Farmers' Loan & Trust Co. v. Board of Sup'rs of Alcorn County

93 F. 579, 35 C.C.A. 460, 1899 U.S. App. LEXIS 2262

Opinion

McCORMICK, Circuit Judge,

after stating the case, delivered the opinion of the court.

Looking through the technical pleadings, it is manifest that this suit is brought and prosecuted substantially in behalf of the appellee the Greenville, Nashville & Chattanooga Railway Company, nominal defendant below. Against it no relief is sought. Considered as a suit between the railway company and the county of Alcorn, the circuit court was without jurisdiction to entertain it. In this court distinguished counsel have submitted a printed argument on behalf of the railway company, in which they say, by way of preface, that the answer of tlie railway company admits tlie allegations of tlie appellant's bill. “Therefore we accept the statement of tlie case as made in the brief of tlie counsel for the appellant, and we rely upon the assignment of errors Qled by the appellant, assuming that we have a right to he heard herein, the railway company being the principal party in interest.” And the first paragraph of the printed argument of these distinguished counsel for the railway company is: “In addition to the elaborate brief already filed for tlie appellant, we feel that it is our duty to say the following in regard to the appellant’s rights. Though we appear formally on the side of the appellee, yet the railway company is the principal party in interest, and we are entitled to be heard.” As already intimated, we fully concur with the distinguished counsel in the suggestion that the railway company is the principal party in interest in the bringing and prosecution of this suit and of this appeal. However, the view we have taken of the appellant’s case renders it unnecessary for us to notice further these suggestions as to the real parties to this litigation, and its possible effect in the matter of the jurisdiction of the circuit court.

The statute which granted to the railway company its charter nowhere names the appellant, except in the twelfth section, which reads as follows:

“Sec. 12. That when said bonds are issued the president of the board of supervisors * * * shall at once deposit said bonds, or cause the same to be done, with the Farmers’ Loan & Trust Company, of the city of New York, to be held in escrow by said trust company, to be delivered to the president or secretary of said railway company at such time or times as' the said counties » * * by their proper officers and the railway company may agree upon.”

Neither in this section, nor in any other section, of the act does it appear that the state was making any provision for drawing to itself any benefit from the selection of the appellant as the party to receive delivery of and hold the bonds in escrow. The language of this section, therefore, like any language used in such grants on which parties seek to rely in claiming benefits or exemptions from the state, must be construed, not as the language of the state, but as the language of the corporators. Nor is this well-settled doctrine averted or disturbed by the language of section 16 of the charter, which says that this act shall be liberally construed, so as to fully protect all the purposes and objects of this charter, the creation of this corporation, and the building of this railroad as herein provided, and the operation and use of the same. In the notice and order for the election issued by the president of the board of supervisors of Alcorn county, the charter of the railway is referred to, and the appellant is named as the depositary of the bonds, to be held by it in escrow; but in the order of the board requiring its president to issue the bonds for the county, attested by the clerk, in pursuance of, and as required by, the order of election and the charter of incorporation of the railway company, the appellant is not named. The charter was approved February 22, 1890. The election was ordered on the 14th day of April, 1890, and the order for the issuance of the bonds was made on or before December 12, 1890.

In answer to the suggestion, on behalf of the county, that the appellant had been guilty of laches, counsel for the appellant in their printed brief say:

“The real point of this demurrer must he that the laches consists in the •delay on the part of the trustee in its acceptance; hut the manifest answer to this is that it was the duty of the defendant, primarily and first, to deliver the bonds or to tender them to the trustee. This the hill shows he [it] never did. Nor does the hill show that the trustee had any knowledge or notice from any one oí' Ills [its] appointment and selection as trustee until shortly before, or some time before, Ms [its] acceptance, in December, 1807.”

It thus -appears, even to counsel lor the appellant, that no delivery oí the bonds was ever made, in escrow or otherwise, and that there is nothing in the charter of the railway company, or in the proceedings providing for conducting and resulting from the submission to the qualified voters of the county o£ the question as to whether the county should or should not subscribe to the stock of the railway company, to show or indicate that the appellant had any knowledge or notice of these dealings between the appellees until December, 3897, nearly eight years after the approval of the charter, and four years after the latest period allowed for the completion of the road.

The elementary idea of an escrow assumes that: the obligatory-writing has been delivered by the party executing it to a third person, to be held by him until the performance of a specified condition by the obligee, or the happening of a certain contingency, and then to be delivered by the depositary to the obligee. Definitions vary somewhat in the adjudged cases and the text-books constructed on the adjudicated cases; but to become an escrow, as well as to become a deed or writing of present obligation, there must: be delivery of the instrument. This delivery need not be in all cases manual, but, whether manual or symbolical, it: must be actual, in order to raise the character of an escrow, and the delivery must be made to a stranger to the contract between the obligor and the obligee; for, if made to the obligee or to his agent, it would, with certain exceptions, at once acquire a present force as a deed or bond. The appellant in its bill styles itself a “trustee,” and the brief of its counsel overflows with learning in reference to the powers and duties and rights of trustees. Being a citizen of New York, created and organized under the laws of that state, asking no license or privilege from the state of Mississippi, so far as this record shows, that state could impose no obligation upon the appellant in favor of the county of Alcorn or any other party. Hence the language of section 12 cannot be construed to raise a binding contract between Alcorn county and the appellant The same is true of the proceedings had in the county before, at, and after the election herein alluded to. The reference to the charter had in these proceedings in no way adds to, or helps out, the language of the statute. The statute; does not undertake to impose any duty upon the appellant, but expressly provides that the proper officers of the county and the railway company may agree upon the time or times when such bonds as the county shall issue in payment of subscriptions for stock are to be delivered to the president and secretary of the railway company. It seems to us that this clearly leaves the whole; matter with the railway company and the county for adjustment, and that until these parties do agree, and complete their agreement: by the delivery of the bonds to the appellant, it has not and cannot have any interest in their negotiations. It has done no service nor contributed anything of value that can support its claim to have an interest in the contract be tween these parties. The highest equity, as expressed in the Louisiana Civil Code, goes no further than to provide that a contract, in which anything is stipulated for the benefit of a third person who has signified his assent to accept it, cannot be revoked as to the advantage stipulated in his favor, without his consent. As already noticed, it is not claimed that the appellant signified its assent to accept any benefit under the contract between these parties prior to December, 1897. Therefore, up to December, 1897, it was competent for the parties, or for either of them, to modify or revoke their contract so far as it affected the appellant, and agree to make the deposit contemplated by the statute in the hands of some other person.

On the 1st day of November, 1890, the people of Mississippi adopted a constitution, to be in force and effect from and after that day. Section 183 of this constitution provides:

“No county, city, town, or other municipal corporation, shall hereafter become a subscriber to the capital stock of any railroad, or other corporation or association, or make appropriation or loan its credit in aid of such corporation or association. All authority heretofore conferred for any of the purposes aforesaid by the legislature, or by the charter of any corporation, is hereby repealed. Nothing in this section contained shall affect the right of any such corporation, municipality, or county to make such subscription where the same has been authorized under laws existing at the time of the adoption of this constitution, and by a vote of the people thereof had prior to its adoption, and where the terms of the submission and subscription have been or shall be complied with, or to prevent the issue of renewal bonds, or the use of such other means as are or may be prescribed by law for the payment or liquidation of such subscription or of any existing indebtedness.”

It cannot be questioned that, in tke instant case, the “terms of submission and subscription” required that the railway company should build its railroad from the Tennessee river to the city of é Corinth, on or before the 1st of December, 1891, and should extend' and complete the same from the city of Corinth to the western or southern bounds of the county by the 1st day of December, 1893. The bill alleges that on July 2, 1895,' the railway company formally made demand of the board of supervisors that it issue the bonds, at. which time the board declined and refused to do so, claiming that it then had no power to issue, or to direct or enforce the issuhnce, of the bonds. As it is clear that the road had not been built, and that no part of it has yet been completed, it may well be doubted whether the saving in section 183 will avail even the railway company, or now permit the county, were it ever so disposed, to issue the bonds in question. Whatever may be the effect otherwise of the alleged primary default on the part of the county, the fact that the terms of the submission and subscription had not been complied with was a matter deserving the grave consideration of the board of supervisors when a formal demand upon it was made in July, 1895, for the issuance of these bonds. Though the bonds may have been lithographed and duly signed, they cannot be said to have ever been issued; and therefore the provision in reference to renewal bonds is of doubtful application. However this may be, and whatever may be the rights of the railway company growing out of the default, if there has been a default on the part of the county, it seems clear to us that the appellant has shown no right whatever to recover against the county.

In .order to show that the matter involved in this controversy equals in value the sum of $2,000, the complainant refers to a contract made, not with the defendant county, but with the defendant railway company, the date and terms of which are withheld from us, but to which the county was not a party, and by which it was not bound, and on which no relief is sought against the railway company. In our opinion, the matters to which we have alluded amply justify the ruling of the circuit court in sustaining the demurrer to the complainant's bill. Therefore the judgment of that court is affirmed.