Case ID: ohio-st_16/html/0216-01.html
Source: Caselaw Access Project
Author: {"author": "Brinkerhoee J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*The City of Cleveland v. The State Bank of Ohio et al.
    1. A power simply to sell personal property does not include or imply a power to dispose of the same by exchange or barter.
    2. Where a special statute constitutes certain persons named therein commissioners for a municipal corporation, and confers on them certain specific powers enumerated therein, a following clause, authorizing them ‘'to do whatever else may be necessary to secure and advance the interests of the city in the premises,” does not work an. enlargement of the powers specifically granted, but the phrase “ in the premises ” limits the discretion conferred to the manner of the execution of the special grants of power.
    3. Boxborough v. Messick, 6 Ohio St. 448, followed and approved.
    Civil action. Reserved in the district court of Cuyahoga county on conclusions of fact found by that court on the pleadings, exhibits, and evidence.
    The original action was brought by the city of Cleveland against the State Bank of Ohio, Christopher P. Wolcott, as receiver of the Bank of Akron, John W. McMillen, the Cleveland, Zanesville and Cincinnati Railroad Company, and the Cleveland, Painesville and Ashtabula Railroad Company, to perpetually enjoin all of the defendants, except the latter company, from transferring, or in any way disposing of, certificates for two thousand shares, of fifty dollars each, of stock in the Cleveland, Painesville and Ashtabula Railroad Company, or any interest, or pretended interest, in the same; and from procuring or demanding a transfer of the stock, or any part of the same, on the books of the Cleveland, Painesville and Ashtabula Railroad Company, from commissioners acting for the city of Cleveland, to either of them, or to any one; and to enjoin the •Cleveland, Painesville and Ashtabula Railroad Company from transferring the stock upon its books to the State Bank of Ohio, the said Wolcott as such receiver, the said Cleveland, Zanesville and Cincinnati Railroad Company, the said McMillen, or to any one named or designated, directly or indirectly, by them, or either •of them; and to obtain an order of court, upon a final hearing in the premises, that the Cleveland, Zanesville and Cincinnati Railroad Company, the • said Wolcott as such receiver, the said Mc-Millen, and the State Bank of Ohio, surrender up said certificates <of stock to the plaintiff, orto said commissioners in trust for it, and for *such other and farther relief in the premises as justice and good conscience may require.
    On February 13, 1851, the general assembly of Ohio passed •“an act to authorize the city of Cleveland to subscribe to the capital stock of the Cleveland, Fainesville and Ashtabula Railroad •Company ” (49 Ohio L. 502), empowering Melancthon Barnett, Hiram Y. Wilson, Arthur Hughes, Charles Hickox, and Oliver H. Ferry, and their successors, as commissioners, to subscribe, under the provisions of said act, in the name of the city of Cleveland, for shares in the capital stock of said railroad company, not exceeding, in the whole, one hundred thousand dollars, and for the ■purpose of paying the installments thereon to issue bonds, scrip, or other contracts, in proper form, in the name of, and binding the city of Cleveland, bearing interest, payable annually.
    The first section of the act further provides that “the shares of «took so subsei'ibed, and the avails arising from the sales thereof, •shall be held for the purpose of paying the principal of such bonds, scrip, or other contracts, and shall be subject to no other liability of the city whatever, so long as such bonds, scrip, or other •contracts shall remain unpaid.”
    The third section provides : “ The commissioners, in person or by proxy, or a majority of them, are hereby authorized to attend all meetings of the stockholders of said railroad company, and vote on the shares which may at any time be held by said city, for the choice of directors of said company, and on all questions which may be submitted to the vote of such stockholders ; and they are also authorized to receive all dividends and profits which may accrue on the bonds, scrip, or other evidences of indebtedness, which may be issuedby them in payment of said shares; to apjily any surplus of such dividends and profits in liquidation of such indebtedness, or any part thereof; or to invest the same to be so applied whenever opportunity may present, or to them may seem expedient; to exchange shares or any part thereof for the evidences of such indebtedness ; to sell said shares or any part thereof, at such time or times as to them may seem expedient; and to do whatsoever else may be necessary to secure and advance the interests of the city in the premises; provided, however, that said ^commissioners shall not sell any of said shares at less than the par value thereof, unless they shall be expressly authorized to accept a less price, by the vote of not less than two-thirds of all the members of the city council, and after at least ten days previous notice having been given, in writing, to said city council, and also by publication in. said city, that such authority will be asked for by said commissioners at some particular meeting of said city council, to be named-in said notice.”
    The district court found the following facts :
    1. The following is a copy of the caption and subscription made-by said commissioners for the two thousand shares of stock in the Cleveland, Painesville and Ashtabula Bailroad Company, viz :
    “ ¥e, the subscribers, severally agree with the Cleveland, Painesville and Ashtabula Bailroad Company, to take the number of shares of the capital stock of said company set oj^posite our respective names, each share being fifty dollars, and to pay therefor in such installments as the directors of said company may, in conformity with the charter, require; not, however, faster than ten per cent, of the amount subscribed every successive sixty days during the first six months ensuing the date hereof, and ten per cent, each successive thirty days thereafter, until the whole is paid. But this subscription shall not be binding upon us, or either of us, unless within three months from the date hereof there shall be. subscribed iu addition to subscriptions heretofore made by responsible-subscribers, inclusive of what may be subscribed on behalf of the city of Cleveland, stock to the amount of two hundred thousand dollars.
    “Dated Cleveland, January 20, 1851.
    
      
    
    On the 23d June, 1851, said railroad company issued a certificate of stock pursuant to said subscription, of which the following is a. copy, with blank for transfers thereon, viz :
    
      «•“SHARES ?50 EACH. UNITED STATES OF AMERICA. CAPITAL $1,500,000. [->89'
    STATE OE OHIO.
    CLEVELAND AND ERIE RAILROAD.
    Number of Certificate, Number of Shares,
    23. 2,000.
    ^ “This certifies that the city of Cleveland is proprietor of two-"thousand shares in the capital stock of the Cleveland, Painesvillo S and Ashtabula Railroad Company, incorporated by the legislature ¡| of Ohio, February 18,1848. Stock transferable on the books of ■§ the company upon the surrender of this certificate.
    | “ Oeeice oe the Company, 1
    3 Cleveland, June 23,1851. j
    “ Alered Kelley, President.
    
    “Peleg P. Saneord, Secretary.”
    (Indorsed.)
    “ For value received, hereby sell, transfer, and assign to
    , the shares of stock within mentioned, and authorize to make the necessary transfer on the books of the company.
    “Dated, , 18 .”
    The certificate was delivered to and held by said commissioners from the time it was issued till the 15th day of May, 1854, when it ' was surrendered and canceled as indicated by the words, “ Canceled May 15, ’54,” written across the face of said copy, at the request of said commissioners, by the secretary; and said ten certificates above mentioned, numbered 1406 to 1415 inclusive, were issued at the request of said commissioners and delivered to them. Said stock has always stood on the stock-books of the company to-the credit of the “ City of Clevelandand no transfers thereof have ever been made on the books of the company by the commissioners.
    2. The contract, copied below, was reduced to writing, and the-signatures and seals of the parties subscribed and annexed thereto, as indicated by said copy, on the 2d of May, 1854, but the delivery thereof, or its effect as a contract, was suspended until it should be reported to the board of directors *of the Cleveland, Zanesville and Cincinnati Railroad Company, and be ratified by said board:
    “ This memorandum of an agreement made this second day of May, a. d. 1854, by and between Melanethon Barnett, Hiram Y.. Willson, Arthur Hughes, Charles Hiekox, and Oliver H. Perry,, commissioners appointed by an act of the general assembly of the-State of Ohio, passed February 13,1851, entitled ‘an act to authorize the city of Cleveland to subscribe to the capital stock of the Cleveland, Painesville and Ashtabula Railroad Company,’ in their capacity as such commissioners of the first part, and the Cleveland, Zanesville and Cincinnati Railroad Company of the second part, witnesses:
    “ That the party of the first part hereby agrees to sell to the party of the second part, capital stock of the Cleveland, Painesville .and Ashtabula Railroad Company, fully paid up, and now held by the party of the first part, in their capacity aforesaid, to the amount of one hundred thousand dollars, and to transfer the same to the party of the second part, reserving in such transfer to the party of the first part, the right to receive for the use of the city of Cleveland all dividends that shall 'be declared on said stock by the said Cleveland, Painesville and Ashtabula Railroad Company, and all profits to which the holder of such stock shall be entitled between the date hereof and the 1st day of May, a. b. 1859, and the right to subscribe for all new stock, that the holder of such 'stock shall be entitled to subscribe for during the term aforesaid, and in like manner reserving the exclusive right to represent said stock and to vote thereon at all elections and other meetings of said Cleveland, Painesville and Ashtabula Railroad Company during the like period for the sum of one hundred and twenty-five thousand dollars.
    “ And the party of the second part hereby agrees to purchase the said stock of said party of the first part, upon the terms above stated, and to pay said party of the first part therefor, the said sum of one hundred and twenty-five thousand dollars in manner following—that is to say, by the issue and delivery, to the party of the first part, of two thousand and five hundred shares, of fifty dollars each, of the full paid capital stock of said Cleveland, Zanesville and Cincinnati Railroad Company, the party of the second part reserving to itself the right to receive for its own benefit all dividends that shall be declared on the last-named stock, by the said Cleveland, Zanesville and Cincinnati Railroad Company, and all profits to which the holder of the same shall be entitled between the date hereof and the first day of May, a. b. 1859, and the right to subscribe for all new stock that the holder of such stock shall be entitled to subscribe for during the term aforesaid, and in like manner reserving the exclusive right to represent said stock, ■and to vote thereon at all elections and other meetings of said Cleveland, Zanesville and Cincinnati Railroad Company, during the period last aforesaid; and said party of the second part further agrees that the stock so by it transferred to the said party of the first part shall be worth in the market on said first day of May, a. b. 1859, and for thirty days thereafter, the full sum of one hundred and twenty-five thousand dollars; and it hereby agrees, that it will make up to the said party of the first part, or their successors or ■assigns, on demand, the amount that the value of said stock, or any part thereof, shall at any time within thirty days after said first day of May, A. d. 1859, fall below par; and for the purpose of securing the fulfillment of the above stipulation, the said party of the second part hereby further agrees that it will, upon the delivery hereof, execute and deliver to said party of the first part its income bonds-to the amount of one hundred and fifty thousand dollars, which bonds by the terms thereof shall be convertible at the pleasure of the holder thereof, at any time after the first day of May, A. d. 1859, into the stock of said company, payable on the said first day of May, A. D. 1859, to bear interest at the rate of seven per cent, per annum after maturity, if not then discharged, and to be held by the said party of the first part as collateral security for the fulfillment by the said party of the second part of this agreement, which hond or bonds, or so much or many thereof as shall be necessary, the said' party of the first part and their assigns are hereby authorized, upon the failure of the party of the second part to fulfill this agreement, to sell in the stock market of the city of New York, for the purpose *of realizing from such sale the difference between the market value and the par value of said stock so delivered to-said party of the first part as above provided, twenty days notice of the time and place of such sale having first been given to the said party of the second part.
    “And the party of the second part further agrees that the northerly terminus of its said road shall be in the city of Cleveland aforesaid, but it reserves the right to continue its track from any point in that portion of said road which has now been constructed, to said city of Cleveland, or to use the track of any other railroad for the purpose of connecting its road with said city, and it moreover agrees-that all the regular trains shall run to and from said city.
    “ Witness the hands and seals of said commissioners, and the signature of the president and seal of said company.
    “M. Barnett, -[Seal’
    “H. Y. Willson, ‘Seal
    (seal.) “Arthur Hughes, "Seal"
    “ Charles Hickox, [Sear
    “ O. H. Perry, [Seal*
    “ Commissioners of the City of Cleveland.
    
    “ Simon Perkins,
    
      “Pres’t C, Z. and C. B. B. Co.”
    
    (Indorsed.)
    “ The C., Z. and C. B. B. Co.,
    AND
    “ The Commissioners of the city of Cleveland fob THE O., P. AND A. B. B. Co.
    “Agreement to sell stock.”
    3. This contract, as written out, signed, and sealed, as aforesaid,, was reported to said board of directors of the Cleveland, Zanesville- and Cincinnati Railroad Company on the 13th of May, 1854, and was on that day in due form ratified and approved by said board, as appears by the record of the action of said board, a copy of which is as follows:
    “Akron, May 13, 1854.
    “Board met. Present—Messrs. Perkins, McMillen, Henry, Miller, and Day. The minutes of the meetings of April 1st and April Í5th wore read and approved. The committe appointed at the last meeting ‘ to negotiate for the transfer of railroad stock held by the city of Cleveland,’ etc., reported that on the second instant they con-eluded an arrangement *with the commissioners appointed by an act of the general assembly of the State of Ohio, passed 13th February, 1851, entitled ‘an act to authorize the city of Cleveland to subscribe to the capital stock of the Cleveland, Painesville and Ashtabula Raildroad Company,’ for the transfer to this company of one hundred thousand dollars of the capital stock of the said Cleveland, Painesville and Ashtabula Railroad Company, held by such commissioners, on the terms set forth in the original agreement of that date, signed by the said commissioners of the one part, and the president of this company of the other part, and which .agreement was laid before the board. Whereupon, the report was accepted, and it was
    “ Resolved, That the said agreement be and the same is hereby ratified and approved.
    “ Resolved, That a certificate in the usual form, dated May 2, 1854, for twenty-five hundred shares, of fifty dollars each, of the capital stock of this company, transferable only after the 1st day of May, 1859, be issued and delivered to the said commissioners.
    
      “jResolved, That the president execute, seal with the common seal, and deliver to the said commissioners, to be held by them for the purpose ‘of security specified in said agreement, the income bond or income bonds of this company, dated 2d May, 1854, for one hundred and fifty thousand dollars, payable to them or bearer, on the 1st day of May, 1859, at its principal office, and if not then paid, with interest after that time at the rate of seven per cent, per annum qntil paid, and that said bond or bonds, or any part thereof, be made convertible into the stock of the company, at its par value, at any time after the maturity and before the payment thereof, when and in such amounts as the holders shall elect.
    “ Resolved, That the president be and is hereby authorized, to do any and all acts that are or may be necessary to fulfill and and carry into effect the aforesaid agreement.
    “ The certificate of qualification of John Cary, as director, was received and placed on file.
    “Adjourned.”
    
      “ September 22, 1854.
    “ Board met. Present—Messrs. Perkins, Henry, McMillen, and Miller.
    *« Mesolved, That Messrs. Perkins, McMillen, and Miller be a committee to arrange for the liabilities of the company, maturing or to mature in New York or elsewhere, with authority to sell or hypothecate any of the securities of the company, or to pledge the income of the road for that purpose.
    “ Minutes of the last meeting were read and approved.
    “Adjourned.”
    “ April 22, 1859.
    “ Directors met. Present—Messrs. Cummins, Perkins, Henry, Enos, Ellsworth, and Bliss.
    “ On motion, it was
    “ Mesolved, That whereas, by reason of unforeseen contingencies, it has hitherto 'been impossible to accomplish the objects of the contract between this company and the commissioners of the city of Cleveland, for subscription......That said certifi-
    cate for $125,000 of stock of said company, and said income bond for $150,000, were issued and placed in the hands of the committee of said board appointed to perfect said contract, together with a copy of the resolutions aforesaid of said board; and on the 15th day of May, 1854, said committee presented to said commissioners the said resolutions of said board, and the said stock certificate and income bond; and said certificaté and bond were, on that day, delivered to and received by said commissioners under said contract; and at the same time said commissioners delivered to said committee, who received the same under said contract, ten certificates of two hundred shares, each of fifty dollars per share, of stock in said Cleveland, Paincsville and Ashtabula Railroad Company, numbered 1406 to 1415, both inclusive, severally bearing date the said 15th day of May, 1854; of one of which certificates the following is a copy, and also a copy of all of the others except the numbers, with the indorsements thereon, viz:
    “SHARES $50 EACH. UNITED STATES OP AMERICA. CAPITAL $1,500,000.
    STATE OP OHIO.
    CLEVELAND & ERIE RAILROAD.
    Number of Certificate, Number of Shares.
    1450. 200.
    
      “ This certifies that M. Barnett, H. Y. Willson, A. Hughes, O. H. Perry, and C. Hickox, commissioners, are proprietors of *two hundred shares in the capital stock of the Cleveland, Painesville and Ashtabula Railroad Company, incorporated by the legislature of Ohio, February 18, 1848. Stock transferable on the books of the company upon the surrender of the certificate, after the 1st day of May, a. d. 1859. William Case, President.
    
    “Geo. B. Ely, Secretary.
    
    “ Oeeige op the Company, Cleveland, May 15,1854.”
    
      The indorsement upon said copy of certificate is as follows, viz :
    “OORT OR CERTIFICATE.
    “Eor value received, hereby sell, transfer, and assign to-
    the shares of stock within mentioned, and authorize to make the necessary transfer on the books of the company after the first day of May, 1859.
    “Dated, , 18 . “M. Barnett,
    “H. Y. Willson, f‘A. Hughes,
    “ O. H. Perry,
    “Charles Hickox,
    “Commissioners.”
    Such certificates and the indorsements thereon, except the words- “ after the first day of May, a. d. 1859,” in both the body of the certificates and the indorsements, are in the form used by said railroad company for transfers of its stock, being printed blanks furnished by said company.
    On the 15th of May, 1854, the following entry was made by said commissioners upon the record of their proceedings, viz:
    “ 15th May, 1854. At a meeting at which all the members were present, for the purpose of consummating the agreement made on. the 2d inst., all the terms in ratification of said agreement were complied with by the transfer and delivery to each other, by both parties, of such railroad stocks and income bond as specified in said agreement.”
    4. Before the agreement of May 2, 1854, was entered into, and pending negotiations respecting the same, the following *proposition was submitted in behalf of the Cleveland, Zanesville and Cincinnati Railroad Company to said commissioners:
    
      “To the Commissioners of the City Subscription to the Cleveland, Painesville and Ashtabula Railroad Company:
    
    “ Gents :—In order to extend the C., Z. & C. R. R. Co. from Millers-burg to Zanesville, the undersigned, in behalf of said company, ask aid from your city, and propose that it be given in the following manner, viz: That you sell and transfer to the C., Z. & C. R. R. Co. your subscription to the C., P. & A. R. R. Co. of $100,000, and receive therefor $100,000 stock in the C., Z. & C. R. R. Co., and to save you from any loss, the C., Z. & C. R. R. Co. will execute to you their bond, guaranteeing to pay you a rate of interest thereon per annum equal to the dividends declared and paid by said C., P. & A.. E. E. Co. upon said stock, and payable in the same manner; and. also binding said company to said commissioners, at or before the expiration of five years, to resell to them $100,000 of the stock of said C., P. & A. E. E. Co. at its par value, at their option. The com missioners shall have the proxy to vote upon the stock of the O., P. & A. E. E. Co. sold as aforesaid, in all elections of the said C., P. & A. E. E. Co., and the C., Z. & C. E. E. Co. shall have the proxy to vote upon the stock of C., Z. & C. E. E. Co. in all elections of the latter company. The stock of the C., Z. & C. E. E. Co. issued to said commissioners, is not to draw interest or dividends during the arrangement.
    “ Simon Perkins,
    “ J. W. McMillen.
    “Akron, March 18,1854.”
    The subject-matter of this proposition was communicated by the commissioners to the city council of the city of Cleveland, and their advice in reference thereto requested by the commissioners; and upon consideration thereof, the city council, on the 21st of March,. 1854, unanimously adopted and communicated to the commissioners a resolution in the words following:
    “Resolved, That this council recommend and advise the *commissioners of the city’s shares of the stock in the Cleveland, Painesville and Ashtabula Eailroad Company, to make any disposition of said stock to the Cleveland, Zanesville and Cincinnati Eailroad Company which they may deem advisable to make, provided it i» not disposed of below par, and that the securities taken in payment or exchange secure the value of the stock disposed of, beyond a. reasonable doubt.”
    The proposition of the railroad company was afterward rejected by the commissioners; but the company, on the 15th day of April, 1854, by resolution of its board of directors, appointed Messrs. Perkins, McMillen, and Miller, three of the members of the board (who had previously been the negotiators with the commissioners-on the part of the company), a committee “ to negotiate for a transfer of railroad stock held by the city of Cleveland, to aid said company in the construction of their road to Zanesville and the committee renewed negotiations in behalf of the company with the commissioners, for the two thousand shares of stock of the Cleveland, Painesville and Ashtabula Eailroad Company • which negotiations resulted in the contract of May 2, 1854, above mentioned,, with the parol qualification of the same hereinafter found.
    
      On the hearing before the court of the cause, as first herein above stated, the plaintiff offered to give evidence by the testimony of ■witnesses in parol, to the effect that, in the negotiations between the committee and the commissioners, the former represented that •the company was desirous to procure the two thousand shares of stock for the sole purpose of using the same in raising money to enable it to construct that portion of its road which lies between Millersburg, in the county of Holmes, and Zanesville, in the county •of Muskingum, in the State of Ohio ; that the road of the company from Hudson to Millersburg was then substantially built, and its cost already provided for; that the company had received reliable assurance that available subscriptions to the amount of $400,000 could be obtained on the line of its road from Millersburg to Zanesville, provided $100,000 could be obtained in Cleveland, making in the aggregate $500,000, *whichthey alleged would be suf- , ficient to grade and bridge that portion of the road; after which, they expressed the opinion that the money to complete the road ■could easily be raised by mortgage on the road itself; that, by the ■construction of said portion of the road (the company making Cleveland its northern terminus), a railroad connection between Cleveland, .Zanesville, and Cincinnati would be secured, which would be of .great value to the city of Cleveland; and that if the stock, or any interest in the same, should be transferred by the commissioners to .the company, the same should be used for no other purpose what•ever by the company, than for the construction of its road from Millersburg to Zanesville; and that the same should not be used at all, unless such promised subscriptions along the line of the road .should first be secured; and that it was in fact the agreement of •the parties, in addition to the terms set forth in the contract of May 2d, that the stock should not be used by the company for any •other purpose than in the construction of its road between Millersiburg and Zanesville; and that the same should not be used at all unless such subscriptions, so promised along the line of the road, ■to the amount of $400,000, should first be secured ; and that with•out such stipulation the commissioners would not have concluded .any contract with the company for the transfer of the two thousand shares of stock; that the verbal agreement of the parties in respect to the limited use of the stock to be made by the company, being ,as above proposed to be proved by the plaintiff, a written draft of 4he contract was procured to be prepared under the direction of the commission ers, including a clause stipulating for sucb limited use of the stock; but that when the draft of the contract was submitted to the committee, with a view to its being executed, the committee objected to said clause, urging as a reason against its being included, that it would embarrass them in disposing of the stock to raise money upon it, as it might impose upon persons purchasing or advancing money upon it, the duty to see to the application of the money; that, influenced by this objection so urged by the committee against including said clause in the written evidence of the agreement, and by the solemn promises then ^verbally made, and personal assurance given by the committee that no other use should be made of the stock, the agreement was redrafted in writing, in the form in which it was executed as aforesaid; and that it would not have been so executed but in faith that the verbal stipulation so excluded from the written evidence of the agreement, would be executed in good faith. To the introduction and admission of which parol evidence (to prove the alleged additional terms of the agreement so by the parties intentionally excluded from the written evidence of the contract as alleged), the defendant, the State Bank of Ohio, by its counsel objected; but the court, reserving to said defendant the benefit of the objection, allowed and admitted the testimony to be given, subject to be overruled or excluded, if upon full consideration it shall be found to be inadmissible in law, for the purpose of adding such additional terms of the contract to the written evidence thereof by parol as aforesaid, or,for any other competent purpose.
    Whereupon, the evidence being given, the court found, subject to the objection reserved as aforesaid, that in fact it was verbally agreed between the committee and the commissioners as above mentioned, that the stock should not be disposed of or used by the company for any other purpose than in the construction of that part of the line of its road between Millersburg and Zanesville, nor be used at all unless such promised subscriptions along the line cf the road to the amount of 1400,000, should be first secured by the company.
    And the court further found, subject to the like condition, from parol testimony in like manner offered by the plaintiff, objected to by the defendant, and admitted under the like reservation by the court, that the commissioners, on the 15th of May, 1854, delivered the certificates to the committee so appointed by the company as above found, to negotiate for the same, to wit, to Simon Perkins,. John W. McMillen, and Horace A. Miller, such delivery being-made by the commissioners and received by Perkins, McMillen, and Miller, upon the express understanding that the certificates-should be used by the company for no other purpose than to raise the means of constructing that portion of the company’s road which 250] *lies between Millersburg and Zanesville, and that they should not be used at all unless the subcriptions so promised along the line of the road to the amount of $400,000 should first have been secured; and that for the fulfillment of which condition Perkins and McMillen gave to the commissioners their solemn personal assurance.
    6. The court did not find, as alleged and claimed in pleading on the part of the plaintiff, that the commissioners were induced to-execute the contract by reason of any fraudulent representations-made by McMillen, or any or all of the committee, for the fraudulent purpose of procuring the delivery, by the commissioners to the-company, of the stock under a contract so expressed in writing as to enable the company to divert the stock from the purpose for which alone the commissioners agreed to deliver the certificates to-the company.
    7. The court found that McMillen, at the time the certificates for the two thousand shares of stock in the Cleveland, Painesville and Ashtabula Railroad Company were delivered by the commissioners under the contract as aforesaid, was, .and from thence to the month of January, 1855, continued to be the treasurer and financial agent of the Cleveland, Zanesville and Cincinnati Railroad Company, and that the ten certificates for the two thousand shares of stock, im mediately upon the delivery thereof as aforesaid, passed into the hands of McMillen as the proper custodian thereof on behalf of the company, and were kept by him in the safe and vault of the Bank of Akron, at the time a portion of the advances of the money of the-bank by McMillen were being made as hereinafter stated; and that,, as financial agent of the railroad company, McMillen was authorized to negotiate the ordinary securities belonging to the company, and otherwise, by the use of the credit of the company, to raise funds for its use, and was in the habit of so doing, but had no* authority from the board of directors to dispose of the two thousand shares of stock for any purpose whatever. And the court further found that the board of directors of the railroad company, as such,. Rad not, nor had any of the members of said board other than McMillen, any knowledge prior to the 16th of October, 1854, that McMillen was advancing the money of the Bank of Akron to the use of *'the railroad company, or that McMillen was making or procuring advances of money in any way to the uses of the railroad company upon the faith o'f the stocks as a security for the repayment thereof, or as an indemnity against loss thereby; and "that none of said advances were made or procured to be made by McMillen in faith of the stocks, or on the strength or credit of the -same, at the time the advances were made or procured to be made, as a security for the repayment thereof, or as an indemnity against .loss thereby, as claimed in pleading on behalf of the defendants.
    8. The court found that whatever indebtedness existed at the dime of the hearing, on the part of the Cleveland, Zanesville and 'Cincinnati Railroad Company, to McMillen, as alleged and claimed ■by the defendants in pleading, if anything, was for advances by McMillen to the uses of the company, which were made by MeMillen, he being president of the Bank of Akron, unlawfully, and without authority of the bank, from the money and effects of the ■bank, and that McMillen first made known to the board of directors ■of the railroad company the fact of having so misapplied the funds -of the bank, on said 16th of October, 1854, on which day he communicated to the board that such was the fact, at the same time presenting to the board a memorandum, on a slip of paper, of the amount in gross, without any details of items or dates, and alleged ■that he had so made the advances for the use of the company, in faith of said stocks as security and indemnity therefor; and that, having thus exposed himself to-the danger of criminal prosecution for such misapplication of the funds of the bank, he solicited said board to make a formal pledge of the stock to him, as security for the indebtedness so incurred by the railroad company to him for ■said advances, and as an indemnity in that behalf against loss; that thereupon said board, on the day and year last above named, by a lawful quorum and majority for that purpose, passed the following resolutions:
    “Akron, October 16, 1854.
    “ Whereas, J. W. McMillen hath, on his sole responsibility, made, or procured to be made, advances of money to and for this company, at its request, to the amount of about one hundred ^and five thousand dollars, upon the strength and credit of the stock hereafter mentioned, in his hands as financial agent,, which advances are dne and unpaid;
    “ Resolved, That the said stock, being the stock of the Cleveland, Painosville and Ashtabula Railroad Company, and the certificates thereof, to wit, two thousand shares, of fifty dollars each, held by this company, be, and the same are hereby, sold, assigned, transferred, set over, and pledged to said McMillen and his assigns, to. secure, indemnify, and protect him for all advances so made, or procured to be made by him, or which may hereafter be made by him, but not exceeding in all the sum of one hundred and five thousand dollars; and the said J. W. McMillen and his assigns is and are hereby authorized and empowered to assign, transfer, sell, pledge,, hypothecate, or otherwise dispose of the said stock or certificates, or any part thereof, in such manner, on such terms and rates, and at such times, either for the purpose of repaying or of raising money ta repay the sum or sums so advanced, or procured to be advanced, or which may hereafter be advanced, by him, with interest, or for the purpose of paying or securing therewith any indebtedness or other liability, of whatever kind or nature, incurred by or resting on him, in making or procuring such advances, as he shall deem may be most effectual for his own security, indemnity, and protection.
    “ Resolved, That Milton W. Henry be authorized and required, in the name and on behalf of the company, to make, under the-corporate seal, or otherwise, all such assignments, transfers, powers, and deliveries as are or may be necessary to carry the first of the foregoing resolutions into full effect, and to vest in the said McMillen the full title and absolute control of the stock mentioned' therein, for the objects and purposes declared in the said resolution.”
    On the same day, the said Milton W. Henry, by authority of the resolutions, so far as they are competent to confer the same, in the name of the Cleveland, Zanesville and Cincinnati Railroad Company, and under the corporate seal, executed and delivered toMcMillen an assignment, pledge, or hypothecation of the two-thousand shares of stock in question in this case, of which the-following is a copy:
    *“ Whereas, The Cleveland, Zanesville and Cincinnati Railroad Company is indebted to John W. McMillen in about the-sum of one hundred and five thousand dollars, for advances made or procured to be made by him at its request: Now, therefore, in consideration thereof, and of the sum of one dollar to it in hand paid, the said, the Cleveland, Zanesville and Cincinnati Railroad. Company, hath sold, assigned, transferred, and set over, and doth, hei’eby sell, assign, transfer, and set over to the said John W. McMillen and his assigns, two thousand shares, of fifty dollars each, of the capital stock of the Cleveland, Painesville and Ashtabula Eailroad Company, and the certificates thereof, held and owned by this company, to secure, indemnify, and protect him for the advances so made or procured to be made by him, or which may hereafter be made by him, but not to exceed in all the said sum of one hundred and five thousand dollars ; and the said John "W. McMillen, and his assigns, is and are hereby authorized and empowered to sell, assign, transfer, ple'lge, hypothecate, or otherwise dispose of the said stock or certificates, or of any part thereof, in such manner, at such times, and on such terms and rates, either for the purpose of repaying or of raising money to repay the sum or sums of money so advanced as aforesaid or procured to be advanced, or which may hereafter be advanced by him, with interest, or for the purpose of paying of securing therewith, any indebtedness or other liability, of whatever kind or nature, incurred or to be incurred by, or resting on him, in making or procuring such advances, as he shall deem may be most effectual for his own security, indemnity, and protection.
    “ In testimony whereof, the said Cleveland, Zanesville and CinfcoKPOEATE) cinnati Eailroad Company hath caused its name and t seaii. \ eorporate seal to be hereto affixed, by Milton W. Henry, its special agent properly authorized for that pui’pose, this 16 thday of October, a. d. 1854.
    “ The Cleveland, Zanesville and Cincinnati Eailroad Company,
    “ By Milton W. Henry, Special Agent.”
    
    The court say that by this finding it is not intended to *con-elude the parties upon the question whether the charges made by McMillen to the railroad company, whether allowed to him by the company or not, were or were not proper charges against the company, and did or did not constitute, so far as the rights of the plaintiff herein are concerned, an indebtedness from the company to McMillen, it being the intention of the court to leave that question open for future determination.
    9. Afterward, to wit, on the 17th of October, 1854, John W. McMillen executed and delivered to the Bank of Akron an assignment in writing, of which the following is a copy:
    “For value received of the Bank of Akron, I do hereby sell, assign, transfer, and set over to the said, the Bank of Akron, all claims, debts, and demands due to me from the Cleveland, Zanesville and Cincinnati Eailroad Company, however originating, and all securities now held or which may hereafter be obtained by me for the same, and especially two thousand shares of the stock of the Cleveland, Painesville and Ashtabula Railroad Company, assigned and transferred to me, to be held by the said Bank of Akron as collateral security for all claims and indebtedness which it may have against me, with power to sell, pledge, or otherwise dispose of the same as it may think best, to pay such claims and indebtedness.
    “ Akron, October 17, 1854. . J. W. McMillen.”
    "With said instrument of assignment, McMillen delivered the ten stock certificates for two hundred shares each, herein above referred to.
    10. Afterward, to wit, on the 28th of October, 1854, the Cleveland, Zanesville and Cincinnati Railroad Company passed and entered upon the records of the board of directors of said company the following resolution :
    
      “ Akron, October 28, 1854.
    “ Resolved, That each and all of the resolutions adopted at the meeting of the board held on the 16th day of this month be, and the same are hereby rescinded.”
    11. The supplemental petition of the plaintiff, including the exhibits therewith filed, not being controverted, the ^ourt found the facts stated in said petition to be true. The supplemental petition states that, after the filing of the original ^petition, to wit, ■on May 2, 1859, the stock of the Cleveland, Zanesville and Cincinnati Railroad Company, amounting, at the par value thereof, to the sum of one hundred and .twenty-five thousand dollars, a ■certificate for which was received by said commissioners from said railroad company, as in the original petition stated, was not worth, in the market, said sum of one hundred and twenty-five thousand ■dollars; but, on the contrary, was then and there, in fact, of no value; and that, therefore, the commissioners caused a demand to be made on that day upon said railroad company, for the payment to said commissioners, for the use of the plaintiff, of the difference between the real value in the market of said last-named stock and the sum of one hundred and twenty-five thousand dollars, to wit, the sum of one hundred and twenty-five thousand dollars, which sum the said company then and there wholly failed to pay; and that, therefore, in consideration of the surrender to said railroad company, by said commissioners, of said certificate for stock in said company, and of the income bond of. said company, so received from it as collateral security by the commissioners, as in the orig■inal petition stated, the board of directors of said company passed the resolution of which the following is a copy:
    
      “ Office Cleveland, Zanesville and h
    “ Cincinnati Railroad Company, v
    “ Akron, May 2, 1859. )
    
    “ At a meeting of the board of directors of this company, hold this day, the following preamble and resolution were passed, viz:
    “ Whereas, by reason of unforeseen contingencies, it has hitherto been impossible to accomplish the object of the contract between this company and the commissioners of the city of Cleveland, for .subscription to the capital stock of the Cleveland, Painesville and Ashtabula Railroad Company, bearing date May 2, 1854, by the •construction of this company’s road from Millersburg to Zanesville, ..and there is no immediate prospect of securing the construction of the same; and whereas, the said contract was predicated upon the mutual understanding between the parties thereto that the stock *of the said Cleveland, Painesville and Ashtabula Railroad •Company, obtained thereby, should be appropriated exclusively to the construction of that portion of our road; and whereas, the stock by this company issued to said commissioners, under said contract, is greatly depreciated in value, and this company is utterly unable to fulfill its part of said contract by making up to said commissioners the difference between its actual value and the par value thereof, as required by said contract, as has been this day demanded of this ■company by said commissioners; and whereas, the income bond of this company, held by said commissioners, constitutes no adequate security to them for the deficiency in the value of said stock; therefore,
    “ Resolved, That Messrs. R. K. Enos and J. D. Cummins be a committee to negotiate with said commissioners, with full power to act for and on behalf of this company in the premises; and that said committee be and they are hereby authorized to retransfer said stock of the Cleveland, Painesville and Ashtabula Railroad Company, and to release all the right, title, and interest of this company therein to the said commissioners, for the benefit of the city ■of Cleveland, in such manner and on such terms and conditions as they shall deem advisable; and also to grant to said commissioners .and to said city full power and authority to assert any and all rights to said last-named stock, and the certificates therefor, which this ■company could itself assert against whomsoever may claim said stock, or the certificates for the same, or any interest therein.”
    The supplemental petition further states, that the Cleveland, .Zanesville and Cincinnati Railroad Company caused to be made to ■said commissioners the retransfer, for the benefit of the plaintiff, ■of the certificate of stock of the Cleveland, Painesville and Ashtabula Railroad Company, so delivered to the Cleveland, Zanesville and Cincinnati Railroad Company, and the return to the commissioners for the benefit of the plaintiff, of all the right, title, and interest of said Cleveland, Zanesville and Cincinnati Railroad Company in and to said stock, and the said certificates for the same; and authorized the plaintiff to assert any and all rights to the stock so retransferred,.
    and *the- certificates for the same, which the said Cleveland, Zanesville and Cincinnati Railroad Company could, but for such transfer and release, itself assert against whomsoever might claim the same or any interest therein. A copy of which transfer and release is as follows:
    “ By virtue of the authority conferred upon us by the foregoing resolution of the board of directors of the Cleveland, Zanesville and Cincinnati Railroad Company, passed this 2d day of May, 1859, and for a valuable consideration received by said company, to its full satisfaction, from the city of Cleveland, we the undersigned, in the name and on behalf of the said company, do hereby retransfer and assign to Melancthon Barnett, Hiram Y. "Willson, Arthur Hughes, Charles Hickox, and Oliver H. Perry, commissioners appointed by an act of the general asesmbly of the State of Ohio, passed February 13, 1851, entitled ‘ an act to authorize the city of Cleveland to subscribe to the capital stock of the Cleveland, Painesville and Ashtabula Railroad Company,’ for the benefit of said city, the certificates of the stock of said last-named company, heretofore delivered by said commissioners to said Cleveland, Zanesville and Cincinnati Railroad Company, and amounting to the sum of one hundred thousand dollars, and hereby release to said commissioners, for the benefit of said city, all the right, title, and interest of said Cleveland, Zanesville and Cincinnati Railroad Company in and to-said stock, and the said certificates for the same, and hereby authorize the said commissioners and said city, for whose benefit this-transfer is made, to assert any and all rights to said stock and the certificates for the same, which the said Cleveland, Zanesville and Cincinnati Railroad Company could, but for this transfer, itself assert against whomsover may claim said stock or the certificates for the same, or any interest therein, in conformity to the terms of said resolution of the Cleveland, Zanesville and Cincinnati Railroad Company, hereto annexed.
    “Akron, May 2, 1859.
    “ The Cleveland, Zanesville and Cincinnati Railroad Com-
    
      “By R. K. Enos, J. D. Cummins.”
    *12. On November 23, 1854, the Bank of Akron, being at the time the holder of the certificates for two thousand shares of' stock in manner aforesaid,' committed an act of insolvency by failing to redeem its circulating notes in the manner prescribed by its-charter, and thereupon, the bank being a branch of the State Bank of Ohio, by force of the statute in such case made and provided, all of the property, securities, claims, and effects of every description, including the claim against McMillen, with the stock as a security for the payment thereof, so far as the same legally passed to and-vested in the Bank of Akron by virtue of said assignments, passed, to and become vested in the defendant, the State Bank of Ohio,, and yet remain vested in it, including the dividends and profits accrued on said stock since May 1, 1859.
    13. As alleged in the answer of the State Bank of Ohio, a settlement and adjustment of the amount due to McMillen from the-Cleveland, Zanesville and Cincinnati Bailroad Company has been made since October 16, 1854, whereby it was ascertained that the-amount due from the company to McMillen, as of November 23,. 1854, is the sum of ninety-seven thousand five hundred and seventy-three dollars and eighty-eight cents, subject to be increased by-interest from the last-named date; which settlement the court do find is obligatory upon the parties thereto, but is not conclusive-as against the plaintiff, and is subject in behalf of the plaintiff to be corrected as may be lawful under the issue arising upon the amendment made to the reply of the plaintiff, and reserved for further consideration by the 'court, as above stated.
    14. That said Cleveland, Zanesville and Cincinnati Bailroad Company was incorporated and organized by the name of the “ Akron Branch of the Cleveland and Pittsburg Bailroad Company,” by a special act of the general assembly, entitled “ an act to amend an act entitled 1 an act to incorporate the Cleveland and Pittsburg Bailroad Company,’ passed February 19, 1851,” and afterward it® name was changed by a judicial proceeding, had in the court of common pleas of Summit county, pursuant to the statute in such cases made and*provided, to that of the “ Cleveland, Zanesville and Cincinnati Bailroad Company.”
    15. Said commissioners, in entering into the contract of May 2, 1854, acted with a view to what they were induced by the representations so made by said committee, in connection with their own views in the premises, to believe to be for the general benefit of the city of Cleveland, and not with a view to any benefit which •they supposed would be derived thereby to the fund which, by the terms of the act in question, has been committed to their manage■ment.
    16. The Cleveland, Zanesville and Cincinnati Railroad Company has never yet secured the said subscriptions so alleged to have been promised along the line of the contemplated extension of its road, .amounting to the sum of $400,000, or any portion of the same; but, •on the contrary, the company having already become insolvent, had, prior to said 16th of October, 1854, abandoned the purpose, at least for the time being, of so extending its road from Millersburg to Zanesville, and had declined to receive said subscriptions.
    17. The transfer of said certificates, as provided for in the resolutions of October 16,1854, was not designed by the parties thereto •to raise money for the purpose of constructing, nor to pay or secure the payment of liabilities incurred in the construction of that portion of said railroad company’s road which lies between Millers-burg and Zanesville, and was a direct violation of the terms and •conditions of the parol stipulations so entering into and forming a part of the contract of May 2, 1854, as above found.
    Upon the facts found in the district court, the case was reserved to this court for decision.
    
      JR. JP. Banney, F. T. Backus, B. Hitchcock, and S. J. Andrews, for plaintiff, argued:
    1. The city of Cleveland had no capacity to acquire or hold the title to stock in the Cleveland, Zanesville and Cincinnati Railroad Company. Starin v. Genova Tp., and Geneva v. Sterling Tp., 23 N. Y. 447, 456; Collins v. Hatch, 18 Ohio, 524: Straus & Bro. v. The Eagle Ins. Co., 5 Ohio St. 59; Const., art. 8, sec. 6 ; Story on Agency, sec. 229; *Comm’rs of Canal Fund v. Perry, 5 Ohio, 56; C., W. & Z. R. R. Co. v. Clinton Co., 1 Ohio St. 89; Hopple v. Brown Tp., 13 Ohio St. 324.
    2. The Cleveland, Zanesville and Cincinnati Railroad Company ■had no power to dispose of its stock for the stock of another road, nor to become, by purchase or exchange, a stockholder in another railroad company. 34 Ohio L. L. 576 ; 49 Ohio L. L. 468; Henry v. Vermillion R. R. Co., 17 Ohio, 187; Veedor v. Mad River R. R. Co., 14 Ohio, 563; Savings Bank, etc. v. The Meriden Agency Co., 24 Conn. 159, 164; Railroad Co. v. Hickman, 28 Penn. St. 318; Carr ,v. Le Fevre, 27 Penn. St. 413; Pearce v. M. & I. R. R. Co., 21 How. 442; Pearce on R. R. 397; Hood v. N. Y. & N. H. R. R. Co., 22 Conn. 508; McCullough v. Moss, 5 Denio, 567.
    3. The commissioners had no power to make the contract in question. (1.) Because, if it is to be regarded as a sale, it was not a sale for cash. (2.) Because it was not a sale at par, the sole inducement to the purchase of the C., P. & A. stock by the railroad company as alleged by the defendants, being its ability to realize-thereon an amount of money which it could not realize upon the-stock and collaterals given in payment for it. (3.) Because, if an ■ exchange, it was clearly beyond the authority of the commissioners,. it not being for the evidences of indebtedness specified in the act.. (4.) Because, if not defective for the reasons above given, as a sale - or exchange it was void, as being made in disregard of the purposes for which the commissioners were intrusted with the management of the stock, and for the accomplishment of objects beyond the scope of their powers. 49 Ohio L. L. 502; Story on Agency, secs. 62, 68, 69, 78, 108, 109, 178, 226, 229, 231; 1 Am. Lead Cas. 561; State of Illinois v. Delafield, 8 Paige, 527, 540; 26 Wend. 192; 2 Hill, 160; Wiltshire v. Sims, 1 Camp. 258; Taylor and Morgan v. Galloway et al., 1 Ohio, 232; Story on Sales, sec. 218; 1 Parsons on Contr. 436; Mitchell v. Gill, 12 N. H. 30; Vail v. Strong, 10 Vt. 479. The clause in the 3d section, authorizing the commissioners “ to do whatsoever else maybe necessary, to secure and advance the interests of the city in the premises,” upon the settled-rules of interpretation, does not enlarge the powers expressly given but was simply designed *to give, and does in fact give, only such incidental powers as were necessary to carry the powers expressly granted, into effect. Story on Agency, secs. 62, 69; 5 Barn. & Ald. 204, 211, 214; 7 Barn. & Cress. 278; Rossiter v. Rossiter, 8 Wend. 494; Gardner v. Baily, 6 Term, 591; Sagaw v. Patterson, 1 Blackf. 252; Stairs Ins., b. 1, tit. 12, sec. 15. The very words of the clause import no more. Thq premises, to which the whole refers, are nothing more than the subject-matter; that is, the stock, and" the powers expressly granted for its management and disposal. It is nothing more than saying, in effect, that whatever else is necessary to be done, in discharging the duties expressly imposed upon-them, the commissioners may do.
    4. The parol evidence was properly received by the court. 1 Greenl.Ev.,secs. 275,284; 2 Parsons on Contr. 553, secs. 65, 66; Jeffrey v. Walton, 1 Stark. 267; Thurston and Hays v. Ludwig, 6 Ohio St. 8; Marks et al. v. Pell, 1 Johns. Ch. 594; Strong et al. v. Stewart, 4 Johns. Ch. 167; Chester v. Bank of Kingston, 16 N. Y. 336 ; Story on Sales, 435, 437, sec. 420; Howard v. Thomas, 12 Ohio St. 206; Laphamu. Whipple, 8 Met. 59 ; Deshon v. Merchants’ Ins. Co., 11 Met. 199; Edwards v. Goldsmith, 16 Penn. St. 43; 1 Story’s Eq., sec. 187.
    5. The certificates were never delivered to the railroad company as of binding obligation, and were not to be until a condition was first performed, which never was performed, but the whole scheme was abandoned. Even if these executory agreements were placed in the possession of the company, they would not take effect until the condition was pei’formed. Lovett v. Adams, 3 Wend. 380; Bronson v. Noyes, 7 Wend. 188; People v. Bostwick, 32 N. Y. 445; Chester v. Bank of Kingston, 16 N. Y. 343. But they were not put into the possession of the company. The facts found make Perkins, McMillen, and Miller the special agents of the city, to hold them until the $400,000 of subscription were secured.
    6. McMillen did not, in any event, take anything by the assignment to him, both because there was no debt of the kind authorized by the company to be secured—advances “ upon the strength and' ■credit of the stock,” and because the assignment was obtained by fraud, and within a reasonable time ^repudiated by the company. Morgan v. Spangler, 14 Ohio St. 102 ; Mead v. Bunn, 32 N. Y. 276; Boot v. French, 15 Wend. 570.
    7. Neither the Bank of Akron nor the State Bank stands upon .any higher ground than McMillen, nor can claim anything more than he could while the certificates remained in his hands. 13 N. Y. 600; A. & A. on Corp., chap. 16; Roxborough v. Messick, 6 Ohio St. 448; Story on Sales, secs. 188, 200, 420; Lloyd v. Brewster, 4 Paige, 537; 32 N. Y. 276; 13 Wend. 570; 22 N. Y. 535; 3 Barb. 20; Smith v. Bailey et al., 14 Ohio St. 396
    
      Hunter & Daugherty, for the State Bank, argued:
    I 1. As to the power of the city to hold the stock of the C., Z. & C. B. B. Co.:
    The act of the assembly, authorizing the subscription for the stock in question, was passed February 13, 1851, and in force and ■ effect, and the subscription for the stock made before the adoption by the convention of the new constitution. Therefore, whatever rights, powers, and duties were conferred by the act upon the city or the commissioners, and all necessary incidents proper to the ex-ereise and enjoyment thereof, are to be governed and regulated by and in accordance with the law as it existed before the present constitution, nor inconsistent therewith. Cass v. Dillon, 2 Ohio St. 607; C., W. & Z. R. R. Co. v. Commissioners of Clinton County, 1 Ohio St. 77; Newark v. Elliott et al., 5 Ohio St. 120.
    Before the new constitution, there was no prohibition, legislative or constitutional, against municipal corporations, in the exercise of their incidental powers, becoming the holders of stock in private corporations; and certainly no rule or principle of the common law that would prohibit this, where, as in this case, the object in the •acquisition of the stock in the C., Z. & C. R. R. Co. was to promote the commercial interests of the city.
    2. As to the power of the commissioners :
    The city acted by commissioners, not appointed by the municipal authorities,"but by a special legislative enactment, with unlimited power “ to' sell said shares or any part thereof, ^at any time or times, as to them may seem expedient, and to do whatsoever else may he necessary to secure and advance the interests of the city in the premises,” with the single exception, that they should not sell the same for less than the par value unless authorized, as prescribed, by the city council.
    It is argued, on the other side, that the transaction was not a sale, but an exchange. We think it was a sale, not below, but above par. 5 Ohio St. 113. But if we are wrong and our opponents right, what is the effect ? The power of the commissioners was unlimited, except not to sell below par, and was discretionary “ to secure and advance the interests of the city."
    
    3. The C., Z. & C. R. R. Co. had power, under the circumstances, and for the objects and purposes disclosed in the case, to become the owner and holder of the stock. 49 Ohio L. 468; Straus & Bro. v. Eagle Ins. Co., 5 Ohio St. 62.
    It was in fact the borrowing of moneys not by a single move, but by two moves, by the use of the credit and means.of the company. (1.) By becoming the owner of the stocks purchased upon its credit —namely, the guaranty of its bond stipulated for in the contract, and, in fact, paid for by the issue of its own stocks—the very thing contemplated by its charter as a legitimate resource with which to raise money to accomplish its lawful objects. (2.) By a sale or hypothecation of the stock.
    The power of the company is sustained by the following adjudged cases: Piqua Railroad case, 10 Ohio St. 399 ; Railroad Co. v. Hickman, 28 Penn. St. 318; Carr v. Le Fevre, 27 Ib. 413; Brown & Brothers v. Illius, 27 Conn. 84; C. R. R. Co. v. Clarkson, 7 Ind. 395
    4. Parol evidence is not admissible to establish the alleged verbal additional term of the agreement. Thurston and Hays v. Ludwig, 6 Ohio St. 1; Howard v. Thomas, 12 Ohio St. 201; Woolam v. Heavne, 7 Ves. 211, 216; Long v. Moler, 5 Ohio St. 274; 1 Story’sEq., secs. 153-156 ; 2 Lead. Cas. in Eq. 404, 683, 684; Davenport v. Scovill, 6 Ohio St. 461; Lord Iruham v. Child, 1 Bro. C. C. 92 ; Hunt v. Rousmanier’s Adm’r, 1 Peters, 16; The Marquis Townshend v. *Stangroom, 6 Ves. Jr. 328 (Sumner’s ed.) ; Dwight v. Pomeeroy et al., 17 Mass. 303.
    In Pennsylvania there is no court of chancery; and it is known that the courts in that state admit parol proof to affect written contracts to a greater extent than is sanctioned in states where a chancery jurisdiction is exercised. Bank of U. S. v. Dunn, 6 Peters, 51. See Hunt’s lessee v. Kirkbride, cited in Wallace v. Baker, 1 Binn. 616; Oliver v. Bell, 4 Rawle, 145 ; Christ v. Diffenbaugh, 1 S. & R. 465; Cozens v. Stevenson, 5 S. & R. 424; Campbell v. McClennahan, 6 S. & R. 172; Miller v. Henderson, 10 S. & R. 292; Lyon v. Huntington Bank, 14 S. & R. 285 ; Hain v. Bell’s Adm’r, 14 S. & R. 159 ; Hultz v. Wright, 16 S. & R. 345; Clark v. Partridge, 2 Barr, 13; Renshaw v. Gans, 7 Barr, 119.
    5. If the fact as found by the district court upon the parol evidence, subject to the question reserved, had been embodied in the-written contract, it would be void as a condition, because repugnant to the nature of the estate granted, namely, the absolute ownership-of the stock vested in the railroad company by the purchase and sale, both upon principle and authority. 4 Kent, 150-152 (10 ed.), *130-*132; Co. Lit. 203, 205b, 206a, 208b, 219b ; 2 Bla. Com. 156 ; Mitchell v. Reynolds, 1 P. Wms. 189 ; Carey v. Berter, 2 Vern. 339 ; Rockford v. Hackman, 10 E. L. & E. 64; Gleason v. Fayerweather, 4 Gray, 348 ; Newkirk v. Newkirk, 2 Caine, 345 ; Johnson v. Gray, 16 S. & R. 361; Johnson v. Valentine, 4 Sandf. 36; Woodruff v. Waterpower, 2 Stock. (N. J.) 489; Worman v. Teagarden, 2 Ohio St. 380.
    6. It is not pretended that the Bank of Akron had any knowledge or information of the verbal reservation or restriction in regard to-the limited use to be made of said stock by the railroad company, or of the character of the transaction with the city commissioners-upon which the railroad company became the holder of the stock, except so far as such knowledge may be inferred from the fact that McMillen was president of the bank, and at the same time one oí the committee of the railroad company who negotiated the arrangement with the city commissioners. But no legitimate presumption of notice to the bank can be inferred from these relations of Mc-Millen. *Washington Bank v. Lewis, 22 Pick. 24; Bank of Pittsburg v. Whitehead, 10 Watts, 397; Custer v. Tompkins County Bank, 9 Barr, 27; Seneca County Bank v. Neass, 5 Denio, 337; Bank of U. S. v. Dana, 6 Peters, 51; A. & A. on Corp., secs. 306-309; Bank of Metropolis v. Jones, 8 Peters, 12 : Harrisburg Bank v. Tyler, 3 Watts & Serg. 337; 3 Gill, 96.
    7. If the Bank of Akron had had actual notice, unless there had also been collusion on the part of the bank with McMillen to defraud the city (and this nobody pretends), it would establish nothing, except that the bank was advised that the railroad company was, by the intention of the parties to the contract, vested with the title and right as owner to sell or pledge the stock, the prohibition against this being intentionally excluded from the written evidence of the contract, and the commissioners being content to rest upon the good faith of the committo, pledged to them verbally, in that behalf.
    8. The bank had no basis on which to challenge the truth of the recitals in the resolutions of the board of directors of the railroad company, of October 16,1864, in pursuance of which the assignment was made to McMillen, also in the assignment itself. As between the bank and the railroad company, the company is estopped to deny their truth; and it is clear that the plaintiff can not allege their falsehood to the prejudice of the bank, unless it be established by proof that the bank knew them to bo false at the time it received the assignment from McMillen; and that is not alleged or pretended in any form. The rights of the bank, therefore, stand to be disposed of as would be equitable if the recitals were true.
    In this state of case, the plaintiff, the city of Cleveland, has no right, in equity, to demand of the bank a surrender of the stock certificates, and a decree enjoining the bank from transferring or disposing of the stock to make it available as such security. The claim of the bank, if it be not based upon the legal title, is at least bona fide, and as meritorious in equity as that of the plaintiff; and no case is presented warranting the active aid of a court of equity in behalf of the plaintiff to the prejudice of the bank. Willan v. Willan, 16 Ves. 83; Mortlock v. Butler, 10 Ves. 308.
    *9. The legal title vested by the contract of sale, and transfer of the certificates, in the railroad company; and by the assignment to McMillen, and by him to the Bank of Akron, and by operation of law to the State Bank of Ohio (1 S. & 0. 126, 127, secs. 25, 26), accompanied with actual delivery of the certificates, indorsed as aforesaid, is vested in the State Bank as a pledge; and if the city of Cleveland, or its commissionci's, have any interest in the stock, it is an equitable interest only, and the equity of the bank being, at the least, equal to that of the city, and being accompanied with the possession of the muniments of title, and with the legal title also, the plaintiff is not entitled to the relief prayed for in its petition.
    The fact that the stock, by the terms of the certificate, was not transferable on the books till after May 1, 1859, created no restriction upon the intermediate negotiation by delivery of the certificates ; and the restriction upon the transfer on the books only controls the dividends and the right to vote the stock during the limited period. This would be its legal effect per se, and the written contract expresses it in terms. To give it effect beyond this would be doing violence to both. A. & A. on Corp., secs. 564, 569; 20 Wend. 91; 2 Pick. 243; 17 Mass. 243; 8 Pick. 98; 3 Binn. 394; 2 Cowen, 770; 11 Wend. 627; 2 Comst. 443.
    10. The transfer of the stock certificates by the railroad company to McMillen, and by him to the bank, is to be taken as one continuous act of the railroad company; and is, at the same time, the act of McMillen, in his own individual right, in so far as regards the transfer and pledge of indebtedness of the railroad company to him. Here, then, in equity, and in legal effect, is a twofold hypothecation or pledge of the stock in question by the railroad company, the object and purpose of which was to secure the bank against loss by reason of the fraudulent perversion of its funds to the use of the railroad company. The hypothecation of the stock to the bank by the railroad company for its liability thus assumed, was an act done at the very time of the inception of the liability of the railroad company, and in no just sense was it a security for a preexisting debt.
    11. Touching the question of legal title to the stock in the bank *as a security, claiming under the railroad company, we suggest, whether there can be a question (the time limited in the contract for the transfer on the books having transpired), but that the bank has the right to demand and require a transfer to it on the books of the Cleveland, Painesville and Ashtabula Railroad Co.; and if such transfer were refused, to sustain an action against said company for the value of the stock and dividends. A. & A. on Corp., secs. 381, 710; Sergeant et al. v. Franklin Ins. Co., 8 Pick ; Bates v. New York Ins. Co., 3 Johns. Cas. 237; The King v. The Bank of England, Doug. 526; Boyce v. Russell, 2 Cowen, 444; Asylum v. Phœnix Bank, 4 Cowen, 172; 6 Hill, 243; 10 Johns. 484.
   Brinkerhoee J.

The amount of the railroad stocks in contest between the parties before us is very large and valuable; and this circumstance, rather than anyintrinsic difficulty in the questions which the case necessarily presents, has given the ease much of temporary interest and importance. As was natural and proper, the case has been argued, by able counsel, at great length, both orally and in print; and many questions, which it is not necessary for us to pass upon in order to decide the case, have been raised and discussed on the hearing. These we have mostly passed over; and we have confined ourselves to two questions, the decision of either of which in favor of the plaintiff, the city of Cleveland, precludes all further question of its right to the relief which it seeks.

The first question is this : Had the commissioners of the city of Cleveland the power to make the contract which they assumed to make with the Cleveland, Zanesville and Cincinnati Railroad Company?

If they had such power, it is to be found in the act of the general assembly which made them commissioners and defines their powei’s. It can be derived from no other source. And in respect to that act I may remark, that it needs only a careful reading of it to show that its draughtsman, whoever he may have been, evidently had a distinct idea of the objects aimed at by the legislation he proposed; and that he understood the significance of language, and knew how to employ it so as to give a clear and definite expression to his ideas. *Now, what was the contract which the commissioners of Cleveland assumed to- make ? It was not a sale for cash in hand, nor for money on terms of credit. It was nothing but an exchange, a swap, of the stock of the Cleveland, Painesville and Ashtabula Railroad, owned by the city of Cleveland, for a larger nominal amount of the stock of the Cleveland, Zanesville and Cincinnati Railroad—the latter guaranteeing that its stock, given in exchange, should, at a given period of time, be worth a certain sum of money in the market. Now, in looking into the act referred to, for power in the commissioners of the city of Cleveland to make this contract for an exchange and barter of stocks, all that we can find from which, with a show of plausibility, such power can be inferred, is the power (sec. 3) “ to sell said shares, or any part thereof, at such time or times as to them may seem expedient, for not less than their par value,” “ and to do whatsoever else may seem necessary to secure and advance the interests of the city in the premisesBut the power to sell is one thing, and the power to barter and exchange is another and a very different thing. “ A sale of a chattel is an exchange thereof for money, but a sale is discriminated in many respects from an exchange in law—an exchange being the giving of one thing, and the receiving of another thing, while a sale is the giving of one thing for that which is the representative of all things.” 1 Parsons on Contracts, 521. And the same distinction is asserted in Story on Sales, sec. 1. And a power to sell does not authorize a barter or exchange. Taylor v. Galloway, 1 Ohio, 232.

And the following clause of the act, giving to the commissioners of Cleveland power “ to do whatsoever else ” they “may deem necessary to secure and advance the interests of the city in the premises,” can not be held to enlarge the circle of the specific powers before conferred. The phrase, “in the premises,” is one of limitation, and is substantially equivalent to, in the things premised, or, in the matters aforesaid. It limits the discretion conferred to the manner of exercising the powers specifically granted.

These conclusions are confirmed by the fact that the statute referred to, does expressly authorize the commissioners “to exchange ” *the shares of stock held by the city, for the outstanding evidences of indebtedness issued by the city in order to raise the means with which to pay up its stock subscriptions in the first place; for it shows that the draughtsman of the act knew and recognized the distinction between a sale and an exchange, and that where he meant an exchange ho said exchange.

The commissioners of the city, then, had no power to make the contract of exchange which they assumed to make; and the powers of the commissioners being derived solely from a public legislative act, those who dealt with them, or who claim under them directly or remotely, were bound to take notice of the extent of those powers; and the city is not estop£>ed to deny the existence of the power assumed. The contract of exchange is void for want of power in the commissioners to make it.

This is conclusive of the case; and we might, with no impropriety, stop here. But the second question considered by the court leads to the same result. The district court find, as a matter of fact, in substance, that the so-called contract for an exchange of stocks, was obtained from the commissioners of the city of Cleveland by false and fraudulent representations made to them, in the course of the negotiation, by one McMillen, acting in behalf of the Cleveland, Zanesville and Cincinnati Railroad Company. McMillen took to himself an assignment of the stocks thus fraudulently acquired.' As against him, the contract was null by reason of hia fraud in obtaining it. He subsequently assigned the stocks to the Bank of Akron, simply as collateral security for a pre-existing indebtedness of McMillen to that bank, and not contracted in any way on the faith of such security. On the principles decided by this court in Roxborough v. Messick, 6 Ohio St. 448, this assignment conferred on the Bank of Akron no better title than McMillen had; and the State Bank of Ohio, succeeding as it does, under the statute, simply to the rights of the now defunct Bank of Akron, stands in its shoes.

Decree for plaintiff.

Scott, C. J., and Day, White, and Welch, JJ., concurred.