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demurrer to the fourth plea, the last plea of set-off, should have been overruled as to the plea, because the plea was good, and should have extended back to the first count in the declaration and annulled it, as it was very faulty in setting forth no cause of action. And, though the court had overruled a demurrer to this count, and the defendant had pleaded to it, he had a right to have it considered and treated as bad, when the plaintiff demurred to his plea.
The proceeds of the services of Fowler & Stillwell, belonged equally to Stillwell, as executor of Fowler, and to Stillwell individually, that is in equity, though, at law, the death of Fowler cast the right of action for them upon Stillwell. If this suit had been brought before Fowler died, and against both Fowler and Stillwell, Stillwell could have set-off against the suit any several demand which he had against Burke. This is the principle of our statute of set-off, as expounded by RINGO, C. J., in a dissenting opinion in Trammell vs. Howell, 4 Ark. 610, and which was adopted as the correct construction in Leach vs. Lambeth, 14 .Ark. 668, overruling former decisions of this court, which held that a demand of one plaintiff against several defendants could not be set-off by a demand of one of the defendants against the plaintiff. What Stillwell could do in the supposed case, he did by his plea in this case, and he had a right so to do. If Burke's debt to Fowler & Stillwell, by the offer of Stillwell, the surviving partner, could go against Fowler's debt to Burke, his administration cannot complain, and the beneficent object of the statute to settle in one action several causes of action, is promoted. The finding of the court in allowing the evidence in support of the whole account of set-off, was right in itself, and was not a ground for a new trial, for although there was no plea of set-off on which the evidence could rest, there would have been but for the ill-advised demurrer of the plaintiff to the fourth plea. A party must not drive a court from a legal conclusion, though it was attained by a departure from the law, and by a return thereto in a deviation from ille
Burke's ad. vs. Stillwell ex'r.
gal premises. The whole account of set-off was properly allowed, it was all well proved.
The Circuit Court found against the plaintiff, as to her whole demand, though it consisted of one item, and was substantiated by the memorandum of Fowler, before copied. This result must be attributed to the following writing introduced in evidence by the defendant, over the signature of Patrick G. Burke:
"STATE OF ARKANSAS, COUNTY OF CHICOT.
"Know all men by these presents, that I, Patrick G. Burke, have this day, nominated, constituted and appointed Henry Smith, of the county and State aforesaid, my true and lawful attorney, in fact, and in my name, for his sole use, to collect and receipt for a certain claim in my favor, against Lycurgus L. Johnson, Nathan Ross and William W. Collins, which is in suit in the Circuit Court of said county, or to compromise and settle the same in any manner he may think proper, and when the same is settled, to pay me one-half of the nett proceeds of said claim, and to employ any attorney or attorneys to prosecute the same to judgment, hereby ratifying and confirming all my said attorney's acts in the premises, as though I were personally present. Witness my hand and seal this 26th day of December, A. D., 1854.
P. G. BURKE. [SEAL.]"
On consideration of this instrument, the court regarded Henry Smith as entitled to the half of the plaintiff's demand that was not resisted by the set-off. Fowler did not recognize Smith's claim in making the memorandum, nor did Stillwell in framing the account of set-off, each paper assuming Burke to be the creditor, and the debtor on account of his judgment against Johnson and Ross. Nor unless from the presumption attending the production of the instrument, is there any evidence that Fowler or Stillwell had any notice of its execution. There is no proof that Smith ever accepted it, that he or Burke ever acted under it, and the presumption from Fowler's acts are strong to the contrary. As the matter was before the Circuit Court, we are sure
M., O. & R. R. R. R. Co. vs. Mayor etc. of Camden. [JANUARY
it was not sufficient evidence. We think it was no evidence, even with Reed's corroborating testimony, to overcome or to resist the evidence of the plaintiff to the residue of her demand, after deduction of the set-off and interest. Upon another trial, these defects may be obviated, but we cannot allow the judgment to stand on the foundation of this writing, as it is brought to our notice.
The principle here settled, as the difference between the plaintiff's demand and the set-off, will not be the subject of enquiry again. The fourth plea of Stillwell must be re-instated, and the first count of the declaration quashed on the plaintiff's demurrer as mentioned.
Fowler received the drafts referred to in his memorandum as money, he promised to account for them on settlement as money, he must be presumed to have converted them into money before this suit was brought. In this, the case is unlike Peay vs. Ringo, 22 Ark. 70, as in that, Ringo & Trapnall did not receive Notrebe's note as money. We think the action for money had and received is sustainable on the evidence of the memorandum.
M., O. & R. R. R. R. Co. vs. MAYOR, ETC. OF CAMDEN.
The subscription of a municipal corporation to the capital stock of a railroad company, unless authorized by legislative authority, is not valid and binding on the corporation.
TERM, 1861.] M., O. & R. R. R. R. Co. vs. Mayor, etc. of Camden.
Appeal from Ouachita Circuit Court.
Hon. LEN B. GREEN, Circuit Judge.
GALLAGHER, and KNIGHT, for the appellant.
On the main question-the question of authority in the city by virtue of her general powers under her charter as a municipal corporation—it is stated, in Pierce on Am. R. R. Law, p. 108, that by virtue of their ordinary powers, and without special legislative authority, the competency of municipal corporations to contribute to such enterprises as those in which the plaintiffs were engaged, cannot be sustained; but he adds, that this question has not as yet been the subject of judicial examination; and he further adds, in note 3, but in Talbot vs. Dent, 9 B. Mon. 537, it is said that a city might contribute its surplus funds—such subscriptions being within the local purposes of a municipal corporation, as tending to promote its prosperity. But that question is not legitimately raised in this case: the declaration sets forth a good cause of action on demurrer; and the defence relied upon ought to be interposed by plea.
FARRELLY & FINLEY, for appellees.
A corporation does not possess the incidental privilege or power to subscribe for stock in another corporation, and such subscription is illegal and void, unless authorized by the charter, or other special legislative enactment. See Dartmouth College vs. Woodard, 4 Wheat. 626; Head & Armory vs. Providence Insurance Co., 1 Curtis; 2 Cranch, 127; 15 John. Rep., 358.
Mr. Justice FAIRCHILD delivered the opinion of the court. The defendants, the mayor and aldermen of the city of Camden, are charged in the declaration, preferred by the Mississippi, Ouachita and Red River Railroad Company, with having subscribed two hundred shares, of one hundred dollars each, to the capital stock of the company, by virtue of which they became liable to pay calls or installments on their subscription; that the
M. O. & R. R. R. R. Co., vs. Mayor, etc., of Camden. [JANUARY
company, pursuant to their charter, and to ordinances and conditions of the subscription, have made various calls for payment upon stock subscriptions; that the installments and interest due from the defendants on the calls made upon their subscription amounted, on the first of February, 1858, to eighteen thousand, four hundred and twenty-seven dollars, which the defendants had failed to pay. This suit, an action of assumpsit, is brought to enforce the payment of this sun. The case is brought here by the railroad company, to obtain a reversal of the judgment. of the Circuit Court that sustained the demurrer by which the declaration was met, in which demurrer various defects of pleading are urged; but we shall confine our opinion to two of the specified causes of demurrer, one alleging that the subscription of stock was unauthorized by the charter of Camden, and the other, that the subscription is illegal and void. And passing by the form of the first objection, which seems rather to interpose a fact in bar of the suit, than to assign the want of alleging the fact as a fault in the declaration, we shall consider the two specifications as raising the proposition, that the stock subscription of Camden to the Mississippi, Ouachita and Red River Railroad Company is illegal, because the municipal corporation had no power to make such subscription.
And this is a conclusion that results from the character of a corporation.
A corporation "having been created for a specific purpose, not only can make no contract forbidden by its charter, which is, as it were, the law of its nature, but in general can make no contract which is not necessary, either directly or indirectly, to enable it to answer that purpose." Angell & Ames on Corporations, sec. 256. "A corporation must act within the limits of its delegated authority, and cannot go beyond it." Mayor of Baltimore vs. Hughes, 1 Gill & John. 495. "In the State of Tennessee, a corporation is the creature of the legislative department of the government; it exists solely and alone by virtue of its act of incorporation, and it can exercise no powers but such as are expressly granted to it, and such as are the result