Wilks v. Georgia Pacific Railroad

STONE, C. J. Wilks, in consideration that Colquit and the Gordons, their associates and successors, would, within three years, construct a railroad from one of several named connections, “so as to reach the county of Fayette, or the county of Walker, State of Alabama, or both,” bound himself, by bond in writing, to make to said Colquit and Gordons, their associates or successors, good and sufficient titles to all the coal and iron upon and in certain described lands; and also to secure to them right of way, etc. This bond bears date May 12, 1880. On May 4, 1882, Colquit and the Gordons assigned the bond to the “ Richmond and Danville Extension Company,” a corporation chartered by New Jersey and Mississippi, and having very large powers, — among them, the right to construct railroads, and to own lands. On December 20,1883, the Richmond and Danville Extension Company assigned and transferred said bond to the Georgia Pacific Railway Company, a [185] corporation chartered under the laws of Alabama. The bond contains the following clause: “ It is further specially and expressly understood, that no such deeds to the coal and iron we own shall be made to the parties named in this instrument, unless they shall build the railroad as specified in this instrument ; nor, on the other hand, shall the parties who now propose to build this railroad be liable for any damages, should they fail to build the same.” The present bill was filed by the Georgia Pacific Railway Company, in February, 1884, and prays a specific performance of said contract. It alleges the completion of the railroad within the time stipulated, tender of a deed to be signed by Wilks, in accordance with the terms of the bond, and his refusal to execute the conveyance. There was a demurrer to the bill, assigning many grounds. The chancellor sustained the demurrer, on the first three grounds, and overruled it as to the others. The demurrant appeals, and assigns as error the chancellor’s ruling on the several grounds assigned. 1. It is urged, in support of the demurrers, that the contract we are considering was and is wanting in mutuality, a necessary ingredient in every asserted right to specific performance. We need not decide, in this case, that the obligor, at any time before the railroad was constructed, or before material and substantial steps were taken in its construction, could not have withdrawn from the bargain. That is not this case. Here, the condition was complied with, and the railroad completed, before any dissent from, or dissatisfaction with the agreement, was made known. The question is not distinguishable in principle from an offer of sale, coupled with an option reserved to the other party of saying whether or not he will purchase. Until there is acceptance, there is no sale; and until the offer is accepted, it may be withdrawn by the offerer, if there be nothing else in the transaction. If, however, the offer is accepted within the agreed time, or within a reasonable time, when no particular time is fixed, then the contract is complete, and neither party can withdraw, without the consent of the other. And a contract thus made, the other conditions existing, is a proper subject of specific performance in a court of equity. There is nothing in this objection.—1 Benj. on Sales (4th Amer. Ed.), § 41; Perkins v. Hadsell, 50 Ill. 216; Pom. on Contr. § 169, note 1 to § 167; Whar. Spec. Per. §§ 200, 201; Derrick v. Monette, 73 Ala. 75; Reese v. Board of Police, 49 Miss. 639; Mich. Mid. R. R. Co. v. Bacon, 33 Mich. 646; Kerr v. Purdy, 50 Barb. 24; Seagur v. Burns, 14 Minn. 141; Swartout v. Mich. A. L. R. R. Co., 24 Mich. 390; Odineal v. Board of Police, 24 Miss. 9; Waters v. Internal & G. N. R. R. Co., 54 Tex. 294; Williams Col. v. Dan186 forth, 12 Pick. 541; Amherst Academy v. Cowles, 6 Pick. 427; Gibbons v. M. & G. R. R. Co., 36 Ala. 410. 2. A second objection urged is, that it is not shown that Colquit, Gordons and their associates, had any corporate authority to construct a railroad. Railroads may be built by private enterprise, without a charter.—1 Redf. Railways, introduction, sub-section 6; 1 Wood’s Railway Law, § 2; Rogan v. Aiken, 9 Amer. & Eng. R. R. Cas. 201: Bank v. Edgerton, 30 Verm. 182. 3. A third objection is, that a right to sue on Wilks’ bond or obligation can not be assigned, so as to vest in the assignee a right to maintain the present bill.' The complainant maybe regarded, under the terms and purposes of the contract declared on, as the successor of the persons with whom the contract was made. The bond, on its face, is made payable to Colquit, Gordons, their associates and successors. The enterprise they were entering upon was the construction of a railroad, necessarily involving the expenditure of a large sum of money. It is by no means probable that any charter had then been obtained for the construction of their road. They were but canvassers for material aid for their, probably, stupendous enterprise. Succeeding in obtaining sufficient outside aid, the next step usual in such adventures was incorporation. The road, if built at all, would probably be built by a corporation ; possibly, a succession of corporations, if wo may draw an inference from the history of kindred enterprises. The company, or corporation, which did the work and constructed the railroad, must be regarded as the successor of the associates who solicited and obtained the help which enabled them to complete their undertaking. There is nothing in this objection.—Goodlett v. Hansell, 66 Ala. 151; 6 Amer. & Eng. R. R. Cas., 622. 4. The present suit is brought by the Georgia Pacific Railway Company, a private porporation. Ownership of land, or an easement in land, except for purposes of its construction and operation, is not among the incidental powers of such corporation.—Morgan v. Donovan, 58 Ala. 241. And it is not shown that the act of incorporation conferred this power. Without expressly granted power, it could neither acquire nor recover mineral interests in lands ; for such property does not appear to be necessary and proper for carrying out the purposes of the corporation. Some of the grounds of demurrer interposed by defendants are based on a failure of the bill to show that complainant had authority to acquire the property it seeks to recover. 5. The rulings of different courts, on this question, are not uniform. In some States it is held, that by contracting with a [187] corporation, the party contracting estops himself from disputing the power of the corporation to make such contract.—Waterman on Spec. Per. § 226; Kansas City Horse Railroad Co. v. Hovelman, 79 Mo. 632; Parish v. Wheeler, 22 N. H. 494; Thompson v. Lambert, 44 Iowa, 239; Wilcox v. Toledo & Ann Harbor R. R. Co., 43 Mich. 584. That principle, however, even if it prevailed in this State, could not aid the present bill. Wilks made no contract with the corporation. His contract was with Colquit and the Gordons.—Marion Savings Bank v. Dunkin, 54 Ala. 471. 6. The case, then, presents the naked question, whether a corporation, without express power therefor, can sue on an ex-ecutory contract, and recover ah interest in lands, when it does not appear that such land or interest is necessary for carrying into effect some power or purpose for which the corporation was created. Our uniform rulings for forty years require us to answer this question in the negative.—Smith v. Ala. Life Ins. Co., 4 Ala. 558; City Council v. M. & W. Plank-road Co., 31 Ala. 76; Waddill v. A. & T. R. R. Co., 35 Ala. 323; Grand Lodge v. Waddill, 36 Ala. 313; Marion Savings Bank v. Dunkin, 54 Ala. 471; City of Eufaula v. McNab, 68 Ala. 588. As the bill now stands, the demurrer to it ought to have been sustained. We can not, however, know that it can not be so amended as to give it equity. We will, therefore, make no final decree of dismissal, but will remand the cause, that complainant may have the opportunity of offering an amendment as it may be advised. If the bill can not be so amended as to obviate the difficulty pointed out above, it must be dismissed. The demurrer is sustained. Heversed and remanded.