Johnson v. Pensacola & Georgia Railroad , 9 Fla. 299 ( 1860 )

Hon. J. J. FINLEY,

Judge of the Western Circuit, who sat iu this case in place of Hon. D. S. Walker, disqualified for having been of counsel for the defendant in the Court below, delivered the opinion of the Court.

The Pensacola and Georgia Kailroad Company instituted an action of assumpsit in the Leon Circuit Court against Calvin Johnson, the plaintiff in error, for the recovery of certain calls, amounting to two hundred and fifty dollars, which were admitted by the defendant upon the trial to have been regularly made, upon his subscription for stock in said Railroad.

The defendant pleaded “non-assumpsit,” upon which plea issue was joined, and the parties went to trial, with the agreement and understanding -that the defendant should be allowed, under the plea of the “ general issue,” to make any and all substantial defences which he might have.

In pursuance of said agreement, and under the said plea, certain issues of fact were submitted to the jury who were empannelled in the case, all of which issues were found against the defendant; but as their finding is not put in question by the record, it will not require the consideration of this Court.

The record in this case presents only three questions for the consideration of this Court, ■ and they all arise upon exceptions taken to the rulings of the Judge on the trial in the Court below. These questions are as follows, to-wit:

1. Will parol evidence be received to prove the inducements to a subscription for railway stock ?

2. Was the original charter of the Pensacola and Georgia Bailroad Company materially or fundamentally altered or changed by the acceptance of the Internal Improvement Act of the 6th January, A. D. 1855, or by the act of the 15th December, A. D. 1855, amendatory of the original charter of said Company ?

3. If such change or alteration of the original charter were made, was it necessary, in order to have entitled the plaintiff to have recovered against the defendant in action upon his stock subscription, to prove that such alteration was made with the assent of the defendant; or will such assent be presumed, unless the defendant should prove his dissent ?

The first question is not made in the assignment of errors nor insisted on in the argument here. This point was understood to have been abandoned by the plaintiff in error; but if by any means the Court should have fallen into mistake in regard thereto, such mistake will be cured by its giving, as its opinion, as it now does, that the Court below did not err in rejecting parol evidence to prove the inducement to the defendant’s subscription for stock in the Pensacola and Georgia Bailroad, it being an established principle of law, which is as applicable to subscriptions for railway stock as to any other written contract — that parol evidence will not he received to vary the terms of a written contract, unless in case of fraud, «fee.

We are next to consider the effect of the acceptance of the Internal Improvement Act, by the Pen. and Ga. B. B. Co., and the effect of the amendatory act of the 15th December, 1855, upon the original charter, under which the defendant made his subscription for stock, and under which the said Company organized.

The record shows that on the 10th day of February, A. D. 1855, tlxe Board of Directors of said Company accepted tlie provisions of the Internal Improvement Act, and instructed their Secretary to notify the Trustees of the Internal Impovement fund of such acceptance, and to specify the route between Pensacola or the waters of Pensacola Bay and the point of intersection with the Florida Railroad, in the most direct practical line to Jacksonville, (with a view to an extension afterwards to the Georgia line) as that over which this company proposes to construct its road.

No power was reserved to the Legislature in the original act of incorporation to alter, amend or repeal the same, and the principle which we have drawn from the current of judicial decision upon this point is, that the charter of a railroad company contains the terms of the contract between the Legislature granting it and the company incorporated under .it, and also the terms of the contract between the company and the individual stockholders or corporators, and that no material or radical change or alteration can be made in the charter after a subscription for stock, so as to bind such subscriber without his consent.

We will first proceed to enquire whether such change or alteration has been made in the original charter of the Pen. and Ga. R. R. Co., by reason of its acceptance of the provisions of the Internal Improvement Act.

Is there anything contained in the Internal Improvement Act, which being accepted by the Pen. and Ga. R. R. Co., works a material or essential alteration in the original charter of that Company ?

To answer and dispose of this question satisfactorily, it will become necessary to examine with great care the provisions, both of the original act of incorporation and of the Internal Improvement Act, at least so far as those provisions may relate to and affect the power granted to the Board of Directors to locate the route and terminal points of the roach

By tlie first section oí tlie original charter, the Commissioners are authorized to open books and to receive subscriptions for stock in a “ railroad to be constructed from the city of Pensacola, or any other point or points on the waters of Pensacola Bay in Florida, and running thence in an eastwardly direction to the western or southern boundary line of the State of Georgia.”

And by tlie third section of the same act, it is provided, “ that said Railroad shall extend from the city of Pensacola, or any other point or points on the waters of Pensacola Bay, running' eastwardly to some point on the boundary line between the States of Florida and Georgia, to be determined by a majority of the Board of Director's of said GonypamyP

The foregoing are the only provisions in the original charter which relate to the location of the route and termini of the road.

The power is expressly given to the Board of Directors ■ to fix one of the terminal points of said road any where upon the waters of the Bay of Pensacola, and the other, any where upon the boundary line between the States of Florida and Georgia. And we think there can be but little doubt but that the Board of Directors had the power, under the charter, at any time to alter and change its policy as to the location and terminus of the road, even without the consent of the individual stockholders, provided they run said road from some point on the Bay of Pensacola, in an eastwardly direction, to some point on the boundary line between the States of Florida and Georgia.

But it is insisted for the plaintiff in error, that the acceptance of the provisions of-the Internal Improvement Act did work a radical and fundamental change in the orginal charter, in regard to the location of the road and its terminus on the Georgia line.

As to the question whether the Board of Directors did, in point of.fact, alter or change the location of the road in a manner which was violative of the original charter, it has been definitely settled by the verdict of the jury, and cannot be enquired into by this Court, for the reason heretofore stated, that the finding of the jury is not put in question by the record.

But the question presented to the Court upon the record is, whether there is any provision in the Internal Improvement Act which materially alters or changes the power which the Company derived from its original charter to establish the route and to fix the terminal points of the road.

In order to ascertain this, we must examine such of the provisions of the Internal Improvement Act as bear upon the questions of the location and termini of the road.

The 4th section of the Internal Improvement Act designates as a proper improvement to be aided by the Internal Improvement fund, “ a line of railroad from the St. Johns river, at Jacksonville, to the waters of Pensacola Bay,” with extensions to certain points on the Gulf of Mexico, and elsewhere. And the 5th- section of said act provides, that any railroads which were then organized or chartered, or which might thereafter be chartered by the Legislature, and whose routes, in whole or in part, as authorized by their own charters, should be or lie within the line so to be aided by the Internal Improvement fund, should have the right to construct that part of the said line from Jacksonville to1 Pensacola Bay, as might be embraced by their own charters, provided the provisions of said act should be accepted by them within the time and in the manner prescribed by said act.

It is clear that there is nothing contained in the 4th and 5th sections of the Internal Improvement Act which altered or in any wise changed the power which was conferred by the original charter upon the Board of Directors to determine the location and to fix the terminal points of said road. For it is manifest from the plain and unequivocal language employed in the third section of the original charter, that the Legislature intended to confer upon the Board of Directors an unrestricted power to fix the terminus of said road, after leaving Pensacola Bay and running thence eastwardly, crnywhere, and at mvy pomt on the boundary line between the States of‘Florida and Georgia. And it is equally manifest that the 5th section of the Internal Improvement Act only authorized the said Company to construct so much of their own road as could, by authority of its own charter, be located on the line of road designated in the' 4th section of said Internal Improvement Act, as an improvement to be aided by the Internal Improvement fund.

The Internal Improvement Act simply designated an open line from Jacksonville to the Bay of Pensacola, as a line to be aided by the fund which is set apart, without granting a charter to any company or companies to construct a road upon that line, but creating and presenting very important and inviting inducements to any Railroad Companies which were then chartered, or which might thereafter be chartered by the Legislature, to locate and construct so much of their respective roads as might be authorized by their respective charters, upon the line so indicated in the 4th section of the Internal Improvement Act.

But it is contended for the plaintiff in error, that the 24th section of the Internal Improvement Act, the provisions of which were .accepted by the Pen. and Ga. R. R. Co., does so essentially alter and change the original charter of said Company as to impede, delay, obstruct and prevent the establishment of a terminus on the Georgia line. We are of opinion, after much consideration and careful examination of the matter, that nothing contained in the said 24th section of the Internal Improvement Act will be found, under a'fair and just construction of tlie same, to invade, impair or destroy the powers conferred by the 3d section of the original charter upon the Board of Directors to locate said road, and to determine upon and fix the points of its termination.

The 21th section of the Internal Improvement Act provides “ that no branch road from the main line of Bailroad provided for by this act, between the waters of Pensacola or Escambia Bay and the junction of the- Florida Bailroad, shall be made to the northern boundary of this State, until that part of the line between the Suwannee river and the Florida Bailroad has been constructed, nor shall any such branch road be made to a point west of the Alapaha river without the consent of all the companies owning the several portions of the main line and without the approval of the trastees of the Internal Improvement fund.”

Now, it has been seen that the Board of Directors of the Pen. and Ga. R. R. Co., under its original charter, were clothed with the express and unrestricted power to locale their road from cmy point on the Pensacola Bay to cmy point on the boundary line between Florida and Georgia, and as it will appear from the record in this case, said Board of Directors did, at the time of the acceptance by the stockholders of the provisions of the Internal Improvement Act, specify as the part of the line provided for in said act, and embraced in their own charter, and which they intended to construct, the line from Pensacola Bay to the point of intersection with the Florida Bailroad Company in the most direct juacticable line to Jacksonville, with the expressed view to cm extension afterwa/rcls to the Georgia Une.

If the original charter granted the unrestricted power to the Board of Directors to run their road to any point on the Georgia line, then we think it can hardly be questioned but that they had the power to extend said road eastwardly, the direction specified in their charter, until they should intersect the Florida Railroad.

If the Pensacola and Georgia Railroad Company had the power under its original charter to run its road eastwardly until it intersected the Florida Railroad, and did so locate the road eastwardly from Pensacola Bay so as to intersect the Florida Railroad in the most direct practicable line to Jack~ sonville, and so as to bring it upon the open line designated in the 4th section of the Internal Improvement Act, with a view to an extension afterwards to the Georgia line, then it will be seen that so soon as so much of the Pensacola and Georgia Railroad shall be constructed as will be necessary to effect the intersection with the Florida Railroad, that part of the line designated by the 4th section of the Internal Improvement Act and which lies between the Suwannee river and the said intersection will necessarily have been constructed and completed, so as fully to meet and satisfy all the conditions and restrictions imposed by the 24th section cf said act, so that the Pen. and Ga. R. R. Co. will neither be prevented nor delayed in extending their road to such point on tlie Georgia line as the Board of Directors of such company may, in the exercise of the power given them in the charter, determine and establish.

Then the acceptance of the provisions of the Internal Improvement Act did not confer upon the Pen. and Ga. R. R. Co., any power in regard to the location of the road, and the fixing its termini, which it did not before possess, nor did it take away from said Company any power with which it was clothed by its.original charter.

It is therefore the opinion of the Court, the acceptance of the provisions of the Internal Improvement Act by the Pen. and Ga. Railroad Company did in no manner abridge, alter or destroy the power which it possessed under its original charter, to locate their road and to fix and establish the termini thereof.

Tlie Board of Directors in locating their road so as to intersect the Florida Bailroad, by running easfwardly from Pensacola Bay, have not attempted to construct a road in a different direction from that authorized by its original charter, as was the case of the Middlesex Turnpike Co. vs. Lock, decided by the Supreme Court of the State of Massachusetts, and in the case of the Buffalo, Corning and New York Railroad Company vs. Pottle, decided by the Supreme Court of New York.

In selecting the route or line indicated by the 4th section of the Internal Improvement Act from Pensacola Bay to an intersection of the Florida Railroad, in the most direct practical line to Jacksonville, the Pen. and Ga. R. R. Co., only exercised a power which was conferred by its original charter.

Nor does the location of this route by the Board of Directors of the Pen. and Ga. B. B. Co. cause an extension of their line of road beyond a point originally authorized by its charter as was the case in Macedon and Bristol Plank Road Co. vs. ——, decided by the Supreme Court of New York. Because here, the Company are authorized to go to any point on the Georgia line, and as it appears from the' record, they make -their intersection with the Florida Bailroad, by running in an eastwardly direction from Pensacola Bay, as specified in their charter, with the declared purpose of extending their road to the Georgia line, as they were expressly authorized by their charter to do.

Nor did the Internal Improvement act, which was accepted by the P. & Ga. Railroad Company, authorize or require said Company to enter upon a new and different enterprise from that contemplated by the original charter, as was the case in Keene vs. Johnson, decided by the Supreme Court of New Jersey, and in the case of Hester vs. The Memphis'& Charleston R. R. Co., decided by the Supreme Court of Mississippi. For the enterprise in which the plaintiff in error agreed to participate, was the construction of a Boad from the waters of Pensacola Bay to any point on the Georgia line, the location and termini to be adopted and fixed at the discretion of the Board of Directors, and the acceptance of the Internal Improvement Act does not compel the P. & Ga. Railroad Company to construct any other than a Boad from the waters of Pensacola Bay to some point on the Georgia line yet to be determined by the. Board of Directors, in the exercise of the power conferred by the charter.

But it is contended that the amended Act of the 15th of December, 1855, materially altered the original charter as to the location and termini of the Boad.

We might here remark that there is no evidence in the record to show that the Company ever accepted the amended charter; and if not accepted by them, it could in no way affect the question now before the court. It does appear, however, in the record, that a proposition was before the Board of the P. & Ga. Bailroad Company, in regard to an intersection with the Atlantic <fe Gulf Central Bailroad Company, which might be made at Aligátor, in Columbia, county, or East or West of that place, according to the progress which might be made by the P. & Ga. Railroad Company to the East, and by the A. & G. C. Railroad to the West. But the record does not show with which of said Companies such proposition originated. Nor does the record show that it was ever adopted by the A. & G. C. Railroad Company. One of the resolutions adopted at the same time by the P. & Ga. Railroad Company, was to the effect that the two Companies should unite in asking the Legislature to ratify and confirm the agreement which shall be made between them, by proper amendments to their respective charters, in such a manner as to give effect to their agreement ; and it appears that the Legislature did, at its next session, amend the charter of the P. & Ga. Bailroad Company, but there is no corresponding amendment of the charter of the A. & G. C. Railroad Company.

The amended charter simply authorized the P. & Ga. Railroad Company to build an extension of their Road to a junction with the A. & G. C. Railroad at or in the vicinity of Aligátor, with a provision, that if the latter Company should fail to construct its Road to Aligátor by the time the P. & Ga. Railroad Company constructed its Road to that point, then the said last mentioned Company might extend east of Aligátor, or to a junction with the Florida Railroad, which, it should be remarked, is the point to which the P. & Ga. Railroad Company had already determined to go, as early as the 10th of February, 1855, and which determination had been formally notified to the Trustees of the Internal Improvement Fund.

Now admitting, for the sake of argument, that such agreement had been made between the two Companies, and that the Legislature had amended both their charters, so as to ratiratiiy and confirm the agreement, and that the P. & Ga. R. R. Company had accepted the amendment which authorizes the junction with the A. & G. C. Railroad Company, we cannot see that such amendment would confer any greater power upon the P. & Ga. Railroad Company to locate its Road or fix the termini, than it had under its original charter.

Indeed the record shows, that the P. & Ga. Railroad Company had, ten months before that time, specified the route or location of their Road, as far as the junction with the Florida Railroad; and even if it had entered into an agreement with the A. & G. C. Railroad Company, by which the junction with that Road was to be made at any point West of the Florida Railroad, it would, if constructed to such junction, have necessarily completed the very line designated by the Internal Improvement Act, between the Florida Railroad and the Suwannee River, and consequently no obstacle would have been in the way of the extension of tlie P. & Ga. Railroad to the Georgia line immediately after its intersection with either the A. & G. O. Railroad or the Florida Railroad, in pursuance of the requirements of the charter of said P. & Ga. Railroad Company, and of the declared purpose of its Board of Directors.

But the record does not show that this proposition for a junction with the A. & G. C. Railroad Company was ever agreed to by said Company; and as the Legislature has passed no act amendatory of its charter, so as to ratify and confirm any agreement which may have been made between tlie two Companies, and as the Resolution adopted by tlie R. & Ga. Railroad Company simply invites a joint application for an amendment of their respective charters, to confirm and ratify — not such agreement as had been made, hut as shall be made between them, it is rather to be presumed that no such agreement was ever made by the A. & G. C. Railroad Company.

But let the fact be as it may, the record does not show any such agreement, and the amended charter, made in pursuance of such proposed agreement, would not have materially changed or altered the original charter in respect to the power conferred by it upon the Board of Directors, for the location and terminus of the Road, as did the amended charter in the case of "Winter vs. The Muscogee Railroad Company, decided by the Supreme Court of the State of Georgia.

As to the extensions provided for in the amended charter to Crooked River and elsewhere, it does not appear in the record that the P. & Ga. Railroad Company ever applied for or accepted such amendment of their charter.

The mere passage by the Legislature, when the power is not reserved, of an amendment which materially affects or alters the original charter of a Railway Company, cannot hind such Company until, in some authorized manner, it shall accept such amendment.

But even supposing the amended charter had heen accepted by the P. & Ga. Railroad Company, so far as it provides for a junction with the A. & G. C. Railroad, it would, as we have seen, have left the P. & Ga. Railroad Company with unimpaired power to execute, substantially, tbe original work and enterprise authorized by its original charter, as was the case in the Pacific Railroad Company vs. Hughes, decided by tbe Supreme Court of Missouri, and as was much more strongly ruled in Barret vs. The Alton & Sangamon Railroad Company, decided by the Supreme Court of the State of Illinois.

In the latter case the Legislature had authorized hy an amendment, which was adopted by the Board of Directors, a change of route which was different from that fixed by the original charter.

As we have seen the original work authorized by the charter of the P. & Ga. Railroad Company was the construction of a Railroad from the waters of Pensacola Bay to some point on the Georgia line, to be determined by the Board of Directors. Tbe power to execute this work, substantially, as authorized by tbe charter, was neither impaired nor destroyed by any agreement to form a junction with tbe A. & G. C. Railroad, and as we have already seen, such a junction being effected on the line already located by tbe P. & Ga. Railroad Company would neither have delayed nor prevented sueh extension.

It is, therefore, the opinion of the Court, that the amend.ed charter of the 15th of December, 1855, so far as the record in this case may show that it has been acted upon by the P. & Ga. Railroad Company, (if indeed it bas been acted on at all by said Company,) does not materially alter or change the original charter of said Company, in regard to tbe powers conferred by sucb original charter upon the Board of Directors of said Company, to locate the route and terminus of said Road; and consequently does not invade the contract of subscription made by Johnson for stock in said P. & Ga. Railroad Company.

When Johnson subscribed for stock in said'Road, it was under the original charter, which was approved the 8th of January, A. D. 1853. Said charter did not fix the Georgia terminus of the Road, but expressly left it to be determined by the .Board of Directors. In subscribing for stock in said Road, he undertook to abide by any terminus on the Georgia line, which the Board of Directors, in their discretion, might adopt.

In signing the books as a subscriber for stock in said Road, he did, in effect, sign the charter, and placed it in the hands of the Company organized under it, and said, “ You are authorized by me to do anything which said charter empowers •you to do, and I will abide by it.”

Seeing that neither the acceptance of the Internal Improvement Act by the P. & Ga. Railroad Company, nor the amended Act of the 15th of December, 1855 — so far as the record may show that the Company acted under it, cannot materially or essentially alter the original charter of the said Company, in regard to the location and termini of said Road; and seeing that they do not invade the contract of subscription made by Johnson for stock in said Road, it becomes wholly unnecessary to enquire as to the remaining question made by the record in this ease, which is, whether to make Johnson liable in a suit for the calls upon his subscription for stock in said Road, it is necessary to prove his assent to material alterations made in the charter since his subscription was made, or whether his assent will be presumed, in the absence of proof of his dissent.

If, as we have decided, there was no material change or alteration in the charter,- occasioned by the amended charter of the 15th of December, 1855, nor by the acceptance of the Internal Improvement Act, then the question of assent or dissent cannot arise.

Talcing this view of the case we see no cause for disturbing the judgment of the Court below.

It is therefore ordered and adjudged that the judgment of the Circuit Court be affirmed with costs.