Snell, Taylor & Co. v. Pells

Mr. Justice Dickey delivered the opinion of the Court: The only question for our consideration in this case arises upon the rulings of the court upon the instructions in the case. The bill of exceptions does not profess to give all the evidence introduced on the trial. The suggestion of counsel for appellee, that the proofs are not sufficient to require the law as to the supposed agency of Pells to be given to the jury, - can not prevail. The instruction given by the court for the defendant, assumes that sufficient proof of his agency was given to present the questions of law passed upon by the court. The only question brought to this court by agreement of the parties, as stated in the bill of exceptions, with the approbation of the circuit court, is that of the effect of the alleged illegality of the contract and subscription. That allegation of illegality rests solely on the contention the contract and subscription were against public policy. The court charged the jury, that if plaintiffs rely for a recovery upon a contract made either with the makers of the note or with defendant to locate a switch and station at Pellsville, when neither the public convenience nor the interests of the stockholders of the railroad company required it, but solely to get money for the job, then such contract is void, and plaintiffs can not recover upon it if Pells was a director of said railroad company, and was employed by plaintiffs, as their agent, to raise the money upon such contract, and by subscription. Whatever may be thought as to the legality of such a contract or subscription, its illegality, if any, rests solely upon the suggestion that the same is merely against public policy, and not upon the ground that there is anything immoral or criminal in such a contract. In such case, an agent who has ¿received money for his principal caii not, by law, set up such supposed illegality as a reason why he should not pay over the same to his principal. The law, in such case, does not permit the agent to make such defence. He is estopped by the relation of agency, and receipt of the money. Upon this ground the judgment of the circuit court ought to have been reversed by the Appellate Court,- and remanded for a new trial. The writer of this opinion goes farther, and holds that the " contract, as stated in the instruction, is not vicious, as being against public policy. .1 think that when a-railroad company has established such depots as meet the wants of the public, and all such as the interests of the railroad company require to be constructed, at its own cost, and where some one or more of the men doing business near the line of the road desire, for their special convenience, the construction of an additional station, and are willing to pay a sufficient sum to make it to the interest of the company to build such station and construct its necessary switches or side-tracks, there is no impropriety in the acceptance of the proposition by the railroad company, and the construction and maintenance of such additional depot, if it will pay to maintain it after it is constructed. Such a contract would necessarily be made, if made at all, with the directors or other agents or officers of the company. Appellee relies upon certain decisions of this court as teaching a different doctrine, but they have no application to the case presented here. In Bestor v. Wathen, 60 Ill. 138, persons owning land on the line of a railroad, contracted with certain officers of the railroad company to convey to them, individually, a-certain interest in the land, for the sole consideration that the grantees would aid, assist and contribute to build up a town upon the land. It was held-the contract could not be enforced. It was in the nature of a bribe to the officers of the company, to induce them to manage the affairs of the road to promote their private interest, at a sacrifice of the interests of the public and those of the stockholders. In Marsh v. Fairbury, Pontiac and Northwestern Railroad Co. 64 Ill. 414, it was held that a contract by a railroad company - to locate and construct a depot at a given point in a town> - and at no other place in that town, was not binding, for the public convenience and the-interests of the stockholders might require a depot at some, other point, and in such ease it would be a violation of duty and trust to omit to conform to such requirement. And in St. Louis, Jacksonville and Chicago Railroad Co. v. Mathers, 71 Ill. 592, an agreement by a railroad company not to establish another depot or station within three miles of a given station, was for the same reason held invalid. The principle of these decisions is, that no contract by a railroad company which obstructs or restrains it in the performance of any of its duties to the public or to its own stockholders, can properly be held valid or be enforced by the courts; and no contract with any director or officer of any railroad company which creates in him a private interest, which will stand in the way of a fair and just performance óf his duties to the public or to the stockholders of his company, can be sustained. Now, it may be that no interest of the general public required a depot at Pellsville. It may be that the interests of the stockholders did not require a depot to be made at that place at the expense of the company; but it is- not perceived that the interests of the public or those óf the stockholders could, by any possibility, be injuriously affected by the construction of a depot at that place, at the expense of appellants, or at the expense of one or more of the neighbors who had an interest in having such a depot there. Had the contract been to pay to Pells money for his own use, to induce him, as ■ a director, to cause the railroad company to construct the depot at the expense of the corporation, it would doubtless have been a transaction in the nature of a bribe. It may be conceded that the establishment and construction of a depot at that point by appellants is, in one sense, the same as if it were located and constructed by the railroad company. In so far as they had power to locate stations under their contract, they were the agents of the railroad company; but, as already suggested, the establishment and construction of an extra depot not at the expense of the company, can not possibly harm either the interests of the public or those .of the stockholders, só long as it does not restrain the construction of depots elsewhere when needed by the public, and does not cost the railroad company' anything for its construction. There is absolutely nothing in the position of Pells, as a director, or in that of appellants, as agents and contractors of the railroad company, which should forbid him to give his own money, or to induce others to give their own money, to procure, without expense to the railroad company, an extra depot for their own accommodation, or to forbid appellants to construct the same at their own cost, for an agreed compensation, to be paid them from funds other than those of the railroad company. These are my views. But the ground on which the majority of the court place the decision of this case, and in which I concur, is, that if Pells, as the agent of plaintiffs, received the proceeds of the note in question, he can not, as against his principals, set up the supposed illegality of the arrangement as a reason why he should not pay the money which he has received for them. This the instruction given for the defendant permitted him to do. For this error the judgment of the Appellate Court is reversed, and the cause remanded, that the judgment of the circuit court may be reversed and a new trial ordered. ' Judgment reversed. Walker and Scott, JJ.: We do not concur either in the reasoning or conclusion in this case. Mr. Justice Mulkey was not present, and took no part in the consideration of this case.