Paine v. Lake Erie & Louisville Railroad

Gregory, J. The portions of the depositions which were suppressed only tended to prove the matters set up in the special answer and cross complaint, to which a demurrer was sustained. In our view of the case, it is not necessary to notice them more specifically. The first question presented is, did the court below err in refusing to transfer the case to the circuit court? The statute provides,that “when it appears upon the face of the complaint or by other legitimate pleadings verified by affidavit, that the title to real estate is in issue in the common pleas court of any county, the cause, with the papers, and a transcript of the entries of record shall be transferred to the circuit court of the same county.” 2 G. & II. 22, sec. 11. The main object of the complaint was to have satisfaction entered of a mortgage; this might or might not involve the title to real estate; it therefore did not appear on the face of the complaint that the title to real estate was in issue. There was no issue until answer, and that answer might, or might not, put in issue the title to the mortgage premises; and unless the answer was verified by affidavit, it wms not the duty of the common pleas court to transfer the case to the circuit court. The true rule on this subject is stated in Carpenter v. Vanscotten, 20 Ind. 50. The court below committed no error in refusing to certify the case to the circuit court. Did the court below err in overruling the demurrer to the complaiut? A very grave question is presented in the argument as to the power of two states to create one corporation. It is — 348 — claimed, that to maintain this action the consolidation must have resulted in the formation of one company, and that this is simply impossible. It is urged, that it might with as much propriety’- be argued that a child can have two mothers, as that two states can create one corporation. Under our view of the case, this question becomes of no importance. It is admitted by the counsel for the appellants that the effect of the consolidation might be to create two corporations, with the same name and stockholders, a unity of stock and interest. This suit, in our judgment, can well be maintained under cither view. If there is but one corporation as the result of the consolidation, then the suit is undoubtedly'- well brought; if there are two corporations, then all the parties necessary for a complete settlement of the matter in dispute arc before the court. The facts set out in the complaint show that bpth corporations are before the court. It is assumed in argument by the counsel for the appellants, that the grounds of relief against the defendants are both constructive and actual fraud, and it is urged that the appellee is not in a condition to take advantage of the fraud. The relief sought by the plaintiff is based upon a compromise and settlement between the assignee of Oswald’s executor and the railroad company'-, for and on account of the original contract, treating the intermediate steps as offering no impediment to such a compromise and settlement. To enable Oswald’s executor or his assignee to make such a settlement, there was nothing to rescind. It could hardly be contended that the appellants, under the facts averred in the complaint, could have a standing in court to entitle them to object to the consummation of such a settlement. The complaint shows that the sub-contractors were paid out of the means of the railroad company; that the seventy bonds to which Oswald was to be entitled, by the arrangement made at the “ Suspension Bridge,” wTas profit, in which the appellants were to share. Such an arrangement made by the directors of a railroad company could only- be — 349 — confirmed by the action of the' stockholders, and not by the directors of whom the guilty parties formed a part. It is clear to our minds, that the new company succeeded to the rights of the old corporations. The new was composed of the elements of the old; it was the same under a new form. It is only a play upon words to say, that phoenix-like the new arose from the ashes of the old. There was no turning to ashes necessary in the process. It only required a commingling of the elements of which the old was composed. The new assumed the liabilities and succeeded to the rights of the old. The next inquiry is, did the court err in its rulings on the demurrers to the answers ? 1. The proposed contract of Oswald with the company, dated November 14th, 1864, at Suspension Bridge, never contemplated that seventy of these bonds should be delivered to him, but only that he should receive seventy bonds of the consolidated company. This written proposition is made a part of the answer. In his proposal of the above date,'Oswald says: “I will cancel and abrogate my said contract upon your giving me seventy of the first mortgage coupon bonds of your said company of $1,000 each, which bonds are to be exchanged for a like number, kind, and amount of bonds of the consolidated company, in the time and manner hereinafter specified. You to give an order upon said trustees for the balance of said bonds, 820 in number, and also for the bonds, seventy in number, which I am to have under this proposition; but all of said bonds shall be and remain in the hands of said trustees until the bonds of the consolidated company are issued and ready for delivery, as hereinafter stated; when said trustees shall cancel and exchange seventy of said bonds for a like number, kind, and amount of said consolidated bonds, which said consolidated bonds they are to hold for the benefit of, and to be delivered to, Mr. James Oswald, when called for by him. The bonds of the consolidated company to be issued — 350 — and exchanged for the present bonds within six months from the date hereof.” On the same day and at the same place of the above proposal of Oswald, an agreement was entered into between him and Rawson, in which the seventy bonds are referred to, as follows: “Second, And until seventy of the first mortgage bonds of the consolidated company of the Fremont, Lima & Union Railroad Company and the Lake Erie & Pacific Railroad Company are delivered by said Rawson, or some agent of the consolidated company, to the trustees named in the bonds of the Lake Erie & Pacific Railroad Company, subject to the order of said Oswald,” &c. This agreement is also part of the answer. The foregoing extracts show that none of these bonds, now in controversy, were ever to be delivered to Oswald, and, therefore, that these defendants could not have any interest in them. 2. The proposition of Oswald was conditional, that “I will cancel and abrogate my contract, upon,” &c. The cancellation depended upon compliance with the terms of the proposition, and within six months of the time specified therein. The proposition of Oswald says: “I beg leave to make the following proposals: “1st. I will cancel and abrogate my said contract upon your giving me seventy of the first mortgage coupon bonds, &c. “2d. The company to pay its floating debt—I pay all liabilities I have incurred since the 1st day of October last. “3d. I will settle and pay the trustees of said bonds, G-. S. Robbins and Geo. T. M. Davis, and will settle and pay the Hon. James Wadsworth for his services.” The fourth proposal relates to the seventy bonds. “ 5th. The bonds of the consolidated company to he issued and exchanged for the present bonds within six months from the date hereof. “6th. You to issue to me the amount of stock subscribed — 351 — by me, and now due me as a cash payment upon my said contract, for work already done.” The above proposition of Oswald only offers to cancel upon compliance with the six conditions stated in it, and not until they are complied with. The language of the proposition is, “I will cancel and abrogate my said contract, upon” compliance with the six following stipulations. Even an unconditional acceptance of the proposition by the company would not have the effect to cancel the original contract until all the terms of the proposition had been carried out. Some of the conditions of the proposition are to be performed by Oswald, and others by the company, and not until all these conditions are complete would the original contract be affected in any way whatever. 3. The acceptance of the proposition of Oswald by the company was conditional. It is as follows: “On motion of John D. Eay, seconded by D» Webb, the following resolution was unanimously adopted: Resolved, That the proposition of James Oswald, submitted to this board, and which is hereinafter set forth, by which he rescinds and cancels his contract for the construction of the Lake Erie & Pacific Railroad, be, and the same is hereby, accepted, with all its terms and conditions; and said contract is hereby declared void and of no further effect : provided, the floating debt is paid off by L. Q. Rawson, of Ohio, and the bonds delivered as per agreement between said Oswald and L. Q. Rawson, on this 14th day of November, 1864.” This acceptance, being conditional, and not unqualified, amounts to nothing, unless Oswald had assented to its conditions. The proposition of Oswald, thus accepted, does not even amount to a contract to rescind the original contract, much less to a rescission of it. Even the unqualified acceptance by the company of the proposition would only create an agreement to rescind whenever the conditions of the agreement were fulfilled by both parties. Rut an ac — 352 — ceptance with new conditions appended to. it is, in legal effect, a rejection by the company of the proposition. The proposition of Oswald, in the second stipulation, says: “You (the company) to pay the floating debt of said company.” The acceptance of the propositioñ by the company says: “Provided, the floating debt is paid off by L. Q. Rawson, of Ohio.” Now, the proposition of Oswald requires that the company shall not only agree to pay off' its floating debt, but shall actually pay it before cancellation. The so-called acceptance of this proposition by the company not only refuses to bind the company to pay off this floating debt, or to cancel it, but actually insists that it shall be paid by L. Q. Rawson, of Ohio. In the pretendeli acceptance by the company, of the proposition of Oswald, it is also made a proviso or condition of the acceptance, that the “floating debt is paid off' by L. Q. Rawson, of Ohio, and the bonds delivered, as per agreement between said Oswald and L. Q. Rawson, on this 14th day November, 1864.” The foregoing proposition and acceptance is the sole and entire contract under which Oswald could claim any interest in the bonds in controversy, and under which the defendants claim, by virtue of their agreement with Oswald. If there was no contract under which Oswald might claim an interest, of course these defendants could claim none. The answers are also defective, in not showing a compliance with Oswald’s contract to pay the trustees and Wads-worth for their services. But independant of all this, the appellants do not show themselves entitled to any equitable relief. They do not show a compliance on their part with any of the. terms of their contract with Oswald by which they were to share in the profits of the contract with the railroad company. Under the agreement between Oswald and the appellants, the latter are only entitled to a share of the net profits. — 353 — They are not joint owners with Oswald, or interested in the specific things received by him in payment for work clone' under his contract. He, only, is entitled to receive the compensation, and when he has liquidated all the expenses incurred in the prosecution of the work, and thus ascertained what, if any, the net profits are, and not until then, in the absence of bad faith, can the appellants prefer any claim.. See Chase, Ad’r, v. Barrett, 4 Paige Ch. 148. It is clear to our minds, that the appellants, being directors in the railroad company, could not acquire such an interest in the profits of a contract for the construction of the road as would give them a standing in a court of equity,, to interpose an objection to the consummation of a compromise between the railroad company and its contractor.. Their relations to the company forbade such an agreement;. at least, a court of equity would not interpose to enforce such an agreement against the interest of the company. The court below committed no error in sustaining the demurrers to the answers. The complaint sought no relief against the - appellants. They were made parties to answer as to their pretended interest in the subject matter of the suit. In such a case,.an affirmative answer is necessary if relief is sought. The' general denial by such a party puts the plaintiff to such, proof as would place the defendants in the wrong. They could have disclaimed any interest, and thus have saved themselves from costs. There being no answer entitling-the defendants to affirmative relief, the court committed no available error in suppressing portions of the depositions of' the appellants. It is claimed, that the court below erred in admitting - Swan & Critchfield’s edition of the Ohio statutes' in- evidence. The title page, in our judgment, shows that it was printed! under the authority of the State of Ohio. It was “published for the State of Ohio, and distributed to its officers:,. — 354 — under the act of the General Assembly.” How could it bo published under an act of the General Assembly, for the State of Ohio,unless it was published by authority? Ohio could only speak through her laws. It could not have been published for the State unless a law authorized it. An unauthorized'publication could not be a publication for the State. We think the court committed no error in admitting the statute. It is claimed, that the statute of Ohio ought to have been pleaded. This is never required where the statute constitutes a part of the organization of a corporation suing. Any other rule would tend to great prolixity in pleading. The court committed no error in admitting in evidence 'the articles of association of the Fremont, Lima & Union -Railroad Company. They were duly certified as required by fthe law under which the company was organized. The -sworn and certified copy of the articles of consoli■dation between the Lake Erie & Pacific Railroad Company .-and the Fremont, Lima & Union Railroad Company, from the < office of the Secretary of State of Ohio, was properly ;admitted in evidence. 2 G. & IT. 184, sec. 284. The.court committed no error in excluding the evidence • offered'by the appellants. There was no issue to which it was.applicáble. The verdict, embraced everything that was necessary on the issue 'between the plaintiff and the appellants. The • equitable.fights of the appellants were not before tlio court •under the'.issue made. The.answers to the interrogatories could stand as a special verdict. There is no. available error in the instructions given to the Jury. It was'immateriál.whether the consolidation resulted 'in one or in.two-corporations ’having the same officers and ! stockholders. The decree cannot be complained of by the appellants. ‘The default*of itho «otheivdefendants.justified the decree as ¡rendered. B. F. Glaypool, T. A, Hendricks, 0. B, Hord, A. W. Hendricks, and G. L. Holstein, for appellants. Hunter $ Daugherty, J. P, 8idda.ll, K JL Johnson,and W. 8. Ballenger, for appellee. Substantial justice was done between tbe appellee and tbe appellants; no error was committed by tbe court below, of wbicb tbe latter have any right to complain. Judgment affirmed, with costs.