| Ala. | Dec 15, 1884
— The Central Railroad and Banking Companyjwas chartered by the State of Georgia, for the purpose and witli power to construct and operate a railroad from Savannah to Macon, and to organize and do a banking business. The complaint alleges that the defendant and one Whitesides were the owners and proprietors of a steamboat called the George W. Wylly, and were engaged in operating the same on the Chattahoochee river, for the carriage of passengers and freight from Columbus, Georgia, to Apalachicola, Florida, and intermediate landings. The action is brought by appellee, to recover damages for injuries sustained, while a passenger on the boat in April, 1883. For the purpose of proving ownership of the steamer, and partnership or agency in operating it, the court,
1. Ownership, partnership, and agency are facts, to which witnesses, who know their existence, may testify. But, while the notoriety of a fact in a particular community may be admissible, to lay a foundation for an inference that one residing in the community had knowledge thereof, the existence of the fact having been otherwise established, it is well settled, that it is not competent to prove by general reputation ownership, partnership, or agency. These do not fall within any of the exceptions to the inadmissibility of hearsay evidence. — Humes v. O'Bryan, 74 Ala. 64" court="Ala." date_filed="1883-12-15" href="https://app.midpage.ai/document/humes-v-obryan--washington-6511695?utm_source=webapp" opinion_id="6511695">74 Ala. 64; McCoy v. Odum, 20 Ala. 502" court="Ala." date_filed="1852-01-15" href="https://app.midpage.ai/document/mccoy-v-odom-6504775?utm_source=webapp" opinion_id="6504775">20 Ala. 502; Blevins v. Pope, 7 Ala. 371" court="Ala." date_filed="1845-01-15" href="https://app.midpage.ai/document/blevins-v-pope-6502422?utm_source=webapp" opinion_id="6502422">7 Ala. 371.
2. It may be true that, where two persons are sued as partners, a judgment by default on personal service may, in a subsequent action against them by a stranger, be competent as an admission of the partnership. In such case, it is competent only as an admission, and is received on the same grounds as other admissions. The effect of an admission can not be accorded to a judgment, when the liability is denied and controverted in the suit. A denial of any and all liability can not be regarded as an admission of liability as partners. The suit of Gordon not being on an instrument in writing purporting to be signed in the partnership name, it was not necessary for the defendant to have contested the partnership charged by special plea. The verdict and judgment thereon, the general issue having been pleaded, do not convert the denial into an admission by the defendant. It is admitted that the record of a former suit and judgment, though between different parties, is admissible to prove the existence of the former suit, and the rendition of the judgment, when these become material matters of inquiry; but, for the judgment to operate as a bar, or as evidence of the facts on which it professes to be founded, it must be between the same parties, or their privies. Generally, a judgment can not be used as evidence by one party in a subsequent suit, when an opposite decision would not be evidence for the adversary party. The benefit must be mutual and reciprocal. — Phillips v. Thompson,3 Stew. & Port. 369 ; Tridby v. Seybest, 12 Penn. St. 101. The former suit and judgment are res inter alios.
3-4. The acts and declarations of a party in possession of property are admissible, so far as explanatory of his possession ; but not to prove joint ownership or partnership with a third person, unless notice of them is brought to the knowledge of
5-6. The merits of the case involve the consideration of the questions, whether the corporation has power, under its charter, to own steamboats, and to engage, in association with a natural person, in the business of carrying persons and freights on the Chattahoochee river; and, if without power, whether under any, and what circumstances, it is liable to a passenger for injuries resulting from the negligence or unskillfulness of those in charge of the boat.
The general rule, that corporations created by an act of the legislature, or organized under general laws, can exercise only the powers expressly granted, the implied powers necessary and proper to carry into effect the express powers, and such incidental powers as pertain to the purposes of their creation, is not controverted. It may be conceded, that a railroad company, in the absence of express power, is authorized to make traffic arrangements for transportation by water, or may purchase, own, and operate steamboats, or other water-craft, when such an arrangement or business legitimately pertains to the corporate purposes, or may reasonably be inferred to have been contemplated and intended by the creating power. Such power is incidental to the purposes of the corporation, and such inf erence is reasonable, when a railroad company is incorporated with power to construct a railroad between fixed and designated termini, and to effectuate the construction it is necessary to cross navigable rivers, bays, or arms of sea, which, on account of their width and depth, or from other causes, can not be bridged ; or when a body of water, lying at the termination of the railroad proper, separates it from the metropolis, to and from which it was contemplated, intended, and is necessary to transport freight and passengers conveyed over the road,-A“ from the ostensible and substantial termini of their route ;” ol* when the act under which the company is organized authorizes it “ to contract for the transportation and delivery of, and to deliver persons and prop
In Wheeler v. S. F. & A. R. R. Co., supra, it is said : “It is one thing to build and own a line of steamers to some foreign country, or some distant port, carrying on a wholly distinct and independent business entirely foreign to the objects of a railroad corporation, which might just as well, and a great deal better, be transacted by some other company organized for the purpose ; and quite another, to own and control steamboats for crossing rivers and bays in the line of the road, and the use of which is convenient, proper, and necessary to a successful accomplishment of the objects for which the road is built and operated.” It may be stated, generally, that a corporation has no power to engage in any business, not authorized by the law of its creation ; and a railroad company is unauthorized to use or apply its funds in aiding and carrying on business foreign to, and unconnected with its proper and legitimate purposes and objects, although the design and effect may be to augment the business of the road, and increase the profits of the corporators. Under the operation and application of the general rule, it has been held, that a company incorporated for the construction of a plank-road between designated points, with the right to take tolls, is not authorized to establish a stage-line 'on their road ( Wiswall v. G. & R. P. R. Co., 3 Jones Eq. 183); that a corporation chartered to lay out, make, and keep in repair a road from a point in the vicinity of Mt. Washington to the top of the mountain, and to take tolls,1 and to build and own toll-houses, had no authority to establish stage and transportation lines (Downing v. Mt. Wash. R. R. Co., 40 N. H. 420); and that corporations organized to construct and operate railroads have no power to buy steamboats to run in connection with their roads (Pearce v. M. & Ind. R. R. Co., 21 How. 441" court="SCOTUS" date_filed="1859-03-11" href="https://app.midpage.ai/document/pearce-v-madison--indianapolis-railroad-87236?utm_source=webapp" opinion_id="87236">21 How. 441). Lord Langdale, as quoted by Mr. Justice Campbell, in the case last cited, says: “ Ample powers are given for the purpose of constructing and maintaining the railway, and for doing all business required for its proper use when made. But I apprehend that it has no where been stated, that a.railway company, as such, has power to enter into all sorts of other transactions. Indeed, it has been properly admitted, that railway companies have no right to enter into new trades or businesses, not pointed out by the acts. But it has been contended, that they have a
A late decision of the Supreme Court of Georgia has rendered a further discussion of the question unnecessary. In Gunn v. v. Cen. R. R. & Banking Co., that court has construed the powers conferred by the charter of the defendant, and held that the corporation has no power to enter into a partnership with a natural person to purchase and run a steamboat on one of the rivers of that State. This decision was made in a suit brought hy a passenger on the same steamboat, to recover damages for injuries sustained at the same time, and under the same circumstances, as the plaintiff in the present action. If we entertained doubt of the power of the defendant to engage in such business, — when it is 'said, “ to be in doubt is to be resolved,”— comity would suggest an acceptance of, and acquiescence in the construction of the statutes of that State, under which the corporation was organized, by the court of last resort. We observe, however, an allusion to another statute, which authorizes railroad companies “to build, construct, and run as part of their corporate property, such number of steamboats or vessels as they may deem necessary to facilitate the business of such companies.” This statute does not appear in the present record, and can not be, and is not considered by us.
7. With the postulate assumed, that the defendant has no authority to own and operate, in association with a natural person, a steamboat on the Chattahoochee river, for carrying persons and freights, there remains to be considered the liability of the defendant to a person for injuries suffered on a boat thus owned and operated, while a passenger thereon.
This court has repeatedly decided, that the contracts of corporations, which they have no power to make, are void, and that the courts will not enforce them. “ Such contracts on the part \ of a corporation are ultra vires, and void, and no right of action can spring out of them.” — Marion Sav. Bank v. Dunkin, 54 Ala. 471; Chambers v. Falkner, 65 Ala. 448" court="Ala." date_filed="1880-12-15" href="https://app.midpage.ai/document/chambers-v-falkner-6510651?utm_source=webapp" opinion_id="6510651">65 Ala. 448. No contract made by a corporation, not within the scope of its powers, can be made valid', or the foundation of a right of action, by the assent of the shareholders. If the corporation attempts to carry such
Were the present action founded on a contract of transportation, it is unquestionable, that the defendant could successfully interpose the defense of ultra vires. The action is, however, ex delicto., founded on the common-law duty of a common carrier. The plaintiff does not require the aid of an illegal contract to establish his case; its enforcement is not necessary to entitle him to a recovery. The rules applicable are those which govern in cases of torts committed by a corporation. The question is, whát is the liability of a corporation for a tort, committed while transacting a business without and beyond the purview of the corporate powers and purposes? This is followed by another question; by what authority, and in what manner, can a corporation be subjected to such liability?
While, as the law confers no power or permission to commit a wrongful act, every species of tort may be technically ultra vires, it is well established, that corporations may commit almost (every kind of tort, and be liable to an action for the same. In such case, the doctrine of ultra vires has no application. — Mer. Bank v. State Bank, 10 Wall. 601. “A corporation is liable to the same extent, and under the same circumstances as a natural person, for the consequences of its wrongful acts, and will bo held to respond in a civil action, at the suit of an injured party, for every grade and description of forcible, malicious, or negligent toft or wrong which it commits, however foreign to its nature, or beyond its general powers, the wrongful transaction or act may be.” — N. Y. & N. H. R. R. Co. v. Schuyler, 31 N. Y. 30. Accordingly, actions have been maintained against corporations for libel, malicious prosecutions, assault, and other torts too numerous to be mentioned.— Green v Lon. Gen. Om. Co., 7 Com. B., N. S. 388: P. W. & R. R. R. Co. v. Quigby, 21 How. 202" court="SCOTUS" date_filed="1859-01-17" href="https://app.midpage.ai/document/philadelphia-wilmington--baltimore-railroad-v-quigley-87204?utm_source=webapp" opinion_id="87204">21 How. 202; Jordan v. Ala. Gt. So. R. R. Co., 74 Ala. 85" court="Ala." date_filed="1883-12-15" href="https://app.midpage.ai/document/jordan-v-ala-great-southern-railroad-6511696?utm_source=webapp" opinion_id="6511696">74 Ala. 85. Generally, it may be said, that corporations are liable for the consequences of tortious acts done by its authority, though not within the scope of its powers, express, implied, óF incidental. The distinction between the liability of a corporation, on an unauthorized contract, and for a negliVol. LXXVI,
8. But, before the duties and responsibilities attach, the corporation must undertake and engage in the business, and thereby assume its burdens. Of this there can be no implication, from the isolated fact, that some officer or agent has engaged, in the name of the company, in running and operating the boats; in other words, there can be no implication that a corporation has made a contract, or engaged in business transcending its powers. — Oreen’s Brice’s Ul. Vires. 36Í. It may he interred from proved circumstances, as other facts, but is not the subject of implication. Corporations are responsible for the wrongs committed by their officers, agents, or servants, while in the course of their employment; but, if the officer,
In Brakan v. N. J. R. & T. Co., 32 N. J. Law, 328, it is said : “In considering the question whether the agent has the authority of the- corporation, so as to make it answerable for his act, the purposes for which the company was incorporated must not be overlooked. An authority given even by the board of directors, in expi'ess terms, will not, in all cases, be the authority of the corporation. The directors are only agents themselves, and their powers are necessarily limited within the scope of the purposes for which the corporation was created, beyond which they are not authorized to bind the corporation. To fix the liability of a corporation for the tortious acts of one of its employees, done in obedience to the commands of its officers, the act must be connected with the transaction of the business for which the company was incorporated. If the directors should order an agent to take a person out of his house and beat hita; or if the directors of a banking company should purchase a steamboat, and engage in transporting passengers, 'the corporation would not be liable for the misfeasance or nonfeasance of agents employed in that business.” It is true that the board of directors may be invested by the charter, or general law, with such management and authority as practically to constitute it the corporation; but, by the provisions of the char
A corporation is an artificial body, a distinct person, in legal contemplation, from the stockholders, in which the corporate property is vested. Its will is usually or ordinarily expressed at a meeting of the corporators. Its officers are its agents, and not the agents of the stockholders. In this sense, previous authority, to bind the corporation by the act of an officer or agent transcending its powers and unconnected with its authorized business and purposes, must be the result of corporate action, as contradistinguished from the individual action of the stockholders or officers. Subsequent ratification results, when a knowledge of the business being thus conducted, and of the reception and retention of its fruits and benefits, is brought home to the corporators, at a time, and under circumstances which require them to elect to repudiate or be bound, and they fail to disavow the act; in other words, any facts, wdiich would' be a ratification of the unauthorized acts of an agent by a prin-' cipal who is a natural person.
An application of these principles will probably be a sufficient guide on another trial.
Reversed and remanded.