State ex rel. St. Joseph & Denver City Rld. v. Comm'rs of Nemaha County

1. Stock-in Eaiwvat Corporations; Power and Authority of County Commissioners to Subscribe. Where, after an election has been held in a county which resulted in authorizing the commissioners to subscribe to the stock of a railroad corporation, and before such subscription has actually heen made, such corporation, in pursuance of authority granted by general law in force at the time of the election, consolidated with another railroad corporation, held, that the authority to make any subscription was terminated, and that an attempted subscription by the commissioners to the stock of the new and consolidated corporation was ultra vires, and did not hind the county. 2.--Chapter 44 of the Laws of 1865, relating to the consolidation of railroad corporations, considered and construed, with respect to the consolidated company.

Original Proceedings in Mandamus. This action was commenced in this court in 1870, and an alternative writ of mandamus was awarded at the January Term 1871. See 7 Kas., 542, where a sufficient statement of the averments of the petition will be found. The Board of County Commissioners refused to issue the bonds of the county, as demanded by the Railroad Company, but in answer to the alternative writ showed cause. The additional facts, appearing upon the answer of the defendants, are fully stated in the opinion of the court. The action was tried at July Term 1872 of this court, and the opinion filed at the January Term 1873. 1. The remedy to compel the issuing of the bonds by defendant is mandamus. 1 Ohio St., 77; 41 Mo., 221; 43 Mo., 117. 2. The facts authorizing the subscriptions to the capital stock of the relator, the organization of the Northern Kansas Eailroad Co., the consolidation of the two corporations, and that the St. Joseph & Denver City Eailroad Co. is entitled to all the franchise and rights of the Northern Kansas Kailroad Co., the subscription of the stock, and all the other facfe as set out in the statement, are made out by the records of the defendant, and it is estopped from denying them in this case. The defendant (the county board) is a court of record: Gen. Stat., ch. 25, § 44. Copies of its proceedings are made evidence in all courts of the State: Code, §372. The acts of the court can only be shown by its record, it acts only by its record, and cannot impeach or dispute the .same: 7 Mo., 600; 8 Mo., 235; 6 Kas., 274. 3. The subscription was made under and by virtue of aa act of the state legislature, which was at the time in full force: Ch. 12, laws of 1865, page 41. It was immaterial whether the petition on which the vote of May 8th 186$ was ordered by the court was signed by a fourth of the voters in the county, because the ordering of the, vote was a judicial act, remaining unreversed, and cannot now be inquired into. The object of the law submitting subscriptions to vote is to arrive at the will of the electors, and mere informalities cannot be taken advantage of except by contesting the elections: 19 111., 407; 15 Ohio St., 137; 2 Cal., 135; 2 Abb., (N. S.,) 361. The declaration of the vote is proof prima fade of all prerequisites: 19 111., 406; 21 How., 539; 5 Iowa, 15. 4. Where a particular route is specified as a condition precedent to the payment of the subscription, and that route is followed, their subscription must be paid. 1 Redf. on Rlys., 201; 12 Rich., 675. 5. The laws of Kansas authorized the consolidation of the two companies; and although the company thus formed might have been unable to enforce a subscription to its stock, yet, when the defendant, after the consolidation, made a subscription founded upon the former vote, with a full knowledge of the facts, it is a consent to the consolidation. (7 Ind., 369.) The informalities or irregularities in the vote and subscription are all cured by the act of Eeb’y 25, 1868; Gen. Stat., 892. This law took the place of all others, and was the only law in force on the 3d of January 1870 authorizing a subscription of stock. The power was vested in the board of county commissioners: Comp. Laws of 1862, page 409, §1; Gen. Stat., ch. 25, § 1; Const, of Kansas, § 21, art. 2, and § 2, art. 9. 1. Before the relator has any standing it must show that the Northern Kansas Railroad Company was consolidated with the St. Joseph & Denver City Railroad Co., by which act the said two railroad companies became a consolidated and single corporation, and became a corporation acting under and by virtue of the powers conferred by ch. 44, approved 13th February, 1865. Then the question presents itself, was there,, under § 22 of said act, a legal consolidation of the said two-railroad companies, as in law made a new and single corporation, and conferred upon such new corporation any authority in law to sue for and recover the $125,000 of the bonds of Nemaha county voted by the people of said county, previously, to the Northern Kansas Railroad Company? The* first inquiry is, does the said § 22 authorize the consolidation?' The language is: “Any railroad company in this state forming a continuous or connected line with any other railroad company may consolidate with such other company either in or out of this state into a single corporation in the following-manner.” Then follows the manner in which the agreement-must be made. Now, what is the obvious reading of this-section? It clearly only contemplates the consolidation of such roads as are already built and forming a continuous ox-connected line, and has no applicability to the building of a new x’oad over the same line. Said two railroad companies did not form a continuous or connected line of railroad in this state, or out of it, and consequently are not within the provisions of the said act. 2. Bxxt if the court shoxxld decide that the relators had so far established their title as to show that the Northern Kansas Railroad Co. was a legally incorporated railroad company, and also, that the St. Joseph & Denver City Railroad Co. was at the same time a legally organized railroad company,. and that said consolidation was done in due form of law and transferred all the rights, franchises, and privileges to the consolidated company, then the next question to be discussed, and to make up the title of the relators, is, does the board of county commissioners of Nemaha'county stand under any legal liability to the relators to issue to them the bonds of said county to the amount of $125,000 as claimed? The law under which it is claimed that the board of commissioners .acted, and became liable, if at all, was ch. 12, laws of 1865. This act this court, by its recent decision, (7 Kas., 542,) has held to a constitutional enactment. And it now only remains to inquire if there has been any such proceedings taken under it by the county board that they are liable to be compelled by the writ of mandamus of this court to issue said bonds to the present relators? Section one of said ch. 12 was amended by ch. 24 of the laws of 1866, and other provisions added; and this ch. 24 was the whole law in force at the time the attempted proceedings authorizing the county board .to subscribe for stock and issue bonds to pay therefor. Do the relators claim that any company, more particularly ■the Northern Kansas Railroad Co., had located a railroad to, into, through, from or near Nemaha county, at the time the question was submitted to the voters of said county for the subscription of said stock and for the issuance of said bonds to the amount of $125,000? It cannot be so contended, for such was not the fact. The election was held on the second Tuesday of May 1866, and no railroad was located by the relators or by those under whom they claim, \mtil the 18th of September 1871, when the St. Joseph Denver City Railroad Company, the present relators, filed a profile of their road in the office of the county clerk of said county. (7 Ohio St., 331; 10 Ohio St., 57.) Said ch. 24, laws of 1866, had a special proviso that such bonds (meaning the county bonds) authorized to be issued under the provisions of said law, where the county boards had not previously acted upon it should be issued in payment of assessments made upon all the stock of such railroad company. Here the county board expressly exceed their authority, by attempting to issue $125,000 of bonds at one time to pay in full íor 1,250 shares of $100 each of said stock, and its acts are void. 11 Ohio St., 183, 228; 9 Ohio St., 27,136. This would be amply sufficient to defeat the recovery of the relators in this proceeding if this law of 1866 had still been in force at the time of the pretended subscription on the 3d of January, 1870. But the truth is, that it had been repealed unconditionally in 1868. 1. If the relator has shown a valid consolidation of the Northern Kansas Railroad Co. with another corporation, it is not entitled to a peremptory mandamus, because, by such consolidation a new corporation was created, and the Northern Kansas Railroad Company ceased to exist or be a corporation from or after the time of such consolidation, in October 1866. See §22, page 102, Laws 1865, and 1 Wallace, 25; 48 Mo., 543; 15 Ohio St., 21; 6 Inch, 317; 27 Penn. St., 405; 27 Miss., 518. And the commissioners never had power given them to subscribe to any other than the capital stock of said Northern Kansas Railroad Co. 2. The relator claims to bé a corporation organized under the charter granted by the act found on pages 193 to 198, of the territorial laws of 1857. It is not shown that the Northern Kansas Railroad Co. formed a continuous or connected line with the corporation created by the aforesaid act of 1857, but on the contrary, we submit it does affirmatively appear that the two consolidated companies did not, either .separately or together, form a continuous or connected line; and as only such companies as did then (in 1866) form a continuous or coimected line, could or were authorized to consolidate, by law, (said § 22, page 101, laws of 1865,) we submit that such a state of facts is not shown as would authorize the'pretended consolidation; and, consequently, that the plaintiff’s statements are not sufficient to show a merging of the Northern Kansas Railroad Co. in the relator, or that any rights therein, or thereof, have vested in the relator. A corporation can only do such things as it is by law authorized to do; any act by it done beyond the power conferred upon it, is illegal, ultra vires, and void, and all powers not conferred on a corporation are withheld and denied, just as much as if the legislature had used express negative language for that purpose. 9 How., 172; 16 English L. & Eq., 180; 13 Peters, 519; 44 Barb., 625; 10 How. Pr., 543; 7 Wend., 412; 21 Penn. St., 22; 13 Minn., 64, 65; Pierce, 397, 404; 1 Southern Law Review, 5; 3 Head, 337. The county board not having authority to make the pretended subscription relied on, the county has not, in legal estimation, made it; and as the Northern Kansas Rid. Co. had not power to consolidate with the first St. Joseph & Denver City Rid. Co., no one is estopped from denying such want of power, because of anything shown in this case: 3 Kas., 104; 38 111., 45; 31 Ala., 77; 11 Ohio St., 183; 22 Conn., 502; 46 Barb., 432; 10 Wal., 676. The plaintiff does not pretend that any vote at any election held for such purpose in Nemaha county was ever casLin favor of a subscription being made in behalf of said county to the capital stock of the pretended relator. 3. If the Northern Kansas Rid. Co. and the corporation created by the said act of 1857 were consolidated with each other on the 9th of October 1866, as claimed by plaintiff, then it follows as a matter of course that there has not been any Northern Kansas Rid. Co. since said 9th of October 1866, because a consolidation of those two companies on that day would have occasioned and operated as a dissolution of the two previous companies, thus consolidated, and created a new corporation. (See § 22, page 101, laws 1865, and 1 Wal’., 25; 6 Ind., '317; 15 Ohio St., 21; 48 Mo., 543.) It is equally clear that the vote or election claimed to have been had in May 1868 did not amount to a subscription or create a contract between the Northern Kansas Rid. Co. and the county: 6 Kas., 256; 34 Ind., 279. 4. Of course it cannot be successfully claimed that the pretended relator is the same corporation (the late Northern Kansas Rid. Co.) as that to the capital stock of which plaintiff claims that by the pretended election of May 1866 the said county board were authorized to subscribe; and the pretended subscription relied on is void, and cannot be enforced against the county: 10 Wallace, 676; 16 Ind., 172; 48 Mo., 543; 21 111., 338; 10 Mass., 384; 23 Barbour, 21; 5 Hill, 383; 15 Ohio St., 438. These cases will show, beyond controversy, that a valid subscription could not have been made to, or for, the capital stock of a defunct corporation, as plaintiff itself shows the Northern Kansas Rid. Co. was, long before the pretended subscription relied on was made. 5. By reference to the plaintiff’s petition (recited in the alternative writ,) it will be seen that the Northern Kansas Sid. Co. was required to survey and locate its railroad through Nemaha county before the bonds were to be issued; and also, that the bonds were to be issued to that company to be used for grading its road, in said county, and for no other purpose whatever. As we understand it, plaintiff does not pretend that said company ever surveyed or located its railroad through said county, nor is it pretended that such use can be made of the bonds if issued as required by the conditions specified in the order on which the vote was taken, but on the contrary, it is certain that the bonds if they shall be issued, cannot be used for any such purpose. ’ By the last clause of § 2, ch. 24, laws of 1866, the commissioners were prohibited from subscribing stock in any manner other than under the restrictions and conditions specified. And as there is no pretense that the condition about survey and location by said Northern Kansas Rid. Co. of its railroad through said county has been complied with, and as it is certain, because of the dissolution and complete annihilation of that company, that such survey and location can never be made, and as it is equally clear that the bonds are wanted for any such purpose, therefore we submit that because of those conditions the bonds ought not to be issued, and that it is not, and never was, and never can become the duty of defendant to issue the same. In this connection, see 6)Irtd., 316; 23 Barb., 21; 32 Miss., 373.