Elliott National Bank v. Western & Atlantic Railroad

70 Tenn. 676
CourtTennessee Supreme Court
DecidedSeptember 15, 1879
StatusPublished
Cited by4 cases

This text of 70 Tenn. 676 (Elliott National Bank v. Western & Atlantic Railroad) is published on Counsel Stack Legal Research, covering Tennessee Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Elliott National Bank v. Western & Atlantic Railroad, 70 Tenn. 676 (Tenn. 1879).

Opinion

CoopeR, J.,

delivered the opinion of the court.

By an act of the Legislature of Georgia, passed December 21, 1836, “A railroad communication as a State work and with the funds of the State,” was directed to be made, which was eventually known as the Western and Atlantic Railroad, and extended from Atlanta to the Tennessee State line near Chattanooga. On the 24th of January, 1838, by an act of the General Assembly of the State of Tennessee, the State of Georgia was allowed the right of way for the extension and construction of her said railroad from the State line to the Tennessee river, with the privileges, rights and immunities and subject to the restrictions as prescribed for the benefit, government and direction of the Hiwassee Railroad Company. The road was completed and run by the State, its executive officers, as fixed by the Georgia act of 1851-2, being a superintendent, treasurer and auditor, whose duties are prescribed in detail, Code of Georgia, secs. 968 to 986, •embodying the provisions of the act. By sec. 971, par. 4, The superintendent has authority to contract for, and purchase machinery, cars, materials, workshops, and all other contracts necessary for the general working and business of said road, not exceeding three thousand dollars, — and over that amount subject to the approval of the Governor in writing.” Other provisions of the act contemplate the auditing of all claims against the road, after which, if approved by the auditor, the superintendent is to draw his warrant for the amount on the treasurer, who is to pay the same. [678]*678On December 27th, 1870, the State of Georgia leased the road to the Western and Atlantic Railroad Company for a term of twenty years; and that company, being chartered by the Legislature of Georgia, has been in possession of and running the road ever since. On the 21st of June, 1876, this bill was filed in the Chancery Court at Chattanooga by the complainants as creditors of the Western and Atlantic Railroad, against that road and the Western and Atlantic Railroad Company — “both of Georgia," says the bill. It is based upon the Code of Tennessee, sec. 3431 and sec. 4294, which authorize a creditor’s bill against a corporation when it has ceased to use ts franchises or granted them to others in whole or in part.

The Elliott National Bank founds its claim as a creditor on the following note:

Western and Atlantic Railroad,
Office Superintendent,
Atlanta, Ga., July 8, 1870. Nine months after date the Western and Atlantic-Railroad promises to pay E. N. Kimball, manager, or order, twelve thousand and seventy-seven 40-100 dollars, for value received. Payable at office of Henry Clews & Co., 32 Wall St., New York.
The Western and Atlantic Railroad, By Poster Blodgett, Supt.

the complainant, Demeret, is the holder of a precisely similar note, except that it is dated July 25th, 1870, is payable four months after date and is for,-$8,060. Both of the complainants claim that these notes were sold and endorsed to them respectively be[679]*679fore maturity and in due course of trade for value, and without notice of equities or defects.

The State of Georgia was permitted to intervene in the suit as a party defendant, on the ground of being the owner of the Western and Atlantic Railroad, subject to the lease to the Western and Atlantic Railroad Company, its depots, track, etc., which were attached under the bill and sought to be subjected to-the satisfaction of the debts of complainants. Upon the final hearing, the Chancellor dismissed the bill and the complainants appealed.

The case is of grave importance to the litigants- and has been argued with marked ability on both sides. Omitting technical points and collateral issues, and conceding that the complainants are bona fide holders for value of the notes traded as negotiable securities, the case turns upon the powers of Foster Blodgett, as superintendent, to execute the paper so as to make it binding on the road or the State of Georgia.

Both notes were executed in Georgia, and their validity must depend on the law of that State. The parties agreed of record in the court below that the statutes of Georgia and the decisions of the Supreme Court of the State might be read from the printed laws and reports. It seems, however, under the Code, sec. 3801, the court will take judicial notice of the laws of our sister States and the decisions of their courts. Hobbs v. Memphis Railroad Co., 9 Heis., 873; Anderson v. May, 10 Heis., 88. The character of the Western and Atlantic Railroad in the State of Georgia and the authority of its superintendent to execute ne[680]*680gotiable paper, must turn upon tbe construction of the Georgia statutes. In the absence of any construction put upon them by the highest court of the State, our duty would be to construe them as best we could. But if the highest court of the State has already construed them, our duty is ordinarily to conform our decision to the construction given. There are exceptions to this rule of comity, bul this case falls within none of them. Lewis v. Woodfolk, 2 Bax., 26; White v. Hart, 13 Wall., 647. It has been held by the Supreme Court of Georgia, that the Western and Atlantic Railroad is not a corporation, and that the superintendent of, the road belongs to the class of public agents like the Governor of the State. Dobbins v. Orange, etc., R. R. Co., 37 Ga., 240. The difference in the relations of public and private agents to their principals is well defined. A private agent will bind his principal within the apparent scope of his authority, although he violate instructions. New York, etc., R. R. Co. v. Schuyler, 34 N. Y., 30; Merchant’s Bank v. State Bank, 10 Wall., 604. But with public agents it is entirely different. Their powers and duties are defined by statute, which is notice to the world of the limitations of their authority, and no pretension of authority or customary action can amplify that authority beyond the statutory limitation. The Floyd Acceptances, 7 Wall., 666; Pierce v. United States, 1 N. H., 270. With this distinction in view, even if the courts of Georgia had never passed upon the question, we should be compelled to hold that the notes sued on are void for want of authority in the [681]*681superintendent to execute them. But the very question has been presented to the Supreme Court of Georgia, in Tappan v. Western and Atlantic Railroad and others, and decided at the August Term, 1878, of that court. That was a suit brought by Tappan on two notes identical in form with those sued on in this case, bearing respectively the same dates, one for $12,006.57, and the other for $6,000. The Western and Atlantic Railroad filed a demurrer, assigning among other causes, that “ Foster Blodgett had no authority, as superintendent or otherwise, to bind said defendant by giving said promissory notes.” The demurrer was sustained by the court below and the judgment on appeal was affirmed. “At the time the notes were made,” says the Supreme Court, through Warner, C. J., “the Western and Atlantic Railroad was the property of the State and had not been incorporated.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State v. O'CONNELL
523 P.2d 872 (Washington Supreme Court, 1974)
Tennessee Enamel Mfg. Co. v. Stoves, Inc.
192 F.2d 863 (Sixth Circuit, 1951)
State ex rel. Dossett v. Obion County
221 S.W.2d 705 (Tennessee Supreme Court, 1949)

Cite This Page — Counsel Stack

Bluebook (online)
70 Tenn. 676, Counsel Stack Legal Research, https://law.counselstack.com/opinion/elliott-national-bank-v-western-atlantic-railroad-tenn-1879.