St. Louis

• Decision Date: 05 November 1887
• Citation: 37 Kan. 606,15 P. 544
• Court: Kansas Supreme Court
• Parties: THE ST. LOUIS, FORT SCOTT & WICHITA RAILROAD COMPANY v. FRANCIS TIERNAN

15 P. 544

37 Kan. 606

THE ST. LOUIS, FORT SCOTT & WICHITA RAILROAD COMPANY v. FRANCIS TIERNAN

Supreme Court of Kansas

November 5, 1887

[Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted] [Copyrighted Material Omitted]

Error from Bourbon District Court.

ON December 10, 1884, Francis Tiernan filed his petition against The St. Louis, Fort Scott & Wichita Railroad Company, in the district court of Bourbon county, in the words and figures following, (court and title omitted,) to wit:

"The plaintiff for cause of action says:

"I. That the defendant is a corporation duly organized under and by virtue of the general laws of the state of Kansas.

"That the defendant is indebted to this plaintiff upon a promissory note, of which the following is a copy, to wit:

"'FORT SCOTT, March 10, 1882.--One hundred and eighty days after date, the St. Louis, Fort Scott & Wichita Railroad Company promises to pay to the order of Francis Tiernan, ten thousand dollars, value received, payable at the First National Bank, Fort Scott, Kansas, with interest from date at ten per cent. per annum, the same being for salary from February 3d, 1880, to February 3d, 1882.

"'ST. LOUIS, FORT SCOTT & WICHITA R. R. CO.

"'By A. M. AYERS, President.

"'Attest: IRA D. BRONSON, Secretary.

"'(Seal.--St. L., Ft. S. & W. R. R. Co.)'

"That said note was for salary as president and vice president and general manager from February 23d, 1880, to March 7th, 1882, and by mistake the recital was as above set forth.

"Wherefore, plaintiff demands judgment on said note as against this defendant in the sum of ten thousand dollars, with interest at ten per cent. per annum from March 10th, 1882.

"II. And for a second and further cause of action this plaintiff says, that the defendant is indebted to this plaintiff for salary as president and general manager of this defendant railroad company from March 7th, 1882, to March 7th, 1884, at an agreed and understood rate of five thousand dollars per year; and this plaintiff alleges that he was, and acted and performed the duties and services of, president and acting general manager of said defendant railroad company during the whole period of time from March 7th, 1882, to March 7th, 1884, and that such services were well worth the sum of five thousand dollars per year.

"And this plaintiff alleges that he has received from said railroad company, this defendant, at various times, the following sums and amounts of money, which he hereby credits and applies upon his account for salary from March, 1882, to March, 1884, to wit:

By corn delivered in 1882

$ 48 60

By corn delivered in 1883

52 35

1883, cash received to settle Whittaker claims

1,500 00

Oct. 21st, 1884, cash on account

3,000 00

Total

$ 4,600 95

"Wherefore, plaintiff prays judgment against the defendant in the sum of ten thousand dollars, with interest at seven per cent. on five thousand dollars from March 7, 1883, and interest on five thousand dollars from March 7, 1884, less said credit of four thousand and six hundred and 95/100 dollars.

"Wherefore, plaintiff demands judgment against the defendant for fifteen thousand three hundred and ninety-nine and 5/100 dollars, with interest at ten per cent. per annum from March 10, 1882, and costs of this action."

On January 10, 1885, the defendant filed its answer in words and figures as follows, to wit, (court and title omitted:)

"I. The defendant, for answer to the first cause of action in plaintiff's petition set forth, says:

"That the pretended promissory note therein set forth was not executed by this defendant, and that A. M. Ayers, as president, and Ira D. Bronson, as secretary of this defendant, were not authorized by this defendant to execute the same, and that the same is not the note or obligation of this defendant.

"STATE OF KANSAS, COUNTY OF BOURBON, SS.--J. W. Miller, being duly sworn, says that he is vice president and general manager of the defendant herein, the St. Louis, Fort Scott & Wichita Railroad Company; that he has read and knows the contents of the foregoing answer, and that he verily believes the statements therein made are true.

J. W. MILLER.

"Sworn to and subscribed before me, this 8th day of January, 1885.

[Seal.]

J. S. WEST, Notary Public.

(Commission expires March 17, 1885.)

"II. For a second and further answer to the first cause of action in plaintiff's petition set forth, defendant says that it is and has been a duly incorporated railroad company under the laws of the state of Kansas, from and since February 23d 1880; that the plaintiff was one of its original promoters, incorporators and directors, and has, from February 23d, 1880, continuously remained a director, and is such now, having during all that time assumed and taken upon himself the duties of a director, and continued and acted as such; that on February 28th, 1880, the plaintiff was elected president of this defendant, and acted as such to March 9th, 1881, at which time he was elected vice president and general manager, and so continued and acted as such to March 10th, 1882: that on May 10th, 1880, the plaintiff was elected a member of, and chairman of, the executive committee of the board of directors of this defendant, said executive committee being, by resolution of the board of directors, vested with the power of making contracts, transacting business, and appointing officers on behalf of and for this defendant, and from May 10th, 1880, to March 10th, 1882, said executive committee exercised such powers, and were during that time mainly the managing body of the corporation; that previous to March 10th, 1882, no promise, agreement or contract had been made by this defendant to or with the plaintiff to pay him any sum of money for his services as president, vice president, director, or general manager; that he agreed to serve as such without the payment of any salary therefor.

"III. The defendant, for answer to the second cause of action in plaintiff's petition set forth, admits the payment to the plaintiff of the sum of $ 4,600.95 at the times therein stated, but defendant says that this sum of money was paid by the officers of this defendant without authority from this defendant, and when the plaintiff had no just demand therefor against this defendant, and that the plaintiff wrongfully appropriated the same to his own use; and except as herein admitted, defendant denies all, each and every allegation in said second cause of action set forth, and demands judgment against plaintiff for the sum of $ 4,600.95, and interest from this date.

"IV. The defendant, for further answer to plaintiff's petition and for cause of action against him, says that this defendant was duly incorporated as a railroad company, under and by virtue of the laws of the state of Kansas, on February 23 1880, for the purpose of constructing and operating a line of standard-gauge railroad from a point on the eastern line of said state, east of Fort Scott, in Bourbon county, to Kingman, in said state, a distance of about 250 miles, and that from the time of its incorporation up to this time it has continuously exercised the rights, powers, privileges and franchises of a railroad company under the laws of the state of Kansas; that the plaintiff was one of its original promoters, incorporators and directors, and has, from February 23, 1880, continuously remained a director, and is such now, having during all that time assumed and taken upon himself the duties of a director, and continued and acted as such; that on February 28, 1880, the plaintiff was elected president of this defendant, and acted as such to March 9, 1881, at which time he was elected vice president and general manager, and so continued and acted as such to March 10, 1882; that on May 10, 1880, the plaintiff was elected a member of, and chairman of, the executive committee of the board of directors of this defendant, said executive committee being, by resolution of the board of directors, vested with the power of making contracts, transacting business, and appointing officers on behalf of and for this defendant, and from May 10, 1880, to March 10, 1882, said executive committee exercised such powers, and were during that time mainly the managing body of the corporation; that as such president, vice president, general manager, member of, and chairman of, the executive committee of the board of directors of this defendant, the plaintiff was the managing and chief administrative officer of this defendant; that on January 12, 1881, the plaintiff and one A. M. Ayers, who was then a director and vice president of this defendant, and one J. J. Franklin, who was then the treasurer of this defendant, purchased of one M. S. Carter the road-bed of what was theretofore known as the 'Fort Scott, Humboldt & Western Railroad Company,' in the counties of Bourbon and Allen, in the state of Kansas, the same consisting of some grading which had been done some ten years prior thereto on a contemplated line of railroad between Fort Scott and Humboldt, but which had long been abandoned--the plaintiff, said Ayers and Franklin, paying to said Carter therefor the sum of fifteen thousand dollars, which was the full value thereof; that on January 13, 1881, at the time when this defendant was greatly indebted beyond its ability to pay, and when very little, if any, of its line of railroad had been constructed, the plaintiff and said Ayers wrongfully, fraudulently, and in utter disregard of the duties which, as officers and directors of this defendant, they owed to it, and by collusion with their associate officers and directors, and in fraud of the rights of this defendant, its stockholders, bond-holders and creditors, the public and the state of Kansas...