Our first point of inquiry will be as to the validity of the deeds of trust, which the plaintiff seeks to foreclose, because, if no title passed by such deeds it would be altogether futile to make further inquiry.
1. Deed. We discover no objection either to the form, of these deeds or their respective certificates of acknowledgment, since it clearly appeal's that the Cairo & Pulton Railroad Company is the grantor, and the corporate seal is duly affixed by the president of the company. Deeds far less formal than these have been regarded as sufficient by this and other courts. McClure v. Herring, ante, p. 18, and cases cited.
2. A certificate of acknowledgement. As to the certificates of acknowledgment, although they do not contain the word “acknowledge,” yet they do contain words of equivalent import, and this is sufficient, the case before us is consequently totally unlike that of Cabell v. Grubbs, 48 Mo. 353, and the ruling in that case of course inapplicable.
3. Corporation : defective execution of power validated by acquiescence. It is also claimed that the first deed of trust is inoperative, because the resolution of September 22nd, 1857, only authorizes the conveyance of 400,000 acres ** of land, while the deed itself purports to 7 x *- convey 405,000. The authorities cited certainly seem to establish that in the execution of powers where the boundaries between the excess and the rightful execution are not distinguishable, there the whole will be' void. Story on Agency, § 166; and cases cited. Here it would not be possible to eliminate the excess, to determine where the rightful exercise of the power conferred ceased, nor where the wrongful exercise of power not conferred
*325But notwithstanding this defect, which, under certain circumstances, must be regarded as a fatal one, we think such defect as well as the others alleged to exist as to both deeds, cured, because of the acquiescence of the directors and stockholders of the Cairo & Fulton Railroad Company in the execution of the deeds for years after they were put to record. And besides, that company gave recognition to those deeds in an almost infinite variety of ways, as the record abundantly discloses. There is no lack of authority to show that such acts of acquiescence and recognition bind the company, its officers and its stockholders, as thoroughly as though the instruments in question were executed -with the most rigid observance of all the technical formalities known to the law. Hoyt v. Thompson, 19 N. Y. 207; Peabody v. Flint, 6 Allen 52; Woodbridge v. Proprietors, 6 Vt. 204; Enders v. Public Works, 1 Gratt. 364; Walworth v. Farmers, 16 Wis. 629; Gordon v. Preston, 1 Watts 385.
In the ease last cited, Gibson, C. J., in delivering the opinion of the court, said; “It is equally clear that the mortgage did not originally bind the corporation. It was executed not on a charter day, or a day appointed by a bylaw, but at a special meeting convened without notice, written or verbal, to the directors who did not attend. When a day has not been fixed by other competent authority, this notice is indispensable to a legal convention for the transaction of even ordinary business. * * But can the act be impugned now? A corporation can contract but by its agents, general or special; and in pursuance of powers delegated specially by its grant to particular persons, or generally, by its charter,.to the officers intrusted with its affairs. Hence, the members of this board stood in relation to it as servants whose acts may be disaffirmed for defect of authority, but by their master. But the maxim which makes ratification equivalent to a precedent authority, is as much predicable of ratification by a corporation, as it is of ratification by any other principal, and it is equally to be presumed from the absence *326of dissent. Now the validity of this mortgage is unquestioned by the corporation even at this day, though its existence has all along been known to the corporate officers,, whose duty it was to disavow it had there been an intent to contest it. The corporation then being satisfied with it,, who has the right to object V” These remarks are directly applicable to the case at bar, and leave no room to question the validity of the deeds of trust, nor that those conveyances passed to the trustees therein named whatever title Was then possessed by the Cairo & Fulton Railroad Company.
4. Misrecital of statury authority. There is no question that so far as the Congress lands are concerned, i. e., those granted by the United States to the State of Missouri by the act of February 9th, 1855, the Cairo & Fulton'Railroad Company had a title thereto when the trust deeds were executed. Indeed, the answer of Allen admits as much. So that the inquiry is narrowed down to the point whether the title of .the swamp or overflowed lands was in that company at the time those.deeds were executed, the respective dates of their execution being April 30th, 1855,. and October 6th, 1858. It is claimed on the part of the defendant, Allen, that inasmuch as the patents executed by 'the State of Missouri to the Cairo & Fulton Railroad Company recite that the county courts of the counties of Scotty Dunklin, Butler and Stoddard had under the act of December 7th, 1855, transferred the swamp lauds mentioned -in such patents to that company, and inasmuch as the orders of transfer of the dates specified in the patents do not set forth that in accordance with the provisions of that act a “majority of the voters” of each county had petitioned the county courts of their respective counties to make such transfer; that the non-compliance with this statutory condition precedent, prevented any title from passing by - such patents There would appear to be much force in this claim that the county courts, acting under a special statutory authority, would have to spread upon their records *327evidence of having complied with such authority, in order to give their act of transfer any legal force or validity. . A majority of the court are, however, of opinion that .in consequence of the act of December 10th, 1855, in relation to the completion of certain railroads in this State, not containing any .such restriction as that above mentioned, but permitting any county court of any county in this State possessed of swamp lands,.-to “subscribe the same as stock to any railroad,” &c., therefore the orders of transfer wore as fully valid as if the patents had referred to the act of December 10th, 1855, instead of to the act of the prior date.
5. Title to Cairo a Fulton Railroad lands:fore-closure of State’s lien. Having ascertained that the lands specified in the deeds of trust passed by those conveyances, we are next to consider what lands passed to the defendant Allen, by reason or the sale which occurred 7 J . October 1st, 1866, under and by virtue of what is commonly designated as the “ sell-out” act of February 19th, 1866, amended by the supplementary act of March 19th of the same year. So far as respects the “ Congress lands,” described in. the deeds of trust, it has been held that they passed in consequence of the sale which occurred October 1st, 1866, and which was but the foreclosure of the first lien and statutory mortgage held by the State over all the property of the company. Whitehead v. Vineyard, 50 Mo. 30; Wilson v. Boyce, 2 Otto 320.
But by the express terms of section 8 of the act first referred to, it is provided that: “Nothing in this act shall be so construed as to convey or to authorize the commissioners to convey to the purchasers of the Cairo & Fulton Railroad any of the lands subscribed by the counties to the stock of said road.” This express reservation of lands of this description would entirely preclude them from passing by the sale or by the conveyance made by the governors his acts and his conveyance being in entire subjection to the familiar rule which confines a special-agent'within the precise limits of his delegated authority. No hold then, *328that the land donated by the counties to the Cairo & Fulton Railroad Company, or subscribed as stock to said road, did not pass, nor were they intended to pass by the conveyances of either the governor or the commissioners; thus leaving these lands fully subject to the lien of the deeds of trust, from which lien the “Congress lands” were exempted by reason of the sale of October 1st, 1866. The title of Allen to the “Congress lands” must, therefore, be regarded as free from flaw.
6. Corporation : notice of unauthorized act of officers: effect of acquiescence. "We pass now to the consideration of the bonds held by plaintiff, and as to the nature of his rights' respecting them. And first, as to the 125 bonds purchased by him of Schuschardt & Gebhardt; much has been said by counsel respecting the negotiability of these bonds. We do not regard the negotiability or non-negotiability of these bonds as exercising any controlling influence in the case. If Brayman had the authority to pledge the bonds, that is an end of the matter. If, on the other hand, he possessed no such authority, then unless his act was assented to in some way, it has no validity. But we think such assent, either directly or indirectly, has been manifested. These bonds were pledged by Bray mail April 20th, 1860, to Schuschardt & Gebhardt, to secure a debt of $12,000. In the report made January 11th, 1861, to the Board of Public Works, by II. II. Bedford, one of the directors of the Cairo & Fulton Railroad Company, a statement is made that 330 of the bonds of the company had been hypothecated to secure a number of debts which are specified, among them that of “ Schuschardt & Gebhardt, New York, $12,000.” Accompanying that report is the agreement dated January 8th, 1861, therein referred to, entered into between Brayman, the retiring president, and Kitchen, the vice-president, and II. II. Benford, director of the company, whereby Brayman is to be “ saved harmless from all his indorsements or personal liabilities on account of said company.” In the conclusion of that agreement are mentioned the liabilities *329specified in the report, including that to “ Schuschardt & Gebhardt, New York, with interest, $2,000.” The company were thus apprised, at least as early as the date of the agreement, which we may fairly infer was soon thereafter, deposited among its official papers, that the debt to Schushardt & Gebhardt, of New York, existed ; that Brayman had, “ on account of the company,” created the debt and had pledged to the firm mentioned the bonds of the company to secure the payment of such indebtedness. Matters stood in this condition until May 15th, 1867, when Schuschardt & Gebhardt, under the power conferred by the written instrument signed by Brayman, president of the Cairo & Fulton Railroad Company, which accompanied the delivery of the note and bonds by Brayman, sold the bonds at public auction and bought them in for themselves. If those facts are indicative of acquiescence in and recognition of the acts of Brayman, then those acts must be 'deemed as recognized and ratified in their fullest extent by the Cairo & Fulton Railroad Company. If so, then the authorities heretofore cited in respect to acquiescence in the deeds of thus are to be held equally applicable in the present instance. Here the corporation was directly notified through its officers and servants of Brayman’s act, and opportunity afforded to either reject or ratify that act. In the absence of any expressed dissent, ratification must be presumed, and notice to and ratification by the corporation cannot be deemed as anything else than notice to and ratification by the component elements of the corporation, i. e., the stockholders; any other rule than this would possess the element of absolute impracticability. This being true, we are to treat this case as if Brayman had a precedent authority for making pledge of the bonds.
7. Pledge: notice of sale: waiver, Proceeding upon this as the basis of investigation, the inquiry arises, was notice to the pledger under the circumstances presented by the record, a condition precedent to a valid sale of the pledge by the pledgees? It is to be observed that the note execute *330by Brayman, as president of the Cairo & Fulton Railroad Company, to Schuschardt & Gebhardt, in reference to the-bonds pledged, uses -this language : “ With authority to-sell the same at the brokers’ board or at public or private sale, or otherwise, at their option, on the non-performance of this promise, and without notice^” And the agreement also executed by Brayman, as president, &c., to the above mentioned firm, has the following : “As security attached to said note are $125,000 first mortgage land-grant bonds-of the Cairo & Fulton Railroad Company, of Missouri,, with full and complete authority to sell the same in any manner you may deem fit, without notice, and to purchase them yourselves to protect your own interests.'' I* must be admitted that language possessing a broader or more comprehensive significance than this, could not easily be-employed. Did it dispense -with and obviate notice to or demand of the pledger to redeem prior to sale?
.Numerous authorities have been cited for the defendant,. Allen, as showing that this agreement did not and' could not have that effect.- We do not regard any of these authorities as going so far. There is no doubt as to the general doctrine that notice to, or demand of, the pledgor is necessary before sale, in the case of a mere naked pledge-where no definite time of payment is fixed. Judge Story says- “ The common law of England existing in the time of Glanville, seems to have required a judicial process to-justify the sale, or at least to destroy the right of redemption. But the law as at present established, leaves an election to the pawnee. lie. may file a bill in equity against the pawner for a foreclosure, or he may proceed to sell ex mero motu, upon giving due notice of his intention to the pledger.” Story on Bailment, § 310. But the learned author is careful to say that: “ In speaking of sales by the pledgee, it has been assumed that there is no special agreement between the parties as -to the time or mode of sale, nor any stipulation wholly interdicting any sale. If any *331such agreement exist, it must ordinarily regulate the rights of both parties." Ib., § 317.
The case of Stearns v. Marsh, 4 Denio 230, was shortly this: “The pledgers executed their note July 5th, 1837,. payable in four months, and pledged for its payment ten cases of boots and shoes; a few days thereafter the pledgers authorized the pledgees to sell certain of those cases; (Nos. 5, 6 and 7,) at a public sale about to occur at Rich’son the 19th day of July, and to apply the proceeds on the note This privilege the pledgees did not avail themselves of, but on the 15th of the following November, without any notice to the pledgers, caused the sale of the goods at Rich’s at public auction, indorsed the proceeds on the note, and brought suit against the pledgers for the balance due on the note, and a plea of non-assumpsit was pleaded. This sale was characterized as a tortious one, and the pledgees as wrongdoers. But in that case there was no agreement dispensing with notice, either of time or place of sale, no power of sale conferred and no time fixed by the contract of pledge when redemption was to occur. The case of Wilson v. Little, 2 Comst. 443, was one where the note was payable immediately. “I promise to pay Jacob .Little, or order, $2,000.” This note was virtually payable on demand, and in effect the court so held. But no demand of payment was made until several days after the sale of the pledge. Of course no court could give its sanction to such an unconscionable act; and it was aptly remarked then that: “ In every contract of pledge there is a right of redemption on the part of the debtor. But in this case the right was illusory and of no value if creditors could instantly, without demand of payment and without notice, sell the pledge.” The court, however, distinctly recognizes the principle that, where the parties by contract expressly fix the time for the payment of a debt secured by pledge, there no prior demand upon the pledger is necessary. The case of Brown v. Ward, 3 Duer 660, only decides that after notes fall due bonds pledged as col*332lateral security may be sold upon giving due notice of the sale to the pledgers.
In Milliken v. Dehon, 10 Bosw. 325, direct recognition, is given to the doctrine that “ all or any of the pawner’s rights can be waived or modified by consent, including notice of the time and place of sale,” the court remaking: “ There is, however, no express waiver of such notice' in the case before us.” In that instance the sale, a private one, occurred on the 26th day of December, when the sum advanced, $7,000, was not to be re-paid until the 4th day of January following, and a default had not yet occurred in respect to that, so that the sale which took place was not justified on the score of default. The only other ground upon which a sale was by the written agreement authorized to occur was, in the event a decline should occur in the value of the merchandise pledged, and the pledger should “ fail whenever demanded to deposit in cash sufficient to •cover such decline.” But there was no evidence of such demand, and consequently the sale was in direct violation .of the express agreement of the pledger. When the case went to the court of appeals, (27 N. Y. 364,) the power to sell given to the pledgee, which was “ at public or private sale, or otherwise, at his option, for the most it will bring,” was held to be a valid agreement.
In Markham v. Jaudon, 41 N. Y. 235, the trial judge had charged the jury that: “In the absence of a special agreement to authorize it, no sale of the stock could be made by the defendants except upon notice given to the plaintiffs of the time and place when the sale would take place,” and the verdict was for the plaintiffs and judgment accordingly, which judgment, though reversed by the intermediate court, was affirmed by the court of appeals. The chief point of defense in that case was, that the sale was made by stock brokers, of stock held by them, in accordance with a usage prevalent in the city of New York, whereby brokers may sell out their customers’ stock on exhaustion of the margin ; but such usage was held invalid, *333an 1 that it could not dispenso with notice or judicial proceedings. So that case, when narrowly scanned, by no means militates against the doctrine that allows parties to 'measure, secure, waive or modify their rights by their own special stipulations. A recent text writer recognizes this principle in its fullest extent, saying that it is the settled doctrine of pledges as declared by-tho courts of New York, that the pledgee can never sell unless there is a waiver, without first calling upon the party, if he is within reach, and requiring him to make his pledge good, &c., * * and that, “ Unless there is an agreement to the contrary, the pledgee can never proceed to sell the pledge until default of the pledger,” and again, that “if the contract of pledge specifics the time in which the pledge must be redeemed, or in other words, there is an agreement as to the time when the pledge may be sold,’ upon the expiration of the stipulated time, the pledgee may proceed to make sale of the thing pledged.” Tyler on Usury, Pawns and Loans, pp. 582, 594. In the somewhat recent case of Genet v. Howland, 45 Barb. 560, the court said: “ Excluding the authority contained in that note, the defendant could not have sold the stock without notice of the time and place of sale, and in such case the sale must be public at the time and place mentioned in the notice. But where the parties agree to have the pledge sold at public or private sale, without notice, the party pledging the property cannot insist that he should have notice.”
Counsel for plaintiff have cited a very large number of authorities, tending either directly or else by necessary inference, to establish the doctrine that in cases of .this sort, the well known maxim “ conventio vineit legem,” is as fully applicable as to any "other species of contract whatsoever, and indeed why should it not be so ? The doctrine of waiver is one of the most familiar of doctrines; it pervades a very large portion of all human transactions-; under its operation rights are lost "and rights acquired; titles vested and titles divested; and it would be passing strange *334.that a doctrine which exerts such a potent and controlling influence in every other species of contract, should be short of its customary power when it approaches a contract of bailment; and authorities cited for plaintiff show that, independent of any agreement as to a sale, if a definite time of payment was fixed, the pledge might be sold by the pledgee, without demand or notice. We are well satisfied, therefore, both upon reason and authority, that the public and duly advertised sale of the bonds was a valid one, unless, because of further considerations to be now noticed.
8. Pledge. Rut it is with great ingenuity insisted that the sale was invalid for the reason that the date at which the company was bound to pay, was fixed, not by the note, hut by the maturity of the acceptance; that the note itself was merely collateral security, and delivered as an evidence of the debt. Taking this as true, we do not see that it will alter the attitude of the case. The pledger has said in the note, that “ on the non-performance of this promise ” the bonds pledged as collateral security might be sold. This, confessedly, must he regarded as fixing the date of the sale, if words are to receive their accustomed import, and we can discover no way to evade their specific force. The fact that the company might avail itself, of the letter of credit, as it did do, and draw certain acceptances for the amount of the note, neither destroys nor postpones the date of performance fixed by the note. Nor do we believe, when we come to carefully consider both the note ■and the agreement, that in reality the parties intended the note as collateral security; for, as has been not inaptly •suggested, this involves the novel feature of one collateral being pledged to secure another collateral, and leaves no written evidence of the debt to be secured. Resides, the monthly installments arising from the net earnings of the road were to be credited on the note. "Why thus credit them if the note did not evidence and represent the debt, and the indorsements thus made were not intended to show ■such debt pro tanto satisfied? Again, if the parties, as *335already seen, could agree upon a definite time,' when, upon non-performance, a sale "was to occur, would it not clearly rest within their power to contract for alike sale whenever the debt might mature? We see but one answer to this question.
9. —: sale by pledege to himself. But the further objection is made that this sale of the collaterals was void because made by the pledgers, who became purchasers at their own sale. The general rule, as is well known, is strongly prohibitory of such sales. Story on Bailment, § 319; Tyler on Usury, Pawns and Loans, 604; Fire Ins Co. v. Dalrymple, 25 Md. 242; Blood v. Hayman, 13 Met. 231; Bank v. Minot, 4 Met. 325; Edwards on Bailment, §§ 291, 292; Story Eq. Jur., §§ 321, 322; Hill on Trustees, p. 159; Thornton v. Irwin, 43 Mo. 153. The question is, whether the agreement entered into between the parties that the pledgees might thus purchase, shall abate the force of this salutary and equitable rule. There is no doubt that such a sale is not absolutely void, but only voidable, for it may be sanctioned or ratified by consent, and this is shown by .numerous authorities. If absolutely void, no title would pass at law, and consequently neither ground nor necessity exists to invoke equitable interposition to declare a nullity null. If voidable, then capable of ratification; if thus capable, then also of prior authorization. Subsequent assent is tantamount to prior-authority; “he who may authorize in the beginning, may ratify in the end,” (Bank v. Gay, 63 Mo. 33 • 1 Daniel Negot. Instr., § 316,) and vice versa. For these reasons, and those given above •which we doom equally applicable to this branch of the case, we are of opinion that the agreement under consideration must be held valid in ioto, and the sale made there-•iinder of equal validity.
10. fraud. We now proceed to consider the title of the plaintiff •to the 581 bonds. It would be impossible, in the brief limits allotted to an opinion, to enter into a -.minute detail of the evidence, as it is very voluminous, oc*336copying many hundred pages; nor would it serve any useful purpose to do so. That the court below did not regard these bonds as the valid obligations of the Cairo & Pulton Railroad Company, is shown by its findings and the dismissal of the plaintiff’s petition as to them. After a careful perusal of the evidence, a tangled web of infinite contradictions, we have deemed it best, as much of the testimony was taken orally, and opportunity thus afforded the lower court, which is denied to us, of observing the demeanor of the witnesses, to defer somewhat to that court, and to give its findings our sanction, contenting ourselves with merely giving a brief statement of the reasons which have induced our concurrence in the action of the circuit court. •
We regard these bonds as having been fraudulently issued. After June 13th, 1861, the road was abandoned, the track torn up, the rolling stock disabled and destroyed, and this dismantled condition of the road continued until long after the sale of October 1st, 1866, when the Cairo & Fulton Railroad Company, in consequence of such sale, ceased to exist as a corporation. Moore v. Whitcomb, 48 Mo. 543. The alleged foundation of the order of June 13th, 1861, whereby $912,000 in bonds of the company were pledged, to and placed in possession of Kitchen and the two Bedfords, was the order of March 5th, 1861, which ordered that $20,000 be raised upon personal responsibilty for the purpose of paying the expenses necessary for laying the iron from Sikoston to Little River, and that $900,-000 of the company’s bonds be set apart and appropriated for that purpose, as indemnity to the parties who should raise the money. And the order of June 13th, 1861, is, in its turn, made the b...«is for the order of September 14th, 1866, which order distributed the bonds of the company between Kitchen, Miller, Poplin, the two Bedfords, Whitcomb, Hill, Crumb and Johnson. But there is evidence showing that the indebtedness to the Union bank of the State of Missouri, as recited in the last named order, had *337no existence, and it is very clearly shown that none of these orders were entered on the books of the company until'the fall of 1866, after the road, its property, franchise, &c., had been sold in enforcement of the State’s prior lien. The fact that these important entries were made,'not contemporaneously with the matters they affect to record, but .'years afterward, from loose memoranda coming from very questionable' sources, is a circumstance in and of itself of very grave suspicion, and when we consider that fact in connection with others, that the alleged indebtedness of $20,000 to the Union hank'was of doubtful existence; that those who made the order of March 5th, 1861, were the officers and agents of the company; made it in favor of themselves, and, under the order of June following, divided ■912 of the company’s bonds amongst themselves, in pledge to secure that alleged indebtedness, and then on September 14th, 1866, just sixteen days before the State sale occurred, several hundred thousand dollars of these bonds were parceled out among these same officers and agents and others, (all of whom had been or were officers of the company at the date of the order,) in payment of their claims at ten cents on the dollar, without inviting competition or making a single attempt to see if a better price could be elsewhere obtained, the grave suspicion first generated in the mind becomes vastly heightened, and it becomes less difficult of belief, that other and lesser items of indebtedness, referred to in general terms in that order, had no more of -reality than the larger items of debt just mentioned.
As to the other bonds which go to make up the’581 of plaintiff, the evidence shows; as we think', though on this point there is-vexatious conflict, that they also formed' a portion of the ■ 912 bonds which were turned- over by Brayman in the early part of 1861, unissued, and which remained unissued in the hands of the company or its officers until 1866. As before seen, from ¿Tune 13th, 1861, no work had been done on the road, no service was performed for and no semblance of vitality existed in the company *338except as such semblance was manifested by alleged corporate meetings, hastily and irregularly summoned, where a quorum of directors was frequently constituted by gratuitous deliveries of stock, and yet on the same day the order for the division of the bonds was made, thousands of dollars were allowed against the corporation by the officers and directors to themselves and those formerly holding similar official positions; as if seeing the near approach of the dissolution of the corporation, its officers were determined not to forget themselves.
11. Pledge : of corporate assests by directors to themselves. Even if the order of June 13th, 1861, by which the officers and directors of the company pledged to each other nearly million dollars in bonds to secure an indebtedness of less than four per cent of the face of the collaterals, can be imagined, considering the great disproportion between the amount of the debt and the value of the pledge, to have been made bona fide, still the fact that the pledge was made in favor of themselves, by the fiduciaries of the company’s interests, is enough to cause the order to be scrutinized with the most rigorous and jealous observation. A transaction of this nature is viewed with greater odium than a dealing between a trustee and his beneficiary. Some of the authorities go so far as to pronounce it wholly void; as, for instance, it has been held that a note made by a corporation to its trustees is against public policy and void. Wilbur v. Lynde, 49. Cal. 290; 1 Daniel Negt. Instr., § 282 Other authorities, while not proceeding to. this extreme, still hold that though such a transaction may stand upon proof of full concurrence and consent of those beneficially entitled to the property, yet even then the transaction “ will be regarded with great suspicion.” Hill on Trustees, .159. Ve discover nothing in the circumstances of this case which relieves it from the operation of the general prohibitory rule forbidding dealings of this sort, or •takes from it that “ great suspicion ” which equity ever fastens upon such transactions. If the. order of June 13th, *3391861, falls, then that of September 14th, 1866, falls with it. Indeed the latter may be considered as supplemental to the former, and characterized by the same disregard of the company’s-interests. In view of the foregoing, we are not disposed to hold the pledging and sale of the bonds in question as anything less than actual fraud upon the corporation and its stockholders.
12. Bonds, when non-negotiable. But it is urged that the plaintiff is the innocent purchaser of these bonds, and, therefore, entitled to the usual protection which the law affords to him who occupies that attitude. The bonds contain this clause: * * “but the company reserve the right to pay the same at any time to be named by them, by adding to the principal a sum equal to twenty per cent, thereof.” Any contingency, either as to the amount to be paid, or as to the time when payment is to occur, robs the paper of that certainty which is one of the chief essentials of negotiability. In Way v. Smith, 111 Mass. 523, there was a provision in the instrument that: “ It is agreed that this note may be paid at any time before maturity, and that interest at the rate of eighteen per cent, per annum shall be deducted till due,” and held not negotiable. To the same effect is Hubbard v. Mosely, 11 Gray 170. In the present instance, it is obvious that it depends upon the exercise of the reserved option of the maker, when the amount specified in the bond, plus twenty-per cent, thereof is to be paid, so that the time of payment depends not upon the face of the paper, but upon the option of the maker. 'We., therefore, regard the bonds asnon-negotiable inform.
13. - But even if the bonds should be held to possess the feature of negotiability, the conclusion to be reached will not be changed thereby, and this, for the reason that the bonds had attached to them past due coupons, coupons eight years over due. They must, in consequence, be considered dishonored paper. In the recent case of Parsons v. Jackson, 9 Otto Rep. 484, the Supremo Court of the United States said: “The presence of the *340past cine and unpaid coupons was, of itself, an evidence of dishonor.” A similar ruling was also made in Minnesota, the court in regard to the coupons, remarking: “The interest equally with the principal, is a part of the debt which they were intended to 'secure, and it does not seem to us material whether the whole or only a part of the debt was overdue. When due, the plaintiff had a right of action for the recovery of the interest as for any other installment due on the bond.” The same doctrine was announced in Arents v. Commonwealth, 18 Graft. 750; Newell v. Gregg, 51 Barb. 263. So that plaintiff- should be held to occupy the same position respecting these bonds as his immediate transferrer, and, consequently to take with full notice of all the equities to which the bonds were subject in first hands.
Other circumstances, however, connected with this case will prove of equal efficiency in casting notice upon him. Webber was evidently Chouteau’s agent, for he agreed with Chouteau, on the 8th day of December, 1866, to “ absorb” for him the outstanding bonds of the Cairo & Eulton Railroad Company at cost, Chouteau furnishing the money, which he did, and the 581 bonds were all purchased through Webber, whose drafts were duly honored. This agreement between Chouteau and Webber was over five months after the road had been extensively advertised for sale by the governor in various newspapers, over three months after the sale of -the road, which plaintiff attended as a bidder, and nearly ten months subsequent to the passage of the “ sell-out act,” of which he admits knowledge, as well as of the governor’s advertisement made thereunder. Webber, at the time he bought the bonds for Chouteau, was one of the directors of the company, and had been since March, 1866, and was also one of the commissioners appointed under the “ sell-out act,” and Bedford, through whom Webber procured the bonds, was the “financial agent” of the company. We cannot, in the light of these and similar facts, presume Webber otherwise than conversant with all that transpired in reference to the bonds *341be purchased for Ms employer. Webber’s agency being established, his knowledge acquired not only during the continuance of his agency, but also that possessed by him so shortly prior to his employment, as necessary to give rise to the inference that it remained fixed in his. memory when the employment began, must be deemed the knowledge of Chouteau; This principle was recognized in Hayward v. Ins. Co., 52 Mo. 181, though the case was not put upon it. A much broader doctrine respecting the effect of knowledge previously acquired by the agent, is elsewhere announced, (Wade on Notice, § 687,) the merits of which it is unnecessary to discuss.
Another circumstance in this connection not to be ignored is, that the bonds were purchased for less than one-half of the accrued interest. While this inadequacy would not itself-be sufficient to charge Chouteau with notice, yet it is a very pregnant fact to be given its due weight in connection with other things, in determining whether Chouteau is to be deemed an innocent purchaser. Parsons v. Jackson, supra. Nor is it to be forgotten that these bonds were not purchased in the ordinary routine of commercial transactions, in the customary prosecution of business, but were industriously searched for by Webber, the very accommodating agent who worked for nothing and bore his own expenses.
15. Statute of limitations: fraud: pleading: pledge. In relation to the 119 bonds once held by Kitchen, and which formed part of the 581 bonds claimed by plaintiff, it is asserted that the former held the 119 bonds by force of the statute of limitations. If our position relative to the fraudulent character of the order of June, 1861, be correct, then the statute does not apply. It does not apply, also, because not pleaded. And even were the bonds bona fide pledged, the statute would not run while the pledge continued; and any one purchasing or receiving any of the bonds from Kitchen, since the bonds upon their face imparted notice, could take no better title than had Kitchen. Any one, therefore, taking *342these bonds, either mediately or immediately, from Kitchen, would take them impressed with the character possessed by them when in Kitchen’s hands, whether as pledged, or whether as fraudulently obtained.
16. Pledge : assignment by pledgee. Tor a similar reason the statute respecting fraudulent conveyances is inapplicable. It is well settled that a pawnee can conveJ no greater right than he him-se]f possesses, and that his assignee stands in his shoes to all intents and purposes. Story on Bailment, § 324; Edwards on Bailments, 69.
Kitchen certainly would not be permitted, did he still retain possession of the bonds, to shelter himself behind either of the statutory provisions above mentioned; and the ostensible purchaser from him, warned as he was by the faces of the bonds, of all the equities which had attached to them in consequence of the fraud committed, ought not in equity and good conscience to occupy a more advantageous position, or possess a higher claim to equitable relief. In short, Chouteau comes into court with hands no cleaner than those from whom ho bought, and a court of equity might even concede the operation of the statutory provisions to be as plaintiff claims, and still refusing its aid, leave him where it finds him.
7. Parties: corporation: mortgage. But it is said that no matter what the circumstances under which the bonds were acquired, Alien has shown no such'interest as entitles him to defend'in this , proceeding. JLhat lie is owner of the capital stock once held by Scott county, is shown by the conveyance of that stock to him by that county, through its commissioner, Rhoads. That there is no evidence showing compliance with the conditions upon which the conveyance was made, is altogether immaterial. Allen’s title to the stock will remain until advantage be taken, by the proper party, of conditions broken. The ownership of this stock, as well as that of the Congress lands, is sufficient to give him a standing in court, and renders discussion as to *343bis acquisition of the stock of ther counties unnecessary at present.
18. No laches or acquiescence. It is also said .that there has been such delay, such acquiescence, on the part of the corporation and stockholders,'in respect to the pledging.and subsequent sale of the bonds, as to entirely preclude those interested from averring aught against the validity of the bonds. It is not to be denied that laches and acquiescence will cure an otherwise unauthorized act; this we have already announced in a • former part of this opinion. But we scarcely think those remarks applicable in respect to the pledging and issuance of the bonds, and for these reasons: After June, 1861, on the 13th of which month the order to pledge the bonds was made, which order, as before seen, was never placed upon record till the fall of 1866, the road was dismantled and abandoned, and so far as further work was concerned, the company practically ceased to exist. Then the war, with all its attend? ant confusion, raged for four years, and though corporate meetings wore held, no publicity was given them, and no public record of such meetings kept, to which the stockholders could have had access. Then the order of September 14th, 1866, was made, but not entered of record, selling the bonds to the officers and directors, and then in about a fortnight thereafter the State sale occurred, which accomplished, as a matter of law, the destruction of the company, and doubtless in popular opinion, destroyed, as a matter of fact, all the rights dependent .upon a continuance of that organization. In addition thereto, although under .the statute, the president and directors are made the trustees of a dissolved corporation to settle its affairs, sue for and recover its debts, property, &c. (Wag. Stat., § 21, p. 293; Kansas City Hotel Co. v. Sauer, 65 Mo. 279;) yet those who, on the 14th day of September, 1866, professedly occupied those official positions appear never to have acted as trustees; on the contrary, we find them, by their answer refusing to act in that capacity, and by that answer deny*344ing that they, at the time of the State sale, occupied any official position in the company. This being the case, it would certainly seem a hardship too great to be tolerated, to impute laches to counties and others beneficially interested, and let them suffer under such circumstances, when abandoned and betrayed by their official protectors, their wrongs unsuspected, their rights unknown, and when nothing short of extraordinary vigilance could have secured redress of the one and recognition of the other. .We, therefore, hold no laches or acquiescence imputable to the stockholders or corporation in the present instance.
There is no occasion to discuss the nature of certain titles of Allen -to the swamp lands by reason of certain conveyances to him, as whatever of validity they may possess must be subordinate to the deeds of trust.
19. Foreclosure of mortgage practice and pleading. It was erroneous to enter judgment in favor of plaintiff as pledgee for the amount of the $12,000 note and interest. and that judgment must be reversed. He hah sued as owner of the 125 bonds, and, therefore, was entitled to recover only in that capacity. When the lower court becomes again possessed of this-cause, judgment in favor of plaintiff, to be satisfied out of the swamp lands, will be entered in accordance with this opinion, for the. amount of the 125 bonds, with accrued coupons, up to the date of such judgment; the remaining coupons, falling due after such date, will be canceled.
For the reason just announced, the judgment-in favor of defendants Moore and Bridges, administrator of Patterson, as pledgees, was erroneous.. Since they claimed as owners, and not otherwise, and consequently could only recover in conformity with their pleadings, that judgment must also be reversed; and the same remarks are applicable here as were to the Schuschardt & Gebhardt bonds, because a power to sell the bonds, was in this instance, also, conferred by .Brayman upon Whitcomb and Moore, and default having been made in the payment of the note, the *345bonds were sold in conformity to the terms of the instrument. .Upon return of this cause, the court below will allow a recovery for the amount of the bonds and coupons,diminished by whatever amount Whitcomb and Moore may have received from the company, and if necessary, have an accounting to ascertain such amount.
The judgment against the defendant Hill must be affirmed, and this.regardless of the merits, as his motion for new trial was not filed within the time prescribed by law.
We also affirm the judgment against defendant Clark-son, thinking that he established no right of recovery, lie was the pledgee of a bond given to secure a note, executed by the company and Sexton, for the right of way through the pledgee’s land. Suit was brought on this note and judgment recovered, a transcript of the judgment sent to Chicago, judgment recovered against Sexton’s estate, and judgment, less $100,‘paid to Clarkson’s attorneys in satisfaction. of his claim. In addition to that, he after-wards sued out execution in Mississippi county, levied upon, sold and bought in the very right of way for which the note was given, and also the bond itself. We feel no hesitancy, therefore, in affirming the judgment which went against him.
In relation to the 51 bonds claimed by Seelye: the judgment in his favor, as to one of the bonds, and several of the coupons, deeming it correct, we affirm.
I regard the judgment of the circuit court correct, also, as to the remaining 50 bonds, and for these reasons : The statute, (1 R. S. 1855, p. 488, § 58,) made it a felony for any person whilst a director, engineer, clerk, secretary, 1 reasurer, or any other, officer, agent, employee or servant, of any railroad company, to either directly or indirectly be a contractor, or directly or indirectly receive any profits, portions, proceeds, commissions or charges, whatever,-of any contractor; on account of any contract for -the .construction, building, grading or repairing of any railroad belonging to such company. And/the .next section, 59, *346made all contracts of any kind or for any purpose whatever made in violation of any of the provisions of this act, “ absolutely null and void, and incapable of being enforced in an.y court in this State.”
The testimony showed to the satisfaction of the circuit court, and but little reason is discovered to doubt the correctness of its conclusions, that in the contract made, nominally between Hamilton and the railroad company, Sexton, the vice-president and a director of the company, was, if not the real party in interest, interested largely in the contract, and Brayman, the president, was also interested. If this was the case, them, according to the express statutory provisions, the contract is null and incapable of enforcement. It will not do to say this is not a suit upon the construction contract; this may be true, but it is a suit upon the written promises of'the company, and the consideration of those promises is, in part, at least, illegal, based, in part, at least, upon a consideration which the law will not recognize.- Mr. Justice Story says : “ When the' consideration is illegal in part, then it avoids the note in into,” (Story Prom. Notes, § 190.) and the same learned author says elsewhere, that the consideration of a note will be illegal either because against the general principles and doctrines of the common law, or because specially prohibited by statute. Id., 189 Language could scarcely be more thoroughly prohibitory of any given act than that of the statute above quoted, and if it would not apply to a case of this sort, it would seem difficult to imagine one where it would apply. If it does apply, then of necessity, the consideration of the bonds being illegal, no recovery can be had upon them, unless, indeed, we are prepared to turn our backs upon the statutes. And it is a matter of no moment that the bonds bear a date anterior to that of the construction contract; otherwise, the provisions of the statute could be easily evaded by simply antedating the written security based upon the illegal consideration. A similar point was so ruled in Williams v. Wall, 60 Mo. 318.
*347Nor is the objection well taken that the statute under discussion is not applicable to the Cairo & Fulton Railroad Company. The language of section 60* is comprehensive enough to embrace not only companies for which the credit of the State was “engaged” at the time of the passage of the act, but also any company for which the credit of the State might, in the future, be engaged; so that whenever the State engaged its credit in favor of a railroad corporation, then the statute would spring into operative existence and interdict the making of a certain class of contracts. Besides, the State’s credit, in the present instance, had been “ engaged ” in favor of the Cairo & Fulton Railroad Company in 1857, long before the contract in question was entered into. As before seen, the bonds not being in form negotiable, and having past due coupons attached to them, Seelye took them with all their antecedent infirmities clinging to them, and is consequently in no better situation to maintain suit on them than would be the original parties.
But it is strenuously asserted that the claim of Hamilton against the railroad company, oven if illegal, has been “adjusted” and purged of its illegality in consequence of the bonds having been received by him of the company. I do not take this view, for the bonds were merely the promises of the company to pay; and the question of illegality of consideration could be raised at any time prior to payment, as much so as if the bonds had been given for a gaming or other illegal consideration. For these reasons I and of opinion, in which Judge Norton concurs, that the judgment of the circuit court, as to the remaining 50 bonds, should be affirmed. The majority of this court are, however, of a different opinion, and in consequence, the judgment as to those bonds must be reversed, and on return of *348this cause judgment in favor of Seelye will be entered as to those bond's also.
In regard to that portion of the judgment respecting the 581 bonds, and which -went -against the plaintiff, we affirm the same,- and remand this cause to be proceeded with as herein indicated.
All concur.Section 00 reads as follows:' “The provisions of the last two sections shall apply only to railroad corporations and companies for which the credit of the State is, by some act of the" Legislature, in some way engaged.”