U.S. Supreme Court
Clark v. Barnard, 108 U.S. 436 (1883)
Clark v. Barnard
Decided May 7, 1883
108 U.S. 436
1. The B. H. & E. Railroad, a corporation created by the State of Connecticut, purchased the franchises and railroad of the H. P. & F. Railroad, a corporation created under the laws of Rhode Island and Connecticut. The Legislature of Rhode Island ratified the sale, and authorized the B. H. & E. Company to exercise the rights, privileges, and powers of the H. P. & F. Company. Held that the B. H. & E. Company thereby became the legal successor of the H. P. & F. Company in Rhode Island, and, in respect to its railroad in Rhode Island, a corporation of that state.
2. The State of Rhode Island authorized by an act of its legislature the B. H. & E. Company to extend within the limits of the state the road thus acquired. The act further contained the following proviso:
"This act shall not go into effect unless the said B. H. & E. Company shall, within ninety days from the rising of this General Assembly, deposit in the office of the General Treasurer their bond, with sureties satisfactory to the governor of this state in the sum of $100,000, that they will complete their said road before the first day of January, A.D. 1872."
Within the time named, the requisite bond was filed in the sum of $100,000 conditioned as follows:
"Now, therefore, if said B. H. & E. Company shall complete their said railroad before the first day of January, A. n. 1872, then the afore-written obligation shall be void; otherwise be and remain in full force and effect,"
and as the requisite security for the payment of the bond, a loan certificate of the City of Boston for $100,000 was deposited with the state treasurer. The B. H. & E. Company became bankrupt. chanroblesvirtualawlibrarychanroblesvirtualawlibrary
The assignees in bankruptcy filed a bill in equity to restrain the treasurer of the state from collecting the certificate. The treasurer demurred on the ground that the real party in interest was the state. In the course of the proceedings, the money was paid into court on an interlocutory decree. The state then came in and claimed it.
(1) That the voluntary appearance by the state disposed of the demurrer and conferred jurisdiction to adjudicate upon the rights of the state. The case distinguished from Georgia v. Jesup, 106 U. S. 458.
(2) That the sum named in the bond in question was not a penalty to secure the performance of a condition which could be discharged on payment of such damages as might be proved to have arisen from nonperformance, but that it was in the nature of a statutory penalty for the nonperformance of a statutory duty, and that it was not necessary for the state to show any actual damage or injury from the breach in order to be entitled to recover when the breach was proved.
The law and cases on this subject considered and reviewed.
Bill in equity by the assignees in bankruptcy of the Boston, Hartford & Erie Railroad to restrain the Treasurer of the State of Rhode Island from receiving $100,000 in the possession of the court, the proceeds of a loan certificate of the City of Boston, which was lodged with the state by the bankrupt as security for the performance of its bond for that amount given to the state in pursuance of law to secure the construction of an extension of its road in Rhode Island, the extension never having been made. The facts appear in detail in the opinion of the Court. The main questions discussed in argument were the power of the corporation to make the agreement with the state; the rights of the parties in the absence of the state; the effect of an appearance by the state for the purpose of claiming the fund after it had been paid into court, and the measure of damages on the breach of the condition of the bond. chanroblesvirtualawlibrarychanroblesvirtualawlibrary