30 N.J. Eq. 12 | New York Court of Chancery | 1878
The bill is filed to obtain a decree for specific performance, by the defendants, of a contract entered into between the complainants, partners in business, and them, on the 19th of December, 1877, by which the former agreed to construct, equip and finish, for the latter, a single-track, narrow-gauge' railroad, and telegraph line in connection therewith, from the terminus of the Camden, Gloucester & Mount Ephraim Railway to high-water mark in the city of Gape May, with stations, engine and freight-houses, machine and repair-shops, turn-tables, water-stations, &c., &e., and all necessary terminal facilities, for $2,000,000, payable in the capital stock and first mortgage bonds of the company.
By the contract, the complainants were to complete the work within five months after the bonds were negotiated and sold at a price not less than ninety cents on a dollar of the par value thereof; and it was stipulated that they should not be sold at less than that price without the consent of both parties.
The bill states that the complainants entered on the work, and proceeded with it from the date of the contract to the 20th of February following; that there was, at the latter date, due to them, under the contract, the sum of $40,000, or thereabouts; that they were then entitled to have an estimate made, but the defendants refused to make it, or to pay them, or to carry out the contract, which the complain
The defendants’ answer admits the contract and declares their willingness to perform it, but alleges their inability to do so by reason of the provisions of an act of the legislature of this state (a supplement to the general railroad law), approved on the 19th of February, 1878. By one of those provisions the provision of the original act requiring that the articles of association should not be filed until at least $2,000 of stock for every mile of the proposed railroad should have been subscribed and ten per cent, paid thereon, was altered so as to require that the entire amount of $2,000 per mile shall be paid to the treasurer of this state, to be repaid by him to the directors or treasurer of the company in the manner specified in the supplement, as the work of constructing the railroad shall progress. By the other, the provision of the original act which authorized the mortgaging of the road, &c., of the company, to secure
There are several considerations which forbid the granting of the relief prayed for in this suit. If this court would undertake the performance of such a contract as that stated in the bill, a contract for building and equipping a long line, of railroad, building station, freight and engine-houses, &c., &c. (and the current and great weight of authority is decidedly against it, Story’s Eq. Jur., § 726; Ross v. Union Pacific R. R. Co., 1 Woolw. 26; Fallon v.
In this case the defendants are willing to perform their part of the contract if they can lawfully do so. They have never refused to issue their bonds and stock to the complainants in accordance with the terms of the contract, except because of the provisions of the supplement above referred to, under which they apprehend they may have lost their corporate existence, and by which, if their corporate existence be not lost, their directors and officers who should act in the matter would be liable to severe and ignominious punishment for so doing (P. L. 1878, p. 23). They have not complied with the provisions of the supplement in reference to the amount to be paid in on their capital stock, and have not been able and are not able to do so. Only ten per cent, of the amount of their capital stock has been paid in. Their corporate powers are, according to the supplement, extinct, and the corporation is dissolved (P. L. 1878, p. 22). The complainants, however, insist that the supplement is an unconstitutional law; that it destroys their contract, which existed when it was passed, and which was founded on the faith of the original act; that it deprives them of their vested rights thereunder, and that it should be declared to be unconstitutional, and its provisions, so far as they are subject to that objection, disregarded. But it is in nowise necessary to consider that question; for, if there were no other valid objection, this court would not, under the circumstances of the case, declare that the apprehensions, or doubts at least, of the defendants, as to the validity of the supplement, áre wholly groundless, and
Though the court might, if the case were free from these difficulties, direct the defendants to make the estimate of work already done prayed for in the bill, (Waring v. Manchester, &c. Railw. Co., 7 Hare 482,) yet, for the considerations already presented, that relief must also be denied.
The bill will be dismissed.