Case Name: Smith and Others v. Allison and Another
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1864-11
Citations: 23 Ind. 366
Docket Number: 
Parties: Smith and Others v. Allison and Another.
Judges: 
Reporter: Indiana Reports
Volume: 23
Pages: 366–370

Head Matter:
Smith and Others v. Allison and Another.
Contract—Location or Railroad.—Where a subscription was made to the capital stock of a railroad company upon condition that the final location of the road should be upon a certain route, the permanent location of the road contemplated by the contract was held to be the adoption by the directors of the route mentioned.
APPEAL from the Clay Circuit Court.

Opinion:
Erazer, J.
The appellants, who are the heirs at law of Oliver H. Smith, deceased, sued the appellee in ejectment. Answer: 1. General denial. 2. A counter-claim alleging, substantially, that in April, 1855, the defendant subscribed the land as stock in the JE. I. and C. Straight Line Railroad Company for $10,000, upon condition that the final location of the railroad should cross White river near Martinsville, and run within one mile of Gosport, and continue down on the west side of the river to the' town of Spencer; that afterward the agents of the company showed him a map, fraudulently published, representing a location according to the condition of his subscription, and the board of directors fraudulently passed a resolution falsely declaring the road located there, and it was so represented to him repeatedly by tbe company's agents; that thereby be was afterward induced to convey tbe lands to tbe company; that various conveyances have since been made, until finally tbe lands were conveyed to 0. H. Smith, who, with all intermediate purchasers, bad notice, etc.; that tbe road has never been so permanently located; that since 1857 tbe company have ceased operations, and abandoned tbe entire enterprise, and become insolvent, and unable to locate tbe road according to tbe condition upon which tbe subscription was made; that, ascertaining that tbe condition bad not been performed, Allison kept possession of tbe lands; that be brings tbe certificates of stock into court, and demands that tbe contract be canceled. He prays that bis title be quieted; bis deed to tbe company and tbe other deeds be canceled; and for general relief. Issues were made and tried, which resulted in a decree according to tbe prayer of tbe counter-claim.
Tbe only question upon which we need to express an opinion is, does tbe evidence sustain tbe verdict ?
Allison's subscription (and others, amounting to $58,320) was in writing, with tbe condition expressly stated therein, as alleged in tbe counter-claim. It was in that form offered to tbe board of directors, for tbe purpose of securing tbe permanent location of tbe railroad on tbe west side of tbe river through Spencer. Tbe board accepted tbe subscription on tbe 10th of May, 1855, by adopting and entering upon their books a preamble and resolutions. Tbe preamble states that, at a previous meeting, tbe board had located tbe road, as specified in tbe counter-claim, upon condition that certain citizens should subscribe to their capital stock a sufficient sum to justify it, which bad not been done; but " a part of said citizens now having presented a subscription of $58,320, upon condition that said road shall be permanently located by crossing White river below Martinsville, and running on tbe west side to Spencer. Therefore, resolved, that said stock be accepted and entered on the hooks of the company as absolute, and that the railroad of this company be and the same is hereby located permanently, etc., by crossing White river below Martins-ville, and running on the west side of the river from the crossing to Spencer; and the engineers are hereby required, when so directed by the president, to locate and plat that part of the line as required by law."
The route specified in the resolution (waiving the condition to pass near Gosport) seems to have been satisfactory to Allison, and indeed no question is now made upon that subject. This action of the railroad company yet stands. It has not attempted to change it; there is no proof that it ever intended to change it. There is in the evidence nothing whatever justifying the slightest doubt of the purpose of the company to construct the road on the route indicated in the resolution; there is simply proof that it has not yet been surveyed and staked by engineers, and that it has not been constructed, and also some evidence indicating that the company is insolvent. But the condition of the subscription was not that the route should be surveyed and staked, nor that it should be actually constructed. The parties might have made such conditions, but they did not. Eor can it be held that either of these things is necessary to the permanent location of a railroad. A survey may or may not, owing to circumstances, be necessary to enable the directors to judge as to the most advantageous route, and to act understandingly in adopting a location. It is a necessary preliminary, however, to the appropriation of the right of way, under our statute, but even then it adds nothing to the permanency of the location ; for after the map of the route has been filed, as the act requires, it is still in the power of the corporation to change the line. 1 R. S. 417. "What, then, is to be understood as a " permanent location " of the route in this case ? It does not mean that the construction of the road must be accomplished. This the appellee concedes, but argues that no location can be deemed permanent so long as it may be lawfully changed. If both propositions be correct, then the condition means nothing at all.
"We think it clear that the resolution of May 10, 1855, must be regarded as a permanent location of that part of the road, in view of all the evidence. Such is the proper interpretation of it, and its interpretation is a matter of law. Should we hold Otherwise, it would be simply holding that the failure of the corporation to construct the road is a breach of the condition upon which the stock was subscribed. Should the road hereafter be built on a different route, of course the party would have his remedy.
This precise question was incidentally considered in Shearer's case, 10 Ind. 244; and in Dunn's case, 17 Ind. 603, it was discussed, but not decided, the point not being in judgment. In Parker v. Thomas, 19 Ind. 213, the very question, as we think, was before the court upon the sufficiency of a reply; and, though not elaborated by the learned judge, who delivered that opinion, it was decided, without hesitancy, as we decide it. There the answer alleged that the subscription was upon the condition precedent that the railroad (the Fort Wayne and Southern) should be "located" within one-fourth of a mile of West-port, and that the southern terminus of the road had been, by resolution, fixed at Columbus, thus rendering the performance of the condition impossible. .The reply averred that afterward the board of directors, by resolution, rescinded this resolution, and ordered that the road be located on a line passing through Westport and terminating at Jeffersonville. The reply was held good. Upon the authority of this case, and after a careful consideration of the question for ourselves, we have come to the conclusion that the permanent location of the road contemplated by the contract must be held to mean the adoption' by the directors of the route mentioned, and that until a different route is shown to have been afterward adopted, it can not be deemed that the condition has been broken.
Smith <§ Mach and McDonald 8; Roache, for appellant.
W. M. Franklin, for appellees.
Counsel for appellant argued: The location of a railroad route, under- the statute, is the fixing upon a route by the board of directors. Evansville, etc. Railroad Company v. Shearer, 10 Ind. 244; Parker v. Thomas, 19 Ind. 213; Hudson and Delaware Canal Company v. New York and Erie Railroad Company, 9 Paige, 323.
The judgment is reversed with costs, and the cause remanded for a new trial.