Pixley v. Gould

• Decision Date: 31 August 1883
• Citation: 13 Bradw. 565,13 Ill.App. 565
• Parties: ASA PIXLEY ET AL.v.A. A. GOULD ET AL.
• Court: United States Appellate Court of Illinois

13 Ill.App. 565

13 Bradw. 565

ASA PIXLEY ET AL.

v.A. A. GOULD ET AL.

Appellate Court of Illinois, Fourth District.

August Term, 1883.

OPINION TEXT STARTS HERE

ERROR to the Circuit Court of Edwards county; the Hon. T. S. CASEY, Judge, presiding. Opinion filed October 10, 1883.

Messrs. HANNA & ADAMS and Mr. W. F. FOSTER, for plaintiffs in error; that as to the whole amount of the joint liability being discharged before a judgment or decree for contribution should be rendered, cited Jester v. Carse, 71 Ill. 23; Robertson v. Deatherage, 82 Ill. 511; Harvey v. Drew, 82 Ill. 606.

As to burden of proof: Watt v. Kirby, 15 Ill. 200; Union Nat. Bk. v. Baldenwick, 45 Ill. 375; Town of Prairie v. Lloyd, 97 Ill. 179; Howard v. Bennett, 72 Ill. 297; Baird v. Evans, 20 Ill. 29.

The agreement is void as against public policy: Bestor v. Wathen, 60 Ill. 138; Linder v. Carpenter, 62 Ill. 309; St. L. J. & C. R. R. Co. v. Mathers, 71 Ill. 592.

No distinction is made between such a contract in the name of the company or of officers of the company: Fuller v. Dame, 18 Pick. 472; Pacific R. R. Co. v. Seely, 45 Mo. 212; Holliday v. Patterson, 5 Oregon, 177; Fort Edward, etc., v. Payne, 15 N. Y. 583; Butternuts, etc., v. North, 1 Hill (N. Y.), 518.

As to what matter may be admitted in a cross-bill: Hurd v. Case, 32 Ill. 49; Kennedy v. Kennedy, 66 Ill. 194; Ayres v. Carver, 17 Howard, 595; Story's Eq. Pl. § 389.

Mr. J. S. STEVENS, for defendant in error, P. D. & E. R'y Co.; as to contribution, cited Eddy v. Traver, 6 Paige, 521; Hickman v. McCurdy, 7 J. J. Marsh, 560; Mitchell v. Sproul, 5 J. J. Marsh; Wilton v. Tazwell, 86 Ill. 29; Gillilan v. Nixon, 26 Ill. 50; Parsons on Contracts, 6 ed. 31, 32; Ralston v. Wood, 15 Ill. 159.

The payment to establish a claim for contribution, must be compulsory; but this does not mean that there must be a suit, but only a fixed and positive obligation: Chipman v. Morrill, 20 Cal. 135; Chaffee v. Jones, 19 Pick. 264; Little v. Pope, 11 B. Monroe, 308; Pitt v. Pursford, 8 M. & W. 538; Moden v. Forrester, 5 Taun. 615; Davis v. Humphreys, 6 M. & W. 153; Russell v. Failer, 1 Ohio, 327.

When a court of equity once obtains jurisdiction of a subject it will comprehend and decide all incidental matters necessary to a full and final determination of the whole controversy: Sander's Appeal, 7 Smith (Penn.), 498; Keaton v. Spaulding, 13 Mo. 226; Franklin Ins. Co. v. McCrea, 4 Ia. 229.

Messrs. BELL & GREEN and Mr. J. P. ROBINSON, for defendants in error; that an obligor who advances money for a co-obligor may be indemnified to the extent of his advances for such other party, cited Harvey v. Drew, 82 Ill. 606; Klein v. Mather, 2 Gilm. 317.

BAKER, J.

This was a bill in chancery in the Edwards Circuit Court in which Ansel A. Gould and Philander Gould were complainants, and all the other parties to the record were defendants.

The complainants and eighteen of the defendants, had executed and delivered to the P. D. & E. Railroad Company their written agreement to furnish the said railroad company the right of way through the county of Edwards, for the construction of their railroad, in consideration that said company would locate said road on a certain line. Assessments were made upon the joint contractors for the purpose of paying for such right of way, and some of them paid all the assessments, while others paid but little, and plaintiffs not only paid their own assessments, but in order to avoid litigation with the railroad company, advanced for their co-obligors who had failed to pay in full their respective shares, a considerable sum of money. The purpose of this bill was for contribution.

The P. D. & E. R. R. Co. was also made a party defendant. It answered and also filed a cross-bill, in which both the complainants, and co-defendants to the original bill were made defendants. The cross-bill alleged the parties bound by the contract had not procured all the right of way, but that said company had expended over $2,000 in addition to what had been paid by them under their agreement, and prayed a decree against them all for the sum so expended.

The railroad corporation had prosecuted a proceeding against Jacob Hinkle, one of the parties to the contract to condemn the right of way over his land, and there was awarded to him as compensation $625, which had not been paid. Afterward the company filed a bill against said Hinkle asking that he be perpetually enjoined from the collection of such compensation or judgment.

There were answers and replications as to each of these three bills and on the final hearing all the suits were consolidated and tried as one cause and a decree entered therein.

The substance of the decree was as follows:

1st. Jacob Hinkle was perpetually enjoined from collecting said compensation or judgment of $625.

2d. The court found there was due the P. D. & E. R. R. Co. from the twenty defendants in the cross-bill for money expended by it in procuring the right of way, the sum of $2,021.25 and entered a decree therefor and awarded an execution for the collection of the same with costs.

3d. The court also found there was due the complainants in the original bill the sum of $2,357.95, which they had paid in excess of their proportionate part for said right of way.

A decree was rendered against the delinquent defendants, severally, for the amount which the court found each one of them should have paid of this $2,357.95. It is urged the contract was void as being against public policy.

The doctrine announced in Bestor v. Wathen, 60 Ill. 138 and Linder v. Carpenter, 62 Ib. 309, is that a contract made with officers of a railroad company acting in their individual capacity to induce them to establish the line of the road at a given point for the purpose of promoting the private advantage of the contracting parties is against public policy as tending to sacrifice the interest of stockholders and of the public and will not be enforced in equity. Fuller v. Dam, 18 Pick. 472 and Holladay v. Patterson, 5 Oregon, 177, were cases of like character, where one of the contracting parties, while occupying a fiduciary relationship to the corporation, entered into the contract for the purpose of promoting his own private advantage. Fort Edwards, etc., v. Payne, 15 N. Y. 583, and Butternuts & Turnpike Co. v. North, 1 Hill, 518 are to the effect that in New York, corporations of the character involved have no authority to receive conditional subscription to stocks. The general doctrine, however, is that subscriptions of stocks to railway companies conditioned on the line or station will be upheld. See authorities cited in Pacific Co. v. Seely, post. The only cases to which our attention has been called other than the two last mentioned in which the contract was by and on behalf of the company itself are, St. L. J. & C. R. R. Co. v. Mathers, 71 Ill. 592, and Pacific R. R. Co. v. Seely, 45 Mo. 212.

In the first of these suits the agreement was, the company would not establish a depot or station within three miles of a particular point; and it was held the agreement was illegal, as the interests of the public and of the stockholders might require the establishment of such depot or station. In the other suit the agreement was to deed certain land to the corporation in consideration of the location of depots, and the decision, the contract was void and against public policy, was put upon the ground the land was to be conveyed to the company for purposes of speculation and not for the purpose of being used in locating, constructing, managing and using the road, and the further ground that the corporation under its charter had no power to acquire land for purposes...