43 Ark. 275 | Ark. | 1884
The Iron Mountain & Helena Rail Road Company made a contract in 1873 with the Southern Construction Company for the building of its road. For work done and materials furnished the Construction Company was to receive all subscriptions voted- by counties, cities and towns along the line of the road, as well as all subscriptions by individuals and all unsold stock of the railroad company. Being unable to collect these subscriptions promptly, so as to pay for the work as it proceeded, the board of railroad directors in 1874, by resolution, authorized the issue of certain “ Freight and Transportation Certificates” to the amount of $50,000 and in the following form:
“ Six months after the completion of the Iron Mountain & Helena Railroad from the City of Helena to Forrest City, or the crossing of the Memphis & Little Rock Rail Road, the Iron Mountain & Helena Rail Road Company will pay to bearer five'dollars in freight, or passage, or other dues of the Iron Mountain and Helena Rail Road Company.
WM. H. CATE, President.
T. M. JACKS, Treasurer.”
These certificates were engraved, with vignette, on bank-note paper and in form and appearance closely, resembled ordinary bank bills. It was directed that they should be paid to the Construction Company and its subcontractors in lieu of the consideration named in the contract.
On the first of August, 1882, Stansell brought an action against the rail road company before a Justice, of the Peace for the indebtedness represented by thirty-six of these certificates and recovered judgment. An appeal was taken to the Circuit Court, where the plaintiff again prevailed, obtaining judgment for the debt and interest from the date when he received the certificates.
The defences seem to have been (1). That the certificates were intended by the rail road company to circulate as money, being in the similitude of bank-notes and were in violation of the statute, which prohibits unauthorized persons to issue notes and bills designed to be used as a circulating medium; (2) the statute of limitations, the certificates having been delivered in 1875 as part payment for money then due ; and (3) if the plaintiff should be found entitled to recover any sum, no interest should be allowed for the time prior to the completion of the road to Forrest City in the month of December, 1881.
The testimony showed that Stansell had furnished cross-ties to the Construction Company to be used in building defendant’s rail road. His contract was that, within twenty days after delivery of ties, he was to receive the acceptance of the Construction Company with the indorsement of some solvent party in St. Louis, and in the meantime was to hold the transportation certificates as collateral security. But the acceptance had never in fact been substituted for the certificates. Six months after the completion of the road to Forrest City, the plaintiff had tendered the certificates to the defendant in payment of freight and passage but they had been refused.
The court at the instance of the plaintiff, and against the objection of the defendant, instructed the jury, in substance as follows : 1st. That if the certificates were issued to be used as a circulating medium, or if the defendant promised to receive them in payment of debts due it in lieu of money, they were void; hut, nevertheless, if defendant delivered them to the'S. W. Construction Company in payment of a just debt, and the S. W. Construction Company delivered them to plaintiff in payment of a just debt due by it to plaintiff, plaintiff was subrogated to the rights of the Construction Company and its assignee to the amount of certificates so held, and entitled to a verdict for that amount if defendant in- no. way participated in the issue of the illegal paper. 2nd. That if not issued for the purposes above stated,-they were valid; and if plaintiff, after six months from the completion of the road to crossing of M. & L. R. R., tendered them to the defendant in payment of freight dues and they were refused, the finding should be for the plaintiff.
The court, on its own motion, and against the objection of the defendant instructed the jury ' in substance : 1st. That if the finding was for plaintiff' interest should he computed at six per cent, per annum, from the day the'bills were delivered to plaintiff*.
2nd. That the statute of limitation did not begin to run till the completion of the rail road, admitted to be in December, 1881; the contract between the Rail Road Company and tne Construction Company being a single contract for construction, although certain sums were due the Construction Company on estimates of work done and from which time the jury will award interest as damages.
The court refused to give the instructions asked by the defendant which were, in substance, as follows:
1st. That the certificates sued on were void; that their delivery to the construction Company by the I. M. & H. R. R. Co. was no payment of its indebtedness to the Construction Co.; that the Construction Co. might have disregarded such payment, and at once brought an action against the R. R. Co. for the amount; that having a complete cause of action at the date of such delivery, the Construction Co. was required to assert it within 3 years or be barred by limitation ; the plaintiff having only such rights as the Construction Company had and might assign, was compelled to enforce his rights under the assignment within three years; that if the certificates sued on were delivered to the Construction Company by the I. M. & H. R. R. Co. on the '5th day of June, 1875, and this action was not commenced until August, 1882, the finding should be for defendant.
2nd. That the certificates sued on were issued in lieu of sums of money subscribed by individuals in aid of I, M. & H. R. R. Co. and were in no event to impose upon the R. R. Co. a personal liability in excess of such subscriptions, and that plaintiff can only recover by showing that such subscriptions have been collected by the R. R. Co. and not properly applied to the redemption of its certificates ; that if ho such collections have becu made, or, if made, and properly applied to redemption of other certificates of the same issue, the finding should be for defendant.
3d. That if the finding should be for plaintiff, interest should be computed at 6 per cent, per annum, from Dec, lst? 1881, the date upon which the I. M. & II. R. ,R. was completed to Eorrest City.
4th. That the cause of action accrued 5th day of June, 1875, and if action was not brought in five years from date, finding should be for defendant.
5th. That the cause of action accrued June 5th, 1875, and if the action was not brought within three years from that date, the finding should be for defendant.
The result of the present controversy does not depend on the validity or invalidity of these transportation certificates; nor upon the question whether, if they were issued in contravention of a statute, a private corporation is obliged by law to redeem them.
Upon tírese points the curious may compar Gantt’s Digest Ch. XIX, entitled Change Tickets; Van Horn v. State, 5 Ark. 349; Anthony ex-parte Ib., 358; Yeatts v. Williams Ib., 684; Smith v. State 21 Id., 294; Jones v. Little Rock, 25 Id., 301; Lindsey v. Rottaken, 32 Id., 619.
The plaintiff does not sue on the paper, but for money due on the original contract, the certificates being used as evidence of the amount due. The main question is therefore whether the corporation defendant owes the plaintiff money on a contract, which it refuses to pay.
By the resolution of the directory, the original contractor was authorized to pay out the certificates, which weredirected to be made transferrable by delivery and payable to the holder. Thus by its own aci, the rail road company split up the original consideration, agreeing to become paymaster for the work to as many creditors as there might be holders of the certificates. And having received all the benefit to be derived from the transaction, it is estopped to deny this.
The judgment is affirmed.
