Gardner v. Minneapolis & St. L. Ry. Co.

• Decision Date: 12 August 1898
• Parties: GARDNER v MINNEAPOLIS & ST. L. RY. CO. ET AL.
• Court: Minnesota Supreme Court

73 Minn. 517

76 N.W. 282

GARDNERvMINNEAPOLIS & ST. L. RY. CO. ET AL.

Supreme Court of Minnesota.

Aug. 12, 1898.

(Syllabus by the Court)

1. The Minneapolis & St. Louis Railway Company has not the same corporation that was created by the territorial act of 1853 entitled “An act to incorporate the Minnesota Western Railroad Company,” but a new corporation, created and organized under Sp. Laws 1881, c. 113; and hence the stockholders were subject to the personal liability imposed by Const. art. 10, § 3.

2. Having accepted the benefits of the act of 1881, by organizing, issuing stock, and doing business as a corporation under it, the stockholders are estopped from asserting the unconstitutionality of the act.

Appeal from district court, Hennepin county; Seagrave Smith, Charles B. Elliott, and David F. Simpson, Judges.

Action by Henry A. Gardner against the Minneapolis & St. Louis Railway Company and others. Judgment for plaintiff, and William Strauss and others appeal. Affirmed.

Albert E. Clarke and Wilbur F. Booth, for appellants.

F. W. M. Cutcheon, for respondent.

BUCK, J.

One of the defendants, the Minneapolis & St. Louis Railway Company, is a domestic railroad corporation, and located within this state, and is insolvent. The defendants who answered are William L. Bull, Richard B. Hartshorne, Edwin Hawley, and William Strauss. The plaintiff, Gardner, brought the action, in behalf of himself and other creditors who might intervene, against the defendants for the purpose of enforcing an alleged double liability on the part of certain stockholders, individual defendants above named, and on March 23, 1898, obtained a judgment in the district court of Hennepin county in his favor, and against the above-named answering defendants, for the sum of $14,987.95. The facts were all stipulated, and the appeal is from the judgment.

It appears from the record that during the year 1853 the Minnesota Western Railroad Company was incorporated by an act of the legislature of the territory of Minnesota entitled “An act to incorporate the Minnesota Western Railroad Company,” approved March 3, 1853, which railroad company continued to be known by said name until on or about the 26th day of May, 1870, when its board of directors, under authority conferred upon it by an act of the legislature approved February 4, 1870, lawfully changed the name of the corporation to the Minneapolis & St. Louis Railway Company, by which name it was thereafter commonly known.

On or about the 20th day of April, 1881, said corporation, proceeding under and in accordance with the provisions of another act of the legislature of the state of Minnesota approved March 2, 1881, and entitled “An act to amend an act entitled ‘An act to incorporate the Minnesota Western Railroad Company,’ approved March third (3d), one thousand eight hundred and fifty-three (1853), and the act amendatory thereof, approved February fourth (4th) eighteen hundred and seventy (1870),” did duly enter into an agreement with certain other corporations, to wit, the Minneapolis & Duluth Railroad Company, the Minnesota & Iowa Southern Railroad Company, and the Ft. Dodge & Ft. Ridgely Railroad Company, by and under the terms of which all said corporations above mentioned agreed to make a full and complete consolidation and amalgamation of all said corporations, and their respective stocks, franchises, property, earnings, and management, in accordance with the provisions of said act of March 2, 1881, under the name of the Minneapolis & St. Louis Railway Company, which said agreement was to and did take effect June 1, 1881. Thereafter said companies filed their said articles of consolidation as provided by said act of the legislature of Minnesota of March 2, 1881, and on or about said June 1, 1881, said consolidation was duly consummated, each of said constituent companies in form conveying and transferring unto said consolidated corporation their respective stocks, franchises, rights, property, and earnings, in accordance with the provisions of said act of March 2, 1881. Thereafter said consolidated company entered upon, and ever after, until the 2d day of November, 1894, enjoyed, the franchises, rights, property, and earnings of its said constituent corporations conveyed as aforesaid. Said consolidated corporation is the defendant corporation, the Minneapolis & St. Louis Railway Company, above named. Said defendant corporation, the Minneapolis & St. Louis Railway Company, was invested, by said acts above mentioned and the laws and statutes of said territory and state of Minnesota, with the usual and general powers of a body incorporate, and especially was empowered to construct, maintain, and operate a railroad, with a single or double track, from Stillwater, on Lake St. Croix, to the city of St. Anthony, on the Mississippi river, both in Minnesota, and thence across said river to the city of Minneapolis, in said state, to a convenient point of junction with the Mississippi Valley Railroad, or the Hastings & Dakota Railroad, or both, besides eight branches. On and prior to the 28th day of June, A. D. 1888, said defendant the Minneapolis & St. Louis Railway Company owned and operated a system of railroads in the states of Minnesota and Iowa, extending from Minneapolis, through Hopkins, Merriam Junction, and Albert Lea, Minn., and Ft. Dodge, Iowa, to Angus, in the state of Iowa, with a branch line from Hopkins, via Winthrop, Minn., to Morton, in said last-named state. Said railway company also owned a line of railway extending from Minneapolis to White Bear, in the state of Minnesota, which was leased to, and operated by, the St. Paul & Duluth Railroad Company. On said day last mentioned said defendant railway had executed three mortgages, securing bonds theretofore issued, and varying in amount, which said mortgages, and six others, were liens upon different portions of said lines of railway. The mortgages amounted in the aggregate to several millions of dollars, and, in addition to said mortgages above described and mentioned, there existed upon said 28th day of June, 1888, a number of contracts of various kinds, to wit, construction contracts, traffic agreements, trackage agreements, leases, etc., which upon said day constituted liens upon the lines of said defendant the Minneapolis & St. Louis Railway Company. Subsequently this railroad became insolvent, and a receiver thereof was duly appointed on the 28th day of June, 1888, who took possession of all the property, railway, franchises, rights, and estates of said railroad company, and continued the certain foreclosure proceedings against said company which had previously been commenced, and thereafter such proceedings were had in said foreclosure action that on the 29th day of June, 1893, an interlocutory decree was entered in said action, whereby it was ordered and decreed that said improvement and equipment mortgage be foreclosed, and that all the property, railway, franchises, rights, and estates, upon which said improvement and equipment mortgage was then a lien, but none other, should be sold at judicial sale, at the time and in the manner therein provided, in case no redemption thereof should be made as therein provided. No redemption of said property, railway, franchises, rights, or estates having been made as in said decree provided, all said property, railway, rights,...