Case Name: Frederick Chapman and Laman G. Harkness v. The Mad River and Lake Erie Railroad Company and the Sandusky City and Indiana Railroad Company
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1856-12
Citations: 6 Ohio St. 119
Docket Number: 
Parties: Frederick Chapman and Laman G. Harkness v. The Mad River and Lake Erie Railroad Company and the Sandusky City and Indiana Railroad Company.
Judges: Bartley, C. J., and Swan, Bowen, and Scott, JJ., concurred.
Reporter: Ohio State Reports, New Service
Volume: 6
Pages: 120–141

Head Matter:
Frederick Chapman and Laman G. Harkness v. The Mad River and Lake Erie Railroad Company and the Sandusky City and Indiana Railroad Company.
.''Whether the construction by one railroad company of another road entirely parallel with its own, which, if owned and managed by an interest distinct from itself, must necessarily be a competing road, for the purpose and with the effect to bring about a change in its own line, rather than to create a feeder or an extension of its own line, is within the limits of such “ connections” as are authorized by the twenty-fourth section of the “act to provide for the creation and regulation of incorporated companies in the State of Ohio” — quczre.
•Conceding that it is not competent for the general assembly to authorize a corporation to embark in new enterprises, entirely beyond and outside of 120] *the scope of the objects contemplated by its charter at the time stockholders became members of the corporation by subscribing to its stock, and thus to effect a fundamental change in the charter, and in the risks and prospects of its stockholders, without the consent of all the stockholders; yet it is clear that before a stockholder can be entitled to a remedy by injunction against such departure from the original objects of the incorporation, he must have shown himself prompt and vigilant in the assertion of his rights as such stockholder. .It will not do for him to wait until the mischief of which he complains is accomplished, fortunes expended, and great public interests created. If he do, he must be held to have acquiesced in the change, or to content himself with some other form of remedy.
’Where a railroad company has received from private parties donations of lands, subscription of stock, and payments in money, in consideration that it should locate its road at a particular place, and allow private side-track and warehouse privileges in connection therewith, the company will not be permitted to effectuate a change in fact (though not 'in name) of the line of its road away from such place, hy getting up a new corporation and', constrncting a new road parallel with its old one, under a different charter, and permitting its old line to go to decay, without compensating the parties ■ with whom it has contracted as aforesaid.
Where it is found that a complainant was originally entitled to a remedy hy injunction, designed to effect a specific performance, and, pending the pro- ■ ceedings, the subject-matter of the litigation is abstracted, destroyed, or decayed, a court of equity will not turn him over to seek his damages in a-court of law, but will afford a remedy hy compensation.
Reserved by the district court of Huron county.
This is a bill in chancery filed by complainants in the old Supreme Court for the county of Huron, against the Mad River and Lake Erie Railroad Company, and a supplemental bill against the-same defendant and the Sandusky City and Indiana Railroad Company, which, together, came on for hearing in the district court for the county of Huron, and was reserved for decision in the Supreme Court.
The original bill was filed July 16,1851, and charges in substance:.
That the Mad River and Lake Erie Railroad Company is *a [121 corporation incorporated by an act of the legislature passed January 5, 1832.
That by the 13th section of their act of incorporation the company were invested with the power to construct a double or single-railroad, or way, from some point in the town of Dayton, in the county of Montgomery, through several towns named as points, to the town of Sandusky, in the county of Huron, “ making such other intermediate points as might thereafter he found necessary.”
That this charter, by its terms, was made a public act.
That on the 17th of March, 1838, an amendatory act was passed,, which contained the following as its first section : “ That the Mad-. River and Lake Erie' Railroad Company shall have power to acquire title, by purchase or voluntary cession, to lands and real estate in the vicinity of said road, or through which it is or may be-located, so far as the same maj' be necessary or convenient, to procure the right of way, and to dis|)ense with farm crossings; or' such as may be granted to aid in the. construction ; or given by way of subscription to their capital, and the same to hold or convey, in such way as the board of directors may determine;” and the following as the third section : “ If the said corporation find any obstacle to continuing the location of their railway on any ¡■selected route, either by the difficulty of construction or procuring right of way at reasonable cost, or whenever a better and cheaper route can be had, it shall have authority to change the route and vary the location, adhering, however, to the several points named in the act to which this is an amendment.”
That these acts are the only authority which the company has •or ever had to construct and use a railroad between the points .named, and that the sections recited are the only parts of said acts in any manner relating to the location of their railroad.
*That in July, 1835, the railroad company being about to locate their road from Sandusky south, and being in great need of means to construct it, entered into a contract with complainants .and others, who were at that time proprietors of the village of Bellevue, by which it was agreed that if the company would locate their road at or through the village of Bellevue the other parties ■would, on their part, convey to the company one-fourth part of all the unsold lots in the village, and, in addition, that they would grant the right of way to the company through the plat of the village, .and all other lands belonging to complainants, and the other per- ■ sons making the contract with them.
That the inducement for the complainants to make this contract was, that they were largely interested in the lots of the village, and wex-e large owners of othex*. real estate in the vicinity, and wished to secure the location of the road as well for the advantage it would be to their village and lands as that they might fox’m business connections with the road by way of side-tracks and warehouse connections.
That in pursuance of this contract the company, in the same month of July, 1835, located their road from Sandusky to Bellevue, and immediately commenced the construction of it, and finished it to Bellevue in October, 1837; and the complainants and -the other persons interested with them, released the right of way for more than a mile through their lands ; and afterward the com-pany having selected, in place of the fourth of the village'contracted to be conveyed to them, eighteen lots on the 11th of May, 1840, the parties made a new contract in place of the former one, ■wherein it was agreed that, in consideration of the location of the railroad, and the establishment of a depot and side-track at Belle- ■ vue, the proprietors would convey to the company the eighteen .123] lots selected by them; and on *the 13th of September, 1840, the deed was made in compliance with these contracts, a certified ■copy of which is filed with the bill as an exhibit, and which contains the following recital of the consideration: “Know all men, that we, James Hollister” (and other persons named, among whom are the complainants), “who are the proprietors of the town of Bellevue, in the county of Huron, in consideration that the Mad River and Lake Erie Railroad Company have established a depot .and side-track at the said town of Bellevue, and in .consideration of the contracts made with said company in regard to said location, ■dated July —, 1835, and May 11, 1840, and of the sum of one dollar, paid to the proprietors,” etc.
That after the road commenced funning from Sandusky to Bellevue, the complainants made another agreement with the company, where it was agreed that, in consideration that complainants would subscribe one thousand dollars or twenty shares to the capital stock -of the company, the company would grant them the privilege of building and continuing a side-track to connect their warehouse with the main line of the said railroad, for the purpose of enabling them, their heirs and assigns, to do a receiving and forwarding business on the said road; that all of this last agreement that is evidenced by writing is upon the records of the company, and complainants pray a discovery in the company’s answer; that complainants complied with this agreement on their part, subscribed and paid up the twenty shares of stock, and have built, at great ■expense, the side-track and warehouse, and have continued in the use and occupation of the same until the filing of the bill.
That on the 10th of July, 1847, in consideration of five hundred dollars which complainants had paid to the company in compliance with a resolution of the board of directors, the company executed to them a deed under its Corporate seal, a copy of £124 which is filed with the bill as exhibit “ B,” and reads as follows:
“ Office of the Mad Rive and Lake Erie Railroad Co. Sundusky City, July 10 1847
“Whereas, Chapman & Harkness have complied with a special resolution of the board of directors of this company,-granting them a connection by private side-track for a warehouse to be erected at Bellevue (see minutes, p. 301); now, this is' to certify, that the said Chapman & Harkness are entitled to the privilege of building and continuing a side-track to connect their warehouse, to be built in Bellevue, with the main line of the Mad River and Lake .Erie Railroad Company, for the purpose of enabling them, their heirs and assigns, to do a receiving and forwarding business upon-said railroad; provided, that the said track be built under the-direction of the superintendent of this company, and continued agreeably to the rules adopted by the board of directors upon that, subject.
(Attest,) “ Wh. Hunt, President.
“R. Patterson, Secretary.”
That the cars commenced running on the railroad as far as Bellevue in the fall of 1837, but that the road was not completed until January, 1851, when the track was laid through to Dayton; that the complainants still own the stocks by them subscribed; that they still own the warehouse and side-tracks, and are still the owners of a large part of the lots in the village of Bellevue, and of other lands-in the vicinity. Complainants claim that they purchased and held this property, relying upon the good faith of the railroad company;- and that from the location of the road, in the manner set forth by-them, and the several contracts made with the company by them, they had a right to forever enjoy all the benefits and privilegesaceruing to them or their property from the location of the road through Bellevue; and had a right to its continuance and maintenance on the line originally located. Yet, notwithstanding all its-said contracts, the company-have taken vai’ious steps to change the 125] location and vary the route of *their railroad, and to remove-the same upon’a line which would pass eight miles west of Bellevue, viz., that the company have caused a survey to be made of the new route, and estimates of its cost of construction; that it has purchased the right of way over lands on the new line, and advertised for proposals for contracts to construct the same; and that its officers have-frequently told the complainants and others that it was their intention to change the location of the road, and to remove the same-upon the new route.
Complainants charge that the board of directors and officers of the company have determined to construct the road upon the new line, and to abandon the old one.
That this would be of great and irreparable damage to complainants, and in violation of the several contracts made with them, and against the rights of the complainants, as stockholders in the company.
The bill prays for a perpetual injunction restraining the company from changing the location of the said railroad from Bellevue, and from building or constructing' any new line or route, which shall not pass through Bellevue.
To this bill an answer was filed at the July term of the court, 1851.
The company, by its answer, admits itself to be a lawful corporation, and that the several parts of the acts of incorporation recited in the bill, are correctly set forth ; that -the company was organized in 1833, and a preliminary survey made by Mr. Stanbury, of the TJ. S.-Topographical Engineers, the same year; that the road was located from Sandusky to Tiffin in July, 1835, and contracts of construction entered into on the 16th of September of that year, and the ears commenced running to Bellevue in October, 1837; that the company continued to prosecute the work as fast as its resources would admit, and the heavy rail was *laid to Day- [126 ton in the winter then last past, but that it was then relaying the road from Springfield to Sandusky with the heavy rail, for which purpose it had purchased 11,000 tons of iron. It claims that ft “ hath found a better and cheaper route from Sandusky to Tiffin,” and admits that it “ hath proposed to change the location and vary the route of its railroad in accordance to the provisions of the act referred to by the complainants” It admits that complainants are stockholders to the amount of twenty shares, but claims that this is but a small part of the stock of the company.
The answer claims that in straightness of line, shortness of distance, levelness, suitable materials for ballasting, and sufficient water to supply engines — “the guiding elements in selecting a route for a railroad ” — the new line was much better than the Bellevue route; that the company, in 1835, had employed for its. “resident engineer, Mr. James H. Bell, a man of very convivial habits, and particularly of not over rigid virtue,” and partly insinuates, and partly charges, that the complainants procured the contracts relating to the location of the road by fraud and corruption, practiced upon Bell, and puts to complainants interrogatories concerning the interest that Bell had in the town-plat of Bellevue, at the time of the location of the road. It concludes by averring, that,, in the proposed change of line, no other motives existed than to promote the good of the company and the public. The answer admits the deed attached to the bill, and the rights of connection, and complainants’ subscription of stock, but does not admit the contracts mentioned in the deed.
A provisional injunction was allowed July 26,1851, “ restraining the defendant from altering the location of the Mad River and Xake Erie Railroad, to be continued until further order, or until the said railroad company shall, in pursuance of the law, in such 127] case made and ^provided, acquire the legal right to change the present location of said railroad.”
August 12,1851, the injunction bond was given; August 15,1851, the writ was issued.
A supplemental bill was filed August 23, 1852, reciting the proceedings under the original bill, and further charging:
That, after the allowance of the injunction, the 'company had combined with certain other persons, and under a protended or ganization, under a charter incorporating the Sandusky City-and Indiana Railroad Company, were constructing the same road intended, originally, to have been made by the Mad River and Lake Erie Railroad Company, and that they were doing this in evasion of the injunction.
That the route of the new road was the same, and the purpose was to connect with the old line at Tiffin.
That the new line was surveyed and located by the engineer of the Mad River and Lake Erie company.
That the Mad River company was furnishing all the means to build the new line.
It charges an agreement that the Mad River company should do the business of their road over the line of the new.
That the Mad River company were relaying their road south of Tiffin with the heavy rail, while they were allowing the road north of Tiffin to go without repair; and that it was their purpose, after they should get to running on the new road, to abandon the old one altogether. The bill prays for an injunction restraining the Mad River company from building, or using its means in constructing the new road, and both companies from connecting at Tiffin.
The answer of the Mad River and Lake Erie Railroad Company 128] *to the supplemental bill was filed October 11,1852.
It states that, “ since the allowance of the injunction granted by this honorable court, forbidding it to change its line until the assent of the board of public works hath been obtained, it hath abandoned its intention to ehangeits line; it hath, therefore, repaired and Jkej)t in order the line of its road; hath purchased warehouses at Elat Eock and Bepublic, and is doing a fair and successful business upon it."
It further says : “ This respondent hath heard, and believes to be true, that a certain corporation hath been organized under the name of the Sandusky City and Indiana Eailroad Company, but it avers that it hath taken no part in its organization.”
It denies the existence of any agreement between the two companies, but it insists that it has a right to make such agreements and connections with that or any other railroad company, whose linos admit a connection, or enter into any agreement, for their •common benefit, consistent with, and calculated to promote, the objects for which they were created.
It repeats its denial that it has, or ever had, any intention to let the old line go down, and avers that it does take every means reasonable to preserve the same in repair; and that the business on that section will require the same to be continued.
The Sandusky City and Indiana company filed an answer denying generally the allegations of the bill.
Answers were filed by complainants to the interrogatories in the answer to the original bill denying all fraud, and that they ever paid, or promised to pay Bell anything, or to give him any interest in property, if the railroad should be'located at Bellevue.
*Since the reservation of this case, by consent of parties, [129 the complainants filed a second supplemental bill, charging, in substance, that the said railroad companies, defendants, pending the preliminary injunction allowed on the original bill, combining together to evade the effect of said inj unction, and impose upon complainants, as stockholders in said Mad Eiver and Lake Erie Eailroad Company, and as owners of property on and in the vicinity of the line of said company’s road through Bellevue, the same injury and damage to be protected against which they filed their said original bill, varied only in the manner of inflicting the same, have, recently, to wit, on or about the 17th day of February, a. d. 1853, entered into a certain contract of lease, whereby the Mad Eiver and Lake Erie company had become the lessee, under the said Sandusky City and Indiana company, of a new line of railroad between San-dusky City and Tiffin, which had been constructed, as charged in complainants’ first supplemental bill. Said lease being for the term of ninety-nine years, and then to be renewed on the same terms.
The Mad Eiver company, in the lease, agrees thereafter to pay all taxes which might be imposed on said new line of railroad, and to assume and j>ay the debts of said Sandusky City and Indiana company, amounting to the sum of ten thousand dollars, and to-indemnify and save harmless the said last-named company from the liability to pay a further debt of three hundred and fifty thousand dollars (and the accruing interest thereon), which is contained in a series of three hundred and fifty bonds, of one thousand dollars each, the payment whereof the said Sandusky City and Indiana company had secured, by a deed of trust and mortgage to Samuel Honshaw, Henry Timmons, and Ebenozer Lane; and the Mad Eiver company agreed, further, to finish, at its own expense, the 130] portion of said railroad ^embraced in the lease, and to operate and manage the same in such manner as will not forfeit the first party’s franchises and corporate rights.
The Mad Eiver and Lake Erie company, by the terms of said lease, was at liberty to use the corporate name of the Sandusky City and Indiana company, in all legal or other proceedings necessary to maintain or enjoy the rights and interests contained in the lease, saving said company harmless from all expense.
The bill charges, further, that the said Mad Eiver and Lake Erie company transcended its corporate powers, by entering into said contract of lease, and had embarked in a new enterprise, without the consent, and against the will, of complainants, as stockholders in said company, and not in anywise sanctioned or authorized by the act of incorporation, or any other law of the state, in force at the time the complainants subscribed for the stock by them owned in said company; and that said company had been, during a length of time, without any lawful authority, as against the complainants, as stockholders, and in defiance of the orders and injunctions exist-, ing in this case, running said new line of road, to the prejudice and injury of complainants, as stockholders; and that the company threatened to continue so to run and use said new line under said lease, and during its continuance. The complainants then pray that said lease be decreed to be fraudulent' and void, as against them, as stockholders, and that the same be ordered to be canceled; and that said Mad Eiver and Lake Erie Eailroad Company be perpetually enjoined from using said road, under said lease, or otherwise ;' and for general relief.
This second supplemental bill is indorsed with the following-agreement between the counsel for the parties: “ It is agreed that this bill be filed, and that it be considered as ^standing upon [131 answer by the companies denying the allegation thereof; and that the proof taken be considered as applying thereto.”
Charles Kent, H. H. Hunter, and S. T. Worcester, for complainants.
W F. Stone, Henry Stanbery, Odlin & Lowe, and R. S. Hart, for defendants.

Opinion:
Brinkerhoff, J.
After a careful and laborious examination of the voluminous testimony in the case, we are satisfied that the leading allegations in the original and supplemental bills are true. The contracts therein set forth exist. The complainants are stockholders, as they allege; and, after the allowance of the provisional injunction, it is evident, beyond controversy, that the principal officers, most influential managers, and controlling minds of the Mad River and Lake Erie company, set themselves deliberately at work to defeat the object of the original bill, and to evade, by indirection, the effect of the provisional injunction. To this end an organization, regular on its face, was contrived and effected under a legislative charter, authorizing the construction of a railroad, under the name of the Sandusky City and Indiana Railroad, from the city of Sandusky to the west line of Ohio, or the south line of Michigan, at the option of the corporation, naming no other point or terminus whatsoever; and passed February 28,1851. The stockholders of the Mad River and Lake Erie company, who became the controlling managers in the new company, under the almost unlimited power of selecting the route for their road, and the extent to which it might be constructed, which their charter permitted to them, determined to construct their road from the city of San-dusky, as far *as Tiffin, a point leaning somewhat toward the [132 west line of Ohio, and there to stop. A very few of the stockholders may have been duped into the expectation that the road might be carried further; but no such idea was seriously entertained by those who got up and controlled the corporation. No payments were ever made on subscriptions of stock in this corporation. The stockholders went through the forms of giving their notes for the amount of their subscriptions, but it does not appear that any of them were ever paid. The road was constructed to Tiffin; but by' the aid, with the means, and on the credit of the Mad River and Lake Erie company; for its use and to answer its purposes. A large quantity of heavy iron rail which the Mad River and Lake-Erie company had purchased, and on hand for the purpose of relaying its old track from Sandusky to Tiffin, by way of Bellevue, was diverted from that object, laid upon the track of the Sandusky City and Indiana road, and the old line by way of Bellevue, although a pretense of still running a train of cars upon it has been persisted in — has, in fact, been suffered to go to decay. •
As soon as the Sandusky City and Indiana road, the creature of the Mad River and Lake Erie company, was completed to Tiffin, the latter company took a perpetual lease of the former road, in which it assumed all the debts of the new company, but contracted for the payment of no other rent whatever, and transferred to it all its machinery and business, except such as arose and lingered immediately on the line of its old dilapidated track, with its flat rail and rotting timbers, between Sandusky and Tiffin, by way of Bellevue. And thus the Mad River and' Lake Erie company-effected by indirection, though under a punctilious observance of the forms of law, the very object which, under the prohibitions of the provisional injunction, or the requirements of the statutes here-133] after to be ^noticed, it either could not, or did not choose to effect directly, to wit., the actual, practical, change of its line from. Sandusky to Tiffin. For the Sandusky City and Indiana company,, though perfect in its external legal aspect, was, in substance, if the idea of substance can be attached to a thing which has no substance, the merest sham that can be imagined.
But while all this is true, it is also true that there wore strong and legitimate reasons for the Mad River and Lake Erie company to desire the change of route which it sought and'finally effected in the manner we have mentioned. In distance, the now route was-shorter; in curve and grade, it was much easier, and it afforded abundant supplies of water and material for ballast, in both of which the old route was very deficient. The directors of the company had originally adopted the route by way of Bellevue on the. recommendation of their chief engineer. This engineer had become a part proprietor with complainants in the town of Bellevue, then recently laid out and platted, and thus had a strong pecuniary intertest in the location of the road on the Bellevue route. He represented to the directors that he had surveyed the route on which the Sandusky City and Indiana road has since been located, when in truth he had done nothing of the kind. That the complainants. made him a part proprietor with themselves in their new town, with a view to influence the then pending question of the location of the road by way of their town, is probable; but it is not shown that the complainants were cognizant of the misrepresentations of the engineer; and if it were shown, we think the acquiescence of the directors, and their contracting with complainants on the assumption that the road was to remain at Bellevue, long after they had ample opportunity to discover, and had discovered the malconduct *of their engineer, and the retaining of the property [184 conveyed to the company under those contracts, must be held to estop them from claiming anything now, on this ground, against the complainants.
By the 10th section of an " act regulating railroad companies,', passed February 11, 1848, and in force at the time of the filing of the original bill in this case, it is enacted that " whenever any rail, road company • • • shall find it necessary, for the purpose of avoiding annoyance to public travel, or dangerous or difficult curves or grades, or unsafe or unsubstantial grounds or foundations, or for other reasonable causes, to change the location or grade of any portions of their road, • • • such railroad company shall bo, and is hereby authorized to make such changes of grade and location, not departing from the points and general route prescribed in the charter of such company; • • • and shall, also, be liable in damages, when any have been caused by such change to the owner or owners of the lands upon which such road was theretofore located • • • provided, however, that no such change of the location of the road be made, unless approved by the board of public woi'ks," etc.
This section of the statute, while the road of the Sandusky City and Indiana company was in process of construction, was superseded by the act of May 1, 1852, " to provide for the creation and regulation of incorporated companies in the State of Ohio," which is still in force, and which is the same in terms as the tenth section of the act of February 11, 1848, except that the clause making the consent of the board of public works necessary to authorize the change of location, is omitted.
It is hardly necessary to say, that in the actual change of the line of its road from Sandusky to Tiffin, which the Mad River and Lake Erie company has effected, it is not pretended *that it [185 has proceeded under the provisions of either of these statutes, or that it has complied with any of the provisions therein prescribed.
The complainants now pray, that the lease of the Sandusky City and Indiana road by the Mad River and Lake Erie company, be decreed to be null and void; that the latter company be perpetually enjoined against the use of the former road; and for general re-, lief; and the first question presented for our determination is, whether the complainants, on the ground of their being stockholders in the Mad River and Lake Erie company, are entitled to the relief specifically prayed for.
The Mad River and Lake Erie company now claims that it was authorized to do all it has done by virtue of the twenty-fourth section of the act last above referred to (Swan's Rev. Stat. 205), and which is as follows: " Any railroad company heretofore or hereafter incorporated, may, at any time, by means of subscription to the capital of any other company, or otherwise, aid such company in the construction of its railroad, for the purpose of forming a connection of said last-mentioned road with the road owned by the company furnishing said aid; or any railroad company organized in pursuance of law, may lease or purchase any part, or all of any railroad constructed by any other company, if said companies' lines of said road are continuous, or connected as aforesaid, upon such terms and conditions as may be agreed on between said companies respectively; or any two or more railroad companies, whose lines are so connected, may enter into any arrangement for their common benefit, consistent with, and calculated to promote the objects for which they were created; provided, that no such aid shall be furnished, nor any purchase, lease, or arrangement perfected, until a meeting of the stockholders of each 186] of said companies shall have *been called by the directors thereof, at such time and place, and in such manner as they shall designate, and the holders of at least two-thirds of the stock of such company represented at such meeting, in person or by proxy, and voting thereat, shall have assented thereto."
In the view which we take of this case, it is unnecessary for us to decide a question of construction arising under this section, which is, whether the Mad River and Lake Erie company has brought itself fairly within its provisions; or, in other words, whether the construction by one railroad company of another road entirely parallel with its own, which if owned and managed by an interest distinct from itself must necessarily be a competing road, for the purpose, and with the effect to bring about a change in a part of its own line, rather than to create a feeder, or an extension of its •own line, is within the limits of such " connections " as were contemplated by the general assembly in this enactment? But, waiving this question, was it constitutionally competent for the legislature to authorize this company to embark in new enterprises, entirely beyond the scope, and outside of the objects contemplated by its charter, at the time the complainants became members of the corporation by subscribing to its stock, and then to effectuate •a fundamental change in its charter, and in the risks and prospects •of its stockholders, without the consent of all its stockholders? 'We think the affirmative of this question to be at least doubtful. And the contrary was directly held'by the chancellor of the third circuit of Yermont, in an' able opinion, powerfully sustained by .authority, and resting, it seems to us, on a basis of reason which it will be found difficult to overthrow. Stevens v. Rutland & Burlington Railroad Co., 1 Law Reg. 154.
While, therefore, we find it impossible to claim for the legislature any such power, and conceding, for thé sake of *the ar- [IS? gument, that it has no such power, we are quite clear that, before a stockholder can be entitled to a remedy by injunction against •such departure from the original objects of the incorporation, he must have shown himself prompt and vigilant in the assertion of his rights, as such stockholder. It will not do for him to wait until the mischief of which he complains is accomplished, fortunes expended, and great public interests created. If he do, he must be held to have acquiesced in the change, or to content himself with some other form of remedy.
Now, the original bill in this case was filed, and the provisional injunction allowed, before the Mad River and Lake Erie company had made any expenditure in the construction of the Sandusky City and Indiana road; but the original bill, and first supplemental bill, both proceeded on the ground of contract alone, setting up no claim that their rights as stockholders were about to be violated A claim to relief on this ground is first presented in the second supplemental bill, after the Mad River and Lake Erie company had exhausted alike its means and its credit in the construction of the new road, and thereby rendered itself unable to repair its old line, even if it had the disposition to do so. It is true, the original bill states the fact that they are stockholders; but the statement is incidentally made, solely for the purpose of showing the consideration. of one of the contracts, which it sets forth as the basis of the relief sought. We-are not satisfied, therefore, that the complainants arc in time to demand this form of relief, on the ground of the violation of their rights as stockholders.
Moreover, there is a limit to the powers of this court. Suppose we were to declare the lease of the Sandusky City and Indiana road to the Mad River and Lake Erie company to be fraudulent, null, and void; and were to perpetually enjoin the latter .company against 138] connecting with, ^running upon, or using the former road ?— to what end? Wo could not compel the Mad River and Lake Erie company to use its old line — it is at present unfit for use — we could nqt compel them to repair it; and, indeed, it is more than doubtful whether it now has either the means or the credit to repair it; and the only effect of such a decree, we apprehend, would ho to bring about a transfer of freight and passengers from one road to the other at Tiffin, without benefiting, in the remotest degree, the pecuniary interests of the complainants, on the one hand; while, on the other, we would materially prejudice great public and private interests.
But, does it follow from all this, that the complainants are entitled to no remedy? We think not. On the part of the complainants, it is contended that the contracts between them and the Mad River and Lake Erie company, bound the latter to keep up and maintain its road on the line through Bellevue forever. On the part of the company, it is contended that by the location of their road through Bellevue, and the allowance of the privileges of sidetracks and warehousing, stipulated for by conrplainants, their contracts have been literally fulfilled and executed, and their obligation is at an end. We think that, by a fair interpretation of those contracts, it is implied that the privileges stipulated for by the complainants should continue at least until the line of road through Bellevue should be lawfully changed.
Now, this line has been changed — changed by indirection,'it is true, and not in name, but still, in substance and in fact, changed. In effecting this change of line, the company has hitherto avoided the performance of a condition prescribed by the statute as precedent to a change; to wit, the payment of damages, "when any have been caused by such change, to the owner or owners of the 139] *lands upon which such road was heretofore constructed." And this seems to us to suggest an answer to the next and last inquiry, which remains to us in this case. Are we at liberty to-adopt a remedy by compensation ?
The analogies, spirit, and policy of the statutes before quoted, seem to point to such a remedy, and we are strongly impressed with the conviction that the equities of the case demand it.
The particular remedy by injunction, prayed for by the complainants in this case, is in the nature of, and is sought by the complainants, in order that it may operate so as to enforce, a specific performance of the contracts between them and the railroad company.
It seems to be well settled that where it is found that a complainant was originally entitled to a specific performance, but pending the litigation, the very subject-matter of the agreement, to which the complainant is found to be entitled, is abstracted or destroyed, a court of equity will not turn him over to seek his damages in a court of law, but will afford a remedy by compensation. Story's Equity Jurisprudence, sec. 794, notes, and cases there cited.
Now the case before us seems to come fairly within this principle. The complainants demand the continued use of the line of railroad by way of Bellevue. To this, by the terms and spirit of their contracts, they were fairly entitled. But pending the proceedings, this line has gone to decay; the means and credit of the-company have been elsewhere exhausted ; the repair of the old line would involve the necessity of an immense expenditure, which the company, even if we were to decree the injunction prayed for,, would have no interest in making, and which we would have no power to enforce. In this way the subject-matter of the contracts has been substantially annihilated; and nothing ^remains to [140-us but to award the complainants a remedy by compensation.
A decree will therefore be entered, dissolving the provisional injunction, and referring the case to a special master for this purpose to inquire and report:
1. The amount, up to the first day of March, 1857, of the par value of complainants' stock in the Mad River and Lake Erie Railroad Company, and unpaid dividends thereon, provided the complainants shall file with said master, and to his acceptance, a transfer, in writing, of their stock aforesaid, to said company.
2. The value of the lots which complainants donated and conveyed to said Mad River and Lake Erie Railroad Company; such value to be estimated at the date of the location of said road through. Bellevue, with interest on such value from the date of the filing of the original bill in this case until the 1st of March aforesaid.
3. The dimunition in value of complainants' two warehouses and .side-tracks, occasioned by the construction and use of the Sandusky City and Indiana Railroad.
4. Compensation to complainants for the right of way through their land, to be computed according to its value, when the Mad River and Lake Erie Railroad Company commenced the use of the Sandusky City and Indiana Railroad ; and up to a time from which the said Mad River and Lake Erie Railroad Company shall release and quitclaim the same to complainants, by deed, to be filed with, .and to the acceptance of, said master; and if said company shall fail to file with said master, and to his acceptance, such deed of release and quitclaim, then said computation to be made on the assumption that such right of way is to be perpetual in said company.
5. That said master report at the present term of this court. 141] *And, following out a remedy analogous to the requirements of the eleventh section of .the act of May 1, 1852 (Swan's Stat. 202), which makes the payment of compensation a condition precedent to the right to change the location of the road, and for the purpose of securing the payment of the compensation awarded to the complainants, an alternative decree will also be entered, enjoining the Mad River and Lake Erie company against the use of the Sandusky City and Indiana road, to take effect after a reason.able time, to be named in the decree, in case of default in the payment of the compensation awarded, and to continue during such •default.
Bartley, C. J., and Swan, Bowen, and Scott, JJ., concurred.