State ex rel. Wilson v. Garroutte

• Decision Date: 30 April 1878
• Citation: 67 Mo. 445
• Parties: THE STATE ex rel. WILSON v. GARROUTTE, Appellant.
• Court: Missouri Supreme Court

67 Mo. 445

THE STATE ex rel. WILSON

v.GARROUTTE, Appellant.

Supreme Court of Missouri.

April Term, 1878.

Appeal from Greene Circuit Court.--HON. W. F. GEIGER, Judge.

C. W. Thrasher and Henry C. Young for appellant.

1. Authority given to a county court to subscribe stock to a railroad and issue bonds does not constitute a contract or vested right until the subscription is actually made. 1 Dillon Munic. Corp., § 42; U. P. R. R. Co. v. Davis Co., 6 Kas. 256; County of Dallas v. MacKenzie, 94 U. S. 660; Aspinwall v. County of Daviess, 22 How. 364; People v. Coon, 25 Cal. 635; State v. Saline Co., 45 Mo. 242. A mere right or power granted in the charter of a corporation, before it has been acted upon, so as to become a vested right, has no greater validity against a subsequent conflicting constitutional provision, than any other law of the State; and it would seem inconsistent to say that the one may not be repealed in the same manner as the other. Certainly the organic law of the State, either by express provision or by implication, is sufficient to repeal both. It cannot be seriously contended that laws enacted for the benefit of corporations are more sacred than those enacted for the protection of individual rights, or that the rules of construction applied to laws governing the individual citizen are not alike applicable to corporation charters.

2. The acts of the General Assembly recited in the pleadings and bonds, if valid, and the proceedings of the county court and railroad companies under the same, as disclosed by the evidence, do not confer authority on the county court to bind the county by a subscription, in the name of the county, to the stock of the Hannibal & St. Joseph Railroad Company, or the Kansas City & Memphis Railroad. See act incorporating Hannibal & St. Joseph Railroad Company, (Laws of 1847, p. 157); act incorporating Kansas City, Galveston & Lake Superior Railroad Company, Laws 1856-57, p. 163; act authorizing the latter company to change name, (Laws 1864, p. 480); act authorizing consolidation of Kansas City & Cameron Railroad Company with any other road, (Laws 1867, p. 143); act authorizing branch railroads, (Laws 1868, p. 90). The Kansas City & Memphis Railroad Company, if it ever had any existence, was created by authority of this latter act and not by the charter of the Kansas City & Cameron Company, and it can have only such powers as were conferred upon it by the act of 1868, and which it might have as a branch of the Kansas City & Cameron road. As such branch, it had no stock, and no authority to receive any subscription to its stock, and, under the act of 1868, it could not receive the subscription of the county without the assent of two-thirds of the voters.

3. The evidence fails to prove any consolidation. It does not appear that there ever was a transfer, or conveyance, or delivery of any property whatever, by the Kansas City & Cameron Railroad Company to the Hannibal & St. Joseph Railroad Company; or that either of said companies had any railroads, or property whatever, to consolidate, or, if they had, that such railroads intersected each other, or were within a hundred miles of each other, or that the new corporation ever exercised any power or authority over, or transacted any business on the line of either of said railroads, (if there were any such railroads,) or ever took possession of, or exercised any control or authority over the same. See resolutions and depositions concerning consolidation in agreed statement of history of case.

4. The evidence does not show that there has ever been any acceptance, by the Hannibal & St. Joseph Railroad Company, of a subscription to its stock by Greene county, so that even if the consolidation of the Kansas City & Cameron Railroad Company and the Hannibal & St. Joseph Railroad Company had authorized such subscription, none such has ever been made. A subscription of stock in a railroad corporation, unless accepted by the corporation, can be of no binding force whatever. Until such acceptance, there is no contract. Parsons on Contracts, (3 Ed.) 399; Jackson v. Galloway, 5 Bing. N. C. 75; Tucker v. Woods, 12 Johns. 190; Bruce v. Pearson, 3 Johns. 534; Tutile v. Love, 7 Johns. 470: Hunt v. Johnston, 24 Mo. 509. Bruner v. Wheaton, 46 Mo. 363; Eads v. Carondelet, 42 Mo. 113; Eliason v. Henshaw, 4 Wheat. 225; Falls v. Gaither, 9 Porter 605; Keller v. Ybarru, 3 Cal. 147; 1 Story on Const. § 378; Barlow v. Scott, 24 N. Y. 40; Honeyman v. Marryatt, 6 H. L. Cas. 112. The only acceptance claimed in this case, is that of Richardson, as president of the Kansas City & Memphis Railroad. And how could the president of the Kansas City & Memphis Railroad accept a subscription from Greene county to the capital stock of the Hannibal & St. Joseph Railroad Company? Or by what authority in law did the Kansas City & Memphis Railroad have a president or a board of directors? Certainly not under any charter or law authorizing its creation. If it had any existence as a branch of the Hannibal and St. Joseph Railroad Company, under the law of March 21, 1868, the president and directors of that company were by law the only authorized agents and business managers of said branch. Laws 1868, p. 90. State v. Greene Co., 54 Mo. 540, and dissenting opinion of Mr. Justice Vories, p. 564.

5. The consolidation of two or more railroad companies carries to the new company thus created, only the vested rights of the constituent companies, and not the mere privileges which might have been, but never were, executed or exercised by such constituent company. Hence, all unexecuted powers and privileges belonging to the constituent companies, not vested rights at the time of such consolidation, are not transferred, but extinguished by such consolidation. They do not survive the constituent corporation to which they belonged before consolidation, but perish with it. Clearwater v. Meredith, 1 Wall. 25; Marsh v. Fulton Co., 10 Wall. 676; Harshman v. Bates Co., 92 U. S. 569. It is not pretended in this case that the right to receive subscriptions from Greene county to the Kansas City & Cameron Railroad Company, had ever been exercised by that company before the alleged consolidation; or that the subscription was made to the Kansas City & Cameron Railroad Company before consolidation. The right, then, to receive such subscriptions was by the act of consolidation (if there ever was a consolidation) extinguished, and did not pass to the new consolidated corporation or any of its branches.

6. The existence of the Kansas City & Memphis Railroad as an independent corporation, having capital stock, and stock-holders, and liabilities, and assets, and property, separate and distinct from any main road, if thorized at all, is by virtue of the act of March 21, 1868, “to aid the building of branch railroads.” Therefore, it cannot, by said act, be endowed with any rights or powers prohibited by the constitution of the State then in force. And the subscription by Greene county to such railroad could only be made with the assent of two-thirds of the legal voters of said county. Const. of 1865, Art. 11, Sec. 14; State v. Saline Co. Ct., 51 Mo. 350; Carpenter v. Town of Lathrop, 51 Mo. 483; State v. Curators, &c., 57 Mo. 178.

7. Even if the county court, under the charter of the Kansas City & Cameron Railroad Company, had power to subscribe to the stock of that corporation in the name of said county, and if by consolidation with the Hannibal & St. Joseph Railroad Company the same right was conferred on the new corporation under the name of the Hannibal & St. Joseph Railroad Company, it does not, by any means, follow that such power is, by said charter or consolidation, conferred on the Kansas City & Memphis Railroad, a corporation distinct and separate from either of those before mentioned, and not created by said charter nor said consolidation; but by virtue of the act of March 21, 1868, concerning branch railroads. It can make no difference that the subscription was made to the Hannibal & St. Joseph Railroad Company to aid in building the Kansas City & Memphis Branch. It was, in legal effect, a subscription to the Kansas City and Memphis Railroad as an independent corporation, under the act of 1868.

J. P. Tracey for repondent.

SHERWOOD, C. J.

This suit is one of many to recover railroad taxes for the years 1875 and 1876, and directly involves the validity of bonds issued in the name of Greene county to the Hannibal & St. Joseph R. R. Co., to aid in building the Kansas City & Memphis R. R., alleged to be a branch of the former road. To sustain the judgment recovered for the amount of these taxes, reliance is for the most part placed on State ex rel. v. Greene County Court, (54 Mo. 540). The case was, however, decided by a divided court, Mr. Justice Vories delivering a very able dissenting opinion; one, the perusal of which will at least give rise to grave doubts as to the correctness of the conclusion reached by the majority of the judges. In addition to that, admissions were made by the demurrer to the answer in that cause, and on which the decision therein was chiefly based, admissions which find no support in the facts developed on the trial of the present cause. The records of the county court of Greene county show that an order was first made June 20th, 1870, subscribing $400,000 to the capital stock of the K. C. & M. R. R. Co., upon certain conditions, among them, that there should be a written acceptance by that company of the subscription. This order was modified October 4th, 1870, so as to make the subscription to the H. & St. Jo. R. R. Co., to aid in building the K. C. & M. R. R., upon similar conditions as before stated. In April, 1871, an order was made rescinding former orders, and the blank bonds were burned. In July, 1871, an order was made rescinding the rescinding order made the previous April, and again rescinding also all that portion of the order of October 4th, 1870, except...