Chicago, Peoria & St. Louis Railway Co. v. Ayres

Mr. Justice Bailey delivered the opinion of the Court: This was a suit in assumpsit, brought by Marshall P. Ayres and two others, a banking firm doing business at Jacksonville, under the name of M. P. Ayres & Co., against the Chicago, Peoria and St. Louis Railway Company, the Litchfield, Carroll-ton and Western Railway Company, The Jacksonville Southeastern Railway Company and the Louisville and St. Louis Railway Company, to recover interest claimed to be due upon certain advances‘made by the plaintiffs to the defendants. The declaration consisted of the common indebitatus assumpsit counts, and the Jacksonville Southeastern Railway Company and the Louisville and St. Louis Railway Company, having been served with summons and failing to appear or plead, were defaulted. The other two defendants appeared separately, and each filed a plea of non assumpsit, and also a plea that it did not jointly undertake or promise in manner and form as alleged in the declaration, all of said pleas being verified by affidavit, and issues being joined on said pleas,- a trial ■was had before the court and a jury, resulting in a verdict in favor of the plaintiffs and assessing their damages at $2191.91, and for that sum and costs the plaintiffs had judgment. The Chicago, Peoria and St. Louis Railway Company and the Litchfield, Carrollton and Western Railway Company appealed to the Appellate Court where said judgment was affirmed, and by their further appeal, they now bring said judgment of affirmance to this court for review. The issue of fact contested at' the trial was, whether the four defendants were all jointly liable upon the indebtedness for which the suit was brought. The evidence adduced on behalf of the plaintiffs tended to show that, on or about March 6, 1887, the four defendant corporations, having formed some sort of joint traffic arrangement under the name of the “Jacksonville Southeastern Line,” William S. Hook, who was the president of all of said corporations, opened an account with the plaintiffs on behalf of all of said corporations jointlj, under the name of said “Jacksonville Southeastern Line, ” and continued said account until about August 6, 1889; that after March 6,1887, and prior to October next following, said Hook, acting on behalf of the corporations forming said “Line,” agreed with the plaintiffs that they should he paid interest' on all advances made by them to said “Line;” that when the account was closed, there was due for interest on advances and overdrafts, after applying thereto a small balance then standing to the credit of the defendants, tjie sum for which the verdict and judgment were rendered. As to the amount thus claimed to be due for interest, there was no material controversy, the contention being merely, that at the time the promise to pay interest was made, the railway of the Louisville and St. Louis Railway Company was in course of construction, ahd wasmot fully completed until about Janu- ' ary, 1888, and it was argued from that fact, as well as from other evidence given on behalf of the defendants tending to the same conclusion, that the last named company was not a party to the promise to pay interest, and so was not liable therefor. The Louisville and St. Louis Railway Company is shown to have been organized in September, 1886, and there was therefore no legal obstacle in the way of its being a party to said “Line” at the time the joint account was opened with the plaintiffs and at the time the agreement to pay interest was made, and as there was evidence tending to show such to be the fact, the judgment of the Appellate Court is conclusive of the fact of the joint liability of all the defendants, and that question is not open for review in this court. The only other questions raised by counsel for the defendants relate to the instructions to the jury. The first three of the instructions given at the instance of the plaintiffs hold, in substance, that two or more corporations may lawfully enter into joint contracts or obligations, and that when they do so, they are jointly liable for the performance of such contracts or obligations, and that a partial performance by one does not absolve such' parties from their liability, but that all remain jointly liable for the complete performance of the act or thing agreed upon. As applied to the facts in this case, we see no substantial objection to the propositions thus laid down. Without attempting to determine whether, as a general proposition, corporations may contract joint obligations, there can be no doubt, we think, of the power of two or more railway companies, whose railways form a continuous line, to enter into a joint arrangement for operating their railways as one “line,” and to become jointly liable for money borrowed to be used in furtherance of the business of such “line.” As applied to the evidence before the jury, the instructions announced correct propositions of law, and even if those propositions should be found to be erroneous as applied to other classes of corporations entering into joint obligations of some other nature, the jury in this ease could not have been misled, and the error -complained of, if it was an error, was harmless. The point made that these instructions affirmed the power of two or more corporations to enter into the partnership relation with each other is not well taken, as no such rule is attempted to be laid down. They merely hold that two or more corporations may enter into "and become bound by joint contracts or obligations, but the peculiar contract by which the partnership relation is created is not mentioned or referred to. The plaintiffs’ fourth instruction held, that if “in the fall of 1887,” the four defendant corporations were operating a line of railway, and in operating such line, they styled themselves the Jacksonville Southeastern Line, and under that name kept a bank account with the plaintiffs and made an agreement with the plaintiffs to pay them interest on all advances made to the defendants, and that in pursuance of such agreement the plaintiffs permitted said companies to overdraw their account from time to time, the defendants were jointly liable to pay interest on such overdrafts, at the rate of six per cent per annum, and the plaintiffs had the right to charge the defendants such interest in the account with the Jacksonville Southeastern Line. It is objected to this instruction that it is not applicable to the facts as disclosed by the evidence. The evidence on behalf of the plaintiffs is, that the account with the Jacksonville Southeastern Line was opened March 6,1887, and the agreement to pay interest on overdrafts was made sometime between that date and the October following. It is said therefore that the hypothesis of the instruction that the agreement to pay interest was made in the fall of 1887 is not supported by the evidence. If said contract was made between March 6 and the following October, it may have been made in the month . of September, which is usually reckoned as-one of the fall months. But it does not seem to be material at what particular date between March 6 and October 1 the agreement was made, the material question being whether all four of the defendants were parties to it. The defendants’ evidence tends to show that the Louisville and St. Louis Railway Company did not complete its railway until January, 1888, and that it did not become a part of said “Line” until that date, while the evidence on behalf of the plaintiffs tends to show that said company was a party to the combination operating the “Line” at the time the account was opened, and at the time the agreement to pay interest was made. Such being the nature of the issue made by the evidence, the precise date of said agreement, whether in September or at some date between March 6 and September 1, seems to be quite immaterial. If the Louisville and St. Louis Railway Company did not join the combination until its railway was completed, it was not a part of the “Line” at the time the agreement was made, whether it was made in the fall or in the summer of 1887. As to the point made in relation to the modification of the defendants’ third instruction, all we need say is, that we have duly considered the suggestions of counsel and fail to find that said modification was in any respect erroneous. ' The judgment'of the Appellate Court will be affirmed. Judgment affirmed.