Town of Danville v. Montpelier & St. Johnsbury Railroad , 43 Vt. 144 ( 1870 )

The opinion of the court was delivered by

Wheeler, J.

The instrument of assent, signed and acknowledged by a majority of the tax-payers of Danville who represented a majority of the grand list of that town, named and constituted William J. Stanton, William B. Palmer, and Benjamin Green-banks to be commissioners to make and execute, in the name and in behalf'of that town, the contract and subscription which these tax payers had assented to, and to do all other things required of such commissioners by the enabling act. That act, Laws of 1867, page 346, provided that when such commissioners should have made and executed such subscription in pursuance of the terms of the assent and the provisions of that act, the same should be binding upon the town. The enabling act and the instrument of assent each contemplated that the town itself should subscribe for, take and pay for the stock of the railroad company. To do that, a contract between the town and the railroad company was necessary, and that contract could only be made by agents to act for each contracting party, for each party had only a corporate existence and could do nothing except through the agency of natural persons.

This contract was one that neither party could compel the other to enter into; however much the town might' desire the stock of the company, it could not subscribe for and take it against the will of the company, and however much the company might wish to have the town take and pay for the stock, it could only dispose of the stock to, and acquire the pay for it of, the town by contract with the town. These commissioners were to act as agents for the town in making the contract, and they were agents for no other party than the town in that business. They had no authority from any other party, and were responsible to no other party for the manner in which it was executed. . Under that authority the commissioners made a written contract of subscription for one thousand shares of the stock of the company of one hundred dollars each, the subscription payable in bonds of the town of specified amounts, rate of interest, and times of payment, upon condition, among others, that the bonds should not be delivered until the president and directors of the railroad company should give to the town a bond that the railroad should be built through North Danville village, thence south of Danville Green, and thence to West Danville, and have a station, with a depot suitable for the business, at each place. This condition was not required by the instrument of assent, and the commissioners were as well authorized to make the contract of subscription without it as with it. They saw fit not to make the subscription without the condition, and insisted upon having it inserted in the contract. In doing this they acted wholly as agents of the town and not at all as the agents of the railroad company, and they were responsible to the town only for what they did. The commissioners delivered the written contract to the president of the railroad company, intending thereby to make a subscription for the one thousand shares of stock upon the conditions contained in the written contract of subscription for and in behalf of the town of Danville. The railroad company was under no obligation to accept this subscription upon these conditions and might have rejected it altogether ; but of itself alone the railroad company could only either reject it or accept it upon the very terms upon which it was offered. The town had a right to require its agents to make the subscription without any conditions, except those set forth in the instrument of assent, and probably might, if it had seen fit, have compelled the commissioners to make the subscription without the condition as to the location of the road and the stations and depots in the town of Danville. But the railroad company could not have compelled the commissioners to do so. The company had the right to control its own agents in their conduct about making the contract of subscription, but it had no right to dictate in any respect the action of the agents of the other contracting party.

The agents of the town inserted that condition in the contract, and insisted that the subscription should be made only upon that condition; the railroad company was not satisfied with the subscription upon that condition, and tried to get it made without the condition, but did not absolutely reject it. The officers of the company retained the written contract and endeavored to get the conditions changed or waived so that the subscription should stand more in accordance with the wishes of the company than it was with the conditions in ; and the condition requiring twelve thous- and five hundred dollars in stock per mthe of road to be subscribed before the bonds of the town should be delivered, was changed to ten thousand dollars per mthe, at the request of the railroad company; but the condition as to the location of the road through and the stations and depots in Danville was retained and insisted upon by those acting in behalf of Danville, and the contract stood as the subscription of the town of Danville for the one thousand shares of stock with that condition as a part of the contract of subscription. Although none of the officers of the railroad company at any time expressly accepted this subscription for the company, their conduct in relation to it was such that the inhabitants and officers of the town were given warrantably to understand that the company did accept it as it then stood, intending however to procure the town to change or waive the conditions if found necessary to enable the company to avail itself of the subscription. The insertion of the condition in the contract of subscription was an unauthorized act on the part of the commissioners, but it was not a void act, unless the town of Danville, for which they acted, chose to avoid it. The town had a right to, and could adopt and ratify it, and when adopted and ratified, it would be as binding as if authority to insert it had been given before it was inserted. There are cases, no doubt, where the act of an agent or attorney may be void as to part done in excess of the authority, and valid as to the residue done within the authority. Co. Litt., 358 a., Story on Agency, § 166, 1 Parsons on Contracts, 81 and note. But these cases have arisen mostly, if not wholly, in relation to the execution of powers for the sale and conveyance or purchase of real estate, where the agent or attorney had included some parcel of real estate about which he had no authority with another parcel about which he had authority; or had made or taken conveyance of one species of estate, when he had authority only to make or take another species greater or less. And there may be good reason for such a division of an act of an attorney, done about the conveyance of real estate and resting upon the artificial rules in relation to the creation and conveyance of the different classes of estates in real property, without allowing such a division of an act done about the making of a personal contract. But, however thrt may be, no case has been shown that holds that any party, other than the one for whom the attorney acted, can, in his own behalf, claim a part of an act of the attorney to be void and another part valid on account, of a want of authority for the whole. No express act on' the part of the town was necessary to ratify the act of the commissioners in the insertion of the condition ; its sthence in regard to the condition for so long a time was sufficient to warrant all others in assuming that the act was assented to, and, as to the town itself, no act of confirmation could be necessary, for, without repudiation, an adoption and ratification would be presumed. Story, on Agency, § 255. The town of Danville never repudiated the act of the commissioners in inserting any of the conditions in the contract of subscription. The doings of the commissioners were suffered to stand as the act of the town in relation to that matter. No other party had any authority to repudiate these conditions, and the subscription stood as the subscription of Danville upon the terms and conditions contained in -the contract of subscription. It was the subscription of Danville, and no one not having authority from that town for that purpose could vary the contract. The commissioners had authority only to make and execute the contract and subscription in the name of and in behalf of the town. When they had made the contract and subscription they did make, and had delivered it to the president of the company, for the company, and it had been received and treated as it was by the officers of the company, they had made and executed the contract and subscription they were authorized to make and execute. Their acts in doing it were the acts of the town. The contract and subscription were the contract and subscription of the town, and they had no further authority in the matter. The railroad company was not satisfied with the subscription as it was left by the three commissioners, and the officers of the company endeavored to get it changed so as to leave out the condition as to the location of the .road, stations and depots in Danville; or, what was the same thing, to get a new contract of subscription without such a condition in it. Two of the commissioners were willing to make a new contract of subscription without that condition in it, the other commissioner was not, and declined to act in any way to change the subscription, or to make a new one to do away with that condition. The two commissioners, who were willing to do so, made a new contract of subscription without the condition in it, and delivered it to the railroad company. The three commissioners had once executed their authority as agents of the town to make the subscription, and the subscription they had made belonged to the town for which they had made it. They had exhausted their powers and had no authority left in them by virtue of which to make another subscription. Therefore the three commissioners, all together, could not hare made a new subscription upon different terms from those upon which the first one had been made, and in that way have deprived the town of the first subscription, and bound it to the now one. But if this were not so, the authority to the three commissioners was joint to them all. Although the town of Danville for which they were appointed to act was a public corporation, and the ultimate object for which all this business was to be done was the building of a railroad, which was in some sense a public work, still the act they were authorized to perform was not to be done in the execution of a public duty, imposed upon them as public officers, but it was a private act, which they, as private citizens, had been appointed to do. They did not derive authority from any position they held as officers ; but only from their private appointment. The common law always required such joint authority to be jointly executed. Co. Litt., 181, b; 2 Kent Com., 633 ; Story on Agency, §42; Hodges v. Thacker, 28 Vt., 455. The statute giving a majority of a board of public officers authority to act for the whole, Gen. Stat., 58, § 2, is not applicable to a case like this. That statute in terms is confined to public officers and has no reference to the acts of private agents. For these reasons the second subscription was of no effect as a subscription for the town of Danville, and the first one is the only subscription remaining in force. The town of Danville insists upon standing upon that subscription upon the very terms and conditions upon which it was made, if any subscription at all is to stand as its subscription. The subscription having been made for the town upon these conditions, the town has the right to insist upon the conditions, and the railroad company has no right to repudiate them. The bill alleges, and the answers admit, that the selectmen and treasurer of the town, who are made defendants in the bill, are willing and intend to deliver the bonds of the town to the railroad company in accordance with the second subscription, and in violation of the condition in the first one, that the bonds should not be delivered until the president and directors of the company should give a bond that the railroad should be built to North Danville village, thence south of Danville Green to West Dan-ville, with stations and depots suitable for the business at each village, unless restrained by the court of chancery. This condition is an important one, and the railroad company has no right to the bonds of the town, and the selectmen of the town have no right to deliver them to the railroad company, without its performance. Should they be delivered the orator could probably defend against them at law in the hands of the railroad company ; but the company, in its answer, says that it intends to negotiate them, if delivered, and in the hands of innocent endorsees the town might, and probably would, be embarrassed in making defence on account of the noir-performance of this condition. This danger is sufficient to warrant the interference of the court of chancery, to prevent the delivery of the bonds to the company. The members of the court, who have heard this cause, all concur in the decision of the case upon this ground, and as that is sufficient to dispose of the case, no opinion whatever is expressed upon any other question involved in the discussion of the case at bar.

The decree of the court of chancery is affirmed, but without prejudice to any right which any party might otherwise have to enforce the first contract of subscription upon compliance with its terms by the railroad company.