Atchison, Colorado & Pacific Railroad v. Board of Commissioners of Phillips County

Supreme Court of Kansas

Atchison, Colorado & Pacific Railroad v. Board of Commissioners of Phillips County

25 Kan. 261

CourtSupreme Court of Kansas

DecidedJanuary 15, 1881

StatusPublished

Cited by4 cases

This text of 25 Kan. 261 (Atchison, Colorado & Pacific Railroad v. Board of Commissioners of Phillips County) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Atchison, Colorado & Pacific Railroad v. Board of Commissioners of Phillips County, 25 Kan. 261 (kan 1881).

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Opinion

The opinion of the court was delivered by

HORTON, C. J:

The principal question for our determination is, whether the consolidation of the Atchison & Denver railway company with the Waterville & Washington railroad company, the Republican "Valley railway company, the Atchi-son, Solomon Valley & Denver railway company, and the Atchison, Republican Valley & Pacific railway company, under the corporate name of “The Atchison, Colorado & Pacific Railroad Company,” released the township of Kirwin from its subscription, September 13,1879, to the capital stock of the first-named company. It is claimed by the defendants that, on December 22, 1879, the .company to which the subscription was made went out of existence; that the construction of the railroad after December 22d was by an entirely different corporation; and that the plaintiff has no interest in the original contract for the construction of the railroad through Kirwin township, or in the subscription of that township to the stock of the Atchison & Denver railway company. The case of The State, ex rel. St. Jos. & D. C. Rld. Co., v. Comm’rs of Nemaha Co., 10 Kas. 569, is cited as decisive. That case is not controlling as to this. There no subscription had been made to the stock of the company to which the [272]*272bonds had been voted. There the law authorizing consolidation expressly reserved to each stockholder of the old companies the right to determine whether he would become a stockholder in the new corporation. Chapter 44 of the statute of 1865, under which the Northern Kansas railroad company and the St. Joseph & Denver City railroad company were consol ¡dated, into a single corporation on October 9, 1866, was abrogated by the adoption of the statute of March 1, 1870, and the proviso of the law of 1865 for dissenting stockholders to withdraw upon the consolidation of the companies was omitted in the law of 1870. (Laws 1870, ch. 92, pp. 195, 197.) The question resolves itself into one of power on the part of the legislature to authorize the consolidation of companies under the provisions of the law of 1870. The doctrine that, after a subscription has been made to the capital stock of a corporation, a material change of the charter by which a new and different business is superadded to that originally contemplated, or its purpose and powers altered, releases a non-consenting stockholder, is limited by a provision in the charter authorizing a change or amendment, and in this state by §l of article 12 of the constitution of the state, which provides that corporations may be created under general laws; but all such laws may be amended or repealed, ,and the statutes enacted under such constitutional provision. The law of 1870 regarding the consolidation of railroads was in force at the dates of the election and of the subscription to the stock of the Atchison & Denver railway company, and such subscription was made under the express provision of the law that the company might be' consolidated with other companies at the instance and approval of parties representing twq-thirds of all the stock of the corporations so consolidated. Paraphrasing the remarks of Mr. Justice Strong, in Nugent v. Supervisors, 19 Wall. 249, 251, when the voters of Kirwin township sanctioned a subscription by their vote, and when the subscription was made by the county clerk in pursuance of that sanction, they were informed by the law of the state that a consolidation with another company might be [273]*273made, that the stock they proposed to subscribe might be converted into stock of the consolidated company, and that the liability they assumed might become owing to that company. With this knowledge and in view of such contingencies, they made the contract. The subscription was therefore made subject to the contingency of the consolidation. There is no claim that the consolidation was prejudicial to the township’s interests or those of the Atchison & Denver railway company • nor is any fraud or wrong alleged in such consolidation. The legislature has the power to authorize such consolidations, at least in all cases where the rights of a stockholder are not injured thereby. We conclude that the consolidation did not exonerate the original stockholders of the companies from their liability to pay their subscriptions, and therefore that it did not release the township of Kirwin from its subscription to “ The Atchison & Denver railway company.” (Nugent v. The Supervisors, supra, and cases cited; The Cork & Youghal Railway Co. v. Patterson, 37 Eng. L. and Eq. 398; Nixon v. Brownlow, and Nixon v. Green, 3 H. & N. 686; Sparrow v. Railroad Company, 7 Porter [Ind.] 369; Bish v. Johnson, 21 Ind. 299; Hanna v. Cincinnati & Ft. Wayne Rld. Co., 20 Ind. 30.) “The Atchison, Colorado & Pacific railroad company,” after December 22d, 1879, was the lawful successor in interest of the company to which the bonds were voted and the stock was subscribed.

Some objection is made to the delivery of the bonds, on the ground that as the construction of 3Jg- miles and of a mile of side-track of railroad brought the road to and into-the city of Kirwin on December 20, 1879, the construction of more railroad within the city of Kirwin after that date does not support the demand for the delivery of the remaining ten bonds. The objection is not well taken. The proposition provided that the railroad was to be completed and in operation before June 1,1880; under its terms there was completed on December 20,1879, miles of main track and of a mile of side-track. Now the agreed statement of facts sets forth:

[274]*274“That prior to June 1,1880, therailroad of said railroad company, as so consolidated, was built and completed and in operation from Cawker City, in Mitchell county, Kansas, in connection with the Atchison, Solomon Valley & Denver railway and the Central Branch Union Pacific railway, to and into the city of Kirwin, in Phillips county, Kansas, from the east line of said township; and that a freight and passenger depot, with side-track and stock-yard and terminal-station conveniences, were built and constructed in accordance with said proposition within the corporate limits of said city of Kirwin, in said township of Kirwin, and within a square of 200 rods in extent, of which the public square in Kirwin is the center, and prior to June 1,1880; and that the length of the main track of said railroad so completed and in operation in said township of Kirwin was and still is 6^¡- miles; aúd the length of said railroad, including side-tracks, between the east line of said township of Kirwin and the west line of the city of Kirwin was and still is 4T2^g- miles; and the length of the side-track in said city of Kirwin was and still is TV(f miles.”

There is no claim that any of the road constructed within Kirwin city was unnecessarily constructed, and the contract to build to and into the city of Kirwin permitted the company to complete the necessary main and side-tracks within the city. Under the proposition submitted, the aid voted was for the railroad within Kirwin township to and into the city of Kir-win, and this included all the road and side-tracks in said township and to and into {within) the city of Kirwin necessary for the efficient running and operating of the road, with .the statutory limitation that in no case should the total amount of the aid exceed four thousand dollars per mile for each mile of railroad constructed in the township. (Sec. 1, ch. 107, Laws 1876, as amended by §1, ch.

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The opinion of the court was delivered by

HORTON, C. J:

The principal question for our determination is, whether the consolidation of the Atchison & Denver railway company with the Waterville & Washington railroad company, the Republican "Valley railway company, the Atchi-son, Solomon Valley & Denver railway company, and the Atchison, Republican Valley & Pacific railway company, under the corporate name of “The Atchison, Colorado & Pacific Railroad Company,” released the township of Kirwin from its subscription, September 13,1879, to the capital stock of the first-named company. It is claimed by the defendants that, on December 22, 1879, the .company to which the subscription was made went out of existence; that the construction of the railroad after December 22d was by an entirely different corporation; and that the plaintiff has no interest in the original contract for the construction of the railroad through Kirwin township, or in the subscription of that township to the stock of the Atchison & Denver railway company. The case of The State, ex rel. St. Jos. & D. C. Rld. Co., v. Comm’rs of Nemaha Co., 10 Kas. 569, is cited as decisive. That case is not controlling as to this. There no subscription had been made to the stock of the company to which the [272]*272bonds had been voted. There the law authorizing consolidation expressly reserved to each stockholder of the old companies the right to determine whether he would become a stockholder in the new corporation. Chapter 44 of the statute of 1865, under which the Northern Kansas railroad company and the St. Joseph & Denver City railroad company were consol ¡dated, into a single corporation on October 9, 1866, was abrogated by the adoption of the statute of March 1, 1870, and the proviso of the law of 1865 for dissenting stockholders to withdraw upon the consolidation of the companies was omitted in the law of 1870. (Laws 1870, ch. 92, pp. 195, 197.) The question resolves itself into one of power on the part of the legislature to authorize the consolidation of companies under the provisions of the law of 1870. The doctrine that, after a subscription has been made to the capital stock of a corporation, a material change of the charter by which a new and different business is superadded to that originally contemplated, or its purpose and powers altered, releases a non-consenting stockholder, is limited by a provision in the charter authorizing a change or amendment, and in this state by §l of article 12 of the constitution of the state, which provides that corporations may be created under general laws; but all such laws may be amended or repealed, ,and the statutes enacted under such constitutional provision. The law of 1870 regarding the consolidation of railroads was in force at the dates of the election and of the subscription to the stock of the Atchison & Denver railway company, and such subscription was made under the express provision of the law that the company might be' consolidated with other companies at the instance and approval of parties representing twq-thirds of all the stock of the corporations so consolidated. Paraphrasing the remarks of Mr. Justice Strong, in Nugent v. Supervisors, 19 Wall. 249, 251, when the voters of Kirwin township sanctioned a subscription by their vote, and when the subscription was made by the county clerk in pursuance of that sanction, they were informed by the law of the state that a consolidation with another company might be [273]*273made, that the stock they proposed to subscribe might be converted into stock of the consolidated company, and that the liability they assumed might become owing to that company. With this knowledge and in view of such contingencies, they made the contract. The subscription was therefore made subject to the contingency of the consolidation. There is no claim that the consolidation was prejudicial to the township’s interests or those of the Atchison & Denver railway company • nor is any fraud or wrong alleged in such consolidation. The legislature has the power to authorize such consolidations, at least in all cases where the rights of a stockholder are not injured thereby. We conclude that the consolidation did not exonerate the original stockholders of the companies from their liability to pay their subscriptions, and therefore that it did not release the township of Kirwin from its subscription to “ The Atchison & Denver railway company.” (Nugent v. The Supervisors, supra, and cases cited; The Cork & Youghal Railway Co. v. Patterson, 37 Eng. L. and Eq. 398; Nixon v. Brownlow, and Nixon v. Green, 3 H. & N. 686; Sparrow v. Railroad Company, 7 Porter [Ind.] 369; Bish v. Johnson, 21 Ind. 299; Hanna v. Cincinnati & Ft. Wayne Rld. Co., 20 Ind. 30.) “The Atchison, Colorado & Pacific railroad company,” after December 22d, 1879, was the lawful successor in interest of the company to which the bonds were voted and the stock was subscribed.

Some objection is made to the delivery of the bonds, on the ground that as the construction of 3Jg- miles and of a mile of side-track of railroad brought the road to and into-the city of Kirwin on December 20, 1879, the construction of more railroad within the city of Kirwin after that date does not support the demand for the delivery of the remaining ten bonds. The objection is not well taken. The proposition provided that the railroad was to be completed and in operation before June 1,1880; under its terms there was completed on December 20,1879, miles of main track and of a mile of side-track. Now the agreed statement of facts sets forth:

[274]*274“That prior to June 1,1880, therailroad of said railroad company, as so consolidated, was built and completed and in operation from Cawker City, in Mitchell county, Kansas, in connection with the Atchison, Solomon Valley & Denver railway and the Central Branch Union Pacific railway, to and into the city of Kirwin, in Phillips county, Kansas, from the east line of said township; and that a freight and passenger depot, with side-track and stock-yard and terminal-station conveniences, were built and constructed in accordance with said proposition within the corporate limits of said city of Kirwin, in said township of Kirwin, and within a square of 200 rods in extent, of which the public square in Kirwin is the center, and prior to June 1,1880; and that the length of the main track of said railroad so completed and in operation in said township of Kirwin was and still is 6^¡- miles; aúd the length of said railroad, including side-tracks, between the east line of said township of Kirwin and the west line of the city of Kirwin was and still is 4T2^g- miles; and the length of the side-track in said city of Kirwin was and still is TV(f miles.”

There is no claim that any of the road constructed within Kirwin city was unnecessarily constructed, and the contract to build to and into the city of Kirwin permitted the company to complete the necessary main and side-tracks within the city. Under the proposition submitted, the aid voted was for the railroad within Kirwin township to and into the city of Kir-win, and this included all the road and side-tracks in said township and to and into {within) the city of Kirwin necessary for the efficient running and operating of the road, with .the statutory limitation that in no case should the total amount of the aid exceed four thousand dollars per mile for each mile of railroad constructed in the township. (Sec. 1, ch. 107, Laws 1876, as amended by §1, ch. 142, Laws 1877.)

The bonds demanded do not increase the aid in excess of four thousand dollars per mile for each mile of road constructed under the proposition or contract, and the plaintiff is entitled to all of them. There is no element of estoppel in the conduct of the Atchison & Denver railway company or the plaintiff. The Atchison & Denver railway company made a demand for all the bonds December 20, 1879, but re[275]*275fused to receive the said twenty-six bonds in compromise of, or as the full payment of its claim under said proposition, and gave notice that it would apply for the other bonds within the time allowed by the proposition for the full completion of the railroad and the improvements connected therewith. And full notice was given that the railroad did not receive said bonds in full payment or compromise of its claim under said proposition. Its successor extended the track within Kirwin city, and demanded the remainder of the bonds according to the notice.

A peremptory writ will be directed to issue for defendants to deliver the additional ten bonds of the denomination of $500 each.

All the Justices concurring.

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25 Kan. 261, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atchison-colorado-pacific-railroad-v-board-of-commissioners-of-phillips-kan-1881.

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