A railroad corporation whose railroad extends across the
Wisconsin from Lake Michigan to the Mississippi River and which is
authorized by its charter to make
"such contracts with any other person or corporation whatsoever
as the management of its railroad and the convenience and interest
of the corporation and the conduct of its affairs may in the
judgment of its directors require"
and by general laws to make such contracts with any railroad
company whose road terminates on the eastern shore of Lake
Michigan, "as will enable them to run their roads in connection
with each other in such manner as they shall deem most beneficial
to their interest," and
"to build, construct, and run, as part of its corporate
property, such number of steamboats or vessels as they may deem
necessary to facilitate the business operations of such company or
companies,"
and also
"to accept from any other state or territory of the United
States and use any powers or privileges applicable to the carrying
of persons and property by railway or steamboat in said state or
territory"
has the power, for the purpose of carrying passengers and
freight in connection with its own railroad and business, to enter
into an agreement with the proprietors of steamboats running, by
way of the Great Lakes, between its eastern terminus and Buffalo in
the New York, by which it guarantees that the gross earnings of
each boat for two years shall amount to a certain sum.
The case is stated in the opinion of the Court.
MR. JUSTICE GRAY delivered the opinion of the Court.
This is an action brought by the Union Steamboat Company, a
corporation established by the laws of the State of New York at
Buffalo, in that state, against the Green Bay and Minnesota
Railroad Company, a corporation established by the laws of the
State of Wisconsin and having its principal place of business in
this state.
The declaration alleges that the defendant was chartered in
1866, and was organized to construct and operate a railroad across
the State of Wisconsin east and west from the City of Green Bay to
the Mississippi River, and its road was built and actually opened
for business in December, 1873; that
"it became important for said defendant to make arrangements
in
Page 107 U. S. 99
regard to the business of carrying passengers and freight
carried eastwardly over its road, and destined for points east of
said City of Green Bay and out of the state, for their
transportation east, as well as to secure business of carrying
passengers and freight arriving at or being moved west by way of
the defendant's route and railway,"
and on the 9th of September, 1873, the plaintiff and defendant
entered into a contract under seal whereby, in consideration that
the plaintiff would, during the season of navigation in 1876 and
1877, run between Buffalo and Green Bay by way of the great lakes,
and touching at intermediate ports, two steam propellers then
belonging to the plaintiff for the purpose of carrying passengers
and freight to and from Green Bay in connection with the
defendant's railway and business and docks at that place, the
defendant duly undertook and guaranteed to the plaintiff that the
gross earnings of each propeller in such business should be for
each of the two years the sum of $45,000 at least, and that if it
should be less, the defendant would pay the difference to the
plaintiff on or before the first of January next succeeding the
close of navigation in each year.
The plaintiff further alleges that it duly put the propellers on
the route and kept them running thereon in connection with the
defendant's business and in accordance with the contract during the
seasons of 1876 and 1877, and in all respects duly performed all
the conditions of the contract on its part; that the gross earnings
of each propeller for each season fell short of the amount
guaranteed by a certain sum named, which thereupon became due and
payable to the plaintiff from the defendant, according to the
contract on the first of January following, and that the two
corporations were duly authorized and empowered by their respective
charters and the laws of Wisconsin to make the contract.
The answer denies that the defendant was so empowered, and avers
that it has no information or knowledge sufficient to form a belief
as to whether the plaintiff was so empowered; admits the making of
the contract stated in the declaration, and sets forth other
provisions of that contract with which it alleges that the
plaintiff had not complied. The plaintiff filed a replication
denying the allegations of the answer. Upon a
Page 107 U. S. 100
trial in June, 1878, a verdict was returned for the plaintiff
for $78,876.13 and judgment rendered thereon, and the defendant
sued out this writ of error.
No bill of exceptions having been seasonably tendered, the only
question presented by the record is whether, under the general laws
of the State of Wisconsin and the defendant's charter, which by
those laws, as existing at the times of the granting of the charter
and of the trial, Revised Statutes of 1858, c. 5, sec. 2, was
declared to be a public act, the contract sued on, as set forth in
the declaration and admitted in the answer, is
ultra vires
of the defendant corporation.
The general doctrine upon this subject is now well settled. The
charter of a corporation, read in connection with the general laws
applicable to it, is the measure of its powers, and a contract
manifestly beyond those powers will not sustain an action against
the corporation. But whatever, under the charter and other general
laws, reasonably construed, may fairly be regarded as incidental to
the objects for which the corporation is created is not to be taken
as prohibited.
Thomas v. Railroad Co., 101 U. S.
71;
Attorney General v. Great Eastern Railway
Co., 5 App.Cas. 473;
Davis v. Old Colony Railroad
Co., 131 Mass. 258.
The railroad of this corporation extends across the State of
Wisconsin from its eastern boundary on Lake Michigan to the
Mississippi River, and its charter empowers the directors to make
such agreements with any person or corporation whatsoever
"as the construction of their railroad, or its management, and
the convenience and interest of the company, and the conduct of its
affairs, may in their judgment require."
Private Laws of Wisconsin 1866, c. 540, sec. 7. It was within
the powers of the corporation, as incidental to its own proper
business, to agree to transport as a carrier, over connecting
railroad and steamboat lines, passengers and freight entrusted to
it for carriage over its own line.
Railway Company v.
McCarthy, 96 U. S. 258. The
general laws of Wisconsin in force at the time of the grant of this
charter authorize any railroad company in this state to make such
contracts with any railroad company whose road terminates on the
eastern shore of Lake Michigan, within the State of Michigan,
"as will enable said companies
Page 107 U. S. 101
to run their roads in connection with each other in such manner
as they shall deem most beneficial to their interest,"
and
"to build, construct, and run, as a part of their corporate
property, such number of steamboats or vessels as they may deem
necessary to facilitate the business operations of such company or
companies."
General Laws of Wisconsin 1853, c. 76. And by the general
railroad act of 1872,
"Any railroad company heretofore or hereafter incorporated by or
under the laws of this state may exercise all its rights,
franchises, and privileges in any other state or territory of the
United States, under and subject to the laws of the state or
territory where it may exercise or attempt to exercise the same,
and may accept from any other state or territory and use any
additional or other powers or privileges applicable to the carrying
of persons and property by railway or steamboat in said state or
territory, or otherwise, applicable to the doings of said company
in said state or territory."
General Laws of Wisconsin 1872, c. 109, sec. 51.
These statutes show that the Legislature of Wisconsin,
recognizing the fact that from the geographical situation of the
state, the railroads which traverse it from east to west form part
of a line of transportation extending across the continent,
intended to confer upon the corporations owning such railroads very
large powers of contracting with other corporations owning
railroads or steamboats whose course includes connecting parts of
the same great line of transportation.
To build and run, as part of the defendant's corporate property,
such number of steamboats on Lake Michigan as it might deem
necessary to facilitate its business would be within the power
expressly conferred by the statute of 1853, and we are of opinion
that, taking into consideration all the statutes above quoted, it
was equally within its corporate powers to hire, either by the trip
or by the season, steamboats belonging to others, running from its
eastern terminus along the Great Lakes eastward, or to employ such
steamboats to carry passengers and freight in connection with its
own railroad and business under an agreement by which it guaranteed
to the proprietors of the boats that their gross earnings for the
season should not fall below a certain sum.
Page 107 U. S. 102
There is therefore nothing in the record before us to show that
the agreement sued on was beyond the corporate powers of this
railroad company.
Judgment affirmed.