Case ID: ohio_14/html/353, 354-01.html
Source: Caselaw Access Project
Author: {"author": "Birchard, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John T. Stewart and others v. The Little Miami Railroad Company.
    The original act of incorporation authorized the company to change the location of the road, when the cheaper route, or obstacles to its continuation on the route first adopted, were found.
    The proceedings, in obtaining a loan of state credit, were such as would have enabled the state to restrain the company from varying the route of a road, approved by the board of public works.
    The amendatory act, giving the assent of the state to a change of route, conferred no new right upon the company; and, therefore, the board of directors could exercise the powers conferred by the original charter, without procuring the assent of the private stockholders.
    This is an application for an injunction, filed in the Supreme Court of Clark county; and having been heard in that county, and again in Erie county, was reserved for decision in bank.
    The .bill sets forth that defendant is an incorporated company, with powef to construct and maintain a railway from Springfield, through Xenia, and by the valley of the Little *Miami river, to Cincinnati, referring to and reciting portions of the act of incorporation.
    That, under said act, the requisite amount of stock having been subscribed, etc., the directors proceeded to have surveyed and examined, by a competent engineer, the routes from Springfield to Xenia; one by way of Olifton, one by Yellow Springs, and one by tbe valley of Clark’s run. That, by resolution, on April 24, 1837, they adopted tho route by Clifton, and also passed a resolution to apply, and subsequently did apply, to the board of public works, for a loan of tho state credit, filing a plan, etc., of the survey, which was approved by the board; upon which a loan was made by the state. That, on February 19, 1840, an act was passed granting the defendant certain privileges, on the express condition that no change should be made on the route established by tho way of Clifton.
    That on March 11, 1843, an act passed changing the loan of tho state into tho capital stock of tho company, which tho state now holds to tho amount of $125,000.
    That from Cincinnati to Xenia the road is nearly completed. From Xenia to Springfield, not under contract. That at the last general assembly, the president of the board of directors, by order of the board, presented without public notice, and without the direction of the stockholders, a petition praying authority to locate such road on such ground as might be deemed practicable; and on March 4, 1845, authority was granted by special act to relocate between Xenia and Springfield. That the directors, without authority ffom tho stockholders at any meeting, regular or otherwise, trader this act, have assumed to alter, and have abandoned tho established route by Clifton, and have laid out and put under contract another and different route by the Yellow Springs, and are about to use and expend the moans of the company in constructing it. That the stock of the company amounts to $600,000, of which complainants own and have paid sixty shares, amounting to $3,000. That part of complainants subscribed before *any survey, part after the route by Clifton was established, with assurances that the money would not be wanted till that route was put under contract. That they and others, stockholders, own land on the route, and are greatly interested in having it remain as first established. That the new route is expensive, etc.
    The prayer of the bill is for an injunction, etc.
    Tho respondent, by Frederick Morrow, president of the company, has answered, admitting substantially the allegations of the bill; but claiming that, under the act of March 4, 1845, tho company was authorized to relocate the road whenever a better or cheaper route, and one having less obstacles, could be found, and claiming that such is the route established.
    Odlin & Schenck, for complainants:
    The defendant is a private corporation, and when it located the road, its power in that behalf was exhausted. After the adoption of the Olifton route, the legislature had no power to authorize the directors to change it, without the assent of the stockholders, which assent has never been given. Marlborough Manufacturing Co. v. Smith, 2 Conn. 579; 6 Serg. & Rawle, 498; 7 Serg. & Rawle, 517; 10 Mass. 384; 8 Mass. 268.
    Fox & Lincoln, for defendant:
    The directors were the proper persons to apply to the legislature for power to relocate, and to make the relocation. They are t'he agents of the company, and the only agents recognized by the charter.[356 Angell & Ames, 212, 213; Angell on Corp. 167; 12 Wheat. 113; 6 Serg. & Rawle, *508; Delaware Canal Co. New York and Erie Railroad Co., 9 Paige, 328.
    The granting an injunction is a matter of discretion, and will not be granted to restrain a great public work, unless the complainant is in great danger of sustaining an irremediable injury. 8 Ohio, 39 ; 6 Paige, 563 ; 5 Paige, 516.
   Birchard, J.

The powers of the respondent are those conferred by the act of incorporation and the acts amendatory thereto. Section 1 of the original law authorized the construction of a road between the given termini. Section 10 empowered the directors to cause such examination and surveys of the road as might enable them to select the most advantageous line, and required them, “ as soon thereafter as practicable, to select the route on whieh said road shall be constructed.”

Section 12 gives to the “ corporation,” after having thus selected a route, authority to vary the route and change the location, whenever a better and cheaper route could be had, or any obstacle to continue said location was found, either by difficulty of construction or procuring right of way at a reasonable cost.

Under the original powers conferred by the charter, the authority of the board of directors to do the act complained of, would be ample. The answer shows that a better and cheaper route than by the way of Clifton can be had, and that there are difficulties in procuring the right of way by that route, whieh do not ex-:st in reference to the one recently selected by way of Yellow Springs.

These original powers were, however, impaired by the act of the company in obtaining the loan of state credit, at least so far as the rights of the state were concerned.

Preliminary to receiving that loan, the company was required to locate, survey, and estimate the costs of the road, etc., and submit the same to the approval of the board of public *works, without which approval, the loan could not have been obtained,, Swan’s Stat. 559.

All these proceedings were had pursuant to the statutes; and in virtue of them, a credit of $200,000 was procured from the state.

It would be unconscionable to permit this company, after the receipt of that loan, without the consent and against the will of the state, to change the location then made and acted upon; and, at the instance of the state, they would be estopped from exercising any such power. But the alteration complained of, is not against the will of the state. It is with her consent. The amendatory act, of March 4, 1845, provides, “ That the Little Miami Railroad Company be, and they are hereby authorized to survey and locate the line of said road between the town of Xenia, etc., and Springfield, upon such ground as may bo most suitable and practicable : Provided, that all subscriptions, etc., upon condition that the road should be made upon the route heretofore surveyed and adopted, and all stock subscribed after said route was located and reported to the board of public works, by persons residing thereon,” ete., “shall be abandoned, and the money, with interest, paid on demand.” The effect of this statute is at least to reinvest the company, or rather to restore to them the rights and powers conferred by the original act of incorporation. It destroys the power which the state would otherwise possess, of setting up an act of the company to prevent the exercise of one of the privileges conferred by the original charter. It is a release of the right of the state to interpose acts which would estop the company from making a better location than the Clifton route.

The complainants treat this act as a grant of new powers, and Insist that the directors, without the assent of the stockholders, can not accept of any alteration in the fundamental law of the company. Without controverting their conclusion, in case their premises were correct, we avoid it by refusing to admit their premises. As above stated, the original charter conferred authority to make the alteration complained *of. That charter has not been repealed nor impaired by any act of the legislature, save the declaratory restriction in the proviso to section 3 of the act of February 19, 1840, “that said company substantially adhere to the line originally located in accordance with the original surveys, as established and reported to the board of public works.” There is no act of the legislature bearing upon the subject. This proviso does not affect to repeal the charter — such was not its object or intention. It may manifest the intention of the state not to relinquish the right she had acquired, by the proceedings in reference to the loan of credit, to restrict the company in the exercise of those'powers granted in the act of incorporation which might otherwise be used in a way to deprive her of the benefit intended to be secured from the approval of the plan, etc., by the board of public works. This proviso is now repealed.

There is another ground upon which, as we think, the injunction should be refused. The complainants appear before us as stockholders of the company, seeking to protect their interest, as such, from injury. Their interest, as landholders, upon the route, is the main interest. Now we can not shut our eyes to the fact that, were it not for the incident, the injury to the principal, i. e. the stock, would not be a cause of complaint. The power to grant writs of injunction, is one of the extraordinary powers of a court of chancery, and should only be exercised, in cases like this, where a great and important public work is to be restrained and suspended, to prevent injuries that would otherwise be irreparable, or when the magnitude of the injury to be dreaded is so great and the risk so imminent that no prudent person would think of incurring it. Then the complainant’s right is doubtful; or an action at law or in chancery, prosecuted in the ordinary mode, will afford adequate redress. 'The provisional injunction should be refused. Injunction refused.