Lake St. El. R. Co. v. Carmichael

• Decision Date: 19 February 1900
• Citation: 184 Ill. 348,56 N.E. 372
• Parties: LAKE ST. EL. R. CO. v. CARMICHAEL.
• Court: Illinois Supreme Court

184 Ill. 348

56 N.E. 372

LAKE ST. EL. R. CO.

v.CARMICHAEL.

Supreme Court of Illinois.

Feb. 19, 1900.

Appeal from appellate court, First district.

Action by Harriet K. Carmichael against the Lake Street Elevated Railroad Company. From a judgment in favor of plaintiff, affirmed by the appellate court (82 Ill. App. 344), defendant appeals. Affirmed.Knight & Brown and William G. Adams, for appellant.

Willard & Evans, for appellee.

CARTER, J.

The appellee recovered a judgment in the superior court of Cook county against appellant upon a guaranty indorsed on the back of a promissory note of one Miller, payable to appellee, in the sum of $2,500 and interest. Said guaranty was as follows: ‘For value received, the Lake Street Elevated Railroad Company hereby guaranties the prompt payment of the within note at its maturity. Lake street Elevated Railroad Co., by John A. Roche, President.’ The pleas were-First, non assumpsit verified; and, second, that the defendant is a corporation organized under the act in force March 1, 1872, for constructing and maintainingrailways, and for no other purpose, and that the plaintiff sold a tract of land, consisting of five certain lots, to Miller, and that, for a part of the purchase money, Miller made and delivered to plaintiff the note described in the declaration, and that for the accommodation of Miller, and to secure his said individual indebtedness, the defendant executed and delivered said pretended guaranty, and that the defendant had no power or authority to bind itself as surety or guarantor for the debt or obligation of another, and that the execution of said guaranty was and is ultra vires and void. Issues were joined on these pleas, and after the evidence was heard the court instructed the jury to find for the plaintiff the amount of the note, and interest. The evidence showed that the defendant, by its attorneys, negotiated with the plaintiff to purchase two of said five lots, over which to construct a branch of its road; but, the plaintiff refusing to sell less than the whole, defendant purchased all of them for the total sum of $7,500, and paid therefor in cash $5,000, and to secure the remaining $2,500, ant to avoid giving its own mortgage, caused the conveyance of the property to be made to Miller, who was a clerk in the office of the company's attorneys, and to have Miller execute the necessary papers. The five lots were conveyed to said Miller, and Miller gave his said note for the unpaid part of the purchase money, upon which note said guaranty was then executed by the president of the company on its behalf. The note was further secured by a deed of trust from Miller, on three of said lots, and thereupon Miller, who paid nothing, and had no personal interest in the transaction, conveyed the five lots to the company.

The only defenses relied on by the company, important to be noticed, are: First (and this is the defense most strenuously insisted upon), that the contract was and is ultra vires the corporation, and therefore void; and, second, that, even if not ultra vires, it cannot be enforced, because it was not authorized by the board of directors of the corporation, and that its president had no authority to execute it on behalf of...