Mercer County v. Pittsburgh & Erie Railroad

The opinion of the court was delivered by Lewis, C. J. This bill prays for an injunction to restrain the railroad company from paying out any of the bonds which have been issued by the county in payment of a subscription to the stock of the company. The Act of Assembly of 4th May, 1852, authorizing the constituted authorities of the county to subscribe to the stock, declares that the subscription to be made “ shall be made subject to the following restrictions, limitations, and conditions, and in no other manner or way whatever, viz., all such subscriptions shall be made by the county commissioners of the county subscribing, and shall be made by them, after and not before, the amount of such subscription shall have been designated, advised, and recommended by a grand jury,” and “ the amount of such subscription ordered and designated as aforesaid may be made payable either in money or in the bonds” of the county so subscribing. At the May Sessions of the Court of Quarter Sessions of Mercer county, 1852, the grand jury signed a paper in which they state that they “would recommend the commissioners of Mercer county to subscribe to the capital stock” of the company — 401 — “ to such amount and under such restrictions as may be required by the Act of Assembly authorizing them to subscribe stock to said road, to an amount not exceeding 150,000 dollars.” Under this authority two of the commissioners subscribed toK the stock of the road to the amount of $150,000, and bonds have been issued and delivered to the railroad company, in payment of the subscription. $65,100 of these bonds have been paid to S. P. Johnson & Company, on account of work under their contract. The residue of the bonds, to the amount of $84,900, remain in possession of the railroad company. It is impossible to read the Act of 4th May, 1852, without perceiving that all discretionary power touching the subscription to the stock was given exclusively to the grand jury. They were directed to “ designate the amount of the subscription to be made, and when they did so designate the amount, and “ advise and recommend” the subscription, it was imperative upon the commissioners to obey. The language of the act is that the subscription “shall be made” by the county commissioners. The mandate is repeated in the clause declaring that the subscription shall be made after “the grand jury have designated, advised, and recommended” the amount. It is indicated in the express prohibition of any subscription before the amount is so designated by the grand jury. It is plainly proclaimed in the preliminary clause declaring that the subscription shall be made subject to the “ restrictions, limitations, and conditions” specified in the act, “ and in no other manner or way whatever.” That the action of the grand jury was intended to be mandatory — a command and not merely an authority — is manifest from what has already been said. The “advice and recommendation” of the grand jury was to be regarded as an order, which the commissioners were not at liberty to disobey. This is the plain meaning of the act. It breathes through every word, and speaks out in every line. As if to leave not a particle of doubt on this question, the legislature, in a subsequent part of the act, speak of the amount of such subscription as “ ordered and designated as aforesaid.” It follows that the commissioners had no discretionary authority whatever in the matter; they were merely permitted to hold the pen, and to write precisely what they were directed by the grand jury to write. Nothing more — nothing less. We can readily see many good reasons for this. The commissioners are selected so long in advance of the decision to be made, that all persons who may be disposed to apply improper influences have abundant opportunities of doing so. They are but three in number, and two of these might decide the fate of the county. These two might lack the wisdom necessary for such an important measure. They might also lack the integrity required for such a high trust. It is not necessary to deal in ambiguous language when discussing such a subject. From the beginning of — 402 — the world to the present time, history has been teaching her lessons of human frailty, beguiled and corrupted by human wickedness. It. is fair to presume that these lessons were not lost on the legislature. Although they could not distinctly see the wily serpent of corruption, the waving of the grass often indicated his stealthy course. It is therefore not improbable that one of the objects of the restrictions in the Act of 1852 was to guard against bribery. Whatever may have been the motive, the legislature were unwilling to place the fortunes of a whole county at the disposal of two county commissioners. I do not regard the declarations of Pennock, one of the county commissioners who issued these bonds, as legal evidence to convict the railroad company of bribery. But his declaration, after the subscription had been made, and after the work had been allotted to the contractors, that he “ had not got work — that he had not yet signed the county bonds, and would not unless he got work on the road,” and the two events which followed this unblushing admission, viz.: his signing the bonds and getting work on the road, are certainly high evidence of his unfitness for the trust, and of the wisdom of the legislature in refusing to trust him with any discretion whatever on the subject. The grand jury are not so readily influenced by improper suggestions. They are selected for their judgment and integrity, and come from all parts of the county, without respect to party politics. They are exposed to temptation for too brief a period to be safely approached — they are too numerous to be easily led away from their duty by “ vfork” on a railroad, or by any other improper considerations. In the multitude of their counsel there is comparative safety. They are the usual agents of the county, when the question of erecting county buildings or county bridges is to be decided. These are some of the reasons which may have influenced the legislature in insisting that the amount of the subscription in this case should be “ designated” by the grand jury. But it is sufficient for the court to know that the law is so written and must be obeyed. It is a special authority, and must be strictly pursued. There is not a word in it which authorizes the grand jury to transfer from their own shoulders any part of the responsibility which the legislature plaeed there. An attorney without power of substitution eannot appoint an attorney in his place. Discretionary powers given to trustees will not pass to heirs, nor personal representatives, nor assignees, nor devisees, nor survivors: Hill on Trustees 488; 16 Ves. 44; 16 Ves. 45; 1 B. & Ald. 608; 2 Ves. 643; 2 Sim. 264; 2 Hare 200 ; 16 Ves. 22; 13 Sim. 91. They will not pass even to a new trustee appointed by a court of equity: Amb. 309. When the grand jury authorized the commissioners to subscribe any “ amount not exceeding $150,000,” they failed to execute the power conferred upon them. Such a proceeding was no designation of the amount — it was a plain transfer of that duty to the — 403 — commissioners, giving them the discretion to subscribe $50 or $150,000, or any intermediate sum. This was precisely what was prohibited by the statute. As the legislature neither intrusted the commissioners with any such authority, nor authorized the grand jury to trust them with it, the conclusion follows that the subscription to the stock of the Pittsburgh and Erie Railroad Company has not been made by competent authority. There is another objection equally fatal to the subscription by the commissioners. The laiv in existence at the time a contract is made, enters into and necessarily forms a part of it. In like manner, the law in force, when a proposal for a contract is made, always forms a part of it, and is the essential and true exponent of the intention of the party in making it. If the proposal be not accepted until the law under which it is made undergoes such a change that a subsequent acceptance would constitute a contract materially different from that intended when the proposal was made, it is manifest that the acceptance comes too late to bind the party. In such a case, the proposal falls with the repeal of the law which induced it. No contract can be made on the basis of it. The negotiations must commence de novo. The Act of 4th May, 1852, authorizing the county of Mercer to subscribe to the stock of the company, contained a proviso, which declared that the acceptance of that act by the company shall be deemed also an acceptance of the provisions of the Act of 11th March, 1851, entitled “An Act fixing the gauges of railroads in Erie county.” When the grand jury recommended the commissioners to subscribe, it was expressly required by them that the subscriptions should be made “ under such restrictions as may be required by the act of Assembly authorizing them to subscribe stock to said road.” So that the grand jury, not tacitly but expressly, required that the subscription should be made under the restriction that the Act of 11th March, 1851, fixing the gauges of railroads in Erie county, should be accepted by the Pittsburgh and Erie Railroad Company. This recommendation was made in May, 1852. Were the terms accepted by the railroad company ? Far from it. On the 18th January, 1853, the stockholders of the corporation, at a meeting called to take action relative to the county subscriptions "and the gauge law, unanimously repudiated the provision in the Act of 4th May, 1852, relative to the gauge law, and determined that “it was inexpedient” at that time “to accept the county subscriptions under this provision of said recited act.” The question of ultimate unconditional acceptance or rejection of the subscription was postponed for further consideration at some subsequent meeting. On the 11th April, 1853, the Act of 11th March, 1851 — called the Gauge Law — was repealed. On the 26th April, 1853, being fifteen days after the repeal, the railroad company passed a resolution, directing notice to be given to the commissioners that — 404 — their subscription had been accepted. On the 5th July, 1853, Messrs. Waugh, Goodwin, and Hubbard were appointed a committee “ to secure the bonds of Mercer county at the earliest possible day.” They were accordingly secured before Mr. Pennock went out of office. If this constitutes a valid contract, the county is bound up to terms entirely different from those expressed and intended by her constituted authorities. If the transaction were between individuals, the subsequent assent to the acceptance, and the delivery of bonds in pursuance of it, would, of course, constitute a valid contract. But in this case, the grand jury alone possessed the power to hind the county; they made the original proposal, and they alone had authority to vary its terms and enter into a new contract binding on the county. It is not pretended that they have, directly or indirectly, done any act whatever tending to sanction or ratify the illegal proceedings of the commissioners and the railroad company. As the commissioners had no original authority to make the subscription, it is scarcely necessary to say that they possessed no power, by any subsequent action, to ratify their own unauthorized proceedings. It is true that where an agent transcends his authority, it is the duty of the principal to disavow it as soon as it comes to his knowledge; otherwise he may be precluded from making objections afterwards, to the injury of persons who may have innocently invested their money on the faith of the acts of such agent. Where a class of persons, such as the citizens of a county, are interested, they cannot be expected to bring actions at law in the name of the county so long as the munipical rights are under the control of faithless agents, or until they have had an opportunity to remove them. But as every taxable inhabitant is interested in all measures which increase the taxes, he may apply for an injunction against abuses of that character. The taxable inhabitants of a county, although entitled to great indulgence on account of the limited interest which each one has in the question, may, nevertheless, be affected by delay and acquiescence. How far this principle may protect innocent holders of the county bonds already negotiated, will be a matter for consideration when the proper parties are before us. But, in regard to the bonds still in possession of the railroad company, the delay in making this application has worked no injury which the company have a right to complain of. They knew, or, what is the same thing, they were bound to know, that the subscription was not made by competent authority; and they also knew that the offer of the grand jury had not been accepted with any intention to comply with the terms upon which it was made. They are parties to the wrong, and have no right to profit by it. The allegation that the bonds have been pledged for work done, or to be done, on the railroad, is not sustained. It is not necessary to enter into the merits of — 405 — the contract with what is called the firm of “ S. P. Johnson & Co.” Messrs. Waugh, Goodwin, and Gibson, were partners in that firm, and directors in the railroad company when the contract was made. Two of them were on the committee appointed to “secure” the bonds from the county, “at the earliest possible day.” That firm had, therefore, full notice of the manner in which the bonds were obtained. The contract to receive payment in county bonds, is neither an assignment nor a pledge of the bonds. They are still under the control of the corporation. The injunction may, therefore, operate on them without inconvenience to any one except the parties to the wrong. For these reasons I am in favour of declaring that the bonds signed by two of the commissioners of the county of Mercer on the 8th October, 1853, still remaining in the possession of the Pittsburgh and Erie Railroad Company, amounting to the sum of $84,900, are null and void, and not binding on the said county of Mercer. I am also in favour of granting an injunction against issuing and paying out any of the said bonds; and directing that the same be delivered up and cancelled. Mr. Justice Woodward concurs in the foregoing views, and Mr. Justice Lowrie unites in what is said in regard to the effect of the refusal to accept the offer to subscribe upon the terms under which it was made. Injunction granted.