1. A company is nonetheless a railroad company within the
meaning of the act of the General Assembly of the State of
Illinois, approved Nov. 6, 1849, authorizing counties to subscribe
to the capital stock of railroad companies, because its charter
vests it with power to carry on, in addition to the business of
such a company, that of a coal, or a mining, or a furnace, or a
manufacturing company.
2. It would be an unreasonable restriction of the rights and
powers of a municipal corporation to hold that it cannot waive
conditions found to be injurious to its interests, or, like other
parties to a contract, estop itself.
3. A county in Illinois, a subscriber to the stock of a railway
company, agreed to extend the time for completing the road from
that originally fixed to a particular date. Before that date, the
county, by its proper officers, declared the road completed to its
satisfaction, delivered its bonds, and received the stock of the
company in return therefor.
Held that its action
constitutes a waiver and an estoppel which prevent it from raising
the objection that the contract was not performed in time.
4. The bonds issued by the County Court of Randolph County,
Ill., bearing date Jan. 1, 1872, and reciting that they are issued
in payment of a subscription
Page 93 U. S. 503
of $100,000 to the capital stock of the Chester and Tamaroa Coal
& Railway Company, in pursuance of an election held by the
legal voters of said county, on the sixth day of June, 1870, and by
virtue of the provisions of an act of the General Assembly of the
State of Illinois, entitled "An Act supplemental to an act to
provide for a general system of railroad corporations," are, with
the coupons thereto attached, valid, and binding upon the
county.
This was an action of assumpsit on certain coupons attached to
bonds issued by the County of Randolph, in payment of a
subscription of $100,000 to the capital stock of the Chester and
Tamaroa Coal & Railway Company.
On the 3d of May, 1870, the County Court of Randolph County, at
a special term thereof, passed an order, which provided that the
question of such subscription be submitted to the legal voters of
the county; that until the railroad of the company should be built,
and cars run thereon from within the corporate limits of the City
of Chester to the line of the county, no bonds should be registered
or paid, and that no bonds should be registered or paid unless the
said railroad should be completed from Chester to that line within
eighteen months from the time of subscription.
At an election held June 6, 1870, the vote resulted in favor of
the subscription. The county thereupon, on the twenty-seventh day
of that month, made its subscription on the books of the company.
On July 26, 1870, the county court ordered that the bonds be
executed and placed in the hands of certain trustees. On Aug. 17
following, it modified that order by directing that the bonds be
executed only at a regular term of the court; and again, on the 6th
of September, 1871, further modified it by requiring the judge and
clerk of the court to execute them, attach its seal thereto, and
deliver them to the trustees, and that the company should issue to
the latter a certificate of stock to the amount of $100,000, which
was accordingly done.
On the 6th of October, 1871, upon the representation of the
president of the company and others, that the work on said railroad
was far advanced toward completion through the County of Randolph,
but that from unavoidable difficulties of
Page 93 U. S. 504
transportation, caused by unprecedented low water in the rivers,
the company found itself unable to get its iron upon the ground in
the time contemplated by the previous orders of the county court,
the latter made an order, which, after reciting those before
issued, concluded as follows:
"Whereas, the time for completing said road will expire on the
twenty-seventh day of December, 1871, and it appearing that said
company are doing all they can to complete said road within said
time, it is therefore ordered by the court that the time for
completion of said railroad be extended to the first day of
February, A.D. 1872, and that, in case said road shall be
completed, and cars shall have run thereon, from within the
corporate limits of the City of Chester to the county line between
the Counties of Randolph and Perry, by the first day of February,
A.D. 1872, the said trustees shall deliver said bonds to said
company, or their authorized agent, and shall deliver said
certificate of stock to said county court or their order."
Plaintiff proved that the road was built and completed within
the time required by the county court through the County of
Randolph, according to contract; that it was upon its completion,
and ever since has been, in full operation, with trains of cars
carrying freight and passengers as a common carrier through said
county, on the line prescribed by the contract; that said bonds
were not issued and delivered to said railroad company until after
the officers of said county had gone over said railroad in the cars
of said company through said county, and expressed themselves
satisfied with the construction of said railroad.
The bonds were delivered to the company Jan. 19, 1872. The
coupons sued on were as follows, differing only in the time of
maturity and number of the bond to which each was attached:
"COUNTY OF RANDOLPH, STATE OF ILLINOIS:"
"The County of Randolph will pay to the bearer, on the first day
of July, 1872, at the agency of the state treasurer, in the City of
New York, forty dollars, it being one year's interest on bond No.
183, for $500."
"JOHN R. SHANNON"
"
County Clerk of Randolph Co."
Page 93 U. S. 505
The bonds were in the following form:
"
UNITED STATES OF AMERICA"
"
State of Illinois, Randolph County"
"
No. 1] RAILROAD BOND [$500"
"Know all men by these presents that the County of Randolph,
State of Illinois, is indebted to the Chester and Tamaroa Coal
& Railway Company, or bearer, in the sum of $500, lawful money
of the United States, with interest from date, at the rate of eight
percent per annum, payable annually on the first day of July in
each year, at the agency of the state treasurer, in the City of New
York, on the presentation and surrender of the respective interest
coupons hereto annexed."
"The principal of this bond shall be due and payable ten years
from the date hereof, at said agency of state treasurer, in New
York."
"This bond is one of a series of bonds issued by the County of
Randolph in payment for $100,000 of the capital stock of the
Chester and Tamaroa Coal & Railway Company, in pursuance of an
election held by the legal voters of Randolph County, Ill., on the
sixth day of June, 1870, and by virtue of the provisions of an act
of the general assembly of the State of Illinois entitled, 'An Act
supplemental to an act to provide for a general system of railroad
corporations.'"
"And for the payment of said sum of money and accruing interest
thereon in the manner aforesaid the faith of the County of Randolph
is hereby irrevocably pledged, as also property, revenue, and
resources."
"In testimony whereof, the county court of said County of
Randolph have caused these presents to be signed by the county
judge and by the clerk of the county court of said county, and
sealed with the seal of said court, at Chester, Ill., in said
county, on this first day of January, A.D. 1872."
"ALEXANDER WOOD,
County Judge"
"JOHN R. SHANNON,
County Clerk"
The act of the general assembly, referred to in the bonds, is,
together with the provision of the constitution bearing upon the
case, set forth in the opinion of the Court.
The case was by agreement tried by the court below without the
intervention of a jury. Judgment was rendered
Page 93 U. S. 506
for the plaintiff, whereupon the county sued out this writ of
error.
Page 93 U. S. 507
MR. JUSTICE HUNT delivered the opinion of the Court.
By consent of the parties, this case was tried by the circuit
judge without the intervention of a jury. It resulted in a judgment
for the plaintiff below for the amount of the coupons upon certain
bonds issued by the County of Randolph and held by the plaintiff,
thus establishing the validity of an issue by said county of bonds
in aid of the Chester and Tamaroa Coal & Railway Company. The
county, dissatisfied with this result, brings its appeal to this
Court and rests its objections upon two principal grounds:
1. The first allegation of error is that the issue of these
bonds was forbidden by the Constitution of the State of
Illinois.
A separate article of the constitution of that state provided as
follows:
Page 93 U. S. 508
"No county, city, town, township, or other municipality shall
ever become subscriber to the capital stock of any railroad or
private corporation, or make a donation, or loan its credit in aid
of such corporation:
provided, however, that the adoption
of this article shall not be construed as affecting the right of
any municipality to make such subscriptions when the same have been
authorized under existing laws by a vote of the people of such
municipality prior to such adoption."
This provision took effect on the 2d of July, 1870.
Richards
v. Donaghue, 66 Ill. 73.
If, then, the County of Randolph had been authorized, prior to
July 2, 1870, to make the subscription in question, the bonds were
valid, so far as this objection is concerned. If it was not so
authorized, the subscription was prohibited by the constitution,
and the bonds were void. It will be observed that the decision of
this point depends not upon the question whether a subscription had
in fact been made by a county prior to July 2, 1870, but whether
the county had been authorized in the manner specified to make such
subscription. The provision does not apply where such subscriptions
"have been authorized under existing laws."
The act of the Legislature of Illinois, respecting railroad
companies, in force prior to the adoption of the constitutional
provision, contained the following sections:
"77. Subscriptions and loans. 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 are hereby authorized to purchase or subscribe for shares of
the capital stock in any such company, in any sum not exceeding
$100,000, for each of such cities or counties; and the stock so
subscribed for, or purchased, shall be under the control of the
county court of the county, or common council of the city, making
such subscription or purchase, in all respects as stock owned by
individuals."
"78. For the payment of such stock, the judges of the county
court of the county, or the common council of the city, making such
subscription or purchase, are hereby authorized to borrow money, at
a rate not exceeding ten percent per annum, and to pledge the faith
of the county or city for the annual payment of
Page 93 U. S. 509
the interest, and the ultimate redemption of the principal, or,
if the said judges or common council should deem it most advisable,
they are hereby authorized to pay for such subscription or purchase
in bonds of the city or county making such subscription, to be
drawn for that purpose, in sums not less than fifty dollars,
bearing interest not exceeding ten percent per annum, provided that
no bond shall be paid out at a rate less than par value."
"79. The railroad companies already organized or incorporated,
or hereafter to be organized or incorporated, under the laws of
this state, are hereby authorized to receive the bonds of any
county or city becoming subscribers to the capital stock of such
company, at par, and in lieu of cash, and to issue their bonds,
bearing interest not exceeding ten percent per annum, for any money
by them borrowed for the construction of their railroad and
fixtures, or for the purchase of engines and cars, and for such
purpose may dispose of any bonds by them received as
aforesaid."
The section following enacts that no such bonds shall be issued
unless a majority of the voters of the municipality shall, at an
election called for that purpose, sanction such issue. It is not
necessary to give the details of this section, as no question
exists as to the holding the election on the sixth day of June,
1870, and to the vote thereat, as set forth in the bonds.
The point of the objection here made is, that the Chester and
Tamaroa Coal & Railway Company is not a railroad company within
the meaning of the general act already cited. It is said that it is
a mining and a manufacturing company, and not a railroad
company.
By an act of the legislature, passed March 4, 1869, that company
was created a corporation, and
"vested with all power, privileges, and immunities which are or
may be necessary to engage in mining, and to construct, complete,
and operate a railroad, with single or double track, commencing at
Chester, in Randolph County, Ill., thence running easterly on the
most eligible route, via Pinckneyville, in Henry County, Ill., to
Tamaroa, in said Perry County; and for this purpose said company
are authorized to lay out their said railroad, not exceeding one
hundred feet in width through the whole length, and, for the
purpose of cuttings, embankments, stone, or gravel, may take as
much more land as may be necessary for the proper construction and
security of said railroad, and shall have power
Page 93 U. S. 510
to extend the same to connect with or cross over any other
railroad within the State of Illinois, and may make such lateral or
branch road or roads to any coal lands belonging to said company as
they may deem necessary for the successful prosecution of their
business, and said company may enter upon and take possession of so
much land as may be necessary for the construction and maintenance
of said railroad and branches, depots, side tracks, water stations,
engine houses, machine shops, and other buildings and appendages
necessary to the construction and working of said road, and in case
said land be not donated to said company for such purpose, it shall
be lawful for said company to proceed to condemn said land, as
provided by the laws of the state concerning right of way."
"SEC. 2. The said corporation may take and transport upon said
railroad any person or persons, merchandise, or other property, and
may fix, establish, take, and receive such rates of toll, for any
passenger and property transported upon the same, as the directors
shall from time to time establish, subject to such limitations and
restrictions as are or may be provided by general law."
"SEC. 3. The said corporation is hereby vested with power to
purchase, hold, and convey real and personal estate; to give and
receive promissory notes; to enter into and carry on all kinds of
mechanical and manufacturing business; to erect mills, furnaces,
foundries, factories, and machine shops, for the manufacture of
flour, lumber, iron, castings, machinery, farming utensils, and any
other kind or description of article not forbidden by law, and may
erect and build marine ways or drydocks and use the same for the
purposes of repairing and building boats, barges, or any other
description of watercraft; may buy, build, and own boats, barges,
or other vessels, and navigate the same for the transportation of
their coal, manufactures, or for other purposes."
We are at a loss to conceive what words could be used to create
a railroad company that are not here used. The persons named are
"hereby created a corporation," and authority is given "to
construct, complete, and operate a railroad" from Chester, a point
in Randolph County on the Illinois Railroad, to Tamaroa, a point on
the Mississippi River. They are authorized to extend their road, by
lateral branches, to connect with other roads, and the power of
eminent domain, to condemn such
Page 93 U. S. 511
land as may be needed for building the railroad, is vested in
the corporation.
The corporation is authorized to take and transport upon said
road all persons and property and to fix and establish rates of
toll for the transportation of such persons and property.
It is not the less a railroad company within the statute
authorizing municipal subscriptions because it is also a coal, or a
mining, or a furnace, or a manufacturing company. By the third
section of its charter, it is vested with large power to carry on
various kinds of mechanical and mining business, and is authorized
to build and use vessels and barges in the transportation of coal,
and for other purposes.
If the legislature had placed great restrictions upon its
capacity as a railroad corporation, it might plausibly be objected
that the purpose of a municipal subscription to its stock would be
so far thwarted. Such purpose is to promote the settlement and
increase the business and enhance the value of the property of the
municipality and of its citizens by furnishing the means of passage
to all wishing to come or to go, and providing a means of bringing
in the produce of other regions and of furnishing a market for its
own. The vast corn-growing lands of the State of Illinois depend
for their value upon their convenience to a market. A few years
ago, its rich production was almost valueless for the want of
railroads or canals to carry it to other regions, where it could
have been sold to advantage.
No court has authority to say that an operating railroad is less
a railroad -- is less valuable to a county through which it passes
-- because it proposes to mine and transport coal, to manufacture
and transport flour, to carry on iron foundries, digging or buying
the raw materials, employing men to manufacture them into different
kinds of iron or articles of use or luxury, and transporting them
as may be required, than if it confined itself to the business of a
carrier. So far as the probable success or advantages of such
undertakings are concerned, it is not for us to decide upon it. The
people of Randolph knew what the powers of the corporation were,
and if they thought well of the undertaking, it was a matter for
their judgment only. The question of power being settled, the
matter of judgment, wisdom, or expediency is not for
reconsideration by the courts.
Page 93 U. S. 512
2. The objection is made, secondly, that the subscription of the
county was a conditional one, and that the condition was not
complied with.
The allegation is that by the terms of the contract of
subscription the road was agreed to be completed and in operation
within eighteen months from the date of the subscription, which
would be on the twenty seventh day of December, 1871, and that it
was not completed until the nineteenth day of January, 1872.
We do not think the fact upon which this objection is based
appears from the record. It is certain that no attention was called
to it in the court below, and no ruling there asked or had in
relation to it. It is there stated that
"the plaintiff proved that the road was built and completed
within the time required by the County Court of Randolph, according
to contract; that it was upon its completion put into operation,
and has been ever since and now is in full operation, with trains
of cars carrying freight and passengers as a common carrier through
said County of Randolph on the line prescribed by the contract. . .
. Said bonds were not issued and delivered to said railroad company
until said county officers . . . had first rode over said railroad
in cars of said company through the County of Randolph, and
expressed themselves satisfied with the construction of said
railroad."
This plain statement is supposed to be overthrown by the
evidence of a petition presented to the county court by the company
on the sixth day of October, 1871, in which it is stated that, for
reasons there given, it will not be able to complete the road
within the time stipulated, and asking an extension from Dec. 27,
1871, until Feb. 1, 1872, and of the order of the county court
granting such extension.
This is evidence, no doubt, that the company then believed that
it would not be able to complete the road as it had undertaken, and
that it desired to guard itself against default, as well as that
the county was ready to grant the request. This was, however,
ninety days before the expiration of the time stipulated; and it is
by no means difficult to believe that the company overcame the
existing obstacles. It could not obtain the bonds until the road
was completed, and it had the
Page 93 U. S. 513
strongest motive, therefore, not to accept the indulgence of the
county if it was possible to avoid it.
The evidence shows that the bonds had been delivered on the
nineteenth day of January, thirteen days before the expiration of
the extended time, and that the road was completed and in operation
before such delivery. It appears also from the citation already
made from the record that the road was built through the county
"according to contract." When it is stated in the bill of
exceptions that the
"plaintiff, to maintain the issue on his part, offered in
evidence the contract made by the County Court of Randolph County,
also the order of the county court extending the time for the
completion of the road,"
it is plain that the distinction between the contract and the
order of extension was well understood, and that the statement that
the road was found to be completed according to the contract, means
within the time and in the manner prescribed by the original
contract, and not by the extension.
If the fact assumed is doubtful, we are not called upon to study
out a defect for the purpose of overthrowing the judgment, which
was not objected to or in any manner alluded to on the trial.
Should we, however, assume the fact to be as is insisted by the
plaintiff in error, it does not follow that its conclusion is
correct. The constitutional provision alluded to prohibited all
loans to corporations of municipal credits after July 2, 1870. If,
however, a subscription for that purpose had already been
authorized by a vote of the people, the right to make such
subscription was not affected by the prohibition. If not authorized
before the date mentioned, the subscription was absolutely
prohibited. If previously authorized, the constitution had nothing
to do with it. It was as if no such ordinance existed.
We should unreasonably restrict the rights and powers of a
municipal corporation were we to hold that it did not possess the
power to alter its legally made contract by waiving conditions
found to be injurious to its interests or that it could not estop
itself like other parties to a contract. Bigelow on Estoppel, 464;
Moran v.
Comm'rs, 2 Black 722;
Zabriskie v.
Cleveland, 23 How. 400;
Pendleton
v. Avery, 13 Wall. 297; 1 Dill.Mun.Corp., secs.
375, 383, 385, 398.
Page 93 U. S. 514
In the present case, the county, by an order in writing made on
the sixth day of October, 1871, expressly agreed, for reasons
satisfactory to itself, to extend the time of completing the road
from the twenty-seventh day of December, 1871, to the first day of
February, 1872. Before that time -- to wit, on the nineteenth day
of January, 1872 -- it declared the road to be completed to its
satisfaction, delivered its bonds to the company, and received its
stock in return, which it still holds and owns. That this
constitutes a waiver and an estoppel, which under ordinary
circumstances would prevent the obligor from raising the objection
that the contract had not been performed in time, the authorities
leave no doubt.
Muller v. Ponder, 55 N.Y. 325;
Barnard
v. Campbell, id., 457;
McMarler v. Bank, id., 222;
Kelly v. Scott, 49
id. 601;
Dezell v.
O'Dell, 3 Hill 215;
Grand Chute v.
Winegar, 15 Wall. 372;
Mercer
Co. v. Hackett, 1 Black 336;
Gelpcke v.
Dubuque, 1 Wall. 175;
id., 184 [argument
of counsel -- omitted];
County of Moultrie v. Savings
Bank, 92 U. S. 631;
Converse v. City of Fort Scott, 92 U. S.
503.
We are of the opinion that the case was well decided, and the
judgment is accordingly
Affirmed.
