Guss v. Federal Trust Co.

• Citation: 91 P. 1045,19 Okla. 138,1907 OK 78
• Parties: GUSS v. FEDERAL TRUST CO.
• Decision Date: 04 September 1907
• Court: Supreme Court of Oklahoma

91 P. 1045

19 Okla. 138, 1907 OK 78

GUSS v. FEDERAL TRUST CO.

Supreme Court of Oklahoma

September 4, 1907

Rehearing Denied Oct. 12, 1907.

Syllabus by the Court.

A railroad company, for the purpose of aiding in the construction of its line of road, may accept and enforce an obligation payable to it, conditioned that the note shall become due and payable when the line of road is built and put in operation to a point named therein; and such a note is not void or against public policy.

One who is not a privy to a contract cannot be bound thereby against his consent, to his detriment; nor can he claim the benefit of any of its favorable provisions.

It is the duty of a trial court to direct a verdict for a party when the evidence is such that, if a verdict were returned by the jury for the other party, the court under the law would be required to set the same aside.

[Ed Note.-For cases in point, see Cent. Dig. vol. 46, Trial, §§ 376-380.]

Error from District Court, Logan County; before Justice John H Burford.

Action by the Federal Trust Company against U. C. Guss. Judgment for plaintiff, and defendant brings error. Affirmed.

Cotteral & Hornor, for plaintiff in error.

Dale & Bierer and Hoyt, Dustin & Kelley, for defendant in error.

BURWELL J.

The Ft Smith & Western Railroad Company contemplated building its line of road from a point about 40 miles west of the city of Ft. Smith, in the state of Arkansas, to the city of Guthrie, Okl.; and the company, through its representatives, proposed that if the people of Guthrie would execute and deliver to it their respective notes, of the aggregate value of $50,000, the line would be built to Guthrie. Notes were executed amounting in all to about $54,000 face value. The defendant executed and delivered his note, which was as follows: "$500.00. Guthrie, O. T. Feb'y 1st, 1902. The undersigned promise to pay to the order of Ft. Smith & Western Railroad Company, five hundred & no/100 dollars at the office of said company in Guthrie, Oklahoma. Provided, always, that this note becomes due and payable when said railroad company shall have in operation a line of railroad from the present terminus of its line in the Indian Territory to the city of Guthrie, Oklahoma Territory. [Signed] U. C. Guss." The road was built on its own right of way to a point about 200 or 300 yards north of the corporation boundary of the city, and from there its train ran over the tracks of the Santa Fé Railway Company to the passenger depot of that company, which the Ft. Smith & Western Railroad uses in common with such company. The note in question was transferred to the Federal Trust Company, and, payment having been refused by Mr. Guss, it commenced this action in the district court of Logan county, which resulted in a judgment in its favor, and the defendant has prosecuted this appeal.

The pleadings, the evidence, and the briefs cover a very wide range and present many supposed issues, which at first blush tend to impress one with the idea that the questions involved are difficult of solution; but when we take the facts as disclosed by the evidence, and apply to them a few simple, well-established principles of law, the complications are imaginary, and not real. We have examined the record and briefs with a view of determining, if possible, what advantage, if any, was taken of the appellant in this transaction, but are forced to the conclusion that the real defense is the usual one of "ought not to pay," under the assignment of error "that the obligation runs to a railroad company and public policy prohibits a railway company from accepting aid in the building of its road." That a note or contract of the character involved in this case is not against public policy has been declared by this court after full consideration. The question is no longer an open one. W. B. Piper v. Choctaw Northern Townsite & Improvement Company, 16 Okl. 436, 85 P. 965. In the case of McGuffin v. Coyle & Guss, 16 Okl. 648, 85 P. 954, 86 P. 962, decided some months prior to the case just referred to, this court recognized the validity of such contracts, where made for the benefit of the railroad company, but by a divided court denied recovery in that particular case, for the reason that the contract on its face ran to an officer of the company, holding that that fact was sufficient to authorize the inference that the contract was made for the benefit of the officers of the company, and not for the benefit of the railroad company itself. By the terms of the contract in this case the appellant agreed to pay to the Ft. Smith & Western Railroad Company $500 when that company (using the language of the contract) "shall have in operation a line of railroad from the present terminus of its line in the Indian Territory to the city of Guthrie, Oklahoma Territory." The road was built and in operation before this suit was commenced. It is true that it is insisted that the company had not built its line of road into the city; but it did not agree to do so. It agreed to build to the city of Guthrie, and the spirit of the contract is that the road should be built so as to afford the people of the city of Guthrie and those living in that community the advantages of such road as an independent line. Under the record this has been done. The contract has been substantially complied with. If it was the desire of those giving aid to the railroad company that it build and maintain separate and independent depot and terminal facilities, they should have so provided in their contracts. Under the record there has been a reasonable compliance with the contract on the part of the railroad company, and the appellant should pay the note, unless he can show some other defense.

But it is insisted that this and other notes were executed under the terms of another contract in writing, entered into between the railroad company and the citizens of Guthrie, through and in the name of the Guthrie Club, of Guthrie, under date of February 20, 1902. The contract is as follows:

"Guthrie, Okla., Feb. 20, 1902.

"Contract and Agreement by and between the Ft. Smith & Western Railroad Company and the Guthrie Club of Guthrie, Oklahoma. This contract and agreement, entered into this 20th day of February, A. D. 1902, by and between the Ft. Smith & Western Railroad Company, duly organized, incorporated, and doing business under the laws of the state of Arkansas and the Indian Territory and Oklahoma Territory, and for convenience hereinafter designated the party of the first part, and the citizens of the city of Guthrie, Oklahoma Territory, acting by and through the Guthrie Club, of Guthrie, Oklahoma, an organization duly incorporated under the laws of Oklahoma Territory, having for its primary purpose the development of the business interests of the city of Guthrie, and which said Guthrie Club, of Guthrie, Oklahoma, is for convenience hereinafter designated the party of the second part, witnesseth, that

"Whereas, said first party did on the 24th day of January, 1902, submit to the citizens of the city of Guthrie, Logan county, Oklahoma Territory, a proposition wherein and whereby said first party proposed and offered to extend its line of railway from its present terminus in the Indian Territory to the city of Guthrie, Logan county, Oklahoma Territory, provided the citizens of said city of Guthrie would make, execute, and deliver their promissory notes to said first party of the value of fifty thousand dollars ($50,000.00), and also secure for the use and benefit of said first party the passage by the mayor and council of the city of Guthrie such ordinances as should in the opinion of said first party be necessary and essential for the use of said first party in the construction and operation of its line of railroad in said city; and

"Whereas, said proposition as in substance above set forth was by the citizens of said city of Guthrie in a public meeting duly accepted, and in compliance therewith the citizens of the city of Guthrie have executed and caused to be executed promissory notes to the amount, as shown by their face, of approximately fifty-four thousand dollars ($54,000.00), and have the same now ready for delivery, and the mayor and common council of said city of Guthrie have by the passage of ordinances permitted said first party to construct and operate its line of railway into and through the city of Guthrie, as requested by said first party; and

"Whereas, there being a question involved as to whether or not the promissory notes above and herein referred to are of the full value of fifty thousand dollars ($50,000.00), in lieu of additional subscriptions and in payment by said first party of the sum hereinafter designated, the major and common council of said city of Guthrie have by resolution duly enacted, passed, approved, and directed a contract to be entered into between the city of Guthrie and said first party herein named, whereby the said city of Guthrie shall, for a period of five (5) years from the 1st day of January, 1903, furnish a supply of water for the use of locomotives, yards, and terminals of said first party; and

"Whereas, said first party, for the purposes of convenience and to enable it to more readily carry out its purposes in building its line of railway as proposed and understood between the parties hereto, did on the 14th day of February, 1902, file articles of incorporation in the office of the Secretary of the territory of Oklahoma and thereafter receive a charter under the name of the 'Ft. Smith & Western Railroad Company in Oklahoma,' permitting the construction of a line of railroad, from the east line of Lincoln county in said territory to the city of

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