Livingston County v. First National Bank

after stating the case as above reported, delivered the opinion of the court.’

The grounds urged for reversing the judgment are (1) that .the statutes of Missouri did not authorize the consolidation of

(1) As' to the authority for consolidation. It was enacted as follows by the act of the legislature of Missouri, approved March 2d, 1869, entitled “An Act to authorize the Consolidation of Railroad Companies in this State with Companies owning Connecting Railroads in Adjoining States,” (Laws of 1869, p. 75, and 1 Wagner’s Missouri Stats, of 1870, p. 314, § 56): “Section 1. That any railroad company organized under the general or special laws of this State, whose tracks' shall at the line of the State connect with the track of the railroad of any company organized under the general or special laws of any adjoining State, is hereby authorized to make and’ enter into any agreement with such connecting company, for the consolidation of the stock of the respective companies whose-tracks shall be. so connected, making one company of the two, whose stock shall be so consolidated, upon such terms and conditions and stipulations, as may be mutually- agreed upon • between them, in accordance with the laws of the adjoining State in which the road is located, with which connection, -is thus formed.”- The statute then went on to énact details in regard to the consolidation. The fourth section of the act provided as follows: “ Section 4. Any such consolidated company shall be subject to all the liabilities, and bound by all the obligations of the • company within this State, which may be. thus consolidated with one- in the

It is not contended that the provisions of this statute were not complied with in. making the consolidation. in question. The consolidated company was, by'the statute, to be entitled to the same privileges under the laws of the State of Missouri as if the consolidation had not taken place. This can only mean that it was to be entitled to the same privileges under the laws of Missouri, that the .Missouri corporation was entitled to under the laws of that State at the time the consolidation took place. One of those privileges was the privilege of a subscription' to stock by the township of Chillicothe.

(2) As to the authority to subscribe to stock in, and issue bonds to, the St. Louis, Council Bluffs and Omaha Bailroad Company, under the vote of the people of the township to subscribe to stock in, and issue bonds to, the Chillicothe and Omaha Bailroad Company. The case of Harshman v. Bates Gownty, 92 U. S. 569 , decided by this court at October term, 1875, is relied upon by the plaintiff in error as a decision against the validity of the bonds in that respect. It arose under the same statute of Missouri, of March 23d, 1868. The bonds -were issued by the county of Bates, in behalf of Mount Pleasant township, in that county, to the Lexington, Lake and Gulf Bailroad Company, in January, 1871. The taxpayers of the township had, in May, 1870, .at an election, voted in favor of a subscription to the stock of, and the issue of bonds to, the Lexington, Chillicothe and Gulf Bailroad Company. In October, 1870, that corporation was consolidated with another corporation, under the name of the Lexington, Lake and Gulf Bailroad Company. Thereafter, in January, 1871, the County ' Court, in pursuance only of the authority conferred by such voté, subscribed the specified amount, in behalf- of the township, to the consolidated company, and issued the bonds to it in payment of the subscription. The objection was taken.

In County of Scotland v. Thomas, 94 U. S. 682 , at October term, 1876, the suit was brought on coupons attached to bonds issued by the county of Scotland, in the State of Missouri, on its own behalf, to the Missouri, Iowa and Nebraska Railway Company, for a subscription on behalf of the county to the stock of that' corporation, which was a corporation formed by the consolidation, in March,'1870, (under the above mentioned act of March 2d, 1869,) of the Alexandria and Nebraska City Railroad. Company, of Missouri, (formerly the Alexandria and Bloomfield Railroad Company,) with the Iowa Southern Railway Company, of Iowa. It was claimed that the power to subscribe to the stock had been given by the charter granted in 1857 by Missouri to the Alexandria and . Bloomfield Railroad Company, before the adoption of the state constitution of 1865, which required that the question of subscribing to stock should be submitted to a vote of the qualified voters of the county. No vote had been taken in the case. It was contended on behalf of the plaintiff, that the consolidated corporation acquired, by the consolidation, all the privileges of the Alexandria and Nebraska City Railroad Company, and, among others, the privilege of receiving county

In the pase of County of Scotland v. Thomas, the power to consolidate was.given in 1869, after the original .charter of 1857 was granted, and after the Constitution of 1865 went into effect; but it was held that, that fact did not affect the power. In its opinion, the court said (p. 691): that the railroad authorized by the charter of 1857 “ was ‘ a railroad frqm the city of Alexandria, "in the county of Clark, in the direction of Bloomfield, in the State of Iowa, to such point on the northern boundary line of the State of Missouri as shall be agreed upon by said company, and a company, authorized on the part of the State of Iowa,, to construct a railroad to. intersect the road authorized to be constructed by the provisions of this act, at the most practicable .point on said state line.’ Bloomfield was a small town in Iowa, evidently not intended as the final objective point of the proposed line, which is only required to be ‘ in the direction of Bloomfield.’ A connection with'a continuous roadin Iowa was the declared object of the road proposed. It was evidently the purpose to bring Alexandria, a port of Missouri on the Mississippi River, in- connection with the rich region of southern and western Iowa, by means of the road then being chartered, and a road to' connect therewith, running into the State of Iowa. This purpose will be most effectually attained by the construction of the. continuous line contemplated by the consolidated companies. The general direction of the road is not changed. It does not pass through Bloomfield, it is true; but it does not pass it by so far as to be a substantial departure from

The court distinguished the.case from that of Harshman v. Bates County, 92 U. S. 569 , on the ground that in that cage the subscription to stock was made by the County Court in behalf of a township, and that the County Court was.regarded as being the mere agent of the township, and as having no discretion to go beyond the precise terms of the power given to it, to subscribe to the stock of the company riamed in the vote; while in the case of Scotland County, the County Court, acted as the representative authority of the county itself, and was officially invested with all the discretion necessary to be exercised under the change of circumstances brought about by the consolidation.

The court further proceeded to say, in the Scotland County case (p. 693): “ If we look at the subject in a broad and general view, it will be still more manifest that the power in question was intended to exist, notwithstanding the consolidation. The project of the railroad promised a great public improvement, conducive to the interests of Alexandria and the counties through- which it would pass. Its construction, however, would greatly depend upon the local aid and encouragement it might receive. The interests of its projectors and of the country it was to traverse were regarded as mutual. The power of the adjacent counties and towns to subscribe to its stock, as a means of securing its construction, was desired not only by the company, but by the inhabitants. Whether the policy was a wise one or not is not now the question. It was in accordance with the public sentiment of that period. Th'e power was sought at the hands of the legislature, and was'

The conclusion of the court was, that the power of the county of Scotland to subscribe, being a right and privilege of the Alexandria and Nebraska City Eailroad Company, passed, with its other rights, and privileges, into the new conditions of existence which that company assumed under the consolidation, and this although the company with which the consolidation was effected belonged to the State of Iowa.

In Town of East lincoln v. Davenport, 91 U. S. 801 , at October term, 1876, which was a suit on coupons attached to bonds issued by a town in Illinois, provision had been made by statute, prior to the time when a subscription was made by that town to the stock of a railroad company, that the company might consolidate with other companies, in order to carry out the object, of its charter, and that its franchises, rights, subscriptions, and credits might be transferred, and such consolidation was effected, a<nd a subsequent transfer by the consolidated company was lawfully made to a new company engaged in constructing a connecting road, thus forming a continuous line, the stockholders in the former companies becoming stockholders in the new company. It was held that a delivery by the town to such new company of bonds for the payment of the original subscription, and a receipt of a certificate of stock in the new company, were warranted by law. In the opinion of the court the doctrine of the case of County of Scotland v. Thomas, 91 U. S. 682 , was confirmed, and the distinction drawn in that case between it and the case of Harshman v. Bates County, 92 U. S. 569 , was adverted to.

In County of Bates v. Winters, 97 U. S. 83 , at October term, 1877, the suit was brought to recover the amount of bonds and coupons issued by the county" of Bates, in the State

In Wilson v. Salamanca, 99 U. S. 499 , at October term1878, the suit was against the township of Salamanca, in Cherokee County, Kansas, to recover the amount of coupons detached from bonds issued by that township to the Memphis, Carthage and Northwestern Railroad Company. The bonds were issued in September, 1872, in pursuance of an election held in November, 1871, at which it was voted to subscribe to stock in, and issue bonds to, the State Line, Oswego and Southern Kansas Railroad Company. After the vote was had, the latter company was consolidated with another railroad company, into a new corporation, to which the bonds were

In Menasha v. Hazard, 102 U. S. 81 , at October term, 1880,

In Harter v. Kernochan, 103 U. S. 562 , at October term, 1880, bonds had been voted by the township of Harter, in Clay County, Illinois, as a donation to the Illinois Southeastern Railway Company, and were issued to the Springfield and Illinois Southeastern Railway Company, the latter company having been formed subsequently to the vote, by a consolidation between the former company and another company. This court held that the statutes of Illinois, existing when the vote was taken, authorized the consolidation, and that, upon such consolidation, the new company succeeded to all the rights, franchises and powers of the constituent companies. ■The court said, (p. 574:) “ The power in the township to make a donation to aid in the construction of the Illinois Southeastern Railway was also a privilege of the latter corporation, and that privilege, upon the consolidation, passed to the new company., The donation - was voted before the consolidation took effect, and since the consolidated, or new company did not propose to apply such donation to purposes materially different from those for which-the people voted it in 1868, its right to

In New Buffalo v. Iron Company, 105 U. S. 73 , at October term, 1881, the suit was brought on bonds and coupons issued by the township of New Buffalo, in the county of Berrien and State of Michigan. The bonds had been voted by the township in May, 1869, as a donation in favor of the Chicago and Michigan Lake-Shore Railroad Company. When the bonds were voted, there was in force a general statute under which any railroad company of the State, forming a continuous or connected line with any other railroad company in or out of the State, could consolidate with the latter. The statute provided that the new corporation should possess all the powers, rights and franchises conferred upon its constituent corporations, and that they should be deemed to be transferred to and vested in it. After the vote was .had,' the company to which the bonds were voted was consolidated with another company, into a new corporation, having the name of the Chicago and Michigan Lake-Shore Railroad Company. The point was taken, in this court, that the bonds were void because they were delivered to a company to which they were not voted. This court said: “ The only remaining objection to the judgment is that the bonds were delivered to the consolidated company, when they were not voted to that company. We concur with the court below in holding that the aid voted must be deemed to have been given in view of the then existing statute, authorizing two or more railroad companies forming a continuous or connected line to consolidate and form one corporation, and investing the consolidated company with the powers, rights, property and franchises of the constituent companies. Nugent v. The Supervisors, 19 Wall, 241 ; County of Scotland v. Thomas, 94 U. S. 682 ; Town of East Lincoln v. Davenport, 94 U. S. 801 ; Wilson v. Salamanca, 99 U. S. 504 ; Empire v. Darlington, 101 U. S. 87 ; Menasha v. Hazard, 102 U. S. 81 ; Harter v. Kernochan, 103 U. S. 562 ; County of Tipton v. Locomotive Works, 103 U. S. 523 . The bonds were,' therefore, rightfully delivered to the new or consolidated corporation.” This court affirmed the judgment against the township.

We do not think that the rigid rule laid down in the case of Harshmam v. Bates County, 92 U. S. 569 , ought to be applied to the present case, although it is a case of bonds issued by a County Court in the State cT Missouri on behalf of a township of the county. In the articles of association of the St. Louis, Chillicothe and Omaha Railroad Company it was declared that the object of the association was to construct, maintain, and operate a railroad for public use, from Chillicothe to such

We think that, in the presen! case, the rule applied in the cases before cited, of County of Scotland v. Thomas, 94 U. S. 682 ; Town of East Lincoln v. Davenport, 94 U. S. 801 ; Wilson v. Salamanca, 99 U. S. 499 ; Menasha v. Hazard, 102 U. S. 81 ; Harter v. Kernochan, 103 U. S. 562 ; New Buffalo v. Iron Company, 105 U. S. 73 ; and Bates County v. Winters, 112 U. S. 325 , is' the more proper and salutary one, and that the doctrine laid down in Harshman v. Bates County, 92 U. S. 569 , and in County of Bates v. Winters, 97 U. S. 83 , that a County Court in Missouri could not, on a. vote by a township to issue bonds to a corporation named, issue the bonds to a company formed by the consolidation of thao corporation with another corporation, would not be, if applied here, a sound doctrine.

(3) As to the objection that it does not appear by the findings of the Circuit Court that there was any formal order made by the County Court for the issue of the bonds. By § 51 of the statute before cited, it was provided, that if it should appear from the returns of the election that not less than two-thirds of the qualified voters voting at the election were in favor of the subscription to the stock of the railroad company, it should be the duty of the County Court to make the subscription in behalf of the township, according to the terms and conditions thereof, and that, if those conditions provided for the issuing of bonds in payment of such subscription, the County Court should issue such bonds in the name of the county and deliver them to the railroad company. This imposed a plain duty in the present case upon the County Court, because the statute and the vote, taken together, authorized

Moreover, the finding of the Circuit Court is, that the records of the County Court show that that court made an order, on ■the 21st of February, 1877, stating that, under and by virtue of the statute of the State, approved March 23d, 1868, the county of Livingston, for the use and in behalf of the municipal township of Chillicothe, had issued and delivered the bonds in question to the St. Louis, Council Bluffs and Omaha Railroad Company. It .is also found as a fact by the Circuit Court, that the county of Livingston had made eleven semiannual payments of interest on the bonds, from the proceeds of taxes levied in each year on the taxable property of the township.

The County Court having been designated by the statute as the proper authority to determine that the conditions existed which authorized the making of the subscription, to be followed by the issuing of the bonds, the fact of the issue of the bonds by the County Court, under its seal, with the recitals contained in the bonds and the other facts above stated, estop the county from urging, as against a Iona fide holder of the bonds and coupons, the existence of any mere irregularity in' the making of the subscription or the issuing of the bonds. On the foregoing facts, it must be presumed that the subscription to the stock was made by the County Court in behalf of

We are referred by the counsel for the plaintiff in error to the cases of The State v. Garrontte, 67 Missouri, 445, and Weil v. Greene County, 69 Missouri, 281, as holding to the contrary of the views we have here announced. Independently of-the fact that these decisions were made in 1878, many years after the bonds in the present case were issued, no such facts existed in those cases as exist in the present case. In the case in 67 Missouri, the bonds were issued to the Hannibal and St. Joseph Railroad. Company, to aid in building the Kansas City and Memphis Railroad, alleged to be a branch of the former road. The main line had never been built. The court said that a branch road necessarily presupposed a main trunk line ; and that the Kansas City and Memphis Railroad was, for all practical purposes, really a distinct and independent branch of the Hannibal and St. Joseph Railroad, the union existing merely in name but not in substance, and the branch road having separate stock and stockholders, president, directors, and liabilities from the main road, so as to require, under the Constitution of Missouri of 1865, a vote of the people in favor . of the issue of the bonds. There was no vote of the people in that case. In the case in 69 Missouri,'the bonds had been issued by Greene County .to the Hannibal and St. Joseph Railroad Company, - to aid in building the road through that county. The case did not show that there was any connection .between the Hannibal and St. Joseph Railroad Company and the railroad to be built,. nor what railroad it was, nor that Greene County had ever subscribed -to the stock of any railroad company.

The exceptions taken on the trial, as above set forth, do not present any question different from those which have been discussed. The bonds and coupons were properly read in evi- ' dence, and so were the certified copies of the tax levies.

We find no error in the record, and

The judgment of the Ci/reuit Cou/rt is affirmed.