42 Tenn. 574 | Tenn. | 1865
delivered the opinion of the Court.
On the 20th of April, 1855, as proven before the jury, the Board of Directors of the Railroad Company, passed this resolution: “That the Nashville & North-Western Railroad, he, and the same is hereby, located, from Hanner’s Ford down Harpeth, and near Isaac Jones’; and thence up Turnbull and Beaver Dam; and thence by Contrary Pond, along the Tennessee ridge to Coffman’s grave.” Before the adoption of this resolution, and in fact, before either of Isaac Jones’ subscription agreements were made, this route had been surveyed by George H. Hazlehurst. It was known as the “Harpeth and Turnbull Route,” and ran up Beaver Dam valley, within a hundred yards of Jones’ forge, being called, indifferently, the “Hazlehurst route,” or the “Harpeth and Turnbull Route.” Isaac Jones owned a tract of land of some fifty-one hundred acres, with a forge on it, and a valuable water power at the forge, and this route ran through the forge yard. The construction of the railroad upon it, would enable Jones to load and unload from the cars in' his forge yard. The forge had not been in operation for many years, but had always been a successful forge, when in operation, and could be put in operation at any time. There were valuable ore banks upon this tract of land, owned by Jones, from which the ore could be brought on the railroad to the forge. The construction of the railroad upon this route, would have added many thousands of dollars to the value of the tract owned by Jones. The Company
The tract of land owned by Jones, was, on the 10th day of April, of the same year, sold for the purpose of partition, and brought the sum of $5,100. It would have brought twice that sum, if it had been supposed the road would ever have been built. It would, as testified by the witnesses, have brought as much, if the route had never been surveyed and formally located. The calls made upon Jones' subscriptions, were- paid up to his death, and the pleadings assume that some calls, made after his death, were paid by his administrators. But if they were, the sums so paid must have been small, since the suit is brought for the calls due in March and April,. 1866, leaving only the two months of January and Eebruary, in which calls made after his death could have been paid by them, if he died in 1856.
The other route, known as the “Sullivan Branch Boute," was always considered the cheapest and best for the railroad, if the Company could have got the subscription on that route. On this latter route the
At the forge, on the Jones place, the two routes are, as stated by the engineer, some twenty-five hundred feet apart, with a bluff between them; and, as proven by another witness, half a mile apart, and the bluff between them a high one. The road from the forge to the new road, is at least a mile and a half in length, and a very bad one. Some two hundred acres of Jones’ forge tract of land, is good tillable land, and the balance of it is thin land, but all of it is well wooded. The change of the road from the original to the new route, materially damaged this land. The new route is the shortest, cheapest and best route for the construction of the railroad. On the adoption of the new route, the old one was entirely abandoned; and at the time of the trial of this case, the road was being constructed on the new route. Upon this state of facts the Court charged the jury:
2d, That the words of the contract were to be understood in their common and popular sense, unless the proof shows that they have acquired an artificial and technical sense.
3d, If the word “locate” were used in the contract in its common and popular sense, it meant to build and construct tbe road.
4th, But if the proof shows the word “locate,” had, when used in reference to the locality of the railroad, acquired an artificial or technical sense, then the parties would be presumed to have used it in that 'Sense.
5th, If when used in that sense, it meant the survey of the route of a railroad, and the adoption of that route as the line of the road, by a resolution of the Board of Directors, and if the company did, or caused these things to be done in good faith, they were a compliance with the condition, and the subscription of Isaac Jones became absolute.
6th, If the route of the road were so located, in good faith,' and afterwards the company, in good faith, changed such location, such change would not release Jones from his subscription.
7th, If the company, in good faith, intended to build the road on the stipulated route, according to the condition,, and if, while endeavoring to accomplish that object, so far as it had the means, but before t had the ability to accomplish it, Jones died, and
The business of the Court was to construe the contract of the parties. But the Court did not do so. It told the jury, that if the word “locate” was to be understood in its common and popular sense, as it was, unless it was shown by proof to have acquired an artificial or technical sense, when used in reference to locating railroads, then the parties to these contracts would be presumed to have used it in that sense. And if, when used in that sense, it signifies the survey and marking of a line, and a resolution of the Board of Directors to adopt that line, as the line of the road, then, if the plaintiff, in good faith, did, or caused these' things to be done, they would be a performance of the stipulated condition as to the location of the road. But the Court wholly omitted to tell the jury in which of these senses, the common and popular, or the artificial and technical one, they were to understand this word “locate” to have been used by the parties.
This omission occurs in a case in which there was not, so far as the record discloses, the slightest proof that the word “locate” had, when used in reference to the locating of railroeds, acquired an artificial or technical sense, or, indeed, any shade of signification
The rule of law is well settled, that the Court will not reverse for a mere theoretical error in the charge of an inferior Court, which has no application to the facts of the case, and could not, in any way, have misled the jury. But the charge in this case can derive no support from that rule. What is stated therein as to these two propositions, with what is omitted therefrom, could afford a jury no aid or light 'as to
In the case of William Chapen vs. Peter Gullet and others, 2 Sneed, 275, it was laid down, that though parol evidence cannot be admitted to vary, alter or explain the intention of the parties, as expressed in a written instrument, yet it is no less true, that application must be given, to the contract by the surrounding circumstances: 2 Sneed, 282. The Court decided, in the case of Caines vs. Apnerson & Co., 2 Sneed, 562; 1 G-reenleaf, 60, sec. 278, “that every species of contract may be subject to conditions, by which all estate or interest may command or be enlarged or be defeated. No technical words are necessary to create the condition, or declare its nature,” and that conditions were to be either precedent, or
“In the present case, it is,” say the Court, “argued that the words “have bargained and sold,” used in the instrument, give character to the contract; and evidently show that a title in prcesenti, was intended to pass. Certainly the words were technical and appropriate to the idea of an executed contract; but when we consider the entire instrument, it is perfectly clear that such was not the intention of the parties.” “No particular words are,” says Story on Contracts, sec. 20, page 33, “necessary to constitute a condition precedent or a condition subsequent.; and if there be any question upon this point, it must be determined by the intention of the parties, as manifested by circumstances of the particular case. For, not only may the exact terms of a condition be modified so as to harmonize therein with the evident intention of the parties; but where no condition has been expressed, it may be implied from the facts of the case.” “A conditional contract” — as defined by this author, Story —“is an executory contract, the performance of which depends upon a condition. It is not simply an ex-ecutory contract, since the latter may be an absolute agreement to do, or not to do, something; but it is a contract whose very existence and performance depends upon a contingency and condition.” “A condition subsequent, is one which follows the performance of the contract, and operates to defeat and annul it upon
The cases of the Henderson and Nashville Railroad Company vs. Lovell, 16th B., Monroe, 358; McMillin vs. Maysville and Lexington Railway Company, 15th B., Monroe, 218; the Wilmington and Raleigh Railway Company vs. Robinson, 5th Iredel, 301; and the Cumberland Yalley Railway Company vs. Bach, 9 Watts, 458, show that contracts of subscription for stock in railroad companies, may be conditional ones; and, indeed, where there is nothing' in the charter of
The Nashville and North-Western Railroad Company had a charter by which it was authorized to construct a railroad from Nashville to -. On the part of this line, between a point two miles East of what was known as Jones’ Forge, and a point some miles West of that Forge, there were two routes. The best, shortest, and cheapest of these routes for the construction of the road, as well as for the subsequent operation of running trains upon the road, was through, a poor section of country, in which the stock could not be raised for its construction. The second and longest, worse and most expensive of them, was through a rich region of country, as far at least as Jones’ Forge, in which the stock for its construction could be got.
• These facts were known to all the residents of the county, and, unquestionably, the company and Isaac Jones knew them. The latter owned a tract of land on the longer, worse, and most expensive route, upon which there were a forge, ore banks, valuable water
The parties used the term “located,” in these contracts, in reference to the then existing state of things, which have been above detailed. The parties entered into the contract with the object, and from the motives, indicated by that existing state of things. Without engaging to locate its road upon this route, the Company could not obtain subscriptions of stock, with
The portion of the charge, therefore, in which the jury were told, “if the term ‘locate" had, when used in reference to locating railroads, ácquired an artificial or technical sense; and if that sense were, the survey of a route, and its adoption by a resolution of the Board of Directors, as the line of the road, then the parties would be presumed to have used it in that sense,” was erroneous.
. There is, in one of these contracts, as we have seen, an express provision, that, unless the Company located, i. e., built and constructed its road upon the stipulated route, the subscription is to be void; and the provision in the other, to be paid, on condition that the road shall be located on that route, when taken in connection therewith, must — both being between the same parlies, as to the same subject-matter, and for the same purpose — be understood as in substance and effect, the same. In other words, the two papers are to be read, understood, and considered as one contract, as they were by the Court below. So viewed, the condition is annexed to the subscriptions themselves, which are, upon the non-performance, or upon the violation of the condition, to be void. The Company’s acceptance of these papers, bound it, so far, at least, as any right to regard or hold on to the estate of Isaac Jones, as one of its stockholders, and to. enforce the obligation of these contracts against him as a stockholder,
The rule that a member of a corporation is ordinarily bound by the acts of the major part of the corporation, or of its duly appointed organs, as a Board of Directors, when' done within the scope of its powers and purposes, does not constitute a reason why these rules of law, as to conditional contracts, should not equally apply to corporations and individuals, if corporations, like the present one, may accept conditional subscriptions to its stock, and consequently, conditional shareholders for members. For the conditional subscriber was either never a stockholder and member of the Company, if the condition was a precedent one and not performed, or ceased to be a stockholder and member,
One party is bound, as well by the rule of moral right as of law, to keep or perform his contract with another in the sense in which he knew at the time of entering into it the other understood the contract: Chitty on Contracts, 62. There can be no doubt that the Company, when it entered into these contracts with Isaac Jones, knew that he understood them to make or continue him a stockholder of the Company, only upon the express condition that the Company should build or construct the road on the stipulated route, and only be bound on that condition, to perform them by the payment of calls. To suffer it then, under the plea of his being a stockholder, and bound by the action of the Board of Directors to change the location of th.e road, and still hold on to Isaac Jones’ subscription, and to him, as a stockholder, would be to sanction and sustain its direct and palpable violation of the terms of its own engagement. Indeed, it would be to permit the Company to practice a fraud upon him. The party who makes a representation upon wich another acts, is bound, both at law and equity, to make such representation good, and the same principle precludes a party from any right of recovery, when he has violated the
The third and fourth pleas of the defendants set out the fact of the change of the route of the road from the stipulated route, and seek to recover the calls paid by the intestate, and by themselves, as administrators, as set-offs, in the nature of cross actions. The replication admits the fact of the change of route, but avers that when the plaintiff was about to begin the construction of that part of the road, it discovered a nearer, better and cheaper route for that part of the road, and adopted that new route, upon which, the road was in the course of construction. Then these replications contain an admission that the plaintiff had violated the condition, upon the performace of which, alone, the intestate was to become, or to remain, a stockholder, and bound to perform his part of the contract; and showed no valid ground of defense against the recovery sought in the pleas, if the result of the case should, in other respects, be such as would entitle the defendants to recover upon these pleas. The demurrers ought, therefore, to have been sustained, and (if the plaintiff had any good ground of defense against the pleas,) the plaintiff
The Court instructed the jury, that, inasmuch as the motive of Isaac Jones, for insisting upon the condition in the subscription agreement, as to the stipulated route, was to enhance the value of a tract owned by him; if the company, in good faith, intended to build the road according to the condition, and was doing what it could towards the accomplishment of that object, as far as it had the means to go, but before it had the ability to accomplish it, Jones died, and his heirs sold out, and parted with all interest in the land, and after they had sold out and denuded themselves of their interest, the company changed the location, though it would be a departure from the letter, it would not be from the spirit, of the contract, and would not operate to discharge Jones from the payment of his subscription.
The express and positive contract of the company and Isaac Jones, was, that unless the road was built and constructed upon the stipulated route, the subscription agreements should be void; but the Court makes for the company, and for the administrators of Jones, another contract, which is, that in the conceded event of the company having deliberately violated the positive condition of its express contract with their intestate, the company should be absolved from the obligations of its original contract, and from the legal consequences of such violation; because their intestate’s motive for insisting upon the condition, as to the stipulated route of the road, was the enhancement of the value of his tract of land; and because his heirs, who were not before the
The original parties had not contracted, in any way, as to the recovery of damages for a violation of the condition. The express and positive condition' of their contract, was, that upon such violation, the subscription agreements themselves, should be void, leaving the law, in that event, to fix their respective rights agamst each other; and the well settled rules of law gave the administrators of Jones, in that event, the right to defeat any recovery against them upon the annulled contract, and also the right to recover what had been paid thereon, before the company avoided them. But the new contract made for them, denied them not only these rights, but any redress whatever for the admitted violations of the conditions of the contract. Both corporations and individuals have the legal right to make their own contracts, and Courts have no right to make- contracts for them. The function of the Court is to construe the contracts of parties, and when construed, and their meaning ascertained, to enforce them as made.
The correctness of this last proposition of the charge can only be sustained, by the assumption, by the Court, of the power, under the guise of cdSrstruing the.express and positive condition of the contracts of those parties, according to which the Court assumed, was its spirit to make a contract for the company and the administrators. This thing is not authorized eitheir by reason, principle, or authority. If there be. any case, in which proof of the sense of a term used in a contract may be admitted before a jury, and in. which a Court may leave
But the bill of exceptions discloses no such proof— and the points are only noticed to prevent the admission of incompetent evidence upon another trial, since the charge in the bill of exceptions would seem to indicate, that, in the Court’s opinion, such evidence was competent.
The judgment of the Court below will be reversed; and the cause remanded for another trial, according to the law of the case, as stated in this opinion.