Case Name: Nancy J. Hutchinson v. The Western & Atlantic Railroad Company
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1871-11-08
Citations: 6 Heisk. 634
Docket Number: 
Parties: Nancy J. Hutchinson v. The Western & Atlantic Railroad Company.
Judges: 
Reporter: Tennessee Reports
Volume: 53
Pages: 634–638

Head Matter:
Nancy J. Hutchinson v. The Western & Atlantic Railroad Company.
1. CORPORATION. Ultra Vires. In an action against a corporation to recover damages occasioned by the negligence of its employees, it is no defense to show that the act from which the injury resulted was not authorized by the charter, if the corporation in any clear and explicit manner recognized the act as done in its business, as by employing agents to superintend it, or receiving the profits arising from it.
2. Same. The fact that the State is the sole owner and stockholder, does not exempt the corporation from liability and suit.
PROM HAMILTON.
Appeal from the judgment of tne Circuit Court, July Term, 1871. J. B. Hoyl, J.
The Western & Atlantic Railroad Company, of which the State of Georgia was the sole owner and stockholder, was • by its charter authorized to construct and operate a line of railroad from Atlanta, Georgia, to Chattanooga, Tennessee. Without any authority in its charter it undertook to run in connection with its road' a line of steamers on the Tennessee river. Two of these steamers collided in port at Chattanooga, and the husband of the plaintiff, who was mate upon one of them, was wounded and afterwards died from the injuries received. This action was brought under the statute to recover the damages resulting to the widow and children.
Upon the trial there was proof tending to show that the boat was imperfectly equipped and perhaps negligently managed. The defendant, in addition to other defenses, insisted that it had no authority to run a line of steamers upon the Tennessee river, that the doctrine of ultra vires applied, and that it could not be held liable for injuries resulting from negligence in the prosecution of this unauthorized business. But it appeared that the profits were received by the company.
The Circuit Judge charged the jury in effect that the charter did not confer upon the corporation the right to run steamers on the Tennessee river; that if the agents of the corporation undertook to do so, the act would be ultra vires, the corporation would not be bound by it, and would not be liable for injuries resulting from negligence in its execution.
Verdict and judgment were for the defendant, and the plaintiff appealed in error to this court.
Ward, Burt & Sykes for plaintiff.
Baxter & GleNN for defendant.

Opinion:
TurNey, J.,
delivered the opinion of the court.
The doctrine "ultra vires" is not aplicable in this case.
In arriving at a true solution of the question involved, the only use to be made of the charter granted by Georgia and Tennessee to Western & Atlantic Railroad, is to show the fact that it had a corporate existence.
If a corporation, chartered for one purpose, engage in a business different from that authorized by charter, or if its employees engage in such different business in the name of the principal, and the principal, with a knowledge of such departure, receive the profits arising therefrom, employ agents to superintend it, or in any other distinct mode recognize it as their business, and in its prosecution by its agents an injury results therefrom to another's person or property, the party so in-jui'ed is entitled to maintain his action for the damages resulting from the wrongful act.
The fact that the act from which the injury resulted was unauthorized by the charter of incorporation, is no defense for the wrong-doer.
With corporations as with individuals, if it be engaged in a lawful business, and to promote that lawful business resort to unauthorized acts, it must be held responsible for the consequences of such unauthorized acts, else the maxim, that " no ' man shall take advantage of his own wrong" is violated.
This holding is not in conflict with the opinion in the case of Pearce v. Madison & Indianapolis Railroad Company, 21 H., 444. In that case the learned judge concludes his opinion : "It is contended that because the steamboat was delivered to the defendants and has been converted to their use they are responsible. It is enough to say in reply to this, that the plaintiff was not the owner of the boat, nor does he claim under an assignment of the owner's interest. His suit is instituted on the notes as an endorser, and the only question is, had the corporation the capacity to make the contract in the fulfillment of which they were executed. The opinion of the court is, that it was a departure from the business of the corporation, and their officers exceeded their authority."
Here we have a clear intimation from the court, that if the owner of the boat had sued for the conversion, or if the holder or endorser of the notes had claimed under an assignment of the carrier's interest, and sued for the value of the vessel, passing by the note, the action would have been maintainable.
That there was a responsibility, not upon the notes executed by the president in the name of the defendants, but for the appropriation of the property by its agents for the use and with the knowledge of defendants.
The cases are not parallel. That was an action ex contractu, this ex delicio; there the authority was exceeded by the officers, here they are acting in conformity to orders in promotion of the object of their employment.
The fact that the defendant is the property of the State of Georgia, which is the sole stockholder, makes it none the less a corporation, able to sue and liable to be sued as other corporations. Here the defendant as a corporation, and not as the State, is sued. If the ownership by the State entitles the road to more immunities than corporations with different status, and gives it privileges in the courts of defenses not extended to others, then the principle must be allowed its full and legitimate application, and but few railroads in this State can be sued, the State being largely interested in most of them.
By becoming owner or stockholder the State descends from its sovereign dignity to individuality so far as to place it upon an even footing of legal liability with other corporations of like character and purposes.
Reverse the judgment