Lincoln, Abraham | A key document from Lincoln's legal career

Property of a New York Collector

Lincoln, Abraham

Autograph manuscript signed ("A. Lincoln"), being Lincoln's official transcript of the "Subscription Book forthe Capital Stock of the Alton and Sangamon Rail Road Company," incorporated 27 February 1843, transcribed in early 1851

5 pages (203 x 160 mm) on 4 leaves of blue paper (watermarked Moinier's | 1849), comprising a title-page (headed "(Copy)" and titled in Lincoln's hand, as above), 4 pages with the names of 91 shareholders and the number and value of their shares listed beneath the shareholders' joint stock subscription statement, 2 blank pages, and Lincoln's filing docket on the eighth page: "Alton and Sangamon Railroad Company vs. James A. Barret. Copy of contents of subscription book mentioned in first count & referred to in second count"; very light vertical crease to leaves. Bound in blue morocco gilt by the Lakeside Press.

After investing in its stock, Lincoln represents a railroad in a precedent-setting lawsuit: "I have labored hard to find the law." This list of stockholders, entirely in Lincoln’s hand, was filed as evidence in his first significant railroad case. Lincoln's own appearance in the shareholder list represents only the second known instance of a stock purchase by the future president. The Illinois Supreme Court’s ultimate ruling in favor of Lincoln and the railroad set an important legal precedent, upholding the binding nature of a stockholder’s contractual and financial obligations. "The decision, subsequently cited in twenty-five other cases throughout the United States, helped establish the principle that corporation charters could be altered in the public interest, and it established Lincoln as one of the most prominent and successful Illinois practitioners of railroad law (Donald, Lincoln, p. 155).

The Alton and Sangamon Rail Road Company was chartered in 1847 to construct a line from Alton, via New Berlin, to Springfield. In 1850, however, the Illinois General Assembly approved a more direct route, bypassing the landholdings of some investors. Claiming breach of contract, James A. Barret refused to make further installment payments for his 30 shares of stock, as did several others who no longer stood to benefit from the new line. In 1851, Lincoln was hired to compel the defaulting shareholders to pay the balance of their promised investment.

The case came at a pivotal moment in Lincoln's career. In an autobiographical sketch he sent to Jesse W. Fell in December 1859, Lincoln recalled that "From 1849 to 1854, both inclusive, [I] practiced law more assiduously than before. … I was losing interest in politics" (Collected Works of Abraham Lincoln, ed. Basler, 3:512).

Michael Burlingame explained the background of the case: "The antebellum supreme court of Illinois had a grave responsibility, as one of its members [John Dean Caton] recalled: 'The jurisprudence of the State was then in its infancy. We were then laying down rules which were to be followed by those who should come after us, and it was of the greatest importance, not only to ourselves, personally, but to the profession generally, that these rules should be such as to bear the test of time and of the closest scrutiny.' That challenge was especially marked in railroad cases, where no common law existed to guide courts. Lincoln helped establish important precedents in this area. One notable example dealt with stock subscribers who reneged on their pledges. To raise capital, railroad corporations issued stock which many Illinoisans, eager to have the tracks pass near or through their property, agreed to purchase. In time, some subscribers changed their minds and refused to pay. In Barrett v. Alton and Sangamon Railroad Company (1851), one of Lincoln’s first railroad cases, James A. Barrett maintained that when he agreed to buy thirty shares of the company’s stock, the rail line was projected to cross his property; later, when the company changed the route (but not the termini), Barrett understandably lost his enthusiasm and declined to honor his pledge. Lincoln, representing the railroad in both the circuit and the supreme courts, won at both levels. His principal argument was that 'Legislation and adjudication must follow, and conform to, the progress of society'" (Abraham Lincoln: A Life, the unedited manuscript hosted online by the Lincoln Studies Center, Knox College, pp. 977–978). 

Lincoln spelled out his tactical plan (including the summary argument quoted by Burlingame) in a 19 February 1851 letter William Martin, a commissioner for the sale of the company’s stock. Four suits were to be brought against stockholders who had subscribed to the initial offering, but had then failed to make the additional installment payments. In preparation, Lincoln listed the essential documents he would need in order to win a judgment. "We must prove," he advised Martin, "that the defendant is a Stockholder"; "that the calls have been made"; and "that due notice of the calls has been given." To show that the defendants were in fact stockholders, Lincoln explained, he needed to produce "the subscription book with the defendant’s name, and proof of the genuineness of the signature, together with any competent parole or evidence, that he made the advance payment" (Basler 2:98–100).

The subscription book, which Lincoln meticulously transcribed, was a key piece of the evidence filed in Sangamon Circuit Court on 22 February 1851. The book includes Barret’s name, and the subscription statement (transcribed by Lincoln on page two) is explicit about the shareholders’ obligations: "We the subscribers to the Capital Stock of the Alton and Sangamon Rail Road Company … do hereby agree … by subscribing therefor, to pay the balance of the installments due on said stock by us subscribed, when the same may be called for by the board of Directors of said Company when duly organized in conformity with the Charter approved February 27th 1847."

"A. Lincoln," with six shares for $600, is prominent among the ninety-one subscriber names. (The only other known record of a Lincoln stock purchase dates from 1836, when he bought one share in the Beardstown and Sangamon Canal.) In June of 1847, as head of a committee to promote subscriptions for the projected railroad, Lincoln wrote an open letter to the "People of Sangamon County," appealing for their support. Railroad construction was booming, and Lincoln anticipated that a line between Springfield and Alton would prove a lucrative investment for himself and his state. "The whole is a matter of pecuniary interest," he argued. "The proper question for us is, whether, with reference to the present and the future, and to direct and indirect results, it is our interest to subscribe. If it can be shown that it is, we hope few will refuse" (Basler, 1:396–98). The list of subscribers is itself of considerable interest. Shareholders include J. Heay (possibly the grandfather of Lincoln’s later secretary, John Hay, 2 shares), Ninian W. Edwards (1809–1889, husband of Mary Todd Lincoln’' sister, 20 shares), John T. Stuart (1807–1885, Lincoln’s law partner, 5 shares), Henry Yates (father of Illinois governor Richard Yates, 10 shares), N.W. Matheny (clerk of Sangamon County Court), and others. (In the subscription book, Henry Yates, hedging his bets, has added a condition—likely extralegal—beneath his name: "if the Road intersects the M. & S R R at New Berlin.")

Lincoln was mindful of the critical issues raised by the Alton and Sangamon lawsuits, and "he put extraordinary time and effort into winning this case. He waited until the state legislative term was concluded before beginning his research, so as not to be distracted by politic" (Dirck, Lincoln the Lawyer, p. 93). To Martin, he pointed out the legal issues, adding "I have labored hard to find the law," in preparation for the trials. In the end, two of the defaulting stockholders paid their delinquent calls. The suits against James A. Barret and Joseph Klein came to trial in the Sangamon Circuit Court in August of 1851, with Lincoln handling both the trials and the appeals for the railroad.

Lincoln’s preparation proved its value—the rulings were in favor of the railroad. "Illinois Supreme Court Justice Samuel H. Treat ruled that public utility superseded private profit. If Barret had won the case, other stockholders would balk at fulfilling their obligations. The rule of caveat emptor protected corporate management from stockholder’s personal interests and encouraged subsequent investment" (Lincoln Legal Briefs, October–December, 1990, no. 16). 

A highly significant Lincoln legal document, with distinguished provenance.

REFERENCE:

Exhibited: "Abraham Lincoln in New York," Federal Hall, 26 Wall St, 6 February 2009 to 30 April 2009; "A. Lincoln: Railsplitter to Rushmore," Ronald Reagan Presidential Library, Simi Valley, CA., 2 May 2013 to 31 October 2013

PROVENANCE:

Philip D. Sang Collection (Hindman, 15 April 1984, lot 135) — Ralph G. Newman — The Forbes Collection (Christie's New York, 22 May 2007, lot 56)