Opinion.
The first error insisted upon is that the execution of both the note and the contract sued upon was ultra vires the powers of the . defendant corporation.
Section 229 of the Constitution provides that the Legislature shall pass no special act conferring corporate powers, but that it shall *555 pass general laws under which such corporations may be organized and corporate powers obtained, subject, however, to the repeal of the Legislature, and that it shall pass general laws under which charters shall be amended.
The Legislature of 1903 enacted a general statute (Acts 1903, p. 310) which, among other things, provided for the formation of corporations, conferring new powers and amending charters, and for consolidating existing corporations, by general laws. This statute now constitutes the greater part of chapter 69, and of sections 3445-3631, of the Oivil Code, relating to private corporations.
The defendant corporation was formed since the Constitution of 1901, and therefore under the general statute now embraced in Code provisions, and was constituted by the consolidation of several other corporations, some, if not all, of which were formed or created by private and local statutes under the old Constitution of 1875. Therefore, to ascertain the powers of this corporation, we must look to both the local and the general laws, an'd to the specific articles of agreement under and by which the corporatiofi was formed through the consolidation of other corporations, as stated. All of these local acts and these articles of agreement of consolidation and incorporation are set out in the record; and, as we take judicial knowledge of the general laws on the subject, we are thus furnished with the means of ascertaining whether or not this defendant corporation possessed the power to execute the note or the contract in question.
Having so examined the evidence and the law, we feel no hesitancy in holding that the defendant corporation had the power to execute both the note and the contract.
As the defendant is a consolidated corporation formed or created under and by virtue of general statutes, these must be looked to, to ascertain its powers. The general statutes as to consolidating corporations now constitute article 6 of chapter 69 of the Code, embracing sections 3502-3508. Section 3502 authorizes the consolidation of two or more corporations, section 3503 provides the mode and manner of consolidating, and section 3504 prescribes or defines the powers of the new consolidated or merger corporation. The last-mentioned section reads as follows:
“Consolidated or merger corporations shall possess all the rights, powers, and privileges, and be subject to all the restrictions, disabilities, and duties of each of the consolidating corporations, unless additional powers not inconsistent with the provisions of this chapter, are expressed in the said agreement and acts of consolidation, and unless the powers possessed by the several merging corporations are limited or restricted in said agreement.”
The new corporation thus formed possesses by virtue of law all of the powers, rights, and privileges of each and all of the old corporations consolidated or merged into the new, and has imposed on it by law all the duties, restrictions, and disabilities of the old, unless the powers possessed by the old are limited or restricted in the agreement of consolidation or merger. In addition to all the powers possessed by each and all of the old corporations, the new corporation may have conferred on it additional powers not inconsistent with any of the provisions contained in chapter 69 of the Code, if such additional powers are expressed in the agreement and acts of consolidation.
“To guarantee any dividends or bonds or contracts or other obligations; to make and perform contracts of any kind and description, and in carrying on its business, and for the purpose of attaining or furthering any of its business, to do any and all other acts and things and to exercise any and all other powers which a copartnership or natural person could do and exercise, and which now or hereafter may be authorized by law.”
Here is express authority to do the very acts complained of.
There is no constitutional inhibition against conferring such powers as those here claimed to be conferred on the defendant corporation. The constitutional provision is that:
“No corporation shall engage in-any business other than that expressly authorized in its charter or articles of incorporation.” Const. § 233.
The power here exercised is expressly conferred, both by the charter of the original corporation and the articles of consolidation and incorporation.
If the acts of consolidation and incorporation were void on their face, the point might be taken in a collateral proceeding; but, being valid on their face, we will treat them as valid in a collateral proceeding, though they might be avoided in a direct proceeding.
*556 Considerable stress is laid on the fact that powers such as those here exercised cannot be conferred on a railroad corporation by consolidation, or otherwise. The trouble with this argument is that all of the consolidating corporations were not railroad or railway corporations, nor is the consolidated corporation exclusively a railroad or railway corporation, though it is authorized to do some things and to exercise some of the authorities pertinent to public railroad corporations. None of the statutory or constitutional provisions can apply so as to declare the attempt to confer this power abortive, in a collateral proceeding like this. The authorities relied upon by appellant do not apply to the case in hand. They are decisions to the effect that as to what a given kind of corporation can do or cannot do, as necessarily incident to things expressly authorized to he done. That is to say, there was no express authority there to do the act complained of, as there is here. The defendant corporation here will not be heard in this collateral proceeding to impeach its own incorporation or consolidation. That will have to be done in some direct proceeding, by the proper parties.
The charter of a corporation, read in connection with the general law applicable to it, is the measure of its powers, and a contract manifestly beyond those powers will not sustain an action against it. But whatever, under the charter and other general laws, reasonably construed, may fairly be regarded as incidental to the objects for which the corporation was created is not to be taken as prohibited.
There was certainly evidence in this case to show that the vice president, who executed these contracts, was held out by the corporation as a general manager for the corporation, a kind of an alter ego for it.
“The person to whom payment may be legally made, and who may discharge the debt- or, may sue in his own name, although the money, when collected, is not for his use. Yerby v. Sexton,48 Ala. 311 ; Hirschfelder v. Mitchell,54 Ala. 419 ; Tilley v. Harrison,91 Ala. 295 ,8 South. 802 ; Bibb v. Hall,101 Ala. 79 ,14 South. 98 ; Rice v. Rice,106 Ala. 636 ,17 South. 628 .” Code 1907, vol. 2, p. 19, note.
Construing the notes in connection with the contract this case falls clearly within the rule announced in the above cases.
These plaintiffs were not parties to that contract. They were neither obligated nor obliged by it. Contracts are reciprocal; there must be two parties to them, and only those interested in the performance of the contract can maintain an action as for a breach of ex-ecutory contracts. These plaintiffs are interested in the -contract only as suitable persons to hold the notes to be executed by the maker, until the other party performs its part of the contract. The* maker of the notes did not desire to deliver to the other party its negotiable notes for thousands of dollars, until it was decided that the party to receive them had performed its part of the contract. So these plaintiffs were named in the contract sued on, as disinterested, rather than interested, parties. They were in. the nature of stakeholders. If the Southern Iron & Steel Company moved its x>lant to Gadsden within the time specified, then the notes were to be delivered to it, or were to become binding obligations; if the plant was not so removed, then the notes were not to become binding obligations, but were to be redelivered to- the maker or destroyed. These plaintiffs have no pecuniary interest whatever in the performance or the nonperformance of the contract sued on. They were evidently selected and named in the contract as stakeholders of the notes, because they had no pecuniary interest in the performance. In fact, they are prima facie made judges, to determine whether or not the Southern Iron & Steel Company performed the contract as agreed. If it performed, the notes were to be binding on the maker, otherwise not; and plaintiffs .were by the contract made the holders of the notes, and prima facie judges to decide whether or not the Southern Iron & Steel Company performed its part of the contract as agreed.
The fact that the notes were made payable to these stakeholders, and that the stakeholders were authorized to. collect the money agreed to be paid, did not change the relation of the parties to the contract, as that relation affected a suit for a breach. According to the contention of the plaintiffs, and to some of the evidence, the contract sued upon has been fully performed by both parties to it. That is to say, the Southern Iron & Steel Company removed the plant as agreed, and the defendant corporation executed the notes as agreed by it. Hence, according to the iffaintiffs’ own contention, there has been no breach of the contract itself; only a failure to pay the notes.
If these notes were accepted as a performance of the contract on the part of the defendant- — and the undisputed evidence is that they .were so accepted, and in fact the agreement was to the effect that they should be so accepted — they were accepted iff discharge of the amount agreed to be paid by the defendant for the removal of the plant. The *558 contract was not that the notes were to be mere evidence of the amount agreed to be paid, but that they should be accepted in payment thereof.
If these notes were really executed by the defendant, as it agreed to execute them, and they were accepted as a compliance with the agreement, then the contract sued on in count 9 was not breached. The Southern Iron & Steel Company — much less these plaintiffs— could not maintain an action as. for breach of the contract, because the contract would not have been breached by the defendant. If these notes, or any part thereof, was not paid, the proper party could maintain an action thereon, as to the amount not paid as agreed, but this action could not be considered as one upon a breach of the contract by which the defendant agreed to give the very notes it did give, and upon which it was sued. The action and the cause of action are different. This seems to us so plain that we deem it unnecessary to argue it further, or to cite authorities to support the correctness of the holding. We will, however, cite a few authorities.
All contracts founded upon mutual promises between persons of full age must be obligatory upon both parties, so that each may have an action upon it, or neither will be bound.. The whole doctrine rests, though, mainly upon the absence of a consideration to support the promise. Evans Case, supra.
The plaintiffs are conclusively shown, and are admitted, not to have been parties to the contract sued on in count 9, though they were parties to the notes, but to the notes only. They were mentioned in the contract merely as suitable stakeholders of the notes.
These plaintiffs were entire strangers to the consideration of the contract, and the contract was not made for their benefit.
The plaintiffs here, in count 9, show no legal interest in the contract alleged to have been breached by the defendant. We know of no statute which changes the rule as to them, in an action like the one stated in count 9 of the complaint. Suppose the contract alleged to have been breached was in fact breached by the defendant’s failure to execute the notes as agreed — and this is the only probable breach that occurs to us, and the only one attempted to be alleged — what interest in the world would these plaintiffs have in .that breach? The very inception of an interest and duty on their part is the execution of the notes, and delivery to them. By the very terms of the contract the notes ■could have been delivered to any other person than the plaintiffs, if the Southern Iron & Steel Company had so elected.
As the case must be reversed, and the other questions argued may not arise on another trial, or, if they do, will probably arise under different pleadings, we will not here decide them.
Reversed and remanded.