Court Opinion

ID: 5456015
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:19:33.331208+00
Date Added: 2024-06-11T08:32:39.615177
License: Public Domain

Clerke, J.
The act of 1848, relative to railroad companies, enacts that all existing railroad companies in this State shall possess all the powers contained in this act (Laws of 1848, 221, ch. 140, § 46). That act (§17, sub. 10) allows them to borrow *434money to be applied to the construction of their railroads and fixtures.
The bond upon which this action is brought was made on the 1st day of March, 1849, and the complaint alleges that it was issued by the defendants for the extension of their road west of Binghampton. This sufficiently shows that it was for the purpose stated in the act, nor are we to presume that it was for the purpose of extending it beyond its limits in this State. But it is maintained that no authority is expressly given by any act previous to that of 1850, “ to issue bonds.” This was not necessary. If the company were allowed “ to borrow money,” it is of little consequence in-what manner or by what description of instrument they acknowledged the indebtedness and promised payment. The counsel for the defendants, however, argues, because the act of 1850 gives the power to issue bonds, the Legislature must have understood that in 1849 no right to issue bonds existed. This would not, by any means, be a legitimate inference. The power to borrow, given by the act of 1849, was not accompanied, as we have seen, by any restriction as to the manner of evidencing the debt. On examining the act of 1850, where the powers of the act of 1848 are enumerated in an extended form (Laws of 1850, 225, eh. 140, § 10), it will be found that the right to issue bonds is indeed given, but it seems to be introduced rather for the purpose of an additional power, which it was deemed expressly to provide for, namely, giving the directors the power to confer on any holder of a bond, issued for money borrowed, the right to convert the principal due into stock of the company.
There is nothing in this act, or in any act, ignoring the idea that a corporation, having the right to contract an obligation for a specific purpose, has also the right to issue any instrument which either party may consider convenient in acknowledgment of it.
The complaint is id every respect sufficient; at least, it contains no defects which can be taken advantage of by demurrer. The plaintiff is not obliged to allege that it was neoesswry to issue the bond, or that the money was borrowed for “ the completion, furnishing, or operating of the road.” If the money was borrowed after 1850, this language may be requisite; but the money in question was borrowed under the power given by the act of 1848.
The demurrer must be overruled with costs, with liberty to defendants to answer within twenty days.