Supervisors of Portage v. Wisconsin Central Railroad

121 Mass. 460, 1877 Mass. LEXIS 20

• Court: Massachusetts Supreme Judicial Court
• Decided: January 6, 1877
• Status: Published

Opinion

Colt, J.

The bonds of the county of Portage, in the State of Wisconsin, which were to be used in exchange for the stock of the Wisconsin Central Railroad Company, were placed with the defendant bank to be held and delivered to the railroad corporation upon the trusts and conditions contained in its written proposition to the county.

The plaintiffs seek that the trust so created may be decreed to be terminated, and the bonds delivered to them, on two grounds: first, that the bonds were illegally issued; and, next, that the railroad corporation has failed to perform the conditions imposed upon it by the terms of the proposition.

1. It is contended that the two statutes of Wisconsin, under which the bonds were issued, are repugnant to that part of the Constitution of that state which in the following terms empowers the Legislature to provide for the “ organization of cities and incorporated villages, and to restrict their power of taxation, assessment, borrowing money, contracting debts, and loaning their credit, so as to prevent abuses.” Const, of Wis. art. 11, § 3. The first of the statutes in question authorized certain counties, cities and villages, (including the county of Portage,) “ through any portion of which any part ” of certain railroads should run, “ to aid in the location and construction of any portion of such toad,” and to that end to issue bonds in such sum “ and upon such terms and conditions as shall be agreed upon ” by the votes of a majority voting upon “ a definite proposition in writing, signed by the president or secretary of said railroad company, and sealed with the common seal of said company,” containing “ a distinct statement of the amount of money or bonds desired, and the terms and conditions and considerations upon which the same will be required to be paid and delivered to said railroad company.” St. of Wis. 1869, e. 126. By the other statute the Wisconsin Central Railroad Company, which had acquired the property and franchises of the railroads named in the preceding act, also succeeded to the rights and privileges above granted. St. of Wis. 1871, e. 27.

It is contended that the constitutional provision, referred to, amounts by implication to a restriction upon legislative grants to raise _money, where, by the terms of the grant, the amount is • unlimited, applicable as well in grants of this description to counties as to incorporated cities and villages. But without considering whether the restrictions contained in the statutes in question would not properly meet all the requirements of the limitation referred to, it is sufficient to say that it is expressly confined to the chartered municipalities named, and does not include counties and other public corporations of a municipal character.

The Legislature of Wisconsin has power, by the Constitution, to confer upon the boards of supervisors of the several counties “ such powers of a local, legislative, and administrative character, as they shall, from time to time, prescribe.” Const, of Wis. art. 4, § 22. And by the general laws each county is made “ a body politic and corporate, and as such shall be empowered” “to make all contracts and to do all other acts in relation to the property and concerns of the county necessary to the exercise of its corporate or administrative powers,” and “ to exercise such further powers as shall be specially conferred by law.” 1 Taylor’s Sts. of Wis. o. 13, § 2. It is settled by the Supreme Court of Wisconsin, that counties may subscribe for the stock of a railroad, and issue bonds therefor, when the power has been ex-oressly conferred. Clark v. Janesville, 10 Wis. 136. Bushnell v. Beloit, 10 Wis. 195. Phillips v. Albany, 28 Wis. 340. Lawson v. Milwaukee & Northern Railway, 30 Wis. 597. Rogan v. Watertown, 30 Wis. 259. The Supreme Court of the United States has affirmed the .validity, under the state Constitution, of county orders issued under a law of Wisconsin by a county in that state; Olcott v. Supervisors, 16 Wall. 678; and has in many eases recognized the validity of debts contracted by counties in aid of railroad construction. Knox County v. Aspinwall, 21 How. 539. Moran v. Miami County, 2 Black, 722. Mercer County v. Hacket, 1 Wall. 83. Rogers v. Burlington, 3 Wall. 654, 663. Railroad Co. v. Otoe County, 16 Wall. 667. In view of these decisions and statutory provisions, we are satisfied there was no violation of any constitutional limitation in the laws, under the authority of which the bonds in controversy were issued.

2. It is further objected by the plaintiffs that the acceptance of the proposition of the railroad corporation, and the delivery of the bonds to the bank, did not make a valid legal contract between the parties, because, when the proposition was made and voted on, the specified line of road, in payment for the stock of which these bonds were to be issued, was not located or authorized by any charter.

The line specified was a line running southerly from Stevens Point, through certain towns named, to the south line of Portage County, in the direction of Portage City, in the county of Columbia. At the time when the proposition was made, the Wisconsin Central Railroad Company had chartered authority to build a road to Portage City, lying seventy-six miles south of Stevens Point, only by a circuitous route of one hundred and fourteen miles, through Berlin and Ripon. It was to be inferred from the terms of the proposition, that the railroad intended to obtain future authority to build on the most direct and feasible route between the terminal points named, instead of going around through the places last named. Such authority was afterwards .obtained, but, until it was obtained, the corporation might lawfully make a location under existing powers upon the Berlin and Ripon line, which could also be availed of for the direct line when chartered, provided such location would be a reasonable one under the charters for each line. There is nothing in the Ctcts presented, or in the maps and plans submitted, which would 4 .istify the court in declaring, as matter of law, that the line between Stevens Point and the south line of the county was not .egally authorized and located under a charter existing at the time the proposition was made, or did not become a part of the direct line when that was subsequently authorized.

But, whether this is so or not, still the fact that there was no location then made or authorized, cannot now be permitted to defeat the right of the railroad to the bonds. The Wisconsin Central Railroad Company was a corporation then legally organized under its charter, with many miles of road constructed and in operation in other directions. It was the purpose of the cor- » poration to improve this part of its line, if sufficiently encouraged by the towns interested. And the whole binding force of the transaction, the validity and future delivery of both the bonds and the stock, were made to depend upon the future construction of the road upon the line indicated, to be certified to the defendant bank by an officer of the county or the secretary of state. There is nothing from which it can be inferred that the road was to be built without proper authority first obtained, and, upon its completion by the Wisconsin Central Railroad Company, a valid legal consideration arose to support the contract for the delivery of the securities deposited.

There is nothing in the contract showing illegality, or that it was to be performed in violation or in excess of the chartered rights of the railroad corporation. The arrangement was preliminary and conditional, to become binding on the county only upon a legal performance of its terms by the railroad. Such contracts, made with a view to ascertain the resources which may be safely relied on in the construction of public works, have been declared by this court to be well calculated to prevent mistakes and to secure the rights of all parties. Western Railroad v. Babcock, 6 Met. 346, 354. And in a recent case it was held by the House of Lords to be not beyond the corporate power of a railway company, wishing to alter one of its branches, and being about to apply to Parliament for authority so to do, to enter into a contract for the purchase of lands required for the road if it should obtain the act. Scottish North Eastern Railway v. Stewart, 3 Macq. 382, 416. See also Mayor, & c. of Norwich v. Norfolk Railway, 4 El. & Bl. 397; Racine County Bank v. Ayers, 12 Wis. 512 ; Lawson v. Milwaukee & Northern Railway, above cited.

3. The form of the proposition is said to be illegal, because it was signed by the vice-president, instead of the president or secretary of the corporation. But this is mere matter of form which, if not cured by the acceptance of the proposition, is disposed of by the provision of the St. of Wis. of 1873, c. 289, § 2, which cures all defects or irregularities in any proceedings, preliminary to the vote granting aid where the railroad corporation, relying upon such aid, shall have performed its agreement in good faith. The case finds everything to have been done which makes this act effectual to cure the illegality, if any, in the signature of the vice-president. St. Joseph Township v. Rogers, 16 Wall. 644, 665.

4. Nor does the proposition fail in definite and distinct statement of “ the terms, condition and considerations ” upon which the proposed aid should be furnished. It defines the route through Portage County with precision; it states the amount of bonds required of the county, and sets forth the terms of their delivery. The only point, in which it can be claimed that it is indefinite, is in failing to fix the time in which the whole subscription required to build the whole line to Portage City should be obtained from the other municipalities to whom application was to be made, and in not limiting the time in which legislative authority for the entire direct line should be procured. But the answer to this is, that in both these matters the proposition is as definite as to time as the nature of the facts permitted either party to make it, and is made definite in law by the rule that when an act is agreed to be done, and no time is fixed, the law will require it to be done in a reasonable time, with due reference to the circumstances and the nature of the act.

If, as the defendants contend, the railroad corporation, by the true construction of the proposition, was allowed six months, after the entire subscription of $400,000 was made, to begin the work, and two years after that time to finish it, it cannot be truly said that it is indefinite, merely because the time of performance depends on a contingent event which both parties contemplate and provide for by apt stipulations. And if, as the plaintiff contends, the corporation was required to build the road in two years from the deposit of these county bonds, then plainly the proposition cannot be said to lack certainty in this respect.

5. The plaintiffs claim the right to reclaim the bonds, because no road has been built from Stevens Point to Portage City, or to some road connecting therewith within two years from the deposit of the bonds of Portage County with the defendant bank. This depends upon the construction of the contract fix-tog the time when the two years shall begin to run. The sub stance of the proposition was that the county should give its bonds to a certain amount, and take stock in exchange. The bonds were to be immediately delivered to the defendant bank, in trust for the railroad corporation, to be delivered to the latter whenever a continuous road between the points stated in the county of Portage should be built. To this was added a condition, to the effect that the railroad corporation should not be bound to build any portion of the road between the points named upon the contemplated direct route, unless the municipal corporations on the line of the road should agree to make a similar exchange of bonds for stock to the amount of four hundred thousand dollars, with a proviso that, if the road should not be commenced within six months after said amount in bonds should have been deposited in the defendant bank, or should not be built within two years from the deposit of such bonds with the bank, the county authorities of Portage County might withdraw said bonds and surrender its stock, meaning, of course, the bonds deposited by them only.

This condition, upon which the obligation to build that part of the road in Portage County was made to depend, was a condition inserted solely for the benefit of the railroad company. It was solely in its option to refuse to build any part, if the entire subscription and the amended charter were not obtained. But it fixes an uncertain event as the time from which, at the end of two years, the bonds of the county might be reclaimed. It appears that the bonds were deposited in the bank in February, 1872. In February, 1875, the railroad corporation was authorized to locate and construct its line in the most direct and feasible route between the terminal points named; and in March following this change was approved by the Congress of the United States, with reference to certain land grant rights. It was proved at the hearing before a single judge, that, as soon as this authority was obtained, the work of construction upon the direct line was begun and carried forward towards completion with all reasonable dispatch; and that, although only $84,500 was ever obtained in aid of the railroad upon similar propositions submitted to other municipal corporations. In September, 1875, the plaintiffs demanded the bonds of the bank, and offered to surrender the stock to which they were entitled ; and apon the refusal of the bank, the bill in this case was filed. Be* fore this, however, and as soon as authorized by an amendment of its charter, the railroad corporation had entered upon the construction of the line, and, as early as December of that year, had completed all that part which, by the terms of the proposition, entitled it to the bonds. This was within the limit of time agreed upon, for it was within two years from the time the charter was amended; and the other contingency, arising when the entire subscription should be filled, has not yet arisen. The railroad company had an option to build this part and take these bonds, although the provisions looking to the completion of the whole line were not complied with.

6. Finally, it is strenuously urged that, by the rule of construction above stated, the parties must have contemplated that the contingencies upon which the time would begin to run would happen within a reasonable time; and that, allowing for such reasonable time, more than two years beyond that had elapsed when this bill was brought. But it is plain that the contingencies contemplated depended largely upon the efforts of the railroad corporation and the friends of the line, involving discussion with many different parties, application for legislative authority, with time to reconcile adverse interests and to enlist support. The burden is on the plaintiffs to show that the time has elapsed which entitles them to the possession of these bonds. Upon the facts here disclosed, we cannot say as matter of law that the reasonable time which must be allowed to the railroad company in determining that question, with two years added, had passed, when the plaintiffs asserted their rights to the bonds.

It was found at the hearing that the railroad company had in good faith built the continuous line required from Stevens Point to the south line of the county, had erected the buildings and deposited the shares of stock, and had obtained a certificate to that effect from the chairman of the board of supervisors of the county, as required by the terms of the proposition, to entitle it to the possession of these securities. And, upon the whole case, the plaintiffs fai'J to establish a right to withdraw the bonds from the trustee, upon a surrender of their right to the railroad stock. Bill dismissed, with costs.