Delaware, Lackawanna & Western Railway Co. v. Welser , 233 Pa. 154 ( 1911 )

Opinion by

Mr. Justice Stewart,

The bill in this case, as amended by leave of court and pleaded to by the defendants, alleged that, before the execution of the contract as prepared by the scrivener, in which it was recited that the option for the purchase of the land in question was for ninety days, it was distinctly understood and agreed between the parties that the date of expiration was to be August 11, following, and that the concluding clause in these words: "Contract or deed to be delivered — between the hours of nine A. M. and four p. M. on or before the 11th day of August, 1909,” was added to express such understanding and agreement. No exception was taken to the order allowing the amendment. The original bill was for specific performance of the contract; the amendment prayed for reformation of the contract to the end that what was supposed to be obscurity of phrase in the last clause might be removed, and the contract be made to read that the option was to expire August 11,1909, instead of at the end of ninety days, which would have been August 9, 1909. It was supposed to be necessary, or at least desirable as a cautionary measure, inasmuch as it was not until August 11, that the plaintiff attempted to exercise the option granted. Whether the contract as written left the date of expiration of the option doubtful is a question we need not consider. The case proceeded on the theory that this was a disputable question, and the errors assigned can be disposed of on the assumption that it was. What is urged upon us is that the evidence introduced by the plaintiff in support of the averment contained in the amended bill was insufficient to warrant a reformation of the contract in the particular referred to. A discussion of the evidence in detail is unnecessary. It is enough to know that three witnesses, one of them a justice of the peace, selected by the grantors to represent them in the transaction as friend and adviser, and a stranger to the parties representing the plaintiff, testified that it was distinctly stated, and as distinctly agreed to by all the parties, that for the purpose of avoiding misunderstanding and dispute as to the limit of the option, August 11 was to be regarded as the last day for its exercise; and that the final clause was added to express this understanding. Counsel for appellants admit that the testimony of these witnesses was both clear and preelse, but insist nevertheless that it does not measure up to the standard required for the reformation of a written contract. To the mind of the chancellor it was not only-clear and precise, but indubitable, in the sense that it was convincing. The opposing testimony- was for most part evasive and inconclusive. It was a matter of controversy whether the one witness who denied directly and unequivocally that any specific date was fixed upon for the expiration of the option was present during the whole of the conversation. If the conversation upon which the execution of the contract followed was as testified to by plaintiff’s witnesses, it requires no argument to vindicate the correctness of the chancellor’s conclusion as to its sufficiency for the purpose for which it was offered. The credibility of the witnesses was for the chancellor; and those for the plaintiff having been unassailed, his findings with respect to the disputed facts are not to be questioned. It is argued that the testimony does not show mutual mistake, but simply a misunderstanding on the part of the plaintiff as to when the option was to expire; that it does not show that the vendors were of the same mind as the vendee as to the purpose and significance of the clause that was to be added to the agreement as originally prepared. The testimony which prevailed with the chancellor was to the effect that August 11 was distinctly agreed upon as the date of expiration; that the final clause of the agreement was added in order to express the entire contract, and that after it had been added the entire paper was read over to the grantors with special explanation that the last clause fixed the date of expiration of option. If credited, and the concluding clause in the contract does not clearly define another limit for the option than the ninety days originally agreed upon, it necessarily follows that the common understanding as to what it should express was disappointed. If the conversation between the parties which led to the insertion of this clause was what the witness testified to, no room exists for any misunderstanding as to what was agreed upon. Indeed misunderstanding is not pretended. What is insisted on is that the conversation did not occur. The evidence was convincing to the chancellor, for reasons which we think entirely adequate that it did occur, and that, without more, established mutuality of mistake.

The other questions raised on the record are quite as free from difficulty. The contract gave the plaintiff an option for the purchase of twelve acres out of a tract of land containing fourteen acres. The negotiation began with an offer from the plaintiff to buy a right of way through the tract for the purpose of laying its tracks thereon. Mrs. Welser, owner of the land, objected to this, giving her reasons, but expressing a willingness to sell the whole tract. After a day’s consideration it was agreed that the company should have an option for the purchase of the twelve acres, a condition being that the company, at its own expense, was to remove the improvements on the twelve acres and reconstruct them on the remaining two. It is argued that the twelve acres are in excess of what is required for the relocation of the company’s tracks, and that therefore the contract on the part of the company is ultra vires and not enforceable. This is talcing a very narrow view of corporate rights and powers. It is not open to question that a railroad company may obtain its rights of way upon such terms as are most favorable to it, and to this end may resort to condemnation proceedings or purchase such estate or interest in the land as may be necessary for its accommodation. Whether it can secure the conveniences it requires on better terms by condemnation or by purchase, is for itself to determine; and so, whether it can secure the accommodation upon better terms by meeting the owners’ demands that it purchase more land than it actually requires than it can by resorting to condemnation proceedings, is for itself to determine. So long as its only purpose in acquiring more land than it actually requires is to secure what it does require upon the easiest terms to itself, it is acting within proper limits. Corporations are restrained by considerations of public policy from engaging in other business tba.n that for which they are chartered; but it has never been understood that a corporation in making sale of what it has acquired for a proper purpose, but for which it has no use, is engaging in business not permitted by its charter. The true test in all such cases is the good faith of the transaction. Was the purchase made to accomplish an object falling within the general purpose and scheme of the corporation? If so, it would be a legitimate exercise of power. It would be otherwise only were it a clear attempt to enlarge the operations of the corporation so as to embrace more than the charter contemplates. There is not a suggestion that the railroad company in this transaction was attempting to combine with its business of common carrier that of dealing in real estate. Says Mitchell, J., in Malone v. Lancaster Gas Light & Fuel Co., 182 Pa. 309: “In considering such questions much weight must be allowed to the judgment of the parties most interested, the officers and stockholders of the corporation itself, and while they will not be permitted, as against the commonwealth or a. dissenting stockholder, to go outside of their legitimate corporate business, yet when the act questioned is of a nature to be fairly considered incidental or auxiliary to such business, it will not be unlawful, because not within the literal term of the corporate grant.” In the same opinion the following from Bigelow, C. J., in Brown v. Winnisimmet Co., 93 Mass. 326, is quoted approvingly: “We know of no rule or principle by which an act creating a corporation for certain specified objects or to carry on a particular trade or business, is to be strictly construed as prohibitory of all other dealings or transactions not coming within the exact scope of those designated. Undoubtedly the main business of a corporation is to be confined to that class of operations which properly appertain to the general purposes for which the charter was granted. But it may also enter into contracts and engage in transactions which are incidental or auxiliary to its main business, or which may become necessary, expedient, or profitable in the care and management of the property which it is authorized to hold.” These authorities are so conclusive as to make further discussion of the question unnecessary. The transaction in this case being lawful on the part of the railroad company mutuality of remedy follows as a matter of course. The case as we read it stands clear of all suspicion of fraud or overreaching, and we see nothing in the record that questions in the slightest degree the right of the plaintiff to a specific performance of the contract as established. The assignments of error are overruled, the appeal is dismissed at the costs of the appellants, and the decree is affirmed.