p. 592growth and development of the business which, in the performance of said contract for many years past, it has been building up and developing in the region of country through which the said lines of railway hereinbefore mentioned run; that said business has been largely built up and developed by the efforts and instrumentality of your orator; that, in the hope and prospect of its future development, your orator has borne the burden of sustaining and upholding it, when the business was comparatively small and unremunerative; and that-it will be a gross injustice and inequity to permit said railroad companies, by violation of contract, as aforesaid, to remove at the present time the-cars of your orator from the line of the said St. Louis, Iron Mountain and Southern Railway Company, or to discontinue operating them thereon, or to substitute the cars of any other party thereon.”
Mr. Edward S. Isham for appellant.
The .burden of this bill is that the road of the Iron Mountain Railway Company has by virtue-of an executed agreement passed into the actual-control of the Missouri Pacific Railway Company. The bill does not set out a written contract, and then aver its meaning by the construction of its terms. It avers a contract, whose terms are shown only by its. averments; and in this respect none of thé authorities cited by appellees apply. The substantial averments are (1.) An agreement to unite the Iron Mountain Road with that of the. Missouri Pacific, under the common management of the Missouri Pacific Railway Company, as a part of one line Avith its own road. ' (2.) The massing of all or. substantially all the stock of the Iron Mountain Road in the treasury of the Missouri Pacific, and a substitution by exchange of the stock of the Missouri Pacific therefor, as one step taken in carrying that agreement into effect. (3.) “The purpose on the part of both of said corporations of putting the control ” of the property of the Iron Mountain into the hands of the said Missouri Pacific “ and of subordinating in effect the roads of both the said corporations to one and the same management and control,” namely, that of the Missouri Pacific. (4.) The consummation of that intent and purpose; in that im
p. 593mediately upon the acquisition by the Missouri Pacific of the control of the affairs of the Iron Mountain Company, “ and in the exercise of the control of said Missouri Pacific Railway Company, they proceeded to put the persons who were charged with the management of the affairs of the Missouri Pacific Railway Company, into the actual control and management of the franchises, property, business and road of the Iron Mountain Company.” (5) The actual fact of the present control and management of the business and road'of the Iron Mountain by the Missouri Pacific; that the general offices of the Iron Mountain have been everywhere abandoned and closed and their business has been transferred to the offices of the Missouri Pacific, and- in every respect ■ there has been effected and brought about a complete absorption of "the said St. Louis, Iron Mountain and Southern Railway Company, and a complete amalgamation of the said two companies, so far as the actual conduct and administration of their business is concerned.These averments (1) as to an agreement; (2) as to the intention of the parties; (3) as to the consummation of the agreement, are all questions of fact, not traversed, and are admitted by the demurrer. Intention is a traversable fact. Moss v. Riddle, 5 Cranch, 351 , 357; Thurston v. Cornell, 38 N. Y. 281 ; Haight v. Haight, 19 N. Y. 464 , 468; Miller v. Miller, 15 Barb. 203 ; Forbes v. Waller, 25 N. Y. 430 , 439; Clift v. White, 12 N. Y. 519 , 538; De Ridder v. McKnight, 13 Johns. 294 ;. Walker v. Sedgwick, 8 Cal. 398 . These averments, therefore, are matters of substantive fact. If the appellees were not to treat them as assumed to be true on demurrer, they ought to have traversed them. If they are true the Iron Mountain road is within the control of the Missouri Pacific.Mr. Isharn also argued that appellant’s only remedy for the enforcement of those parts of the contract which were negative was by injunction, citing Western Union Tel. Co. v. Union Pacific Railway Co., 1 McCrary, 418 , 558, and 581; Pomeroy on Specific Performance, §§ 24, 25, 310, 311, 312; Singer Co. v. Union Co., 1 Holmes, 253 , 256; Jones v. North, L. R. 19 Eq. 426; De Mattos v. Gibson, 4 DeG. & J. 276, 279; Vincent
p. 594v. Chicago & Alton Railroad Co., 49 Ill. 33 ; Frank v. Brunnemann, 8 W. Va. 462 ; Rankin v. Huskisson, 4 Sim. 13; Cole Mining Co. v. Virginia &c. Water Co., 1 Sawyer, 470 and 685; Memphis & Little Rook Railroad Co. v. Southern Express Co., 8 Fed. Rep. 799 .Mr. John F. Dillon and Mr. A. T. Britton for appellees.
delivered the opinion of the court. After stating the facts in the language reported above, he continued :
The main questions involved in the merits of this casé are, 1, whether the contract betwfeen the Missouri Pacific and Pullman Companies, made, before the consolidation, binds the consolidated company to haul the Pullman cars over the road of the St. Louis, Iron Mountain and Southern Company, if that road is controlled by the consolidated company within the meaning of the contract; and, 2, whether it is so controlled by the consolidated company.
The present Missouri Pacific Company, is a-different corporation from that which contracted with the Pullman Company. The original company owned and operated a railroad between St. Louis and Kansas City. This company owns -and operates that road and others besides. It is a new. corporation created by the dissolution of several old ones, and- the establishment of this in their place. It has • new powers, new franchises, and new stockholders. Clearwater v. Meredith, 1 Wall. 25 , 42; Shields v. Ohio, 95 U. S. 319 , 323; Railroad Co. v. Maine, 96 U. S. 499 , 508; Railroad Co. v. Georgia, 98 U. S. 359 , 364; Louisville & Nashville Railroad Co. v. Palmes, 109 U. S. 244 , 254. The bill does indeed aver, that the Missouri Pacific Company “ consolidated with itself certain other companies, . . . retaining its former name,” but, as this was done under the laws of Missouri, the effect of the consolidation depends on those laws. Central Railroad Co. v. Georgia, 92 U. S. 665 , 670. They provide that “ any two or more railroad companies in this State, existing under either general or special laws, and owning railroads constructed wholly or in part, which, when
p. 595completed and connected, will form, in the whole or in the main, one continuous line of railroad, are hereby authorized to consolidate in the whole or in the main, and form one company owning and controlling such continuous line of road, with all the powers, rights, privileges and. immunities, and subject to all the obligations and liabilities to the State, or otherwise, which belong,to or rested upon either of the companies making such consolidation.” In order to accomplish such consolidation an agreement to that effect must be entered into by. the companies interested. “ A certified copy of such articles of agreement, with the corporate name to be assumed by the new company, shall be filed with the secretary of state when the consolidation shall be considered duly consummated, and a certified copy from the office of the secretary of state shall be deemed conclusive evidence thereof.” “ The board of directors of the several companies may then proceed to carry out such contract according to its. provisions, calling in the certificates - of stock then outstanding in the. several companies or roads, and issuing certificates of stock, in the hew consolidated company under such corporate name as may have been adopted.” Rev. Stat. Missouri 1879,' § 789. ■ This clearly contemplates the actual dissolution of the old corporations and the creation of a new one to take their place.
The new company assumed on the consolidation all the obligations of the old' Missouri Pacific. • This requires it to haul the Pullman cars, under the contract, on all roads owned or controlled by the old company at the time of the consolidation,', but it does not extend the operation of the contract to other roads which the new company may afterwards acquire. The power of the old company to get the' control of other roads ceased when its corporate existence came to an end, and the new company into which its capital stock was merged by the .consolidation undertook only to assume its obligations as they then stood. It did not bind itself to run the cars of the Pullman Company on all the roads it might from time to time itself control, but only on such as were controlled by the old Missouri Pacific. Contracts thereafter made to get the control of other roads would be the contracts of the new consolidated
p. 596company, and not of those on the dissolution of which that company came into existence. It follows that the present Missouri Pacific Company is not required, by the contract of the old company, to haul the Pullman cars on the road of the St. Louis, Iron Mountain and Southern Company, even if it does now control that road, within the meaning of the contract.
We are also of opinion that the railroad of the St. Louis, Iron Mountain and Southern Company is not controlled by the present Missouri Pacific Company in such a way as to require that company to haul the Pullman cars over it, if the contract is binding on the new company to the same extent it would be on the old were that company still in existence and standing in the place of the new. Confessedly the St. Louis, Iron Mountain and Southern Company keeps up its own corporate organization. It operates its own road. It has its own officers and makes its own bargains. The Missouri Pacific owns all, or nearly all, its stock, and in that way can determine who shall constitute its board of directors, but there the power of that company over the management stops. The board when elected has controlling authority, and for its doings is not necessarily answerable to the Missouri Pacific Company. The two roads are substantially owned by the same persons and operated in the same interest, but that of the St. Louis, Iron Mountain and Southern Company is in no legal sense controlled by the Missouri Pacific.
It is true the bill avers in many places and in many ways that the purchase of the stock of the St. Louis, Iron Mountain and Southern Company was made by the Missouri Pacific Company for the purpose and with the intent of getting the control of the road of the St. Louis, Iron Mountain and Southern, and that the case is before us on demurrer to the bill. A demurrer admits all facts stated in the bill which are well pleaded, but not necessarily all statements of conclusions of law. What was actually done is stated clearly and distinctly. The effect of what was done is a question of law, not of fact. It is a matter of no importance what the purpose of the parties was if what they did was not sufficient in law to accomplish what they wanted. When there is doubt, the purpose and intention
p. 597of the parties may sometimes aid in explaining what was done, but here there is no need of explanation. The Missouri Pacific Company has bought the stock of the St. Louis, Iron Mountain and. Southern Company, and has effected a satisfactory election of directors, but this is all. It has all the advantages of a control oí the road, but that is not in law the control itself. Practically it may control the company, but the company alone controls its road. In a sense, the stockholders of a corporation own its property, but they are not the managers of its business or in the immediate control of its affairs. Ordinari,y they elect the governing body of the corporation, and that body controls its property. Such is the case here. The Missouri Pacific Company owns enough of the stock of the St. Louis, Iron Mountain and Southern to control the election of directors, and this it has done. The directors now control the road through their own agents and executive officers, and these agents and officers are in no way under the direction of the Missouri Pacific Company. If they or the directors act contrary to the wishes of the Missouri Pacific Company, that company has no power to prevent it, except by the election, at the proper time and in the proper way, of other directors, or by some judicial proceeding for the'protection of its interest as a stockholder. Its rights and its powers are those of a stockholder only. It is not the corporation, in the sense of that term as applied to the management of the corporate business or the control of the. corporate property.
Something was intimated in argument about the duty of the railway company to haul the cars of the Pullman Company, because of the nature of the business in which the latter com.pany was engaged, which consisted “of hiring or otherwise arranging with railway companies to use its cars,” “ under written contracts, for a term of years.” The bill also alleges that, “ by reason of the magnitude of the investment ” “ and the cost of operating such cars,” the Pullman Company “ cannot receive a fair return unless it can have the exclusive operation of said business, as provided in said contracts with the several companies over whose roads it operates.” It may be, as is also alleged, that it has “ become indispensable, in the conduct of
p. 598the business of a railroad company, to run on passenger trains sleeping and drawing-room cars, with the conveniences usually afforded by such cars for night travel,” but it by no means follows that the railway is, in law, obliged to arrange with the Pullman Company for such accommodations. According to the bill itself, two such car companies cannot successfully carry on a competing business on the same road, and the custom has been for the Pullman Company, if possible, to contract for the exclusive right. The business is always done under special written contracts.- These contracts must necessarily vary, according to the .special circumstances of each particular case. Certainly, it cannot be claimed that a court of chancery is competent to require these companies to enter into such a contract for the furnishing and hauling of Pullman cars, as the court may déem reasonable. A mere statement of the proposition is sufficient to-show that it is untenable.
An objection was raised to the jurisdiction of a court of equity to grant relief such as is asked. This we do not consider, as we are all agreed that the demurrer was properly sustained upon the other grounds.
Decree affirmed.