Hays v. the Ottawa
| Decision Date | 30 September 1871 |
| Court | Illinois Supreme Court |
| Parties | GEORGE W. HAYSv.THE OTTAWA, OSWEGO & FOX RIVER VALLEY RAILROAD COMPANY. |
OPINION TEXT STARTS HERE
WRIT OF ERROR to the Circuit Court of Iroquois county; the Hon. CHARLES H. WOOD, Judge, presiding.
Mr. L. E. PAYSON, for the plaintiff in error.
Mr. B. C. COOK, for the defendant in error.
The sufficiency of the pleas of the plaintiff in error is the only question presented.
Hays executed his note to the company, by which he promised to pay it $500 when the iron for the road was laid between certain points, and, upon payment, he was to receive a certificate for a like amount of the capital stock of the company.
The first plea is, substantially, that the company had sold a portion of the road to another corporation, which was operating and controlling it.
We have not been referred to the charter of the company, and therefore have no knowledge of the powers granted therein. If authority was given to the corporation to sell, then it has only acted within the scope of the power granted. Persons contracting with it must be presumed to act with full knowledge of its powers, and can not complain when its acts are in accordance with the law of its creation.
But a sale and transfer of the powers of one company to another, without the authority of the legislature, are against public policy, and the courts will do nothing which would promote the transfer, as it is in utter disregard of the duties and obligations of the company. Great Northern Railway Co. v. Eastern Counties Railway Co. 9 Hare, 306; Beman v. Rufford, 6 Eng. Law & Eq. 106; South Yorkshire Railway Co. v. Great Northern Railway Co. 19 Eng. Law & Eq. 513.
If the sale, then, was without authority granted in the charter, it was merely an unlawful attempt to accomplish what can only be done by the legislature, and is no defense against the payment of the subscription.
The second plea presents the question, whether the subscriber is released by reason of the lease of the road to another company.
If there was power to lease, the subscription must be regarded as having been made with reference to it. If there was not, is the act of leasing such a material and fundamental alteration of the responsibilities and duties of the company as to exonerate the subscriber from payment?
Even an alteration in the location of a road, if made by authority of the law, is no defense to an action for calls. The reason is, that the party is presumed to contract with knowledge of and reference to the law. Illinois River Railroad Co. v. Beers, 27 Ill. 185; Calvin v. Turnpike Co. 1 Carter, 511.
If the leasing was not authorized by law, then the liabilities and duties of the company to...
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