195 Ill. 288 | Ill. | 1902
delivered the opinion of the court:
It is contended by counsel for the receiver that the mortgages executed by his company, the Chicago and South Side Rapid Transit Railroad Company,-were made in violation of the limitations placed upon the company by section 16 of the ordinance of the city of Chicago, granting it permission and authority to construct, maintain and operate its road, and were therefore ultra vires and void, and that the company and its stockholders are not estopped from denying the same, and that the sale of the rights granted by the city in this ordinance should not have been included in the decree of sale. The part of the section bearing on this, question is as follows: “The above consent shall never, in any way or manner, authorize any other railroad company, or street or horse or dummy railroad company, to use the franchise herein above granted to said Chicago and South Side Rapid Transit Railroad Company.” It is contended that this provision absolutely prohibits the railroad company from disposing, in any way or manner, of its right derived from the city to maintain and operate its road. Great stress is laid upon the proposition that this section was a limitation upon the powers of the railroad company, and took away the power granted to the railroad company by paragraph 10 of section 19, chapter 114, of the Revised Statutes, “to mortgage its corporate property and franchises to secure the payment of any debt contracted by such corporation for the purposes aforesaid,” of completing, finishing, improving or operating its road. The case of Tudor v. Chicago and South Side Rapid Transit Railroad Co. 154 Ill. 129, (the receiver’s company,) is cited as having settled this question in favor of the receiver’s contention. That case arose under the eminent domain powers conferred upon the company, and the question there was whether the company could condemn a strip of land more than thirty feet in width, to which width the ordinance had restricted its right of way. It was there held that the city having the right, under the statute, “to provide for the location of any railroad,” had the power to limit the width of the right of way, such limitation not being repugnant' to the statutory provision that the width of the right of way should not exceed one hundred feet. It has also been held that cities have'the right to stipulate for certain pecuniary returns in return for the license granted a railroad company to use their streets, (Byrne v. Chicago General Railway Co. 169 Ill. 75,) but we have been cited to no authority granting the city the right to abridge the statutory powers of a railroad company in the matter of mortgaging its road and franchises to secure the payment of debts contracted in building and equipping its road. The clause of the ordinance referred to does not, however, say that the company shall not mortgage or alienate its property, but only provides that the consent therein given shall never authorize any other railroad company to use the franchise therein granted to the receiver’s company. In other words, the license granted by the city is restricted specially to the receiver’s company. The provision is for the benefit of the city, to enable it to prevent any other company from being its licensee without its express consent, and it enables the city to impose any additional lawful burdens upon any subsequent licensee that it may see fit to impose. There certainly is no prohibition herein against mortgaging the property and franchises in conformity to the statute. If such mortg'age should thereafter have to be foreclosed, the purchaser at such sale would run the risk of getting" the city’s consent to operate the purchased property. The inclusion of the rights granted by the city ordinance in the decree of sale was inoperative as to the further operation of the road by the purchaser, as such rights were personal to the first licensee and expired when its control terminated, and if there was any error in including such rights derived from the city, it was harmless. The mortgag'es were not ultra vires the corporation. Taking the view of the case that we do, the authorities cited by plaintiff in error are not in point.
It is further contended that the bonds secured by the first mortgage, as well as the mortgage itself, are void. The basis of this contention is, that the construction company, to which the bonds and stock were issued originally, received, under an amendment to its contract, §15,000,000, half in stock and half in bonds of the company, while the building and equipping of .the entire road was only §7,728,102.94, including" the second section, not embraced in the original contract. It is said that this contract was so unfair as to be void, making the bonds obnoxious to the constitutional and statutory provisions that the fictitious indebtedness of a corporation shall be void, even as to bonds in the hands of innocent purchasers. The contract with the construction company was authorized by all the stockholders, and the mortgage was authorized by the unanimous vote of all the stock of the company. It is not shown that there were then any stockholders or creditors who were injured by this action against their consent. All then interested in the company having assented to the contract and its modification, and to the mortgage and the issuing of the bonds, the company and the successors in interest of the then stockholders are estopped from setting up the inequality or oppressiveness of the construction company’s contract. (Higgins v. Lansingh, 154 Ill. 301.) The construction company became insolvent, and it was necessary for the railroad company to make a settlement with it so that it could finish the construction of its road. Any equities the company may have had against the construction company for the breach of its contract could not be interposed so as to defeat the title of the bondholders. Peoria and Springfield Railroad Co. v. Thompson, 103 Ill. 187.
It is further contended that the decree allowing ten days in which to pay the money found due, in default of which the whole property was to be sold absolutely, without right of redemption, was erroneous, as it allowed too short a time to bring into court such a large amount of money. In Taylor v. Dillenburg, 168 Ill. 235, it was said: “What is a reasonable time in which to redeem in cases of this character rests in the sound discretion of the court, in view of all the circumstances of the case.” A reasonable time for the payment of the amount due has been variously estimated. In Chicago, Danville and Vincennes Railroad Co.v. Fosdick, 106 U. S. 47, and Howell v. McAden, 94 id. 463, a reasonable time to pay has been said to be ninety days or six months. It appears that the decree of sale, June 29, 1896, ordered the master to give at least sixty days’ notice of the sale, and the sale in fact was made September 16, 1896, or two months and seventeen days after the entry of the decree. September 29 further time of ninety days was given before confirmation of the sale, which was not made until December 29, 1896. The equity of the mortgagor as against the mortgagee is not exhausted until sale actually confirmed, for if at any time prior he should bring into court for the mortgagee the amount of the debt, interest and costs, he will be allowed to redeem. (Chicago, Danville and Vincennes Railroad Co. v. Fosdick, supra.) The mortgagor was actually given six months in which to redeem, and no application was made for further time. In view of the subsequent proceedings, the error, if any, was harmless.
The judgment of the Appellate Court will be affirmed.
Judgment affirmed.