Court Opinion

ID: 6949448
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:29:35.735002+00
Date Added: 2024-06-11T16:08:01.914192
License: Public Domain

Breese, J. Very many important questions are presented by this record, and ably argued by counsel; but we do not deem it necessary to notice all of them, inasmuch as we are satisfied one of them alone is quite sufficient to determine the case in favor of the appellants. There are, however, some questions of practice determined against the appellants, which ought to be noticed for the government of future cases in chancery, and which, we think, were erroneously determined, and might, of themselves, be sufficient to reverse the decree. It appears, by the record, that the answer of the individual defendants was sworn to. The answer of the corporation was not in the mode required by law in such cases. Formerly, it was uncertain whether defendants, as a body politic and corporate, were to answer in a suit against them in equity, under an oath; but now, it is well settled, that a corporation aggregate must make its answer, not as in common cases, under oath, but under the common seal. Angel & Ames on Corporations, 595. In the case of the Fulton Bank v. The New York and Sharon Canal Company, 1 Paige Ch. R. 311, Ch. Walworth said: “ Corporations answer under their seal, and without oath. They are, therefore, at liberty to deny everything contained in the bill, whether true or false. Neither can any discovery be compelled, except through the medium of their agents and officers, and by making them parties defendants. But no dissolution of an injunction can be obtained, upon the answer of a corporation, which is not duly verified by the oath of some officer of the corporation, or other person, who is acquainted with the facts contained therein.” To the same point, is the case of Brumly v. The Westchester Manufacturing Company, 1 Johns. Ch. 366. It is now the usual practice to make such of the individual members of a corporation parties, as are supposed to know something of the matters inquired after in the bill, and such was done in this case, two of the directors having been made defendants. They answered jointly with the corporation, under oath, and another defendant, Maple, separately, without oath; and on certain exceptions, filed and allowed, to the joint answer as well as to the separate answer of Maple, the respondents asked and obtained leave to amend their answer, which was done by erasures and interlineations of the original answer, and by attaching separate pieces of paper to it, to be read as parts of the answer; and then, by interlining and altering the original affidavit, the jurat was erased and a new one attached, and when so amended, the affidavit was re-sworn. On this appearing, complainants moved for a rule on the respondents, to strike out the interlineations and interpolations, and to restore the answer and affidavit to their original condition, which the court refused, and complainants excepted. The practice in chancery, in this State, is understood to be substantially the same as in the English chancery, modified and changed, in some particulars, by our statute. In both, exceptions are treated and considered as allegations in writing, stating the particular points or matters with respect to which the complainant considers the answer scandalous or impertinent, or not sufficiently responsive to the matters charged in the bill. In his exceptions, he is to state particularly such parts of the bill as he conceives are not fully answered, and ask that the defendant may, in such respect, put in a full answer to the bill. Justice Story held, in Brooks v. Byam et al., 1 Story C. C. 296, that an exception to an answer for insufficiency, should state the charges in the bill, the interrogatory applicable thereto, to which the answer is responsive, and the terms of the answer verbatim, so that the court may see whether it is sufficient or not. 1 New-land Pr. 259. And it is a rule that such exceptions can only be sustained, when some material allegation, charge or interrogatory in the bill, is not fully answered. But it is said, exceptions will not lie to the answer of corporations, nor to an answer to which the oath of the defendant is waived, because such answers are not evidence for the party making them. 2 Daniel Ch. Pr. 879 ; 1 Barb. Ch. Pr. 177; Bartlett v. Gale, 4 Paige Ch. 504. So that in this case, the court below should not have regarded any exceptions taken to the answer of the corporation, purporting to have been made on oath, except as to the individual directors jointly sued with the corporation, nor to the unsworn answer of Maple. When exceptions are allowed, and the answer is adjudged insufficient, the defendant must file a further answer, within such time as the court shall direct, and on failure so to do, the bill may be taken for confessed ; and if such further answer is also adjudged insufficient, the defendant must then file a supplemental answer, and pay all costs attendant thereon ; if that is adjudged insufficient, the defendant may be proceeded against for a contempt. (Scates’ Comp. 141.) The further answer required, we understand to mean a formal answer,' specially directed to the matters excepted to, and to supply the deficiency of the first answer. We do not understand that the original answer is to be changed by erasures, interlineations, or in any other manner, except for scandalous or impertinent matter, or the jurat altered. They must remain as they were originally, as an unmutilated and unaltered file of the court; it must be preserved in its original style, so that it may be used as evidence, if necessary, in another case, or that perjury may be assigned upon it. We know the practice has obtained, on the circuits, to amend bills and answers, and declarations and pleadings, in this manner, and there is not so much objection to it, when such papers are not sworn to. It will be seen by the 22nd section, above cited, that on allowance of exceptions, it is not contemplated that the original answer shall be amended; the rule is, for “ a further answer,” which further answer must be wholly disconnected in fact, from the original answer, and must be in proper form, and on separate paper. 2 Daniel Ch. Pr. 912, (note.) The court even, cannot order an answer to be taken from the file, after exceptions to it, notwithstanding the answer be evasive. 1 Barb. Ch. Pr. 181. In mere matters of form, or mistakes of dates, etc., an answer can be taken from the file and amended, but it is not allowed to make.any material alteration in it, (2 Daniel Ch. Pr. 911, note 1, where all the authorities are referred to.) This objection was well taken, and should have been allowed. It is further objected, that after the original answer was thus amended, by erasures, etc., it was not entitled properly, and the seal of the corporation was not attached. Whereupon the complainants moved to strike the amended answer from the files, for the following reasons: First, that the paper is not properly entitled for an answer; Second, it does not show to what bill of complaint it was filed for an answer ; Third, the answer is not signed by the individual defendants, in their proper hands, respectively; Fourth, the company have not signed the same by its chief officer, nor has the seal of the corporation been affixed; Fifth, the original answer has been erased in part, interlineations made therein, and other alterations, to make an amended answer, without the consent of the court; and for other informalities not specified. The court denied the motion, and the complainants excepted. All the reasons given in support of this motion were good, except the third, for we suppose it is not absolutely necessary each individual defendant should write his own name to an answer. It is sufficient if his name is there without objection from him. As to the first and second reasons, the paper purporting to be an answer, does not refer to any bill as pending. This is held to be good ground for taking an answer from the file for irregularity. 2 Danl. 841. So also, where the plaintiff was misnamed in the title, an order was made to take the answer off the file, and for process of contempt to issue. Ib. An answer with these defects is a nullity, and in the notice of the motion to take it from the file, it must not be called an answer, but “ a certain paper writing.” Ib. This strictness, perhaps, would not be required in our practice, yet we will require that the answer shall clearly indicate to what bill it is an answer. For reasons already given, the fourth and fifth objections should have been sustained, and it was error to disallow them. On the refusal of the court to take the amended answer from the file, the complainants presented the same exceptions as to the original bill, some of which should have been allowed, which were disallowed, especially those numbered nine, fourteen, sixteen, seventeen, twenty-third, twenty-sixth, and twenty-seventh. The thirty-third exception is to the want of direct answers to the specific interrogatories of the bill. Of the nine distinct parts which make up a bill in chancery properly framed, several of them are not considered as indispensable. As in amicable suits, the fourth, charging combination, etc., is always omitted, and so is the charging part often omitted, and is not indispensable in any case, for the stating part of the bill ought fully to unfold the complainant’s case, and the charging part in general contains little more than an enlargement of the stating part. It is useful as anticipating the defense, and is in effect a special replication. Nor is the interrogating part absolutely necessary, for if the defendant fully answers to the matters of the bill, with their attendant circumstances, or fully denies them in the proper manner on oath, if the oath be not waived, the whole object of the special interrogatories is completely accomplished. They are, however, quite useful to sift the conscience of the defendant, and are quite universal in practice, except in amicable suits, and in cases where the oath is waived. In this case, imperfect and insufficient answers having been given to many of the charges and statements of the bill, every opportunity should have been afforded by the court, to complainants, to “ sift the consciences” of the defendants, and should have compelled them to answer fully to each specific interrogatory, the interrogatories being based upon the charges and statements in the bill. When the answer is full, it is not necessary to answer the interrogatories. In our practice, where the oath of a defendant is waived, answering interrogatories, or failing to answer them, is of but little importance, as there is no conscience in the matter. Here the defendants most interested, the two directors, answered under oath, and they should have been required to answer to each specific interrogatory, inasmuch as their answers to the charges and statements of the bill, were not as full and direct as they might have been. The peculiar boast of equity is its efficiency when the common law fails; and this efficiency is mainly attributable to the virtues of its searching interrogatories, by which the defendant is, or is expected to be, purged. When facts or their leading circumstances, rest only in the knowledge of the party, a court of equity applies itself to his conscience, and purges him upon oath with regard to the truth of the transaction. 3 Bl. Com. 437. Another objection was taken to the ruling of the court on the motion of complainants to continue the cause on the affidavit of Asoph Perry. The defendants, rather than the cause should be continued, admitted the affidavit, the court deciding that the. statements in the affidavit were not to be taken as absolutely true, but were to have the same weight only as if such facts had been sworn to by the witnesses named in the affidavit, and were liable to be contradicted or qualified by other evidence. We think, on principle, this view of the court .was correct, as all parol testimony should be open to contradiction, and to rebuttal, but this court, having at a very early day, established a different rule by declaring that when an affidavit for a continuance is admitted by the opposite party, the facts stated in it cannot be contradicted, and that adhered to up to this time, we do not feel justified in disturbing it. Willis v. The People, 1 Scam. R. 402. Having disposed of the minor questions in the case, we will now proceed to state the meritorious grounds on which the decree should be reversed. It appears the Mississippi and Wabash Railroad Company was chartered by an act of the general assembly of this State, approved February 10th, 1853, (Laws of 1853, p. 73,) by that style and name, and was authorized to construct and equip a railroad from Warsaw, in Hancock county, on the most eligible route eastwardly, by the way of the city of Bloomington, to the east line of the State, with the privilege of connecting by contract with any railroad in the State of Indiana, at any point within twenty miles north or south of the latitude of Bloomington. On the 14th February, 1857, (Laws 1857, page 1053,) the general assembly passed an act amendatory of this charter, reciting “ that for the purpose of facilitating and more effectually securing the early construction of certain portions of the Mississippi and Wabash Railroad line, the said railroad line, with all the stock, work, subscriptions, franchise and effects thereunto belonging, are hereby divided and set apart into three divisions,” describing them. The western being that part of the line between Warsaw and the Northern Cross Railroad—the central being that part between the Northern Cross and the Illinois river, and the eastern the remainder, being that part of the original line running between the Illinois river and the east line of the State. The second section provides that each of the divisions shall be under the control of three commissioners, to be annually elected by the stockholders, private and corporate, and that the respective boards of commissioners thus elected for each or either division, shall have and exercise all the powers of the original or whole board of directors of said company, upon and pertaining to the contracting, constructing and completing their respective divisions of said road, and operating the same, and shall hold their offices until their successors are duly elected and qualified. The third section provides for the equitable division of the liabilities of the whole company, theretofore incurred, between the different divisions, each division to liquidate its just proportion of the same, and each division to be capable of contracting, and be liable and alone responsible for its own debts or obligations contracted; and nothing herein contained is intended, or to be construed, to invalidate or annul any contract, agreement or subscription made by or to said railroad company. The fourth section provides that the road as located, from Warsaw by way of Hamilton to Carthage, shall not be materially changed, but that there shall be a branch, or an extension of said road from Hamilton to the easterly shore of the main channel of the Mississippi, opposite the old limits of the city of Keokuk, Iowa, with a proviso for additional subscriptions to make the extension. The fifth section provides that the line of the central division, shall be located and constructed by Canton, in the county of Fulton, and may be extended and terminate at Peoria. The sixth provides that the western and central divisions may each or either contract and connect with the Northern Cross Railroad, and the western division may contract or connect with the Warsaw and Rockford Railroad, to build, equip and operate the road between Hamilton and Warsaw. This amendatory act, presents the questions on which we decide the case, and they ai’e,—does this act make a fundamental change in the charter—is it so extensive and radical, as to work a dissolution of the original contract ? Or, is it merely auxiliary to the original design, and has it been legally accepted ? This is the test to be applied to alterations of all charters. When the vote of Fulton county was taken, to subscribe stock, the charter provided for one continuous road across the State, from the Mississippi river, on the west, to the state line, on the east, two hundred and thirty miles in length, and traversing by far the most beautiful and fertile part of the State. An enterprise, it must be confessed, of great magnitude, and promising facilities for a vast and extended commerce and intercommunication with distant markets, an object well calculated to claim and receive the favorable regard of the people of a county lying on its track. This may safely be taken as one of the inducements to the vote for a subscription to its stock by the people of Fulton county. A great thoroughfare across the State, presided over by an intelligent and competent directory, whose management and counsel would be equally beneficial to all portions of it, and large dividends resulting, were objects, compared with which, a county debt of seventy-five thousand dollars, would be quite insignificant. It was for such a road, so to be governed and controlled, the people voted, whose dividends, when completed, as the proofs show, would equal those of the best lines in the State. The presumption always is, that such investments are made with a view to the profits to be derived from the stock subscribed, as an investment. The expected dividends are to be considered as the moving cause of subscription to the stock. It is also in proof, that the dividends on the central portion of this road, if completed and not connected with the eastern and western divisions, would probably be worthless, and at most of but little value. There is no proof in the record, that any arrangements have been made to connect the different divisions, and no assurances that they will be connected; and if there should be, there are no assurances of such running arrangements on the several divisions as to make the several divisions a continuous, through line of travel; and even if there were, Fulton county would be a stockholder, not in a line of .road the eastern and western divisions of which would be making good dividends, but in the central portion of it only, in which no dividends may be declared. As to Fulton county then, the great enterprise, originally contemplated, has dwindled down to a mere local road fifty miles in length, having no important termini, the stock in which, as appears by the record, would be of a nominal value only. We cannot but think, in this view, that the alteration of the original charter, by dividing this great road, was fundamental, and the stockholders released from their subscriptions. The facts in the record show that a great and most important and very promising line of travel has been broken up into fragments—each fragment deprived of the united counsels of a board of directors for the whole line, and their several interests confided to local commissioners, and the several divisions in no way bound or pledged to prosecute the original enterprise. By the amendment, the plaintiffs have an interest in fifty miles only of the road, and none in the remaining one hundred and eighty miles from which the profits may be derived. These fragmentary parts have no necessary connection with each other, and is such a disposition of the original corporate powers of the company as to amount to its dissolution. At any rate, it is not the corporation in which the plaintiffs intended to become stockholders. But it is argued, that the company has accepted the alteration, and such acceptance is binding on the subscribers. If this is so, the stockholders would not be liable. In the cases referred to, (Barret v. The Alton and Sangamon Railroad Company, 13 Ill. R. 504; of Sprague v. The Illinois River Railroad Company, 19 ib. 174, and The Illinois River Railroad Company v. Zimmer, 20 Ill. R. 654,) it is nowhere intimated that fundamental changes, by the legislature, shall not release subscribers to stock, though those changes in the charter be accepted by the directors. It is only such alterations as may be fairly regarded as auxiliary to the original design. But has this amendatory act of 1857 been accepted by the original company ? The record does not show that it has. The eastern division had not accepted it previous to the commencement of this suit, and the western and central divisions by user only—by electing commissioners as provided by the act. The old corporation had not had a meeting for several months before the passage of the act of 1857, nor since, so far as the record shows; and it would seem, that all parties interested ■ considered the original project abandoned, subscribers to stock ■having been permitted to erase their names from the stock books, • and to appropriate their subscriptions to the Jacksonville and : Savanna Railroad. No acceptance by the old company of this • act is shown, and it is indispensable that this should be shown. 'This transmutation, by this amendatory act, must be sanctioned in some mode known to the law, by the original company. "Neither one of the new corporations, nor could all of them, acting •separately, ratify and accept the change. The demand for these bonds is made of the plaintiffs by J. M. .Ingersoll, assuming to be the president and one of the commis- ■ sioners of the central division of the Mississippi and Wabash "River Railroad Company. We cannot but consider, for the .reasons given, this company thus acting, as another and different ■ company from the one to which the subscription was made, and there is nothing appearing on the record to show that it has . succeeded to the rights of the original company in any form .•authorized by law. There is no evidence of the acceptance of the provision in the amendatory law, authorizing such succession • of rights. For anything that appears, the old company in its ■original form is still in being, and may demand these bonds. We are clearly of opinion, the central division of the road is .■not entitled to the bonds, and accordingly reverse the decree ■entered in the cause. Another objection has been made- by complainants which we deem necessary to notice now. It is as to the manner in which this question of subscription to the stock of this road was submitted to the vote of the people. By the act of November 6,1849, authorizing counties and cities to subscribe stock to railroad companies, (Scates’ Comp. 950,) it is provided in the 1st section, that whenever the citizens of any city or county in this State, are desirous that said city or county should subscribe for stock in any railroad company, already organized or incorporated, or hereafter to be organized or incorporated, under any law of this State, such city or county may, and is hereby authorized, to purchase or subscribe for shares of the capital stock in any such company, in any sum not exceeding one hundred thousand dollars, for each of such cities or counties. The 4th section provides that no subscription shall be made, or bonds issued, unless a majority of the qualified voters of such city or county, shall vote the same. Thirty days’ notice of the time of voting is to be given, “ requiring said electors of said counties or cities, to vote upon the day named in such notices, at their usual place of voting, for or against the subscription for said capital stock, which they may propose to make, and said notices shall specify the company in which stock is proposed to be subscribed, the amount which it is proposed to take, the time which the bonds proposed to be issued are to run, and the interest which said bonds are to bear,” etc. The order made by the board of supervisors of Fulton county, under this law, does not seem to be in strict conformity to it. The law evidently contemplates a vote for or against subscription, to some one company only, specifying the company. The order is for a subscription to the Mississippi and Wabash River Railroad Company, and the Petersburg and Springfield Railroad Company, seventy-five thousand dollars to each. This is not only not pursuant to the law, but is manifestly unfair. All elections, as well for measures as men, should be perfectly free, uninfluenced by any consideration, other than the merits of the individual man or measure proposed. We boast of the freedom of the elective franchise, should we not strive to swell the boast by its purity also ? A single, isolated measure, such as a railroad, may not unite a majority of a county to whom it is proposed. It may favor, if constructed, one portion of a county more than another, and thereby be prevented from receiving a clear majority vote, such as the law clearly contemplates shall be given. Is it fair, in order to accomplish this object, to attach another measure to it, to be voted on at the same time, which may benefit the opposing portion of the county ? The law never intended that two roads should be coupled together, and the people forbidden to vote for one if they did not also vote for the other, the one road being really a bribe offered for votes for the other. The truth is, the voters of Fulton have never had an opportunity to vote, and never have voted this subscription, for the question was at no time distinctly before them. The question before them was, will you vote for a subscription to two roads? Neither road has received the approving vote of the people, and until that is done, until the naked single question shall be fairly presented to those voters, they ought not to be bound, or injuriously affected, by any such jockeying management and log-rolling. By this system, condemned as it has always been, by the moral sense as well as sense of justice, of the whole country, it should at this day find no favor in the courts. We do not hesitate to say, this proposition to vote on two roads at the same time, was not authorized by the law, and is a fraud on the people. This tacking one measure upon another, is unjust in another view, as it gives the County Court power to weigh down a popular single measure, by attaching odious measures to it, and thus virtually depriving the people of their right to vote on the one measure, the success of which would greatly promote their interests. Such maneuvering should be condemned everywhere, as unfair and unjust, and we so regard it. The order made by the board of supervisors, in thus obtaining the vote, of the people, is considered as unauthorized by the act. The decree of the Circuit Court is reversed. Decree reversed.