BUliPHREYSt:.ST.,LOPIS, 1.')4'.& S. RY. CO.
, I. :,

807

HWPIlRiEYS

et al.

'l1·

M. & .8. R\. Co·

$. D. New York. January 24, 1880.)

··

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A railroad company, a corporation of Ohio, Indiana, Illinois, r.nd Missouri, whichhaid.: equipped its road under an agreement with a car trust, leased the road and equipments to defendant, a rlloi!roadcompany, which, to induce the c,ar trust to leave theequipments on the'road, agreed to pay the balances un· paid by its les'sor atcertaTn times, in cOhsideration of which paym'ents the car trust, agreed to transfer and assign .all i,is interest to defendant. All the states in the company was except Indiana, provided for the lease o'{ one railroad by another. The laws of Missouri provided that the lease snould not be binding until at a meeting of the stockholders. called for "that purpose, a majority lI.ssented thereto in writing, or until the holders of a majorityof.the stock assentljd thereto in writing, and a certificate, siJ!:ned by the president and secretary, was filed with the secretary of state. No meet· ing was called of defendant's stockholders, but a certificate was filed, sighed bythe'l. president, ,who owned nearIY'aU, of the stock, and the secretary, and the road was operated by defendant withQut any objection from its. lllss0l" Held, in an acti'on' by the car trust on 'its agreement Witjl defendant, that,de· fendanHlould,not plead:ult'l'a 'Dire8 as to the lease.
F'R.\UDS"S",A,TUTEOF--AGRE&HENT TO PAY DEBT Oll' ANOTImR.

VIRES. , .

'

'

S.

The defendant havjng/lbtained the use of the equipments by its agreement to pay (he balance unpaid' by its lessor, the consideration was the use of 'the property and the'right to acqUire title by such {layment, and the contract was a dlrect undertaking, and, nota guaranty, withIn the statute of frauda.· .

At LaW.

george John F.

.... . . " .JameJJ B. Townsenc!,for, plaintiffs. Portia,and Ruah Taggart, for defendaqt.

by thecourtupQn written: jury. The plaintiffs trustees of an by of the" New York & Paci.fic Car Trust Association," forothe purpose of .buying, selling, and leasingraih;oad equipmellt and r,olling .st9ck, ,to, be, fiold. or loosed to com panies owning or operating roads. The, articles of. association provide that the capital stock should be issued in series of certificates representing the property, from time to time, to be classified by letters, and based. qpon successive contracts. for equipment and rolling stock and leases thereof, and for authority in the trustees to <;ontmct with the Wabash, St. Louis & Pacific Railway COlnpany, for the lease to the said companY, and their successors, from time to time, of equipment and rolling stock, a separate lease to be macle of. et\ch series of equipment and rolling might be delivered to tlw trustees of association,upon specified terms .and conditions. Purspa!Jt to this authority, the entered into an agreement with tpeWabash, St. Louis & Pacific Railway Company, a cor" poration of Ohio, Indiana, Illinois, and Missouri,which recited'this authority, and witnessed tbatth,etrustees, as well in considerationofthe sum of one dqllar to them. paid by the said Wp.hash. st. Louis & Pacifio Railway OomPlmy, parties Of,t.he secQnd part, atiund before the sealing and delivery,,thereof, thereceipt,of which acknowledged, as

;WUlllJllLER,J. This cause'has been

308

FEDERAL REPORTER.

of the rent, sums of money, and covenants thereinafter mentioned to be paid, kept, and performed by the said parties of the second part, had let and leased, and by those presents, under and by virtue of the said recited agreement, did let and lease, unto the parties of the second part and their successors, for the use of the parties of the second part in their railroad business. all and singular the railroad equipment and rolling stock, more particularly set forth in the schedule or inventory thereto annexed, with their fixtures and appurtenances. for the term of five years from and after the 1st day of December, A. ·D. 1879, unless sooner terminated, as thereinafter provided, at and for the rent or sums of money, for the rent or hire of the said railroad equipment and rolling stock, as thereinafter set out, to be paid to the said lessor quarter-yearly during the said term, as follows: For the first quarter, the sum of $101,250, and 'specifying a further sum. for each of the other 19 quarters, respectively; that the first quarterly payment should be made on the 1st day of March, A. D. 1880, and thereafter the said quarterly payments should bE:1111adeQU the 1st o( the'mantha of June, September, December, aild March, in each year during the said term; together with further sums incidental to the contract; and that the Wabash. St. Louis & Pa.:. cific Company, in consideration of the premises, did by, those presents covenant and agree with the. sl,tid lessors as follows: That they, the said·lesSee, should aud would ,.pay'to the said lessors the said rent'and sums of money specified, on the days and times and in the manner af()resaid, and should and would, at their proper cost and expense,'keep ,a.nd maintain the said equipment and rolling stock in good order and repair, and cause the same to be numbered and lettered as follmvs, on the bodv thereof, thus: "New York & Pacific Car Trust Association, No. ,i' and onthe'boLtom side rail:"N. Y.& P. C. T. A.' Series Ai" and should and would repiace, at their own cost, any of the said equipment and rolling stock that might be destroyed from any cause whatever' during the continuance ofthe lease by other equipment and rolling stock of equal value and of like material, character, and construction; and should not allow the name or designation of any railroad to be placed on such ment and rolling stock except as "lessee;" and should and would, at their own cost and expense, insure 'said equipment and rolling stock in such amount and in such manner as should be satisfactory to the said trustees, to whom the losses, if any, should be made payable; and that the trustees should be elltitled to hold the policies; and that in case the said lessee should make default in the payment of any part of thesaid c rent or any of said sums of money for more than 30 days after' the same should become due and payable, or should fail to keep the said equipJ ment and rolling Btock in good, serviceable condition, or to keep the same insured as thereinbefore provided, or to perform any of the covenants provided to be performed on their part, the said trustees might, on the request or demand of the managers of the association , declare the said lease terminated,and by their agent enter upon the railroads andprem. ises of the said railroad companynud take all the said railroad equipments and rolling stock, and withdraw the same from the said railroads

HUMPHREYS 17. ST. LOUIS, I. M. & S. RY. CO.

309

and premises, and might also take and withdraw the said equipment and rolling stock', wheresoever the same might be foundj and upon such retaking thereof the said trustees should hold and dispose of the same in such manner, at public or private,sale, for cash or upon credit, as the said trustees, with the approval of the board of managers of the association, might deem most beneficial to the trust, and apply the proceeds thereof to the payment of the expenses of the trustees, insurance expenses, and taxes accrued or to become due, the expense of managing and maintaining the property, and to the rent then due, together with the interest thereon, and also to the payment and satisfaction of all installments of rent thereafter to accrue or become due, and should hold the said railway company responsible for any balance of the said rent then unpaid; and if such sale should yield any surplus the same should be paid to the railway company; and such retaking by the said trustees should not be a bar to the recovery of the rent, and the necessary taxes and expenses aforesaidj that upon the payment of all the rent and sums of money, as therein provided, then and in such case upon the payment by the said lessee to the said lessors of the further surn: of one dollar, the said lessors sho.uld and would forthwith sell the said equipment and rolling stock to the lessees, and that all the said equipment and. rolling stock leased should thereupon become the absolute property of the said lessees, and that neither the said lessors nor their cestwia que tru8tent, should have' any further control over or interest in the sarne, find that the said trustees should have and hold said railroad eqUIpment and rolling stock and the sai,d lease, and all the Tight, title, and interest therein, and should collect, receive, hold, and apply the rents and sums of money to be paid therefor and thereunder, as !(bQve provided, for the use and benefit of the holders of certificates of stor.k in the association, until all the said rent and sums of money should be paid, as in the said lease providedj and when, and as soon as the said rent and sums should be paid, all the said railroad equipment and rolling stock and their fixtures and appurtenanceS should thereupon, as above provided, be sold and transferred to and become the absolute prClperty of the railway company, and neither the said· association, nor the holders of the said stock, nor the said trustees, should have any further control over or interest in the same. The equipment provided for in this agreement, designated "Series A," was delivered to and taken possession of by the Wabash, St. Louis & Pacific Railway Company under the terms of the agreement. Like agreements were 'made for three other series in succession, designated respectively "B," "C," and "D," and the equipment provided for therein was in like manner delivered and taken possession of. The agreement in respect to Series D was modified as to the rate of interest and times of payment. Default was made in 'respect to payments provided for in each of the agreements. Afterwards an agreement for a lease of the roads and equipment of the Wabash, St. Louis & Pacifi(l Railway Company, includingall this equipment and rolling stock, to the defendant, a corporation of Missouri and Arkansas, was made' between these two companies. The stock of the defendant consisted of 220,700 shares, of which 219 1459

810

REPORTER.

shares were:heldandstQod on the books 01 the company in the name of Jay Gould, and he waspres:identof the company. On.the lOth day of April, 1883, aleaae ofthe roads and equipment pursuant to that agreement was made and executed by the o.fficers oLthe respective companies, and on tbe part of the defendant, among others,py Jay Gould, president. l'his lease was filed in. the office of the secretary of state of Missouri ontbe 28th day of April, 1883, with these certificates: . "The undersigned, president and secretary of the Wabash, Saint Louis & Pacific Railway Company, certify that the annexed instrument, bearing date April 10, 1883,i,s a certain original indenture of lease by and between the Wabash, Sain,t Louis &; Pacific Railway Company and the Saint ,Louis, Iron Mountain & Southern Railway Company, and that the holders of a majority of the stock of the Wabash, Saint LouiS '&; Pacific Railway Company have assented thereto in ·wdting.' . [Seal] "JAY GOULD, President, "Wabash, Saint Louis &; PaCIfic Railway Company, . "0. D. ASHLEY, 2d 8ecr(,'tary, "Wabash, St. LouiS &; Pacific Railway Company." "The undersigned, president and secretary of the Saint Louis, Iron Mountain & Southern Railway Company. certify that the annexed instrument, bearing date April 10,1883, is original ,indenture vf lease by and betweenllheWabllsh.l:i'aint LOllis &;Pacific Railway Company, and that the holders of a majority of the stock of the Saint LouiS. Iron Mountain &; Southern Railway Company have assented thereto in writing. . [l::leal]. ; i,' "JAY GOULD, PJ;'esident, , "Saint LOUl,S, .Iron MOllntain & South..rn Railway Company. ','.' . "A. H. CALEF, Seefetary. , "Saint LoUis, Iron Mountain &; Southern Railway Compariy."
i

.'

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Whether defendant took possession of the roads, equipment, and rolling stock of ,the Wabash, St. Louis & Pacific Railway Company under this lease :adisputed qUtlStion of fact upon the evidence. The respective offices company were filled mostly by the same persons; and lUany of the, executive agents of each were respectively the same. Mr. Amos H. Oalef,:who was secretary and treasurer of the defendant com-. pany from 1881., became such of the other in May, 1883, was. called as a witness by defendant, and gave evidence tending to show that such possession was not taken.. The plaintiffs offered in evidence a letter signed by him as such officer, and directed to the president and directors of the other company,. dated May 10, 1884, which stated Rmong other things, that "under the indenture of .lease .between the Wabash j St. Louis and Pacific IVy .Co.and thi& company, dated ,April 10; 1883, the lines of the lessorcompltny bave been operated for a period of about thirteen m(>nths." It was received, .subject to. objection. tWithoutconsidering this letter as evidence of the tact stated in it, or otherwise.than as affecting thetestimony of that witness, upon ,all the :other evidence ll-nd circumstances.it is found that these roads nnd the equipment and rolling stock were brought, by force of theJease, which WIlS at, that time recognized as valid by all, within. the control and management of thedefendnnt company., In view of the situation, and to induce the trustees to let the equipment and rolliug stock remain in use upon the roads, the defendant entered into an

HUMPHREYS V. ST. LOUIS,I. M. &

s.

RY. CO.

311

with these trustees, dated June 26', 1883, and signed by Jay G6uld,· and A. H. Calef, secretary, which,afterreciting thernafingof the agreements in respect to the equipment 'and rollirtg stock between the trustees and the Wabash, St. Louis & PacifteHailway Company;,':proceoosthus: .,.,._--_. . ...,,'" . "Whereas, the said railway company is not in default as to each of said ments by reason of the non-payment of certain of the sums mentioned therein; and wh¢reas, the second patty hereto has leased the railroads and equipments of said Wabash, St. Louis & Pacific Railway Company, and is desirous of preserving intact the said equipment for use in the operation of saidrailtoadll: Now, theJ:efore. it is agreed by and between the parties as follows: First. '.rhe second party hereby assnmes and agrees to pay to the first party thll several sums remaining unpaid by the .said Wabash,8t. Louis & Pacific Railway Company at the times and in the manners following, provided the same are not soOner paid by the said railway company, that is to say: 'rhe principal of each of s!}id installments of rent at the expiration of three years from the date when the same would otherwise respectively fall due, and during the three years; and thereafter the interest 01). each and all of said installments quarterly, as, required by'the terUls thereof", the principal debt is paid. party further agrees with the fi17i1tparty that it will promptly and fully make gOQd any default of the said railway company hereafter to keep and pettorm any and all of the remaining stipulations and covenants which the said railway company has in and bythe'said agreements, or any of them, agreed to keep and perform. Seoond. '.rhe first parties further agree that when and as the extended payments shall and become due, if the same any 0(, them are not paid by said railway then, upon receiVing the money therefor from the first parties will USB the fundS in the pllrl)hase of, and hand over and deliver to the second party, certificates issued various car trusts above mentioned, corresponding at par to the amount paid by the second party under the guaranty hereinbefore stated; the second party holding the said certificates, witb all interest accruing and thereafter. to accrue upon, in the same manner, and with the same rights, and .in the hands of the holders whose tbeypurchase;aIld the first parties shall give to the second parties, for any payment the second party may make on account of either principal ot'interest, receipts which will shOw that' the second party have bought the rights of the holders of the certificates under the car trust to the extent of such payment, with the same rights, power, and anthority as were possessed by the holders of the certificatl's on account of which principal or interest shall have thus been paid by.the second party, and binding the first parties to hand. the' certificates OVtlr to the second party so Boon as the first parties sball' h;l.ve' received the same. And the first parties further agree that whenever the second party shall have paid to them any sums now or hereafter due upon any of said agreements, and not paid by said railway company, and the tirst parties shall also have received the .entire sum which by the terms of such inent the first parties are entitled to receive, then the said first parities will assign and transfer to the Seco\ld party the said agreement and all the right, title, and interest of the second'party thereon." , Thereupon the equipment and rolling stock were left to remain within the control of the defendant; use upon the r08QS covered by tile lease. On May 19.1884, the <lefendant company informed the Wabash, St. Louis & Pacific Railway Company that the ,net earnings of the roads had been insutlicient to pay the interest, rentals, and other fixed charges;

in

312

FEDERAL REPORTER.

that under these circuIl;lstances the St; Louis, Iron Mountain & Southern Railway would undertake to continue its advances, and it would be necessary for the Wabash, St. Louis & Pacific Railway Company to ask the holders of the junior bonds of its main lines and of the leased and acquired lines, which were said to be not se1f:'sustaining, to fund their coupons for such a period as would enable the business to grow up to the expense and interest charges; that if the Wabash Company could ac, COlllplish this, the St. Louis, Iron Mountain & Southern Company would continue to operate the Hnes of the former under the lease,anu in connection with the Missouri Pacifio System; and that its managers felt great oonfidence that within a reasonable time the profit would increase sufficiently to exceed its fixed charges. Upon receiving this information, the officers of the Wabash, St. Louis&: Pacific Railway Company, some of whom were also officers oithe defendant company, took steps to secure the appointment of receivers of the roads and property of the former; and on the 29th day of that May such receivers were appointed, one of whom was one of the plaintiff trustees, and they immediately took possession of the roads and property, including this equipment and rolling stock, without objection on the part of the defendant. The plaintiffs intervened in the receivership proceedings to obtain payments of installments falling due (If the receivers,and succeeded to some comparatively .small extent, and after theexpiration of three years called upon the defend:ant for payment of the sums unpaid. Payment was refused, and successive suits were brought upon this agreement for installments falling due, and these actions have been consolidated into this suit. The defenses set up and urged are that the lease is ultra vires and void, and that the c9ntract depends upon that, and falls with it; that the contract is itself ultra vires and void; that it is within the statute of fraudsj · that it is a mere guaranty of the contract of the Wabash, St. Louis & Pacific Railway Com pany, without consideration; that, as such guaranty, no cause of action would accrue upon it until all other remedies should be exhausted. That one railway company cannot lease its road and ·franchises to another, or acquire those of another by lease, without statutory authority from the jurisdiction in which they are situated, is not disputed in this case, and seems to be well settled. Thomas v. Railroad (V'., 101 U. S. 71; Railroad Co. v.Railroad Co., 118 U. S. 290,630, 6 ·Sup. Ct. Rep. 1094, and 7 Sup. Ct., Rep. 24. That these thinge may be done with such authority follows, and also is not questioned. The Statutes of Missouri of 1879 provide by section790 that".Any railroad company organized in pursuance of the laws of this or any '(lthel" state * * * may lease or 'purchase aU or any part, of a railroad, with all its privileges, rights, real estate, and other property, the whole or a part of which is in this s'tltte, and constructed, 'owned, or leased by .any other company, if the lines of a road or roads of said companies are continuous at a point either within or without this state, * * * provided that rio * ** such lease * * * shall be perfected until It meeting of the stockholders of said company or companies of this state * * * shall have been called by the directors thereof, at such time and place, and in sucb manner, as they shall designate, sixty days' public nO,tice tum"eof having

HUMpHREYS ". ST. LOUIS,

r.

M. & S. RY. CO.

313

been previously gi ven, and the holders ofa majorityof the stock of such company, in person or by proxy, shall have aSaented thereto, or until the holders of a majority of the stol'k of such company shall have assented thereto in writing, and a certificate thereof, signed by the president and secretary of said company or shall have been filed in the office of the secretary of state." The laws of Illinois of February 12, 1855, (Priv. Laws, 304,) that"All railroad companies incorporated * * * under the laws of this state shall have power to make such contracts and arrangements with each other, and with railroad corporations of other states, for leasing or running their roads, * * * as shall be necessary and convenient for carrying into effect the object of this act." The Revised Statutes of Ohio, by section 3300, "Any company may lease or purchase any part or all of a railroad constructed by another company, if the lines of road of such compallies al'e continuous or connected. and not competing, upon such terms and conditions as may be agreed upon between the companies.
II

Therefore, under some circumstances which might exist, the defendant could lawfully acquire the roads of the St. Louis, Wabash & PacifiC;; Railway Company, and all of them, by lease, except that part in Indiana. Railroad Co. v,' Railroad Co., 118 U. S. 290,6 Sup. Ct. Rep. 1094. The only condition required as to Missouri and Ohio is that the roads should be continuous or connected; and none appears to be required as to Illinois. At the time of the lease trains of all the roads ran to and from a union depot in St. Louis. To do this, trains of the defendant crossed a track of the Missouri Pacific Railway Company. running in the same direction, by being switched onto it lrom one side and passing along on it 134 feet, and then being switched off on the other side; and trains of that part of the roads of the Wabash, St. Louis & Pacific Railway Company east of the Mississippi river passed over the track of a bridge and tunnel company across the Mississippi river to the depot, by right acquired by lease. They connected otherwise by their own tracks. These breaks, such as they were, separated parts of their own roads, and not the roads of these parties, from one another. These methods of crossing the track of another road and the river do not appear to break the connection between the two roads, within the meaning of these statutes; and these lines are found upon the evidence of this situation and these circumstances, as a matter of fact, to have been connected and continuous. The holders of a large majOlity of the stock of each company appear to have assented to the lease at meetings when that subject was considered, but not at any meeting called and held for that purpose. No vote at any meeting was required by the laws of Missouri, if the holders of a majority of the stock assented to the lease in writing, and the proper certificates were filed in the office of the secretary of state. Thepropositions voted upon were in writing, and the voting was by written ballots. This is argqed to have been an assent in writing to the lease; but· the ballots were not signatures, and were cast to accomplish corporate, and not individual, action. This does not seem to amount to the assent in

314 writing contemplated by the' statute.>No other assent of the holders of ithe stock of is shown otherwise than by the . Those appear to be designed to furnish authentic fa(lt 'ofassentj ·,arig.. whether tbe plaintiff is required to go evidence 'of beyond them,or tbe deferidantis entitled to go bebind them, is doubt· ful.However that may; be, th,e president of the defendant, who signed the certificate held alm()st the whole bf'the stock of that company. There could be no majority without him. The statement by him in the certificate,- that a majority had asseJ:1ted, hnplies that he had assented. Blanks for such assent were to the lease, and not signed. The statute does not require the aasellt to be in any particular form or place. If the certificate is true, and it is to be so regarded, it appears to prove that the president had s6iliewhete made such an assent, or considered the certificate,'Rs amountirtg to'one... In either case, one was made which was satisfactory to him, both as'!3t6ckholder and president, and was evi· denced in the nHmner required 1:>y the statute. The. lease was therefore well executed in behalf of the defendant as lessee, and not ultra vires on that part. ,It was not disputed,but was yielded to on the part of the lessor,bowever defective theexedntiollof tbat part may have been. This l'0lling stock and equipment was personal property, which might besold or bailed by parol and delivery.;The leases were sufficient to pass the right of the Wabash, St. Louis &Pa:cific Railway Company to that when accompanied 'by delivery .. The defendant therefore had, by the contract of lease, well made on its 'part, and by concession and sufferance on the part ·of the lessor, this road todper'ate, and the possession of this equipment and rolling stock to operate:it with, subject to the rights of the plain. tiffs, when thisoontract was ,It provided a mode for retaining the possession of, and gradually acquiring the title to, the rolling stock and equipment. Nothing appears tobe,more clearly within the scope orthe corporate powers of 'a railwll-ycorporation than the procurement of equipment and rolling stock for the roads it has to operate. Had the defend. ant at that time bought or hired engines and cars for this use, it could no more have resisted payment fotthem than it. could for the services of tt'ain-men employed by it to run the trains, or of track-men employed to keep the track in repair. The fulfillment of this contract would procure the use of necessary engines and cars, and ultimately the title to ,them. The defendant ha.d in fact taken upon: itself the operating of the roads, which made the rolling stock and equipment desirable and necessary, and represented to the plaintifl's:that it had by the terms ·of the contract. The ability to makel:luch contracts,under such circumstances, whether the underlying title of the defene:lantwas ,valid or not, is shown in Zabriskie vdMuroad Co., 23 How. '381',ltrId:.llJcG'luer v. Railroad Co., 13 Gray, 124. In the former case Mr. Justice:CA.MPBELL said in delivering the opinion court: , .
" cI to Rcareiu! adherence tbtruth in their dealings with ma'nkind. and cannot, by their representations or silence. involve others 'in'ot1ercIUs 'e'l'igilgements, and then defeat the calculations and claims their ownCGnduct,had superinduced. "

HUMPHREYS 'il. ST. LOUISj I. M. & S. RY.

co.

In: the latter, whi<lh was an action upon a contraCtor camagao'tTer the MethuenBranch 'Railroad;, that the 'defendant was operating under a 'lease eaid to be ultra vire8andvoid, HOAR;i J ., !laid: . "The decision of this cotirt'in tbe recent; elise of Langley Ratlfoad 00·· 10 Gray, 103, rests upon grdtinds wholly distinct frOID those upon which this action is based. ·'fhe court there decided,that tbeBoston & Maine Railroad. beingtbe owners al1d to run and freight,could not, cars overitas common carriers of the authority of the legislature. lease that road to a corporation created by another state. and transfer their powers and duties to snch corporation, so as themselves from liability for injuries to persons or properby to whicbmight arise in the use of the road. Butif the plaintiff in the present action might have had a remedy. at his election, against the Boston & Maine Railroad, he is not theref()fe precluded from seeking it against the party With whom he contracted. The defendants. so far as any were competent to hire and use the Methllen Branch Railroad, if they could find any party that would permit them to use it, and put them in possessiop. They were in the actual possession and use of it, without obstruction from the Boston & Maille Railroad of the cOlnllJonwealth; and they received the plaintiffs' property through their agents. and agreed· that it should be safely kept. and transported to its desti nation.. It is no ans wer to a breach of, agreement. to deny the validity Of their own contrlJ,ct for the use of the road..',' This contract does not appear to be void from a.ny want of corporate authority to make it. The questions made in respect to the consitleration, construction, and effect of the contract are to be determined in view of the situation out of which it grew, and to which it is to be applied. The contracts between the plaintiffs and the Wabash, St. Louis & Pacific Railwll)" Company, in respect to this equipment and rolling stock, are in the· instruments called "leas68," and·' they are sometimes said to be for conditional sales," and at other times, "mortgages." Neither of these names would seem to be apt to describe them fully. and perhaps tbeypartake somewha.t of the nature of such instruments as each of these terms is nsually applied to. The title to the property was not to pass until payment, and in that respect theyresembled conditional· sales. The use of the property by the conditional purchase was provided for on compensation, and that· respect they would have thequalitiesofai lease, so far as that name isa.pplicable to agreements for the use of personal property. And they provided for security on the property in the hands of the so-called "lessee," and in that respect were like urortgages. In all aspects they fixed the right of the plaintiff to retake the property on default. A default had been made, and the property was subject to the right of the plaintiffs to remove it at once; Rnd the lease passed the right to redeem to the defendant, subject to the rights of the plaintiffs. If the lessor redeemed, the defendant would have the property of the lessor under the lease. If the defendant fulfilhd· the contract, it would have the property as purchaser. The undertakinlfof the;dei'ertdant to pay what should remain nnpaid at the prescribed times Was an agreement to pay the price of the use and ownerahipof the property which it would have ·oithe plaintiffs. What'the lessor should pay, it would pay for itself. The reference:to what should

316

FEDERAL REPORTER.

remain unpaid was for the purpose offi:xing the amount to be paid by the defendant, and not to express an agreement to see that the defendant paid. The consideration was the UBe of the property to be had, and the ownership of it to be acquired. Such an agreement to pay money towards the price of property received was early held not to be within the statute of frauds. Williams v. Leper, 3 Burrows, 1886; Oastling v. Aub&t,2 East, 325; Edwards v. I(elly,6 Maule & S. 204. These considerations lead to the conclusion that the contract is not a mere guaranty, but a direct undertaking, on which the plaintiffs have the right to proceed against. the defendant in the first instance. The evidence tending to show that the lease was not executed according to the laws of the several states in which the road was situated, as well as evidence showing that the stock of the defendant corporation held by Jay Gould, trustee, was in fact held for the Missouri Pacific Railway Company, was recdved subject to objection, without passing definitely upon its materiality, to make the case complete. The Missouri Pacific Railway Company is a corporation of Missouri, and as such appears to have had authority to hold the stock, and to assent to the lease, either by itself or through a tmstee. The presumption is that the act of the trustee was authorized or approved by that company, if anything in that behalf was necessary; and this presumption is not rebutted. The argument made in behalf of the defendant, that want of power to take a lease of the roads would involve want of power to operate them, or to provide means for operating them, although sound in law, does not appear to be well founded in the actual situation. The defendant was not without power by the laws of its Bitus to take title by lease or otherwise of all of those roads. The laws of Missouri already recited appear to have conferred ample authority to acquire title to them in any manner Jnwhich it cou,ld be obtained; and title eould be obtained to all of them in some form, and by lease to all except that part in Indiana, by procuring the execution of conveyances with the required formalities. The defendant accepted such an instrument in that behalf as was made, and .that operated to give the defendant the roads. Whether this operation 'was due to the cuncession of the lessor, or to the force of the instrument, the defendant acquired the roads with authority to operate them, and to provide for their operation. In this view, the defendant became bound by its contract. with the plaintiffs to provide and equipment, without reference to the actual validity of the lease as against the lessor. The defendant, as lessee, could not dispute the lessor's title as .against the lllssor; and still less could it dispute that title as against third parties and strangers to the lease, who had dealt with the defendant on its own representation of the lease. This evidence, therefore, now appears to be immaterial, but the facts shown by it are in the case, to,have such weight as may be found to belong to them, if any, in the further progress of the cause. Upon the whole case, as now considered, the plaintiffs are entitled to recover of the defendant the installments for which the actions consolidated into this one were hrought. .ThElre must therefore be judgment for the,plaintiffs.

SHAW tl. CRAFT.

811

SHAW

v.

CRAFT

et ale

December Term, 1888.)

(GircuitOourl. N. D. OMo,

w: D.

1.

ANTMALS-4NJURIES By-DoGS-PRESUMPTION.

Dogs kept upon a farm: are presumed not to be vicious. or to have dangeroushabits, .and the owner or harborer is not liable for their vicious acts, unles8 he had knowledge of such vicious or dangerous habits.

The owner or harborer of a dog. known to be in the habit of chasing persons or horses on the road adjoining his premises, is not liable for injuries to persons caused by their horses becoming frightened at the dog. where he has no knowledge that injury has ever resulted from the dog's babits; or of any acts of the dog likely to result in injury. and where he exercises ordinary care to prevent injuries by the dog. 8. SU!E. But after knowledge of such acts of the dog as would be likely to re$ult in injuries to passers the road. it is his duty to take such measures as will secure the public against danger therefrom in future. 4. NEGLIGENCE-IMFUTED-HuSBAND AND WIFE. The wife's administrator cannot recover for injuries causing her death, which were occasioned solely by the husband's negligence, but where his negliA'ence only contributes to the injury. and the negligence of defendant directly contributes to the injury, the husband's negligence cannot be so at· tributed to the wife as to defeat the action.]

2.

SAME-KNOWLEDGE OF VICIOUSNESS.

At Law. Action by ,James P. Shaw, administrator of Ella J. Shaw, deceased, founded on the Ohio statute authorizing the administrator of any person whose death wlis caused by the wrongful act of another, to recover damages for the benefit of the husband and children. The plaintiff alleged that on the 27th of October, 1887, as he was passing along a public road near the premises of the defendant Craft, with a buggy and one horse, in which were his wife and two daughters, two dogs of the defendants ran to the road and in it, and viciously barked at and chased his horse, thereby causing him to rrin away and upset the buggy, and throwing his wife out, and so injuring her thatshe shortly afterwards died of the injury. He also alleged that the dogs were vicious and dangerous, and in the habit of chasing and pursuing persons passing along the highway, and that the defendants knew of their vicious and dangerous haQits, but wrongfully allowed them to run at large. . Hamilton Ford, for plaintiff. A. Layton and E. D. Potter, for defendants.

a.

WELKER, J., charged the jury, among other matters: 1. That dogs upon a farm, being regarded as domestic animals, are presumed not to be vicious, or have bad and dangerous habits. and the owner or harborer is not liable for their vicious acts unless he had knowledge of such vicious

'The negligence of a man who invites a woman to ride in a buggy with him, be keeping full control of the horses, and the woman having no reason to doubt bis ability and care, cannot be imputed to her in an action by her against the mUnicijalit:y for injuries resulting from obstructions negligently left in the street. Town 0 Knlghtstowll v. Musgrove, (Ind.) 18 N. E. Rep. 452. See, also, cases cited in note.