Rumsey v. New York & Pennsylvania Railroad

Citations

• 203 Pa. 579
• 53 A. 495
• 1902 Pa. LEXIS 763

Syllabus

<p>Equity — Specific performance — Contract—Stock— Corporation.</p> <p>Where a person has a contract by which the stock of a corporation in the hands of a third person is to be delivered to him when he has complied with certain conditions, and it appears that the stock has no ascertainable market value and carries with it a controlling voice in the management of the corporation, such person on fulfilling the conditions named is entitled to a decree for specific performance of the contract.</p> <p>Railroads — Corporations—Merger of foreign and domestic company — Illegal contract — Participation in profits by officers — Constitution of Pennsylvania, article 17, section 6 — Act of May 15, 1874, P. L. 178.</p> <p>Where the officers of a railroad company organized in New York, enter into a contract with other parties in which the railroad is not a party, by which they are to share in the profits arising from the construction and equipment of the railroad, and subsequently the railroad company is merged and consolidated with a railroad company organized under the laws of Pennsylvania, and it appears that the contract, although void in Pennsylvania as in violation of article 17, section 6, of the constitution of that state, and the Act of May 15, 1874, P. L. 178, is valid in New York as between the parties to it, the contract may be enforced in Pennsylvania.</p> <p>It is very doubtful whether even as regards the corporation itself, contracts legally made by it could be invalidated by a subsequent act of merger, but however that may be, it is clear that no such effect could be produced upon a private contract between individuals to which the corporation was not a party. Contracts valid by the law of the place and time where they are made and are to be performed, are valid everywhere. Per Mitchell, J.</p>