Little Saw Mill Valley Turnpike v. Federal Street & Pleasant Valley Passenger Railway Co.

45 A. 66, 194 Pa. 144, 1899 Pa. LEXIS 747

• Court: Supreme Court of Pennsylvania
• Decided: December 30, 1899
• Docket: Appeal, No. 144
• Status: Published

Opinion

Opinion by

Mr. Justice Brown,

The Federal Street & Pleasant Valley Passenger Railway Company, appellant, incorporated under the act of February 20, 1868, was occupying at the time of the execution of the contract sued upon a portion of the appellee’s roadbed, with its tracks upon which cars were run by horse power. The agreement under which it had its tracks upon the turnpike or plank road seems to have been a verbal one, the terms of the same being immaterial in considering the questions raised on this appeal. In 1889 the appellant decided to change its motive power to electricity, and in making this change others became necessary. New and additional tracks were required, as well as overhead construction, for the operation of the road by the new power. 'These changes imposed new and additional burdens upon the appellee, entitling it to compensation, and there can be no question that the appellant had corporate power, implied if not express, to provide by agreement what should be paid to the Turnpike or Plank Road Company, instead of having the same adjusted by adverse and expensive proceedings at law.

An agreement in its name was executed by D. F. Henry, its president, providing, among other things, for the change to electricity as a motive power, and, in consideration of the change so allowed, guaranteeing to the Little Saw Mill Valley Turn■pike or Plank Road Company, payment by the appellant each year after 1889 of any deficiency in the gross receipts based upon those received in that year. The tolls diminished for the years 1893 to 1896, inclusive, $6,428.63, and this suit was brought for the recovery of that sum. On the trial the plaintiff ■insisted that this deficiency in tolls was the measure of recovery fixed by the contract, but the court, fairly and liberally construing it, at least so far as the defendant was concerned, did ■not sustain this view. The jury were instructed that the amount recoverable was what they might find was the loss in tolls due to the substitution of electricity for horse and mule power in moving the cars. They were told to ascertain to the best of their ability under the evidence what amount, if any, of tolls had been lost by the defendant’s use of electricity on its cars, and that if no loss had occurred by the use of it, the plaintiff could not recover. Their attention was called to what might have been other causes for the diminution of the receipts, and .their verdict in the light of the meager evidence to guide them was in favor of the plaintiff for less than one third of its claim. We cannot disturb it, if the instructions complained of were :not improper.

The first complaint is that the court erred in not holding that the contract was ultra vires and that, therefore, the plaintiff- could not recover. The court properly refused so to charge the jury, and tlie first assignment of error is overruled. It is insisted, however, that the railroad company was not bound by the contract, because it was made by the president without authority from the corporation or its board of directors. It is signed by the president. The corporate name attached was apparently in the handwriting of the secretary, and'the common seal was affixed. Neither officer was called to deny authority to act, and the presumption was that it had been given. The maxim, omnia prsesumuntur rite esse acta, applies to acts done on behalf of corporations, and it can never be presumed that a corporate agent is acting wrongfully; or that an act which might have been a proper act to do on behalf of the corporation was done under circumstances rendering it improper,:-Taylor on. Private Corporations, sec. 204. “Where a party deals with, a corporation in good faith — the transaction is not ultra vires — and he is unaware of any defect of authority or other irregularity on the part of those acting for the corporation, and there is nothing to excite suspicion of such defect or irregularity, the corporation is bound by the contract, although such defect or irregularity in fact exists. If the contract can be valid under any circumstances, an innocent party in such a case has a right to presume their existence, and the corporation is estopped to deny them: ” Merchants’ Bank v. State Bank, 10 Wall. 644. “When the common seal of a corporation appears to be affixed to an instrument, and the signatures of the proper officers are proved, the courts are to presume that the officers did not exceed their authority, and the seal itself is prima facie evidence that it was affixed by proper authority: ” Angell & Ames on Corporations, sec. 224. The second point submitted by defendant was properly refused. The second and third assignments of error are overruled and the judgment affirmed.