Ottawa, Oswego & Fox River Valley Railroad v. Black

Citations

• 79 Ill. 262

Syllabus

<p>1. Contract—whether a purchase of stock, or subscription to stock of a railroad company. A promise to pay a certain sum to a railroad company when a certain amount of the work of construction is done, with an agreement on the part of the company to deliver to the part)-, upon the payment of the money, a certificate for a like amount of its capital stock, on demand, is a subscription to the stock of the road to assist in its construction, and not a purchase of stock.</p> <p>2. Subscriptions to raileoad stock—;failure of consideration. In such a case, if the company should, without any authority granted in its charter for that purpose, attempt to sell and transfer its powers to another company, such attempt would be unlawful, and would constitute no defense against the payment of the subscription.</p> <p>3. The exercise of any legitimate power granted by the charter of a railroad company can never be held, however disastrous to the enterprise, to constitute a failure of consideration for a subscription to the capital stock.</p> <p>4. Same—made with reference to the provisions of the charter. Where a railroad company, by its charter, has power to lease its road, subscriptions to its capital stock will be regarded as having been made with reference to such power, and the exercise of it will not exonerate subscribers to the stock of the company from the payment of their subscriptions.</p> <p>5. Railroads—effect of lease not authorized by the charter. If a railroad company, without any authority so to do, leases its road to another company, the lessee will only be regarded as the servant of the company owning the road, and such company will not be, bj' the act 'of leasing, discharged from its contracts or released from any of its liabilities, and a subscriber to the stock of the company owning the road, when he has paid his subscription and received his certificate of stock, will have equitable rights to be protected by the courts, and may prevent gross mismanagement o