Case ID: ohio-st_41/html/0573-01.html
Source: Caselaw Access Project
Author: {"author": "Martin, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Railroad Co. v. Ralston.
    1. An agreement for tlie location of the route of a railroad at a particular intermediate place is not^er se void as against public policy.
    2. To estop a defendant by judgment in foreclosure to assert that be, as against the debtor, was the owner of tlie subjected premises, it must appear that the point was at issue and material, or was necessarily determined therein.
    3. The equitable owner being impleaded in foreclosure by the mortgagee of the holder of the naked legal title (in trust to convey) made default; and the premises were sold and proceeds distributed. He had been in actual possession prior to the giving of the mortgage and continuously to the sale; and had not assented to the mortgage otherwise than by his default. Held: He thus became entitled to reimbursement from the mortgagor.
    Error to the Common Pleas of Defiance Count}*. Reserved in the District Court.
    In February, 1880, The Baltimore & Ohio & Chicago Railroad Company brought suit in the common pleas of Defiance County against Joseph Ralston and others. The defendants were James Cheney and others, the survivors and representatives of fifty-two persons, parties of the one part, to a contract with the company which is set out in the petition. In the common pleas a demurrer was sustained to the petition. The company instituted a proceeding in error in the district court, where it was reserved to this court. The petition sets forth that .the company was about to. construct a railroad from Chicago Junction, Ohio, to- the city of Chicago, Illinois, and that, on the 27th day of March, 1872, the parties to the agreement with the company agreed, in writing, between themselves, in substance, as follows: That, in consideration that the village of Defiance, Ohio, should be made a point on the line of the proposed road, they would donate to the company two thousand acres of timbered land and depot ground, and secure a specified portion of the right of way'; and they thereon authorized five of their number, one of whom was Wm. C. Holgate, to pledge such donations to the company, and they agreed that they would for those purposes pay $100 each within twenty days to the Defiance Bank, and would pay such other sums as the committee should deem necessary, and would reimburse the committee any advances they should make. It was stipulated that all subscriptions, donations and lands should be under the control of the committee, and be paid over to and held or conveyed by them, or such party as they should appoint, for the purposes named.
    The petition further recites that, upon the execution of the agreement, the committee made known its contents to the company, which accepted the proposition, and, relying, in good faith, on the agreement, constructed the railroad, making Defiance a point on the line. The defendants secured to the company portions of the right of way, depot grounds, and one thousand acres of the land. The remaining one thousand acres was selected, purchased, and fully paid for by the defendants, with the aid of outside subscriptions, and the legal title was taken in the name of Holgate, but was held in trust for the company. The company accepted the lands, and entered upon possession and enjoyment. Holgate afterwards claimed there was due him from his associates the sum of $4,760.48, and, with the assent of the committee gave a mortgage on the la'ud to Cheney, conditioned to pay him the sum of $4,760.48 in one year, with interest, and to repay any disbursement Cheney might make on account of taxes or in liquidating any indebtedness to the bank on account of its advancements in procuring rights of way for the company.
    In August, 1877, Cheney brought suit on the mortgage, which resulted in a judgment in his favor for $6,011.11 and a judicial sale of the land to Cheney, which was confirmed and deed made. The committeemen were parties to the suit, and answered consenting to the judgment. The railroad company was a partjr, and made default. The petition charges that the acts of the committee were in bad faith; that they were bound to convey the land unincumbered, and had no right to incumber it; that the execution of the mortgage was contrived by Holgate to wrongfully deprive the company of the land, and that, by some secret understanding between him and Cheney, entered into since the judgment was taken, Cheney holds the legal title in trust for Holgate. The prayer of the petition is that Cheney be required to convey to the company, that the company may be quieted in its title and possession; or, if Cheney does not hold iu trust for Holgate, and without knowledge of the company’s rights, that an account be taken of the value of the land when sold to him, and that the defendants (except Cheney) be adjudged to pay the same, &e.
    
      C. H. Scribner, for plaintiff in error:
    1. Are the defendants bound by the acts of Holgate, Hilton, Squire, Phelps and Ralston, in entering into the agreement with the railway company in the petition set forth?
    As a matter of course, the parties here named are bound; and the writing set out in the petition, conferring authority upon them to act, is so clear and explicit in its terms that we see no escape from liability on the part of any of the persons who subscribed it.
    See, in this connection, the following authorities: Thayer v. Luce, 22 Ohio St., 62; Himrod Furnace Co. v. Cleveland & Mahoning R. R. Co., 22 Ohio St., 451, 456, 458-461.
    II. As to the effect of the oral acceptance by the company of the proposition of the defendants, and performance in pursuance thereof, see the cases above cited; also Pomeroy on the Specific Performance of Contracts, 98, § 66; 1 Addison on Contracts, § 17; 1 Story on Contracts, 5th edit., § 572; Chase v. Lowell, 7 Gray, 33; Taft v. Mining Co., 14 Allen, 407; Ives v. Hazard, 4 R. I., 14; Sanborn v. Flagler, 9 Allen, 470 ; Reuss v. Picksley, 1 Ex., 342.
    III. But no question can well arise under the statute of frauds, as the petition not only avers full performance on the part of the railway company, but also that the lands were selected by the parties, and purchased and secured under and in pursuance of the contract, and that the company, with notice to the defendants, accepted said lands under the contract, and entered upon the possession and enjoyment thereof.
    IY. As to the validity of the contract, the court of common pleas sustained the demurrer and dismissed the petition upon the sole ground that the contract sought to be enforced is against public policy, and therefore void.
    The authorities cited in support of this view, and which we rely upon, are: C. B. R. R. Co. v. Baab, 9 Watts, 458; New Albany, &c., R. R. Co. v. McCormick, 10 Ind. 499; Jewett v. Lawrenceburg, &c., R. R. Co., 10 Ind., 539; First National Bank of Cedar Rapids v. Hendril, 49 Iowa, 402. We also refer to the recent case of Stowell v. Stowell, 45 Mich., 364.
    We submit, also, that the question is res adjudicata in Ohio. The cases of Chamberlain v. Painesville & Hudson R. R. Co., 15 Ohio St., 225; Ashtabula & New Lisbon R. R. Co. v. Smith, Id., 328; The M. C. & Lake Mich. R. R. Co. v. Brown, 26 Ohio St., 223; M. C. & L. M. R. R. Co. v. Stout, Id., 241, appear to be conclusive upon this point. It is true that in all these cases the contract was to take stock on condition that a particular line was adopted; but this can make no difference in the application of the principle involved. If public policy forbids that a railroad company shall undertake to construct its line of railway, or establish its depots, in a particular locality, in consideration of money to be paid, or property to be conveyed to it, it is clear that the matter is not helped any by a further undertaking on the part of the company to also issue its stock to the party with whom it makes the alleged objectionable contract.
    Our statute regulating railroad companies contains the following provision: “Such company may acquire, by purchase or gift, any lands in the vicinity of the line of its road, or throug’h which the same passes, so far as may be deemed convenient or necessary by the company to secure the right of way, or such as may be granted to aid in the construction of the road, and hold or convey the same in such manner as the directors may prescribe.” 1 Rev. Sts., § 3282. Evidently this legislation was intended as a recognition of the validity of contracts of the character now in question. Indeed, in the well-known' case of Chapman v. Railroad Co., 6 Ohio St., 119, it was held that when “ a railroad company has received from private parties donations of land, subscriptions of stock, and payments of money, in consideration that it should locate its road at a particular place, and allow private side-tracks and warehouse privileges in connection therewith, the company will not be permitted to effectuate a change in fact (though not in name) of the line of its road away from such place, by getting up a new corporation and constructing a new road parallel with its old one under a different charter, and permitting its old line to go to decay, without compensating the parties with whom it contracted.” It is absolutely impossible to reconcile the doctrine of the foregoing case with the grounds of the decision of the court below in the present ease. Again, the question presented seems to be fairly-met by the decision of this court in the case of Railway Co. v. Rose, 24 Ohio St., 219; see also Walsh v. Barton, 24 Id., 28, syllabus paragraph 4; also p. 42.'
    It may be proper to call attention to the fact, also, that under our statute a railroad company, after locating its line of road, can not, except under certain circumstances, change the location; and if a change is made, especially if the line is taken into another county, the company is liable in damages to property-holders, and stock subscribers are released: 1 Rev. Stats., §§ 3272-3276. Where, therefore, a railroad company is induced by considerations held out to it to locate its line, it is bound to such location, and can not, except at the risk of considerable pecuniary loss, change its line. This, it appears to us, furnishes a strong ground for holding the defendants to their contract.
    On the general subject of voluntary subscriptions in aid of public enterprises, we refer to the following authorities: Canal Com. v. Perry, 5 Ohio St., 56; Ohio Wesleyan Female College v. Louis’ Ex’rs, 16 Id., 20; 1 Addison on Contracts,, by Morgan, p. 37, note; Green’s Brice’s Ultra Vires, 2 Amer. edit., 129, note (a).
    
    V. It was argued in the common pleas ‘that we are es-topped by the proceeding in foreclosure from asserting our claim for relief.
    The Baltimore & Ohio & Chicago Railroad Company (plaintiff herein), the Baltimore & Ohio Railroad Company, and William Keyser, were made parties defendants to the proceeding, but neither of them answered or made any defense. There was a simple finding of the amount due, and order of sale.
    It should be remembered that the mortgage in question was given for the debt of the defendants. May a person sell lands, retaining the legal title, receive the consideration, mortgage the lands to a third person, permit a foreclosure, and then be permitted to avail himself of the foreclosure as a defense to an action brought against him by his vendee ? The lands were contracted to the railway company. They have been sold to pay the debt of the vendors.
    See Grottschalk v. Witter, 25 Ohio St., 76 and 80, where a vendee has paid for the land, and has lost it through the fault or misconduct of the vendor, he may recover the purchase money from the latter. By mortgaging the land the defendants sought to disable themselves from conveying it in accordance with the terms of their contract; by permitting the foreclosure, they, in fact, disabled themselves from conveying. If they had made an absolute conveyance direct ,to Cheney, an'd he was informed at the time of the contract with the company, the latter would have had a right to elect whether to demand a specific performance or proceed for the recovery of the purchase price paid. See Howard v. Babcock, 7 Ohio St., part 2, pp. 73, 81. The transfer of the title by a sale in foreclosure places the company in no worse position. Under the allegations of the petition, the execution of the trust deed and the foreclosure were brought about by the contrivance of the defendant, Holgate, for the purpose of depriving the company of the land; and, by a secret agreement between Holgate and Cheney, entered into since the rendition of the decree, the latter holds the legal title in trust for Holgate.
    Clearly, Mr. Holgate, who was one of the parties to the agreement set out in the petition, and one of the agents who stipulated with the company for the grant'of the land, can not escape the trust which attached to it in his hands, nor can he, being bound to the company to furnish the land, insist on retaining it until his associates reimburse him for advances made in their behalf. He has no claim upon the company for any part of the consideration paid by him; the company has his obligation to provide the land ; it has paid the consideration agreed upon between the company and the defendants.
    VI. As to the relief to which the plaintiff is entitled.
    Taking the statement of facts contained in the petition to be true, as admitted by the demurrer, there can be but little difficulty on this point. The trust mortgage and foreclosure were contrived by the defendant, Holgate, to defeat the just claim of the company to the land. By agreement with Cheney, entered into since the decree, the latter holds the legal title in trust for Holgate. Under these circumstances, the right of the company to a decree for the legal title seems clear.
    But if, on a trial of issues of fact, it should appear that the land is lost to the company, what then is the relief to which the plaintiff is entitled ?
    As we have already stated, the company has fully performed the contract on its part; it has paid in full the agreed consideration for the land.
    It is alleged in the petition that at the time of the foreclosure the land was of the value of ten thousand dollars. From the nature of the contract we are compelled to take the value of the land as a basis for estimating the value of the consideration paid for it by the company: Perkins’s note, 1 Sugden on Vendors, 8th Am. ed., p. 231; 1 Leading Cases in Eq., pt. 2, p. 1062 (4th Am. ed.) ; Dustin v. Newcomer, 8 Ohio St., 49; Longworth v. Mitchell, 26 Id., 334; Pomeroy on Specific Perf., §§ 464, 469, 478-480; Rees v. Smith, 1 Ohio St., 124; 3 Id., 335; 56 N. Y., 12, 366.
    
      William C. Holgate, for defendants in error:
    1. The pretended contracts sued upon by the plaintiff are insufficient to save him from the operation of the statute of frauds: §§ 4198, 4199 Rev. Stats.
    In order to withdraw a parol, contract from the statute of frauds, and render it capable of being enforced:
    “1st. The acts of part performance must be such as are not only referable to an agreement such as that alleged, but such as are referable to no other title.
    “2d. They must be such as render it,a fraud in the defendant to take advantage of the contract not being in writing.
    3d. “ The agreement must be such as in its own nature is enforceable by the court......”
    See Fry on Specific Performance, § 384, pp. 251, 252.
    The performance on the part of the plaintiff as set up in the petition is that plaintiff did, in pursuance to their pretended contract with defendants, locate and construct and operate a line of railway from Chicago Junction to Chicago, that passed through the county and village of Defiance.
    Now, though these acts of performance may be referred to the alleged agreement with defendants, they must in addition be such as “ cannot be referred to any other title, nor have been done with any other view or design than to perform such agreement.....they must appear unequivocally to have been done in pursuance of the contract.” Fry on Specific Perform., p. 253, § 387; also p. 254, note, 27.
    The petition indicates that plaintiff contemplated the “ construction and operation ” of this line of road before they ever saw or heard of these defendants. The Baltimore & Ohio Railroad Company had numerous lines of railroad, and vast interests that required the construction of this road to connect them with Chicago. The proposed new road itself, with its rolling stock, would cost over six millions, and this was but a small part of the value and consequence of this new road to that company. It had millions on millions at stake in its construction. And the attempt by plaintiff in its petition to make a case by attributing the “ construction and operation of this line of road, with diligence and dispatch,” too, to this alleged agreement with the defendants, is almost ridiculous.
    But the line passed through Defiance? Yes; but this was a mere incident, unavoidable, probably. Defiance was standing on an air line on the shortest and best route. This made it the interest and duty of the railroad company to take this line through Defiance, and so this averred act of plaintiff’s performance of the alleged parol contract is also referable to another “ title.”
    2. But there is another legal touchstone which plaintiff must circumvent if he succeeds in immolating these defendants on their partly-performed parol contract, all saturated with misrepresentation. I refer to the “ fraud ” that must exist, even if the acts of part performance are not “ referable to 'another title.”
    “ The principle upon which courts of equity exercise their jurisdiction in decreeing specific performance of parol agreemeiits accompanied by part performance is the fraud and injustice which would result from allowing one party to refuse to perform his part after perfprmance by the other on the faith of the contract.” Fry on Specific Perform., 254, 256, 260, §§ 388, 390, 391, 403.
    There are no averments or showings in this petition of any hardships, .injustice or fraud resulting to plaintiff from building this road through Defiance to Chicago, on account of defendants’ alleged parol agreement.
    3. As to the withdrawal of parol contracts from the statute of frauds, the agreement must be such as in its own nature is enforceable by the court......”
    
      Sec. 8282 of our statute in relation to railroad companies reads as follows: “ Such company may acquire, by purchase or gift, any lands in the vicinity of its line of road, or through which the same passes, so far as may be convenient or necessary by the company to secure the right of way, or such as may be granted to aid in the construction of the road, and hold or convey the same in such manner as the directors may prescribe.”
    In the case of Walsh v. Barton et al., 24 Ohio St., 24, the court, in passing upon §14 of the act of February 11, 1848, which has the same provisions as above in effect, say that, if necessary to secure the right of way, a railroad company may purchase more land in the vicinity of their road than is needed for such right of way; but that if not necessary for the securing of such right of way, it would be an abuse of their powers to make such purchase. This decision relates entirely to the restriction on the powers of railroad companies to purchase lands not needed for their actual use, and not to their right to acquire such lands by gift. It may be that by virtue of the words, “ or such as may be granted to aid in the construction of the road,” in this § 8282, which were also in § 14 -of the act of 1848, railroad companies can acquire lands by gift lying somewhat away from their line of road, which they can dispose of at their convenience, so they are not too long about it, for the purpose of raising money to aid them in building their road, l?ut these words do not authorize their purchase of such lands. There is quite a distinction in the effect of a provision allowing railroad companies to acquire such lands by gift to aid them in the construction of their road, instead of by purchase. In the case of gift, it is their then present value that is needed, and can be had very shortly, while in the case of purchase the railroad company pays out their present value from resources that should be applied to the building of their road, and so are embarrassed in its immediate construction, instead of being aided. If a railroad company, then, acquire by purchase thousand acre tracts of land remote from its road-bed, unnecessary for its business uses or the securing of its rights of way, it becomes a land speculator, with no-rights, so far as relates to such transactions, that a court of equity can respect. Plaintiff’s claim, then, whether it be founded on a written or a parol contract to purchase or to give these lands, is not of such a “ nature as is enforceable by a court.”
    
      James Pillars, also for defendants in error:
    I. The promise of the defendants is without any consideration, and, therefore, cannot be enforced.
    This thousand acres of land is called in the petition and the alleged agreement a donation; and it surely is one, for it is to cost the company nothing. It is to be secured to them without cost and free from any incumbrance.
    But it is essential to a donation or gift that it be made completely and at once. If it is to be made in the future, if it rests in an agreement, it is but a promise, and being without any consideration, the promise cannot be enforced. If the donation is not actually and completely made, the law cannot enforce the making of it. 1 Parsons on Contracts, 23-1, 235, star paging.
    II. The promise of the defendants is contrary to public policy, and therefore cannot be enforced.
    When a number of men associate themselves together for the purpose of making and operating a railroad, and get their association incorporated, they become, by force of the statute, delegated to exercise the sovereign right of eminent domain, by which they take our land from us against our will, and appropriate it to themselves for their railroad and depot grounds.
    But the location of their road and depot grounds must be “ subservient to the public welfare,” that is, must be where the public necessity and convenience require it or will be best subserved.
    For, if it is because the land on which a railroad and depot grounds are located is needed for the public welfare that it can be taken from us and made the property of the stockholders of the company (and nothing is surer), it must be that, in the judgment of those whose duty it was to make such location, they made it where the public necessity and convenience would be best subserved. Of course, I mean the public necessity and convenience of the locus.
    In the location of a railroad and depot grounds another interest must be attended to along with that of the public, and that is the interest of the stockholders of the company. For the property, and, of course, the income and revenue of a railroad company, belong to the stockholders.
    But when a railroad and depot grounds are located in the interest of the public necessity and convenience, they are located just where the interest of the stockholders of the company requires they should be. The two interests, that of the.public and that of the' stockholders, go hand-in-hand. What subserves the public welfare exactly subserves the interest of the stockholders.
    Now, is there anything to show that when the directory of the plaintiffs located their railroad and depot grounds in and through the town of Defiance, but what they did so in the interest, solely and alone, of the public necessity and advantage, and of the stockholders of the company, whose agents they were, and for both of which interests they were acting.
    Where, then, was there auy consideration for the promise of the defendants to contribute by donation to the pecuniary wealth of the stockholders of the plaintiff? Their road and depot grounds in and through Defiance were located where the public welfare and their pecuniary welfare both required they should be, in the judgment and opinion of those whose duty it was to make the location. So the stockholders lost nothing, and the defendants gained nothing; for the road and depot would have been where they are now anyhow.
    That a railroad company is a quasi public corporation or agency, created by the public for their convenience and accommodation; that, in locating their road and depots, the officers of the company act as agents both for the public and for the stockholders; that a confidence is reposed in them that they will make such locations for the best interests of the public and the stockholders, and which are identical ; that an agreement with private individuals, in pursuance of which, for promised money or property, the road is located on a certain line, or a depot is established at a certain place, is calculated to prejudice the mind and judgment of those whose duty it is to make such location, or has a tendency to do so, in favor of the interest of such private individuals ; and that, therefore, any such agreement or promise is contrary to public policy, and cannot be enforced, is abundantly sustained by Fuller v. Dame, 18 Pick., 472, 479, 481, &c.; Pacific R. R. Co. v. Seeley, 45 Missouri, 212, 215, &c.; St. Jos., &c., R. R. Co. v. Ryan, 11 Kans., 602; S. C., 15 Amer. Reps., 357, 359, &c.; Beston v. Wathen, 60 Ill., 138; Marsh v. The Fairbury, &c., R. W. Co., 64 Ill., 414; S. C., 16 Amer. Reps., 564; St. Louis, &c., R. R. Co. v. Mathers, 71 Ill., 592; S. C., 22 Amer. Reps., 122, 123, 125, &c.; Holliday v. Patterson, 5 Oregon, 177; Williamson v. Chicago, &c., R. W. Co., Iowa Reps., 1880: (22 Alb. Law Jour., 29).
   Martin, J.

The only question presented is, was the petition good in law. The facts stated are admitted by the demurrer.

The company had fully performed its engagement by constructing the road through' Defiance. The defendants had partially performed their stipulations. And, as no complaint is made except of the failure to convey the legal title to the part of the land in controversy, we may assume that their performance in every other respect was complete. This land was selected by the committee, and fully paid for with funds furnished by the defendants and outside parties. It was selected in pursuance of the contract, and the company accepted it accordingly, and entered upon possession. In this situation the company was manifestly the full equitable owner in possession, and entitled to all the rights pertaining to that relation. Holgate held the legal title only, and held it in trust for the company. The defendants would have been liable for any default of his whereby the company, without fault or consent on its part, should fail to receive the property. The mortgage given to Cheney created no lien as against the company in possession, and conveyed nothing but the bare legal title. But in the foreclosure suit the company was a party and made no objection to the judgment subjecting the premises, and is concluded thereby. Its default was equivalent to an express assent, validly given, to the incumbrance. 'The property thus subjected sustained to the mortgage debt a relation in the nature of a surety-ship ; and it follows that when it was sold, and the proceeds applied to the payment of the judgment, the company became entitled to reimbursement from the principal debtor, Holgate. Hence, a good cause of action is stated against him, and it was error to sustain the demurrer as to him. His co-committeemen incurred no liability by their assent to the mortgage, for their assent was ineffective, and so was the mortgage, until affirmed by the significant default-.of the company. To hold the other defendants liable would be to make them, without their consent or fault, the company’s principals in an engagement which it alone assumed. It is sought to reach the land on an averment that Cheney holds it in trust for Holgate by some secret understanding entered into since the 'judgment in foreclosure was taken. The necessary implication, is that by the sale he took the title free from trust. It is not perceived on what principle this averment is of any value, at least in the present posture of the case. The title passed free from any right or claim of the compañy, or of any of the proponents, and an equity in favor of Holgate, subsequently acquired, stands on the same footing in respect to this case as does any other item of his property. It is claimed in addition that the default of the company goes further and estops it from asserting that it was at the time of the judgment and sale the real owner. All parties were charged with notice of the company’s possession and ownership. It was a party to the suit, and its interest in the premises was subjected. The condition of the title and ownership as between it and Holgate was unimportant and not in any way in issue. Holgate personally and the company’s land became both bound for the debt, and its reduction to judgment did not preclude inquiry as to whether either was surety for the other. To estop the real owner under such circumstances, to assert as a co-defendant the fact of his ownership, it must appear that the point was at issue, material, and necessarily determined in the action.

What has been said renders irrelevant to the decision of the demurrer a consideration of other questions that have been discussed before us. But as the case goes down for further proceedings, it is proper to notice them briefly as affected by the facts stated in the petition.

There having been full performance on both sides, except to pass the legal title to the company in possession, we think that objections grounded on the statute of frauds are not sustainable. We also think that the acts of alleged performance on both sides are referable to the contract, and to it alone. They were done in compliance with, and are strictly responsive to, the térms of the contract. The company was not required by its charter to run its line through Defiance, nor can it be said that it must or would have done so irrespective of its engagement with the defendants. A route slightly or materially variant might have been equally politic. The proponents contracted for the advantages of the location, and received the full benefit. The company, as it avers, relied on the contract, and we must hold that a default would be a fraud on it.

It is also objected that the agreement is without consideration and against public policy. Stress is laid on the fact that in the agreement the word donations is used in designating the lands and moneys to be provided for the company. The case is one of mutual promises. By acceptance of the proposition the company agreed to make Defiance a point on its line, and in consideration thereof the proponents agreed to secure the right of way as named, and procure for the company depot grounds and certain lands without further cost to it. That public policy forbids the enforcement of contracts to induce the location of railroad lines at particular places in disregard of the rights of stockholders and the public is very true. Contracts for location, providing private emolument for the officials who sanction them, are of course void. And even if the stipulated location turn out to be the best that could have been made, and entail no detriment to stockholders or the public, yet such contracts are held in well-considered cases, and, we think, correctly, to be against public policy as a dangerous exercise of official power for private gain.

In the case at bar these objectionable features are not present. The stipulated compensation was for the company alone. And it may well be that it was'a matter of indifference to the stockholders and public whether the route was through Defiance or not. The propriety of the location in respect to particular points when the charter is silent is of necessity left to the managing officers of the company, and we fail to see any illegality or immorality in their stipulating for the benefit of the company in awarding the advantages of location as between contesting localities. The general doctrine that such an agreement is not void per se as against public policy is laid down in the leading case of Cumberland Valley R. R. Co. v. Baab, 9 Watts, 458, and has been frequently recognized in analogous cases in our supreme court, notably in the decisions sustaining contracts to take stock conditioned on a particular location.

Judgment reversed.