Goodrich v. Reynolds, Wilder & Co.

Mr. Justice Beeese delivered the opinion of the Court. It is a rule in pleading, universally recognized, that a plea must answer all that it professes to answer. If it purports to answer the whole declaration, and answers but a part, it is obnoxious to a demurrer. That is the case with all the special pleas in this record. The action was assumpsit, with a special count on a promissory note, and tbe common counts. The pleas are to the whole declaration, whilst they answer only the special count. 1 Ch. Pleading, 555; Snyder v. Gaither et al., 3 Scam. 92. The fact that the plaintiffs admitted, after the pleas were filed, that the note was the sole cause of action, cannot dispense with the rule of correct pleading. But the pleas are substantially defective in other particulars. The first special plea questions the right of the railroad company to take a promissory note in payment of capital stock subscribed in it. In the case of Frye v. Tucker et al., 24 Ill. 180, which was an action on a note executed to the Peoria and Oquawka Railroad Company, and assigned by indorsement of the secretary of the company, this court said that a railroad company have an inherent authority to take and negotiate a promissory note in the ordinary course of their business. By the general railroad law, stock subscriptions are payable by calls made, periodically, by the company on the subscribers. Should a subscriber wish to avoid these calls, by giving a note for the gross amount of the calls in a certain time, we see no reason why he should not be so indulged. It is a matter of contract with the company, and they may know in what manner they can make the note available in the prosecution of the work as so much money. They cannot, as a branch of their business, deal in notes and bills of exchange, but can make such paper subservient to the great design. It is an indulgence to a subscriber thus to extend the time of payment to him, of which he should not, however much other paying subscribers might, complain. The charter of the Illinois River Railroad Company required each subscriber to pay ten per cent, at the time of his subscription. In a suit brought on a subscription to its stock, the defendant set up, as a defense, the fact that the company had not required the payment of this ten per cent. This court said, the defendants cannot be allowed to take advantage of the indulgence extended to them when they made their subscriptions, for the purpose' of repudiating them. This indulgence is a most ungracious defense, which should not be allowed unless it is strictly required by some inflexible rule of law. Illinois River R. R. Co. v. Zimmer, 20 Ill. 657. "With much greater force can these views be urged in this case, where the plaintiff sues as assignee, claiming the note by assignment, and which the plea admits was given for the stock subscribed. The second, third, fourth and fifth special pleas, attack the organization of the company and call in question its legality. “We have said, in the case of Rice v. The Rock Island and Alton R. R. Co., 21 Ill. 95, that a party cannot be permitted in this collateral way to question the organization of the company, and this in an action brought directly by the company. A Iona fide assignee should be in as good a position. The sixth special plea questions the power of the president of the company to assign the note. In the case of Frye v. Tucker et al., before cited, this court held that the assignment was prima facie the act of the company by their authorized officer, and if it was not their act, it should have been denied by affidavit. McIntire v. Preston, 5 Grilm. 60. There is no plea verified by affidavit putting this assignment in issue. The eighth and ninth pleas aver that the note was given for certain shares of stock in the railroad company, which were subscribed for at a time long anterior to the execution of the note, and which was in payment for the stock. The stock being subscribed, it must be paid for, notwithstanding any false representations made at the time of the execution of the note. Besides, the pleas do not allege that those who made the false representations were authorized by the company to make them, or that t^ey knew they were false when made. White v. Watkins, 23 Ill. 482. The fraud and circumvention by which the defendant was induced to give the note, are not stated in the ninth plea, and it is defective on that account. The plea should state distinctly in what the fraud and circumvention consisted; and the same objection lies to the tenth plea. The eleventh plea avers a want of consideration for the note. This suit being brought by an assignee of the note, to avail of this defense, the plea should aver that the note was assigned after it became due. There is no such averment, and consequently the assignee cannot be affected by it. It is no defense as to him, for the declaration shows that the note was assigned before due. The defense, under the twelfth plea, of nul tiel corporation was withdrawn, as appears by the record, and also the plea of the general issue. The thirteenth plea avers that the directors of the company never demanded of the defendant the amount of stock he subscribed. We are not aware of any obligation resting upon the company to make such demand. It was the defendant’s duty to pay the note, which being done, he could demand certificates of stock. The remaining plea sets up usury in this, that the interest' was made payable semi-annually. It has long been settled, such reservation is not usurious. McGill et al. v. Ware, 4 Scam. 21. The whole interest may be lawfully reserved in in advance. Manhattan Co. v. Osgood, 15 Johns. 162; New York Fire Ins. Co. v. Ely, 2 Cowen, 678. As to all the pleas questioning the legality of the organization of the company, reference is made to the case of Grand Trunk Railway Co. v. Cook, 29 Ill. 237, as decisive of these. Seeing no error in the record, the judgment must be affirmed. Judgment affirmed.