A true copy of the original now in my office. St Louis, January 24, 1863. S. W. EAGER, JR., Secretary Board St. Louis Co. Com'rs. Know all men by these presents, that the County Court of St. Louis county, in the State of Missouri, has this day issued and delivered to the North Missouri Railroad Company one hundred and fifty bonds, for the sum of one thousand dollars each. And whereas, under the provisions of the statute in such case made and provided, and in pursuance to the order of the said court, said company covenants to pay the interest on said bonds, and to comply with the provisions of the act of the General Assembly authorizing the issuance thereof, and the order of said court. The undersigned, as President of said Company, hereby authorizes and empowers the President, Judge of said court for the time being, or any person he may name, to appear in any court in said county, and confess a judgment against said company for any sum that may at any time appear just, and for which said company may be liable under any law of this State on any order of said court heretofore made. Given under my hand this third day of June, 1857. (Signed,) THOS. B. HUDSON, Received of St. Louis county, one hundred and fifty more St. Louis county bonds, of one thousand dollars each, on the conditions above named. (Signed,) St. Louis, June 6, 1857. THOS. B. HUDSON, Pres't N. M. R. R. Co. Received, St. Louis, Mo., 12th June, 1857, of St. Louis county, one hundred and fifty St. Louis county bonds, of one thousand dollars each on the conditions above mentioned. (Signed,) ARTHUR KEMPLAND, Received, St. Louis, Mo., 20th June, 1857, of St. Louis county, one hundred and fifty St. Louis county bonds, of one thousand dollars each, on the conditions above mentioned. (Signed,) ARTHUR KEMPLAND, Received, St. Louis, July 3d, 1857, of St. Louis County Court, one hundred and fifty St. Louis county bonds, of one thousand dollars each, on the conditions above mentioned. (Signed,) ARTHUR KEMPLAND, A true copy of the original now in my office. January 24, 1863. S. W. EAGER, JR. Sec'y County Com'rs, St. Louis county. EXHIBIT F. Counsellor Holmes' opinion against the right of the Company to pay interest on the City and County Subscription. ISAAC H. STURGEON, Esq., COUNSELLOR'S OFFICE, St. Louis, Jan. 29th, 1863. President of the North Missouri Railroad Company : SIR: Yours of the 17th inst., asking my opinion upon the question of the liability of the North Missouri Railroad Company to pay interest to the city of St. Louis, and to the county of St. Louis, on their stock subscribed in said company, has been received and considered. I-CITY. By the 14th section of the Charter Act of the 3d of March, 1851, it is provided that "any incorporated city, town, or incorporated company, may subscribe to the stock of said Railroad Company, and appoint an agent to represent its interests, give its vote, and receive its dividends; and may take proper steps to guard and protect the interests of such city, town or corporation." By ordinance No. 3052, approved July 30th, 1853, the Mayor of the city of St. Louis was authorized to subscribe $500,000 to the stock of said company, and to issue bonds and deliver them to the company for the purpose of paying for the same; and the subscription was to be made upon condition that the company would receive the bonds at par in payment thereof. And a further condition was superadded (sec. 3,) that the company should pay to the city of St. Louis, interest at the rate of six per cent. per annum, from the time of delivery of the bonds until the company should pay dividends to that amount, or until the railroad should be completed to the northern boundary of the State; and if the company should fail to pay the interest, the Mayor was not to issue any more bonds until the interest due should be paid up. On the 8th of October, 1853, the Mayor subscribed $300,000 stock on the books of the company; and on the 18th of July 1854, the further sum of $200,000,"in compliance with ordinance 3052 of city of St. Louis," and the bonds have been delivered in full payment thereof. As I am informed, there is no record in the books of any action of the company, having any material bearing on this ordinance, or the subscription made under it. By this subscription the city became a stockholder in the company, with the same rights and liabilities as other stockholders, and she has continued to act as such. The subscription of the Mayor on the books refers to the ordinance, and the question arises, whether this condition for the payment of "interest" thereby became a part of the contract binding on the company. Upon principle and authority, I think that it is clear that it did not. It is not a condition precedent, determining whether the city would become a stockholder or not; it is in its nature subsequent and subordinate only. Redfield on Railways, 78. The city became absolutely a stockholder. So much was authorized both by the charter act and by the ordinance. The company had no power, under its charter and the laws, to accept such a condition; it would have been against the express provisions of the 10th section of the charter act of Jan. 7th, 1853, (whereof the city was bound to take notice,) which prohibits dividends beyond the net. profits actually earned, for this "interest" (as it is called in the ordinance) is not properly interest, but a dividend on stock to be paid by the company to one of its stockholders. The interest on the bonds is payable by the city, in New York, to the bondholders. Such a stipulation for "a dividend by way of interest" is utterly void, not only as against the charter, but as against public policy, as in derogation of the equal rights of other stockholders, and (as it might become) a fraud upon the creditors of the company. This view is sustained by the following cases: Troy & Boston R. Co. v. Tibbits, (18 Barb. 297); Pittsburg & S. R. Co. v. Biggar, (34 Penn. 455); Thigpen v. Miss. Cen. R. Co. (32 Miss. 348.) II-COUNTY. It is under the same act of March 3rd, 1851, (sec. 14,) that the county of St. Louis is authorized to subscribe to the stock of this company, and to "issue the bonds of such county to raise funds to pay the stock thus subscribed, and to take proper steps to protect the interests and credit of the county;" and by the later act of Dec. 13th, 1855, (Rev. Stat. p. 429,) sec. 34, it is provided that "any county court or city which has heretofore subscribed to the capital stock of any railroad in this State, shall be entitled to the privileges, and subject to the liabilities of other stockholders in such company, and the county court or city council shall have all the rights and powers to provide funds to pay such subscription, as are granted to county courts and cities by this act, and may levy a special tax to pay the interest on their bonds, or to provide a sinking fund to pay principal." pay the Under these laws, on the 14th of Nov., 1856, the St. Louis county court made an order for the subscription of $750,000 to the stock of this company, and instructed the presiding justice to place the subscription on the books, and directed that the bonds of the county should be issued to that amount, payable in New York, with interest semi-annually, at the rate of six per cent. per annum, in coupons attached, which were to be taken by the company at par in full payment of said stock. This order also contained a condition, that the company should pay into the county treasury the semi-annual interest, together with current rate of exchange in New York, thirty days before the coupons should fall due; and should execute an "irrevocable power of attorney," authorizing the justices of the county court, or either of them, or their successors, to enter the appearance of the North Missouri Railroad Company in any court of competent jurisdiction, and to confess judgment for the amount due, "without filing any petition or other statement in writing," such judgment to be subject to the lien of the State; and that before the subscription should be binding, the board of directors of the company should formally accept these "terms and conditions," and file a certificate thereof with the county court, reciting this order, to be executed by the President and Secretary under the seal of the corporation. On the 13th of April, 1857, the board of directors of the company took action upon the matter of this order, as follows: "April 13th, 1857. On motion, the President was instructed to accept the subscription from the county of St. Louis of $750,000." Subsequently, the President delivered to the county court a certificate under the corporate seal, dated the 29th day of April, 1857, containing a copy of the above resolution of the board of directors, and stating only, that he, as President, in obedience thereto, accepted the said subscription of $750,000 of stock by the county of St. Louis in said company. And on the 3rd of June, 1857, the President of the company, on receiving the first installment of bonds in payment of said subscription, signed a receipt for the amount, to which was added a recital that, "whereas, under the provisions of the statute in such case made and provided, and in pursuance to the order of the said court, said company covenants to pay the interests on said bonds, and to comply with the provisions of the act of General Assembly authorizing the issuance thereof, and the order of said court, the undersigned, as President of said company, hereby authorizes and empowers the presiding Judge of said court for the time being, or any person he may name, to appear in any court in said county, and confess judgment for any sum that may, at any time, appear just, and for which said company may be liable under any law of this State on any order of said court heretofore made." And this is followed, on the same paper, by four other receipts for a like amount of bonds, at different dates, amounting in all to the full sum subscribed, and expressed to be "on the conditions above mentioned." This acceptance of the subscription by the board of directors, and the certificate thereof under the seal of the company, which was delivered to the county court by the President, amount to nothing more than an acceptance on the part of the company of the subscription for $750,000 stock by the county of St. Louis; nothing is said therein about the "terms and conditions" of the order. It is an absolute subscription which the county court had power to make, and the company to accept. The bonds were delivered in full payment thereof, and the county became a stockholder in the company, and has continued to act as such. The condition consists of three parts: First, for the payment of "interest;" second, for an "irrevocable power of attorney" to confess judgment for the amount of it; and third, for a formal acceptance, reciting the order to be filed with the court, before the subscription should be binding. As to the payment of "interest" by way of dividends on stock subscribed, that must be held to be illegal and void, on the reasons and authorities above given. The provision for an "irrevocable power of attorney" to confess judgment, in the manner expressed, is utterly void. First, in that so far as it would authorize a confession of judgment without any petition or other statement in writing of the cause of action, or case, on which the judgment is to be given, it is against the express provisions of the statute concerning "practice in civil cases," and it could have had no such effect, if it had been given; and second, for that the only subject of it was the "interest" to be paid to the county, and as the provision concerning that is void, the power of attorney ceases to be irrevocable in law, because not coupled with an interest in any subsisting and valuable subject matter; and is in short, in the entire scope of it, wholly illegal and void, as against the charter acts and laws governing the transaction. Moreover, the President was not authorized by the board of directors, and had no authority under the charter acts, to give such an instrument for such a purpose; and it could have no binding effect on the company if it had been given. The power that was added by the President to his first receipt for bonds, did not purport to go further than to authorize a confession of judgment for any sum for which the company might be liable, under any law of this State or any order theretofore made by the county court. It leaves the question of liability to be determined according to law, and as by law there can be no liability for this "interest," the power given can have no effect. The recital in it, that the company under the statutes and in pursuance of the order, "covenants to pay the interest of said bonds,' is not of itself such a covenant; and in point of fact, no such covenant had been made by any action of the company in the premises. As to the third part of the condition, it is certainly not a condition precedent of such a nature that, without a compliance, the county would never become a stockholder and a member of the company. The laws authorized the court to make the subscription; the court ordered it to be made, and it was made, and the stock paid up in conformity to law, and the county thereby became a stockholder, absolutely. So much of the order as was lawful was valid and effective; the illegal conditions only were void. This principle is sustained by the case of the Pittsburg & S. R. Co. v. Biggar, (34 Penn. 455.) These conditions were repugnant to the fixed terms and essential nature of the contract of subscription, and they cannot be enforced against the contract itself. Thigpen v. Miss. Cen. R. Co., (32 Miss. 348.) The county court was bound to know that these "terms and conditions" were against law; they were never actually concurred in by authority of the company, and this provision of the order that a formal acceptance of them should be filed with the court, before the subscription should be binding, cannot be allowed to invalidate the subscription actually made, and completed by payment for the stock, according to law, whether they were complied with or not. I give it, therefore, as my opinion, that the company is not liable to pay this "interest," either to the city or to the county. Yours, respectfully, NATHANIEL HOLMES. EXHIBIT G. TABLE of Distances from the Towns on the projected lines of Railroads in Iowa, and Northern Missouri, to Chicago, Toledo and New York, and also to St. Louis. Rock Island to Chicago... ...... ...... ... Des Moines, via Oskaloosa to......... .............................. ......165 miles, 345 1,295 ....... ..... Crossing of Hannibal and St. Joseph Railroad, via North ...... .... Crossing of Hannibal and St. Joseph Railroad with North Missouri Railroad, via Hannibal and St. Joseph Railroad and Great Western Railroad, to....... St. Joseph, via Hannibal and St. Joseph Railroad, to. |