precedent to building railways. It is questionable whether it would apply to the purchase under section 15 of an existing road so long as no new road was to be built, and as no change could be made of that kind without new permission and a written acceptance of the new route, we do not feel sure that any such acceptance became important. But as there is testimony strongly tending to show a written acceptance, and the council has always recognized complainant as having full right, we do think it important to further discuss that point.

We may assume, then, that complainant possesses whatever rights could be claimed under either of the ordinances of 1864 or 1869. But as defendants claim these rights have been more or less modified by subsequent failures to accept new and changed lines of road, these changes require attention. By section 14 of the statute of 1867 the authorities of any city are forbidden to deprive any company of privileges conferred by ordinance and accepted. And this immunity is as applicable to new companies acting where old ones have declined to act, as to the original companies.

On the twenty-seventh of May, 1878, permission was given to the West Side Street Ry. Co. of Grand Rapids to build a road along Scribner street, and such other streets, etc., as should be thereafter designated by the council. This was done in pursuance of a failure of complainant to build on the requirement of the council, made February 1, 1875. The route required, which was on such failure allotted to the defendant and to another company, covers several streets or parts of streets which need not be now enumerated. In August, 1873, complainant had expressly waived the right to build from Monroe street at its intersection with Division, to the fair grounds on the southern limits of the city, and this route was also given to a different company.

The case also shows that no double track was built, and that complainant objected on demand to build one for reasons which we need not dwell on. It also shows orders to build on Ionia street, and on certain parts of Pearl and Division streets, which have not been complied with so far as appears.

On the third of March, 1879, the council required complainant to build a railway along certain streets named from the intersection of West Bridge and Scribner streets to the Detroit and Milwaukee Railroad crossing on Oakes street. This complainant failed to do, and on the twenty-third of June the route was allotted to defendant. In September, 1880, the ordinance allowing defendant to build the route was amended in certain particulars whereby complainant claims certain portions of streets were covered which complainants had not been asked to build on, and a part of Monroe street was occupied, although complainant has always had a track on that street. The bill was filed in May, 1881, to restrain defendants from building on the lines not included in

the demand on complainant, and on Monroe street, and on a final hearing was dismissed.

The case is brought before us in a very unsatisfactory way, without maps or other data to enable us to understand the full bearing of some of the questions of fact. But enough appears to satisfy us that the case in no way depends on any of the constitutional questions upon which counsel have spent much of their arguments, and we do not propose to discuss them. It is evident that the city of Grand Rapids has not disputed the priority of complainant as claimed under the ordinances of 1864 and 1869, but has acted on the idea that such priority has to the extent of the line involved in this controversy been forfeited.

The case presents two and only two real questions-First, assuming such priority as once existing, has it been lost over this line? and, second, if any part of this line is not thus forfeited, does the bill make out any such case, as, aided by the proofs, will justify the restraining interference of a court of equity? After the defendant and other companies, if there are such, became entitled to build their railways over streets relinquished by complainant, they became entitled to the same rights against injurious interference, and to the same favorable consideration within those bounds, as complainant in its own larger sphere. We do not think that it was illegal, when complainant should refuse to build a line from its own bounds to reach a certain part of the city where the accommodation was needed, to make such changes in the proposed general route as would make it better adapted to form a junction with the other roads whose owners are willing to build it. Any variations which had no other substantial purpose would be entirely proper. Unless so far colorable or oppressive as to indicate substantial wrong, we cannot assume the council departed from their proper discretion. It was the duty of complainant to show such a variation as would work a real and not merely a theoretical griev

ance.

The bill is not so drawn as to indicate any actual grievance except on Monroe street, and inasmuch as complainant could never have obtained any local rights in the portions of other streets named, without further authority from the council, the inclusion of these in defendant's line could do no harm unless actually or probably creating some rivalry or diminution of business. There is no allegation and there is no proof tending to show that it makes any tangible difference to complainant whether defendant should or should not have been allowed to use these parts of the line, in order to make a connection between the proposed terminal

stations.

The only testimony bearing on damages, which is of any importance, is that of Mr. Thayer, who is evidently better informed than the other witnesses, and may be supposed to know the full

extent of the mischief. He testifies in answer to a sweeping question that the construction of defendant's line as laid out in the ordinance would damage the complainant permanently more than $100. But he was not asked whether its construction on the line proposed would be any worse than if confined to the line rejected by complainant. He also, after testifying that complainant's line is in the centre of Monroe street, stated that it would be injurious to complainant to have defendant's line substantially in the centre of the same street. This is obvious enough, but defendants do not, so far as the record shows, propose to put their line in that position.

The only other element of damage shown is that laying defendant's line on either side would interfere with the future laying by complainant of a double track. But complainant lost this right after the expiration of five years from the building of the first track, and could not at any rate build it without the consent of the council. That body certainly cannot properly so multiply tracks as to interfere with the rights of the general public in the street. But as complainant has no right to insist on having a double track, this grievance is not a legal grievance.

It was insisted, however, that complainant's right in Monroe street is exclusive. However this may be as to the profits of that as a distinct line, we do not think the use of a part of the street as a mere connecting link in a road not deriving its business from transporting passengers on that street, is necessarily a violation of such a right if it exists. It is plain from the testimony that no damage is anticipated on any ground of local rivalry in Monroe street, and it can form no basis for equitable interference. Even if it could be regarded as a possible infringement, it is damnum absque injuria, so far as we can now judge.

Upon a review of the whole case we do not think that upon complainant's own theory of rights under the various ordinances in question, there has been any such invasion of right, or any such damage, as would justify a court in granting relief.

The bill was properly dismissed, and the decree must be affirmed with costs.

Cooley and Marston, JJ., concurred.

Graves, C. J., did not sit in this case.

THE PEORIA AND SPRINGFIELD R. R. Co.,

v.

S. H. THOMPSON.

(From Advance Sheets, 103 Illinois Reports, 187. March 28, 1882-Rehearing denied June Term, 1882.)

The object of sec. 13, art. 11, of the present constitution, in providing that "no railroad corporation shall issue any stock or bonds, except for money, labor or property actually received and applied to the purposes for which such corporation was created," and that "all stocks, dividends, and other fictitious increase of the capital stock or indebtedness of such corporation shall be void," was to prevent reckless and unscrupulous speculators, under the guise or pretence of building a railroad or of accomplishing some other legitimate corporate purpose, from fraudulently issuing and putting upon the market bonds or stocks that do not and are not intended to represent money or property of any kind, either in possession or in expectancy, the stock or bonds in such case being entirely fictitious.

But it was not intended by that provision to interfere with the usual and customary methods of raising funds by railroad companies, by the issue of its stocks or bonds, for the purpose of building their roads, or of accomplishing other legitimate corporate purposes. Under that provision of the constitution, railroad companies have no right to lend, give away, or sell on credit, their bonds or stock, nor have they the right to dispose of either, except for a present consideration, and for a corporate purpose. But if, upon a sale of its stocks or bonds by a railroad company for a present consideration, it should subsequently divert the proceeds to other than corporate purposes, the purchaser of such stock or bonds, who has acted in good faith in the matter, or his assignee, cannot be affected by the subsequent misappropriation by the company.

In short, where one. for a present consideration, in good faith purchases bonds or stocks in the regular course of business from a railroad company, and such consideration is accepted by the proper officer of the company, and nothing appears to show that it is to be used or applied to other than legitimate corporate purposes, such bonds or stocks, when thus issued, will be regarded as having been issued for money, labor or property "actually received and applied," within the meaning of the constitutional provision.

It was held in Olds v. Cummings, 31 Ill. 188, that the holder of commercial paper, seeking to enforce in equity a mortgage security therefor, was subject to any defence which would have been good against the mortgage in the hands of the mortgagee himself, although such holder may have purchased the paper in good faith, and before its maturity.

But this doctrine has no application to deeds of trust given to secure railroad coupon bonds intended to be thrown upon the market and circulated as commercial paper, and to be used as securities for permanent investments. So where such railroad bonds, secured by deed of trust for the benefit of the holders thereof, had been issued, and delivered to contractors engaged in the construction of the road, and by them disposed of in the market to innocent purchasers, on bill by the trustee to foreclose the deed of trust for the benefit of the bondholders, it was held, the unsettled equities and matters of account between the company and the contractors could not be interposed in defence againt the bill.

A part of the reasoning of the court in Chicago, Danville and Vincennes

Ry. Co. v. Loewenthal, 93 Ill. 433, is not to be reconciled with the rule here announced. But what appears in the opinion relating to the question here mentioned was said in argument, and after the case had been decided upon another distinct ground and without any argument of the question except upon one side. Under these circumstances, it is considered that what was there said ought not to be and is not regarded as conclusive of the question, and the court is satisfied the view now presented is the correct one.

While it is the general principle that negotiable securities issued by a corporation without authority of law, or in express violation of a statue, are inoperative and void even in the hands of innocent holders, yet there is another rule of law equally well settled-that although a contract entered into by the agents or officers of a private corporation is ultra vires, and therefore not binding on the company so long as it remains executory, yet if the company in such case knowingly permits the other contracting party, without objection, to go on and perform the contract on his part, and thereby obtains and appropriates to its own use money, property or labor in furtherance of some legitimate corporate purpose, it will be estopped from denying its liability on such contract.

Where a railroad, its appurtenances and franchises, are mortgaged as a whole, there is no power or authority to sell them separately, and such property, taken as a whole, not being, strictly speaking, either real or personal estate, when sold on a decree of foreclosure is properly sold without any right of redemption. The rule is founded partly upon considerations of public policy.

APPEAL from the Appellate Court for the Second District; heard in that court on appeal from the Circuit Court of Peoria county; the Hon. D. McCulloch, judge, presiding.

The Peoria and Springfield R. R. Co., a corporation duly organized under the laws of this State, on the 31st day of October, 1871, entered into a written contract with B. S. Prettyman, D. T. Thompson, Thos. Edes, A. J. Ware, B. E. Smith, C. R. Griggs and W. Dennison, by which the latter covenanted and agreed to furnish the materials, build and complete in a good, workmanlike manner, a single-track railway, with necessary sidings and passing places, from the city of Peoria, in Peoria county, via the city of Pekin, in Tazewell county, to the city of Springfield, in Sangamon county, this State, in consideration of which, among other things, the railroad company agreed to pay the above-named contractors the sum of $20,000 per mile in first mortgage seven per cent bonds of the company, which were to be made the first "and exclusive lien on said railroad, its franchises, property and equipments of every kind." Said bonds, or so many of them as might be required, were to be delivered by the company to the contractors, or their agents, at any time, on demand, to be used by them "to pay for iron, materials or labor for the construction of said road, or to be sold for money," upon satisfactory evidence being produced that the materials were purchased for the use of the road, or the work and labor were done according to the terms of the contract. The company also agreed to pay the contractors in the paid-up capital stock of the company the additional sum of $12,000 per mile for said