Empire v. Darlington/Opinion of the Court

by by John Marshall Harlan

United States Supreme Court

101 U.S. 87

Empire  v.  Darlington

The present action involves the validity of the bonds and the coupons thereto attached of the $25,000 issue, some of which are held by the defendant in error.

Their validity is assailed upon several grounds, each of which will be briefly examined.

It is contended that the election held on the 3d of June, 1867, under the charter of the Danville, Urbana, Bloomington, and Pekin Railroad Company, whereby the subscription of $50,000 was made and bonds issued in payment thereof, exhausted the power of the township under that charter, and that any additional subscription was without authority of law.

This position is clearly untenable. The twelfth section of the charter of the railroad company furnishes a conclusive answer to this proposition. That section declares that 'to further aid in the construction of said road by said company, any incorporated town or townships in counties acting under the township organization law, along the route of said road, may subscribe to the capital stock of said company in any sum, not exceeding $250,000.' That the plaintiff in error belongs to the class of townships described in that section, is not disputed. Its right, consequently, to make subscriptions, from time to time, until they reached the prescribed limit, seems to be too clear to require argument in its support. The charter contains no word, clause, or section indicating that the authority of the township to make subscriptions ceased after the first subscription. The legislature fixed a limit beyond which the township could not go in its subscriptions to the company in question, but left it free-the people consenting by popular vote-to make subscriptions in such sums and at such times as it deemed necessary or proper, within the aggregate amount named in the section which has been quoted. People v. Town of Waynesville, 88 Ill. 469.

The next proposition urged upon our attention is that by the consolidation to which we have referred a new corporation was created by the name of the Indianapolis, Bloomington, and Western Railway Company, and the original companies dissolved; that there was no power vested in the electors, the corporate authority of the township of Empire, under the charter of the Danville, Urbana, Bloomington, and Pekin Railroad Company, to hold an election, to subscribe stock and issue bonds to that new company. This proposition is equally untenable with the first.

By a general statute of Illinois, passed Feb. 28, 1854, and in force as well at the date of the charter of the Danville, Urbana, Bloomington, and Pekin Railroad Company, as when it was consolidated with the Indianapolis, Crawfordsville, and Danville Railroad Company, express authority was conferred upon all railroad companies then organized or thereafter to be organized, which then had or might thereafter have their termini fixed by law, whenever their road or roads intersected by continuous lines, to 'consolidate their property and stock with each other, and to consolidate with companies out of this [that] State, whenever their lines connect with the lines of such companies out of this [that] State.' That statute further provided that the consolidated company, by the name agreed upon, should be a body corporate and politic, and 'shall have all the powers, franchises, and immunities which the said respective companies shall have by virtue of their respective charters, before such consolidation passed, within the State of Illinois.' Ill. Rev. Stat. Gross (3d ed.), pp. 537, 538.

It thus appears that whatever powers, franchises, and immunities were enjoyed by the Danville, Urbana, Bloomington, and Pekin Railroad Company, under its charter, passed, upon the consolidation, to the consolidated company. The power of the township of Empire to make, as we have held it could, an additional subscription, beyond the original of $50,000, was, in its essence, a right and privilege of the railroad company which, under the general law of the State, passed to the consolidated company. County of Scotland v. Thomas, 94 U.S. 682; County of Henry v. Nicolay, 95 id. 619. It was evidently so understood by the parties concerned; for while the bonds very properly refer to the act of Feb. 28, 1867 (which is the charter of the Danville, Urbana, Bloomington, and Pekin Railroad Company), as the statute which specifically authorized their issue, the petition of citizens asking an election, and the notice of the election of Oct. 12, 1869, distinctly show that the additional subscription of $25,000 to be voted on was for additional stock in aid of the construction and completion, not of the Danville, Urbana, Bloomington, and Pekin Railroad, but 'of the Indianapolis, Bloomington, and Western Railroad.' If the popular vote had been, in terms, in favor of a subscription to the capital stock of the Danville, Urbana, Bloomington, and Pekin Railroad Company, and the subscription had been made in that form, there would be some reason to contend that the subscription would have been a nullity, since no such company then had a distinct separate existence. But when, as here, the vote was taken, and the subscription made, with direct reference to the construction and completion of the original line by the consolidated company, which had previously succeeded to all the powers, franchises, and immunities of the Danville, Urbana, Bloomington, and Pekin Railroad Company, there would seem to be no ground whatever to question the validity of the bonds issued and delivered to the company in payment of the subscription.

It is scarcely necessary to say that the decree in the Circuit Court of McLean County, Illinois, rendered in 1878, perpetually enjoining the assessment and collection of taxes for the purpose of paying the bonds and coupons in question, and declaring said bonds and coupons to be void, did not conclude the rights of the defendant in error. The bondholders were proceeded against by constructive service, as 'unknown owners and holders.' The defendant in error was not served with process, nor did he appear. If the decree was binding upon the citizens and courts of Illinois, as to which we express no opinion, it was ineffectual as to bondholders residing in other States, who were proceeded against only by constructive service. Brooklyn v. Insurance Company, 99 U.S. 362.

Judgment affirmed.

Notes