook and faithfully promised said plaintiff to pay her the said sum of one hundred thousand dollars in money, whenever she should be thereto requested. Nevertheless, the plaintiff says that said one hundred thousand dollars of said subscription remains still due and unpaid by the defendant to the plaintiff, although often requested; and the plaintiff demands judgment against said defendant for one hundred and fifty thousand dollars, and other proper relief.

"O. H. SMITH, Att'y for Pl'ff."

A demurrer was filed to the complaint and overruled, the defendant taking exceptions.

The defendant then answered in twenty-four paragraphs, to all of which, except the first, the plaintiff demurred. The demurrer was sustained as to all except the 4th, 13th, 14th, 15th, 20th, and 22d; and as to them overruled, each party excepting. The 1st paragraph was a general denial, and the 4th the same in substance with the 22d; hence they need be no further noticed. The 13th, 14th, 15th, 20th, and 22d are as follows:

"13th. At the time of issuing, by the defendant to the plaintiff, of bonds to the amount of one hundred thousand dollars, as stated in the complaint, no order had been made by the board of directors of said railroad company, requiring the defendant to issue any bonds, or pay any stock, nor had any notice of any such order been given to the defendant; and the...