Greeneville & Paint Rock Narrow Gauge R.R. v. Johnson

McFarland, J.,

delivered the opinion of the court.

The plaintiff, claiming to be a corporation, brought this action to recover of the defendant upon his subscription to the capital stock of the company. The ■ verdict and judgment were for the defendant, a new trial was refused, and an appeal in error prosecuted by the plaintiff.

The record of the chancery court was introduced, showing a proceeding to organize the company under the general statutes for that purpose, first under the name of the “Greeneville & Paint Rock Tram Road Company,” but afterward changed to tne “ Greeneville & Paint Rock Narrow Gauge Railroad Company.” The general purposes are shown to be to build and run and use a tram or narrow gauge road from the town of Greeneville on the most direct and eligible route via. the works of the “Greene County Iron Company, and the New York and East Tennessee Iron Company,” in said county, to some point on the Cincinnati, Cumberland Gap and Charleston railroad, between the town of Morristown and the North Carolina line.

In other portions of the record the said iron establishments are indicated as the southern terminus of the road, or such point beyond this as might be desired or determined in a supplemental proceeding.

The written contract of subscription is as follows: “Subscription for the stock of the Greeneville and Paint Pock Tram Road Company. We, the undersigned, hereby subscribe and agree to pay for the amounts of stock in said company set opposite each of our names respectively, upon the following conditions, viz: The road is to be a narrow gauge road. It is to be laid with an iron rail, and operated by steam. Only ten per cent, of the subscription shall be called in by the directors at any one time, and thirty days’ notice of each assessment shall be given by notice published in a Greeneville newspaper.”

It will be seen that the subscription recognizes the original name of the corporation. It has been argued that the proceeding changing the name to the style in which the suit is brought was not valid, as the statute was not pursued.

The circuit judge charged the jury that this question does not arise in this proceeding; that the corporate character of the plaintiff must be taken as established, so far as this action is concerned.

It appearing that the company has in fact been. organized by the permission and direction of the chancery court, that they are assuming to act as a corporation, and that the defendant has dealt with it as such, we are of opinion that for the purposes of this case the corporate character will be taken as established, whatever might be the result of a proceeding in the nature of a quo warranto upon the part of the State. So we held in .a recent case.

With regard to the so-called charter spread upon the record of the chancery court, we need only say, as we have in several recent cases, that the powers and privileges conferred are by virtue of the general statutes upon the subject, and that the action of the court could only effect and be evidence of the organization.

The circuit judge instructed the jury that “if the stock taken by the defendant was sold by a company organized, or professed to be organized, to build a particular road specified in the contract of sale and purchase, and the charter under which the plaintiff is acting and suing provides for the building of a different road, . . . then the defendant is not bound to pay,” etc. It was upon this proposition, as we suppose, the jury found for the defendant. The question is, does the evidence support the verdict? We do not understand the written contract we have set forth to designate, as is assumed, that the road should be built from Greeneville to Paint Rock.

The company is styled the “Greeneville and Paint Rock Tram Road Co.,” but this is simply the name, and does not purport to give the termini. The Memphis & Charleston railroad does not reach Charleston by several hundred miles. Reference must, of course, be back to the proceedings under which the corporation was organized to ascertain the termini route, etc.; nor do we hold that under this charter this road might not be extended to Paint Rock.

The conditions in the written contract are that the road shall be laid with iron rails, operated by steam, and only ten per cent, of the stock called for at one time. No other are specified, none other are in proof. It is true the defendant says that he understood at the time of making the subscription that the road was to run to Paint Rock, but he does not profess to have made this a condition of his subscription. He had notice that the charter was granted or applied for, and must be supposed to have knowledge of the general nature and objects of the enterprise.

We see nothing in the charter or elsewhere in the record to indicate that the road proposed to be built was different from the one for which the subscription was made, or in conflict with the written conditions. There is nothing to show that the road may not be laid with iron and operated by steam, and the proof shows the calls and notice to have been in accordance with the stipulations.

We are of opinion that there is no sufficient evidence to sustain the verdict. Let the judgment be reversed and a new trial be awarded.