Henderson v. R.R. Co.

• Decision Date: 01 January 1856
• Citation: 17 Tex. 560
• Parties: H. G. HENDERSON v. RAILROAD COMPANY.
• Court: Texas Supreme Court

17 Tex. 560

H. G. HENDERSON

v.RAILROAD COMPANY.

Supreme Court of Texas.

1856.

The individual members of an incorporated company are deemed strangers to the artificial body created by the act of incorporation, and may maintain their rights of action, of whatever nature, against the company, in the same manner as those who are not members.

The representations, declarations and admissions of the agent of a corporation stand upon the same footing with those of the agent of an individual.

As natural persons are liable for wrongful acts and neglects of their servants and agents, done in the course and within the scope of their employment, so are corporations, upon the same grounds, in the same manner, and to the same extent.

And nothing is better settled, than that the fraud of an authorized agent will invalidate a contract, entered into by him, on behalf of his principal, although in perpetrating the fraud the agent acted without the knowledge or consent of the principal.

And even though the agent has transcended his authority in making the contract, yet if the principal ratify it and make the contract his own by availing himself of the benefits of it, he is liable in like manner as if he had personally made the contract; for he cannot ratify the contract, and avoid the responsibility of the representations which formed its basis, but he must ratify the contract in toto. (In this case there was no question whether the liability of the principal extended beyond the nullification of the contract.) [[[[[ Ante, 372; 19 Tex. 2.]

If a material misrepresentation be made, although it be not embodied in the contract, it is considered a constructive or legal fraud, although it be made without any willful intention to deceive, but merely through carelessness, mistake or ignorance; for if a party be actually deceived by a misrepresentation, the practical result is the same, whether it were a willful fraud or not. [4 Tex. 75;20 Tex. 103;27 Tex. 443.]

If the construction of the road within some certain and reasonable time was the essential inducement to the making of the contract (to donate lands to the company, or subscribe for stock therein), if that was the real intention of the contract, and the obligation which it imposed on the defendant (the company), the extension of time (for the building of the road) by the legislature could not have the effect to discharge the defendant from that obligation.

The law does not recognize any such distinction as that the ordinary rules governing the contracts of individuals do not equally apply to the case of incorporated companies, regardless of the amount of public interest that may be supposed to be involved in the success of such companies.

The cost of the construction of a given railroad and the time within which it will be completed to a given point are not matters about which every one is presumed to be equally capable of judging, in such sense as would relieve the contract of the company, through its agents, from the ordinary effects of misrepresentations as to those particulars, where they are the essential inducements to the contract.

Where representations in relation to things in the future were alleged to have been false and fraudulently made, and it was objected that representations in relation to things in the future could be deemed fraudulent, the court said it was not necessary in order to render the representations and assurances of a party on which others have acted, binding upon him, that they should have had relation to facts which had previously transpired.

Appeal from Guadalupe. Tried below before the Hon. Thomas H. Duval.

This was a suit commenced October 21, 1854, by H. G. Henderson, appellant, against the San Antonio and Mexican Gulf Railroad Company, appellees, to cancel two deeds, executed by the appellant to Enoch Jones in trust for the appellee, and also to cancel two deeds executed by Jones to the appellee by virtue of said deeds of trust. One of the deeds from the appellant to Jones, for one hundred and forty acres of land, was dated September 4, 1852, and contained the following condition:

“When the said San Antonio and Mexican Gulf Railroad Company shall be fully organized, and shall have put under contract twenty miles of said railroad, and located said road so as to cross the Cibolo creek above the Sulphur Springs to San Antonio, then the said Enoch Jones is hereby fully authorized to convey to the president and directors of the said railroad company in my name, a full and complete fee-simple title to the said land herein described, but without guaranty of title, except as to those claiming by, through or under me, or my heirs or assigns; the land herein conveyed being a donation to said company in the construction of a railroad,” etc.

The other deed from appellant to Jones, for five hundred acres of land, was dated September 4, 1852, and contained the following condition:

“When the said railroad company shall be fully organized and the president and directors shall issue in my favor a certificate for four shares of the capital stock of said company, said stock entitling me to all the advantages, privileges and dividends of other stockholders who may subscribe in money, then the said Enoch Jones is hereby fully authorized and empowered to convey to the president and directors of the said railroad company and their successors in office for the use of the company, by absolute fee-simple title, with full stipulations of warranty, the land hereinbefore described,” etc.

Both of these deeds provided that in case of the death or removal of Jones, Thomas J. Devine should be trustee to convey out the intention of the deed.

On the 9th of June, 1853, Jones conveyed the land described in the deeds to defendant.

The petition alleged “that on the 5th day of September, 1850, Enoch Jones, Thomas J. Devine, citizens of Bexar county, together with others, obtained a charter from the legislature of the state of Texas, in which they were appointed a committee to form and organize a company to be entitled the San Antonio and Mexican Gulf Railroad Company; that the said Enoch Jones and Thomas J. Devine, on the 7th day of October, 1851, were elected, the one president, and the other a director of said company, and had one P. W. Platt constituted and appointed an agent to solicit donations to said company and obtain subscriptions for stock; that the said Platt, on the 4th day of September, 1852, as agent of said company as aforesaid, represented to your petitioner that the construction of said railway would result in very great immediate advantage and profit to your petitioner, from the increase of immigration to this state, and the consequent rise of lands, besides the increased facilities for transportation; and said Platt further represented that said railway had at that time already been commenced in accordance with one of the provisions of the said charter, to wit: that said railway should be commenced within one year from the 1st day of November, 1850, otherwise the charter should be null and void;” that said Platt further represented that twenty miles of said railway would be completed within three years from its commencement. Your petitioner alleges and expressly charges that said representations, made by the said Platt, as agent aforesaid, were false, and were made with a view to deceive and defraud your petitioner; that they were made by the said Platt with the full knowledge and authorization of said company, and that the said company authorized the said Platt, as agent aforesaid, to make said false and fraudulent representations with a view to defraud your petitioner.

Your petitioner further alleges and expressly charges that the above representations by the said Platt that said railway had at that time already been commenced in accordance with the provisions of the charter, and that twenty miles would be completed within three years from its commencement, were false and fraudulent, and that since said false representations were made by the said Platt, this petitioner has discovered, and expressly charges, that said company never did make a bona fide commencement of said road in accordance with the provisions of said charter, but that said company, with a view to deceive, and in fraud of the provisions of said charter, made a few marks with a plow and cut a few bushes near Mission Conception, in the neighborhood of the city of San Antonio, on the 31st day of October, 1851, the very last day allowed by the charter for the commencement of said road; that the whole amount of labor performed in making said marks and cutting said bushes did not amount to the labor of three men for one day; that at the time said work was performed, said road was not located, and the said work was not done upon the line of said road, as subsequently adopted by said company, nor has any work been since done at said place, or anywhere upon the line adopted subsequently; that the representations of said Platt that twenty miles of said road would be completed within the time specified in said charter, was likewise false and fraudulent, and made also with a view to deceive; and your petitioner expressly charges that the said Platt and the said company knew at the time that there was no reasonable prospect of the completion of the said twenty miles within three years. But your petitioner, having faith and confidence in the truth of said false and fraudulent representations, did, at the request of said Platt, as agent aforesaid, make, execute and deliver (the deed for one hundred and forty acres, describing it, and making exhibit of a copy thereof).

Your petitioner further represents that said Enoch Jones, in fraud of your petitioner's right, conveyed said land to the said company without your petitioner's knowledge and consent, and without the conditions contained in said deed of trust having been complied with on the part of said company, a copy of which conveyance...