Court Opinion

ID: 7041686
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:50:56.393968+00
Date Added: 2024-06-11T16:11:22.485326
License: Public Domain

On petition for a rehearing.
Biddle, J.
It is insisted by the appellants, in their petition for a rehearing, that the word “ consideration,” as used in the latter part of the petition,—“ the donation to be made upon the consideration that,” etc.,—should be “ conditionthat, in the agreed state of facts, upon which the case was submitted, the word “ condition ” was used, and therefore must govern. That the word “ donation,” as used in the statute, does not necessarily imply the absence of an inducement; that a donation is always moved by some inducement which must not be confounded with the “ consideration ” of a contract, or a “condition” upon which its validity depends; that a consideration is not inconsistent with the meauing of “ donation,” in its ordinary sense; that the benefits supposed to be derived from railroads m the vicinity of the donor is always the inducement which moves the donation, and is indeed inseparable from it; that notwithstanding there is another inducement m this case, besides the supposed *493benefit of tbe contiguous railroad, namely, tbe location and maintenance of tbe machine shops, the bonds must be held to have been issued as a donation, and not upon a contract.
We do not regard the difference between the word “consideration,” as used in the petition, and the word “ condition,” as used in the agreed state of facts, as being important. If the donation was to be made “upon the consideration that,” or upon condition that, the railway company should locate and maintain its shops near the city of Attica, it would not substantially change the meaning of the words, as used in the petition and the agreed state of facts. Either of them imports a consideration which would sustain a contract, and neither of them is consistent with a donation. Besides, the latter clause of the petition, namely: that, on failure to so locate and maintain the machine shops, “said company is to reimburse said city in the sum of sixty thousand dollars,” is wholly inconsistent with the proposition to donate the bonds to the company. A donation which is made “ upon the consideration that,” or “ upon condition that,” the company which receives it will locate and maintain its machine shops at a particular place, and, failing to do so, will reimburse the donor in the amount of the donation, is a contract, whatever name may be given to it. The obligation to so locate the machine shops, or, on failure to do so, reimburse the city of Attica, can not, with propriety in the use of language, be called a donation. A legal instrument must be construed according to the meaning of its words, by whatever name the instrument itself may be called.
The petitioner further insists, “that the contract of donation” was founded on two considerations: First, the building of the railroad, which is a valid consideration; and, second, the location and maintenance of the machine shops, which is void as a consideration. That when a corporation, in doing an act which it is *494authorized to do, goes beyond its powers, the excess not being intrinsically illegal, the act will be held good so far as authorized, and defeated as to the excess, if that be separable.
We are aware that there' is a line of modern cases holding, that, when a corporation performs an act which it has the power to do, but performs it merely in excess of its authority, when the excess can be separated from the other portion of the act, it will be maintained as far as it has authority; and when a corporation performs two acts in connection, one of which is authorized and the other not, and they can be separated, the authorized act shall be maintained, and the other disregarded; but when a corporation performs two acts, one of which is authorized and the other not, and the acts are so blended as to be inseparable, zieither will be sustained. And this is good law.
But the case before us belongs to zieither of the above classes. In this ease, the first step was unauthorized by law, 'namely, the petition to grant the donation. The statute—which grants zdghts and powers' uzzknown to the common law, and thez’efore must be constz’ued strictly, —authoz’ized the city of Attica, upozi petition of a majority of its resident freeholders, to subscribe to the stock of any railroad, etc., running, etc., or to make, on such petition, doziations, in money or bonds of the city, to aid in the construction of any such railroad, subject, etc. With the first clause of the statute cited, we are not concerzzed in the present case. The petition was not to 'subscribe stock to a railroad. If it can be maintained at all, it must be maintained as a petition to donate the bozzds of the city of Attica, “to aid izz the construct!ozi of” a cez-tain railroad. But the petition is, “ to cause to be issued and donated by the city of Attica to the Indiana North azid South Railway Company, * * sixty thousand (60,000) dollars,” etc., “ in bonds,” etc. “ The donation to be made upozi the consideration that said railway company shall perma*495nently locate and maintain their shops for the manufacture of their rolling stock, in or adjacent to the city of Attica, and, on failure so to do, said company is to reimburse said city in the sum of sixty thousand (60,000) dollars.” This is not a petition simply to donate bonds to the railroad, as contemplated by the statute, hut a petition to contract with the railroad, upon the consideration that, if the company will so locate ■ and maintain its shops, or, on failure to do so, reimburse the city, it will donate to the company sixty thousand dollars in bonds. The words of the petition can have no other plain and fair meaning. It is, therefore, not a petition authorized by the statute. If the petition, and the ordinance of the city of Attica in pursuance of it, agreed to by the railway company, do not constitute a contract, we are at a loss to know what would. They make an agreement, upon a consideration, to do particular acts, and if such a contract can be upheld under the statute, the city of Attica, upon petition of a majority of her resident freehold citizens, could go into the marts of the world and make any contract, provided it was to aid in the construction of a railroad running in the vicinity. We would not know where to draw the line of distinction between this contract and any other for the same purpose.
But it is said that the petition is more favorable to the city of Attica than a petition for a simple donation would he. We do not perceive any force in this argument. The statute authorized the resident freeholders to petition for 'certain things to be done; the city of Attica upon said petition was authorized to do certain acts; this will not authorize the residents of the city to petition for certain other things to he done, nor the city to do other certain acts, merely because they are more advantageous than those which are authorized. The resident freeholders of the city of Attica have no power under the statute to petition for what they choose, nor the city to make contracts with railroads as it chooses, merely because they are *496advantageous, and thus require the tax-payers to answer to their obligations. They can perform only the acts authorized by the statute. The fact that the petition was for certain advantages unauthorized by the statute is specious, and well calculated to induce the resident freeholders to sign it, when they would not, if it were otherwise, have done so. It is impossible to know how many were induced to sign the petition to obtain the supposed benefit from the railroad, how many to obtain the advantage from- the machine shops, or how many upon the faith of the conditional reimbursement. It may be that none would have signed it, if it had been for a donation uncoupled with supposed advantages expressed upon its face. These facts vitiate the petition. It is not one authorized by the statute, and, therefore, did not authorize the ordinance passed in pursuance of it, nor the issue of the bonds.
And the doctrine, that when corporations exceed their authority they may be upheld as to all except the excess, when it is separable from that which is authorized, can have no application in this case. The petition to donate the bonds is so mixed and blended with the consideration or condition upon which they were to be donated, that the parts can not be separated. It is impossible to say what portion of the bonds should be upheld on the grounds of the supposed benefit derived from the railroad, what portion for the advantages of the machine shops, or what portion upon the faith of the reimbursement; all must therefore fall together. "We can not uphold all the bonds for only a part of the consideration, or the performance of only a part of the condition upon which they were issued.
We are thus conducted to the conclusion that the statute did not authorize the petition, that the petition did not authorize the ordinance, and that the ordinance did not authorize the issue of the bonds.
The petition for a rehearing is overruled.