text:
Lincoln v. Iron Company/Opinion of the Court

The principal question raised in this case by the assignment of errors is as to the sufficiency of the first and second counts of the declaration. These counts are upon certain bonds alleged to have been made and executed by the township of Lincoln, in the county of Berrien, and State of Michigan, in aid of a railroad company; and the objection made to them is that they do not aver that an election was held to authorize the issue of the bonds, as required by law, and do not aver various other prerequisites to such issue. The question is whether the omission to make these averments is error.

The law from which the authority of the township to issue bonds is derived was passed March 22, 1869, and was entitled 'An Act to enable any township, city, or village to pledge its aid, by loan or donation, to any railroad company,' & c.

The first section declared that it should be lawful for any township or city to pledge its aid to any railroad company chartered or organized under and by virtue of the laws of the State of Michigan, in the construction of its road, by loan or donation, with or without conditions, for such sum or sums not exceeding ten per cent of the assessed value of the property in such township or city, as a majority of its electors voting should, at a meeting called for that purpose, determine. The second section prescribed the manner of calling the election, and giving notice thereof. The third section directed the manner in which the elections should be conducted, and the recording of the proceedings on the records of the township or city. The fourth section authorized the issue of coupon bonds for the amount of aid voted, and prescribed the form of the bonds and the manner of their execution; if issued by a township they were to be executed by the supervisor and township clerk, and under the seal of the township if it had one. Subsequent sections directed that the bonds when executed should be delivered to the State treasurer as trustee for the municipality and the railroad company; that the treasurer should record them in a book so as to show their amount, date, number, &c.; and that he should deliver them out to the railroad company whenever the company should present a certificate of the governor of the State that it had complied with the provisions of the act, and was entitled to the bonds; that upon delivering them he should indorse upon each bond the date of delivery, and notify the clerk of the township or city; and that the township or city should levy the necessary taxes to meet the interest and principal as they became due. The eleventh section provided that no bonds should be delivered to the railroad company until it should have complied with the conditions voted, and completed its road through or into the township or city concerned, according as the charter required, and thence to its terminus or the some connecting line of railroad; or, if not touching such township or city, then that it should have completed its road through the adjoining municipality, or for a certain number of miles adjoining the nearest terminus.

The declaration, after referring to this statute, and stating the organization of the Chicago and Michigan Lake Shore Railroad Company under the laws of Michigan, having for its object the construction of a railroad from New Buffalo through and beyond the township of Lincoln, proceeds, in the first count, to aver that on the 1st of June, 1869, the township, acting under and in accordance with the authority conferred upon it by said act of the legislature, made a donation to said railroad company, and for that purpose made and executed four certain bonds, payable to the said company or bearer (describing them), which bonds were duly delivered to the company, as provided in the act; that the plaintiff (the Cambria Iron Company) on a certain day named, and before the maturity of the bonds, became and is now the owner, holder, and bearer of said bonds for value; and that the bonds are due have not been paid. The second count describes four other bonds issued by the township under the authority given to it by the said act as a further donation to the said railroad company, and certain interest coupons attached to said bonds and payable to bearer, of which it is stated the plaintiff became the lawful owner and holder for value before maturity, and which have become due and have not been paid. The declaration contained also the common money counts. The defendant pleaded in abatement want of service of process; to which plea a demurrer was put in and sustained by default, for want of a joinder in demurrer. The defendant also pleaded the general issue, and gave notice of several special defences; as, that the Chicago and Michigan Lake Shore Railroad Company, and not the defendant, was owner of the bonds; that whatever of indebtedness was referred the electors of the township to aid in the construction of the railroad of the Chicago and Michigan Lake Shore Railroad Company; that the bonds in suit were delivered to said company in fraud of the township; and 'that when said bonds and the coupons for interest were so delivered, the roadbed of said railroad was not completed; that through said township of Lincoln the culverts were not built, nor were the bridges done or completed, nor was said railroad fenced, nor were the ties laid down, nor was the iron laid thereon, nor had the road crossings been completed, nor the cattle-guards constructed.'

The cause came on for trial, and the following is the record of the proceedings which subsequently took place:--

This cause having been called for trial, the following jury was called and sworn, to wit: [giving the names of the jurors], who sat together in the jury box and heard the evidence this day adduced, the arguments of counsel, and the charge of the court, and without leaving their seats say upon their oath that the defendant is guilty in manner and form as alleged in the declaration, and assess its damages at the sum of $6,273.32 over and above its costs and charges. It is therefore considered by the court that the said plaintiff do recover against the said defendant the said sum so assessed, together with its costs and charges to be taxed, and that it have execution therefor.

We think it very clear that after a verdict upon the issues presented by this record, the omission in the declaration to state the holding of the election and the occurrence of the other preliminary facts which the law required to precede the issuing of the bonds, cannot be regarded as error. It is a rule of the common law that where there is any defect or omission in a pleading, whether in substance or form, which would have been fatal on demurrer, yet, if the issue joined be such as necessarily required on the trial proof of the facts so defectively stated or omitted, and without which it is not to be presumed that the judge would have directed the jury to give the verdict, such defect or omission is cured. 1 Wms. Saund. 228. Or, as it has been tersely put, a verdict cures a defective statement of a title or cause of action, but not the statement of a defective title or cause of action. Id. 228 c, note. The declaration in this case states that the defendant, the township of Lincoln, acting under and in accordance with the authority conferred by the act, made a certain donation to the railroad company, and for that purpose did make and execute the bonds in question; that the bonds were afterward duly delivered to the company as provided in the act; and that the plaintiff before maturity became the owner thereof for value. The defendant denied all this, and also set up special defences, that the transfer was fraudulent, that the road was never built as required before the delivery of the bonds, &c. Now if the township could only make the donation alleged by way of an election duly held, it was the duty of the court below to require proof of this fact, as well as of the other facts necessarily involved in the issue as made, and it will be presumed that this was done. What proof was sufficient for this purpose it is not necessary to decide, as no exception was taken on that point.

But we do not think that there was any defect in the declaration to be cured. We think that it would have been good on demurrer. The township had authority by law to issue its bonds by way of donation to a railroad. It did issue its bonds. They got into circulation as commercial securities, and were purchased by the plaintiff. All the plaintiff had to do in case of non-payment was simply to sue on the bonds. If there was any defence to them by reason of want of performance of any of the requisites necessary to give them validity, or for any other cause, it was for the defendant to show it. A bond, especially a negotiable bond, is a prima facie obligation of the obligor, if he has capacity to make it; and is binding according to the terms and conditions apparent on its face until the contrary be shown. Whether an alleged defence, when set up, is or is not good against the particular holder, is to be determined by the court in each case. How far, as against a bona fide holder, the obligor may, in any case, go behind the obligation itself, for the purpose of showing a failure to pursue the law authorizing its issue, is not yet, perhaps, clearly determined. Here the defendant township had opportunity to set up any defence. It denied all the averments of the declaration, and also gave notice of the non-performance of certain conditions to be performed by the railroad company preliminary to the issue of the bonds. The verdict was against the defendant, and no erroneous rulings at the trial are complained of. We think that the declaration and proceedings as exhibited by the record are not obnoxious to any just exception.

The form of the verdict is defective, it is true, finding 'that the defendant is guilty in manner and form as alleged in the declaration;' but this as a mere clerical error properly amendable. It substantially finds the issue made by the pleadings. The declaration was in assumpsit; the plea was a general denial of the allegations of the declaration, equivalent to a plea of non assumpsit, with notice of special matter. The verdict in effect says that the defendant did promise and violate its promise, as alleged in the declaration.

We think there is no error in the record.

Judgment affirmed.


text: Talk:Lincoln v. Iron Company/Opinion of the Court

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text:
Wilson v. Gaines

ERROR to the Supreme Court of the State of Tennessee.

The facts are stated in the opinion of the court.

Mr. Edward Baxter, for the plaintiff in error.

No. counsel appeared for the defendant in error.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Wilson v. Gaines


text: Talk:Wilson v. Gaines

title: Talk:Wilson v. Gaines


text:
Wilson v. Gaines/Opinion of the Court

This was a bill in equity filed in the Chancery Court of Nashville, Tenn., to enjoin the collection of taxes upon that part of the railroad of the St. Louis and Southwestern Railway Company which was originally owned by the Edgefield and Kentucky Railroad Company. The facts are these:--

On the 11th of December, 1845, the General Assembly of Tennessee chartered the Nashville and Chattanooga Railroad Company for the purpose of building a railroad from Nashville to Chattanooga. The thirty-eighth section of that charter is as follows:--

'The capital stock of said company shall be forever exempt     from taxation, and the road, with all its fixtures and      appurtenances, including workshops, warehouses, and vehicles      of transportation, shall be exempt from taxation for the      period of twenty years from the completion of the road, and      no longer.'

On the 1st of January, 1852, the Nashville and Southern Railroad Company was incorporated to construct another line of road, and was to 'have all the rights, powers, and privileges, and be subject to all the liabilities and restrictions, prescribed in the charter of the Nashville and Chattanooga Railroad Company,' with a single exception, which is unimportant for any of the purposes of this case.

On the 13th of February, 1852, the Edgefield and Kentucky Railroad Company was incorporated to build a road from Nashville to the Kentucky State line, with the following as the sixth section of its charter:--

'That the company hereby incorporated is invested, for the     purpose of making and using said road, with all the powers,      rights, and privileges, and subject to all the liabilities      and restrictions, that are conferred and imposed on the      Nashville and Chattanooga Railroad Company by an act passed      on the 11th of December, 1845, so far as the same are not      inconsistent with the provisions of this act.'

By an act of the General Assembly of the State passed Feb. 11, 1852, entitled 'An Act to establish a system of internal improvement in this State,' the governor was authorized to issue under circumstances therein mentioned to certain railroad companies the bonds of the State for the purpose of aiding in the completion of their respective roads; and it was further provided that upon such issue and the completion of the road the State should 'be invested with a lien, without a deed from the company, upon the entire road, including the stock, right of way, grading, bridges, masonry, iron rails, spikes, chairs, and the whole superstructure and equipments, and all the property owned by the company as incident to, or necessary for, its business, and all depots and depot stations, for the payment of all said bonds issued to said company as provided in this act, and for the interest accruing on said bonds.' Acts of 1851-52, c. 151, sects. 1, 4, pp. 204-206. On the 8th of February, 1854, the privileges of this act were extended to the Edgefield and Kentucky Railroad Company. Acts of 1853-54, c. 131, sect. 1, p. 205.

Afterwards, on the 15th of December, 1855, the charter of the Edgefield and Kentucky company was amended, and the following is sect. 2 of that amendment:--

'That the said company shall be entitled to all the rights     and privileges that were conferred upon the Nashville and      Southern Railroad Company, by an act of the General Assembly      of the State of Tennessee, passed Jan. 1, 1852, entitled 'An      Act to charter the Nashville and Southern Railroad Company."

The company availed itself of the privileges of the internal improvement act, and subjected its property to the statutory lien therein provided for.

Default having been made by many of the railroad companies in meeting their obligations for the bonds of the State issued to them, several attempts were made to enforce the liens on some of the roads without success, and on the 22d of December, 1870, the legislature passed an act, sections 1 and 10 of which are as follows:--

'SECT. 1. That a bill shall be immediately filed in the     Chancery Court at Nashville in the name and behalf of the      State, to which all the delinquent companies, the respective      stockholders, holders of the bonds, creditors, and all      persons interested in the said several roads, shall be made      parties defendant, and shall be brought before the court in      the mode prescribed by the rules of practice in chancery      established in the State, except as otherwise herein      provided. And said court is hereby invested with exclusive     jurisdiction to hear, adjudicate, and determine all questions      of law and matters of controversy of whatever nature, whether      of law or of fact, that have arisen or that may arise      touching the rights and interest of the State, and also of      the stockholders, bondholders, creditors, and others in said      roads; and to make all such rules, orders, and decrees,      interlocutory and final, as may be deemed necessary in order to a final and proper adjustment of the rights of all      the parties, preliminary to a sale of the interest of the      State in said road. Also to declare the exact amount of     indebtedness of each of said companies to the State; and      likewise to define, as may be thought proper, what shall be      the rights, duties, and liabilities of a purchaser of the      State's interest in said roads, or either of them, and what      shall be the reserved rights of said companies, stockholders,      and others respectively, as against said purchasers after      such sale, under the existing laws of this State.'

'SECT. 10. That upon the sale of any of the franchises of     either of the railroad companies by the commissioners under      the provisions of this act, all the rights, privileges, and      immunities appertaining to the franchise so sold under its      act of incorporation and the amendments thereto, and the      general improvement law of the State and acts amendatory      thereof, shall be transferred to and vest in such purchaser,      and the purchaser shall hold said franchise subject to all      liens and liabilities in favor of the State, as now provided      by law against the railroad companies.'

The Edgefield and Kentucky company was one of the companies in default, and it is averred in the present bill that, 'under a bill filed to foreclose the State's statutory lien upon the road and superstructure, equipments and stock, and the property owner by the company as incident to or necessary for its business, &c.,. . . the road, its franchises, property, rights, privileges, immunities, &c., were sold,' and the St. Louis and Southwestern company by sundry mesne conveyances was invested with the title. It is now contended that, under these circumstances, the road of the Edgefield and Kentucky company, in the hands of the St. Louis and Southwestern, is exempt from taxation until the expiration of twenty years from its completion. The Supreme Court of the State dismissed the bill, holding that the exemption from taxation which was granted to the Nashville and Chattanooga company was not one of the privileges of that company which passed to the Edgefield and Kentucky company, either by its original or amended charter. To reverse that decree the case has been brought here by writ of error.

In the view we take of this case, it is unnecessary to determine the question on which the decision seems to have turned in the court below, for, as we think, it has not been shown that if the property in the hands of the original company was exempt from taxation, that exemption passed to the purchasers at the sale to foreclose the State's statutory lien under which the complainant claims. In Morgan v. Louisiana (93 U.S. 217) we distinctly held that immunity from taxation was a personal privilege and not transferable, except with the consent or under the authority of the legislature which granted the exemption, or some succeeding legislature, and that such an exemption does not necessarily attach to or run with the property after it passes from the owner in whose favor the exemption was granted. In that case the property in the hands of the original company was exempt from taxation. The company mortgaged its property and franchises, and under that mortgage the property and franchises were sold, pursuant to the terms of a judicial decree; but we held that by such a sale only such franchises passed as were necessary to the operation of the company, and without which its road and works would be of little value, and that consequently the property in the hands of the purchasers was subject to taxation.

In the present case the lien of the State was put by the statute only on the property of the company. It did not even in express terms include the franchises which were necessary to the operation of the road. Under such circumstances, if there were nothing more, it would seem to be clear beyond all question that a sale under the lien would not necessarily carry with it any immunity from taxation which the property enjoyed in the hands of the original company.

But it is contended that, as the case stands on demurrer to a bill which contains the distinct averment that 'the road, its franchises, property, rights, privileges, immunities,' &c., were sold, it must be assumed as an admitted fact that any immunity from taxation which the old company had, passed to the purchasers and their grantees. This averment must be taken in connection with the further equally distinct statement in the bill that the sale took place under proceedings instituted in the Chancery Count of Nashville 'to foreclose the State's statutory lien,' and as that lien was confined to the 'property owned by the company, or incident to, or necessary for, its business,' we will not, in the absence of a particular and positive allegation to the contrary, presume that more was sold that the lien covered. Mere general words of description are not sufficient to extent a sale beyond the subject-matter of the lien, as defined by the statute which lies at the foundation of the entire proceeding.

We are told that a contrary doctrine is established by the case of The Knoxville and Ohio Railroad Company v. Hicks, decided by the Supreme Court of Tennessee at the September Term, 1877, and not yet reported, so far as we are advised, in any of the volumes of the regular series of the reports of the court. We do not so understand that case. There it was 'distinctly adjudged,' by the Chancery Court of Nashville in the proceedings to enforce the statutory lien under which the sale was made, 'that not only the property of the old company, but all its rights, franchises, privileges, and immunities, as defined by the charter and laws, and the decree in the cause, passed to and vested in the new company,' which was the purchaser. Nothing of the kind is found in this case. It is nowhere stated that the decree of the court was, but only what was sold; and inasmuch as the jurisdiction of the court was, by the terms of the act of 1870, expressly confined to an adjudication of matters of controversy 'touching the rights and interest of the State, and also of stockholders, bondholders, creditors, and others in said roads,' and to defining 'what shall be the rights, duties, and liabilities of a purchaser of the State's interest in said roads,. . . and what shall be the reserved rights of said companies, stockholders, and others respectively, as against such purchasers after such sale, under the existing laws of the State,' it would be against all the settled rules of construction to hold, upon the face of the statute alone, that more was sold than the lien to be adjudicated upon implied.

We are all of opinion, therefore, without deciding whether the property in the hands of the Edgefield and Kentucky Company was exempt, that the decree below dismissing the bill should be affirmed; and it is

So ordered.

title: Wilson v. Gaines/Opinion of the Court


text: Talk:Wilson v. Gaines/Opinion of the Court


text:
Seven Hickory v. Ellery

ERROR to the Circuit Court of the United States for the Southern District of Illinois.

This is an action by George B. Ellery against the town of Seven Hickory, Ill., to recover upon certain bonds issued by it March 1, 1872, which recite that they are issued 'in pursuance of authority conferred by an act of the General Assembly of the State of Illinois, entitled 'An Act to incorporate the Tuscola, Charleston, and Vincennes Railroad Company,' approved March 7, 1867, and 'An Act to amend the foregoing act,' approved March 25, 1869, and of an election of the legal voters of the town of Seven Hickory, Ill., on the second day of April, 1867, under the provisions of said act of incorporation.'

The defendant objected to the validity of the bonds on the ground that the General Assembly by which the bill for the act of March 7, 1867, was passed adjourned sine die Feb. 28, 1867, on which day the bill was presented to the governor, in whose bands it remained until March 7, when it was approved and signed by him and delivered to the secretary of state, in whose office it was filed, and thereupon published as a low of the State. The defendant also proved that after such adjournment there was no session of the General Assembly until June, 1867.

The court having overruled the objection, found the issues in favor of the plaintiff, and rendered judgment accordingly. The defendant sued out this writ of error.

Sect. 21, art. 4, of the Constitution of Illinois of 1848, is as follows:--

'Every bill which shall have passed the Senate and House of Representatives shall, before it becomes a law, be presented to the governor; if he approve, he shall sign it; but if not, he shall return it, with his objections, to the House in which it shall have originated; and the said House shall enter the objections at large on their journal, and proceed to reconsider it. If, after such reconsideration, a majority of the members elected shall agree to pass the bill, it shall be sent, together with the objections, to the other House, by which it shall likewise be reconsidered; and if approved by a majority of the members elected, it shall become a law, notwithstanding the objections of the governor; but in all such cases the votes of both Houses shall be determined by yeas and nays, to be entered on the journal of each House, respectively. If any bill shall not be returned by the governor within ten days (Sundays excepted) after it shall have been presented to him, the same shall be a law, in like manner as if he had signed it, unless the General Assemble shall, by their adjournment, prevent its return; in which case, the said bill shall be returned on the first day of the meeting of the General Assembly after the expiration of said ten days, or be a law.'

Mr. John M. Palmer for the plaintiff in error.

Mr. D. T. McIntyre, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Seven Hickory v. Ellery


text: Talk:Seven Hickory v. Ellery

title: Talk:Seven Hickory v. Ellery


text:
Seven Hickory v. Ellery/Opinion of the Court

The single question we have now to consider is whether a bill passed by both Houses, and presented to the governor before the legislature adjourns, becomes a law when signed by the governor after the session of the legislature has been terminated by an adjournment, but within ten days from its presentation to him. We have no hesitation in saying it does. There is certainly no express provision of the Constitution to the contrary. All that instrument requires is that, before any bill, which has passed the two Houses, can become a law, it shall be presented to the governor. If he approves it, he may sign it. If he does sign it within the time, the bill becomes a law. That is not said in so many words, but is manifestly implied. After a bill has been signed, the legislature has nothing more to do with it. Undoubtedly, if the legislature should be in session when the signing is done, it would not be inappropriate for the governor to communicate his approval to one or both the Houses; but there is nothing in the Constitution which requires him to do so. The filing of the bill by the governor in the office of the secretary of state with his signature of approval on it is just as effectual in giving it validity as a law, as its formal return to the legislature would be. The bill becomes a law when signed. Everything done after that is with a view to preserving the evidence of its passage and approval.

The other parts of the article of the Constitution under consideration relate only to what is to be done if the governor fails to indicate his approval of the bill by signing it. If the legislature continues in session and he positively disapproves the bill, he may, within ten days from the time of its presentation to him, return it with his objections to the House in which it originated. Under such circumstances the bill cannot become a law until it has again passed both Houses, and this time by a majority of all the members elected. Such a second passage, if secured and entered on the journal, makes the bill a law notwithstanding its disapproval by the governor. If the governor remains passive, and neither signs nor returns the bill within ten days, the legislature being at the time in session, it becomes a law without his approval.

In this way provision is made for every case that can arise, except when the governor fails to sign the bill and the legislature adjourns for the session before the expiration of the ten days. To meet such a state of things it was provided that the governor might return the bill with his objections on the first day of the next session, and that, if he did not, the bill was then to become a law. If he did, the bill must again be passed over his objections as in case of a return before an adjournment and within the ten days. If thus passed it became a law, otherwise not. So that, under the Constitution of Illinois, if a bill is passed by both Houses of the legislature it becomes a law,--

1, when approved and signed by the governor within ten days     after its presentation to him; 2, when the legislature being      in session, the governor fails to sign the bill or return it      with his objections to the House in which it originated      within the ten days; 3, when, after being returned within the      ten days, it is passed by the requisite majorities over his      objections; 4, when, if the session of the legislature      terminates by an adjournment before the expiration of the ten      days, he fails to return the bill with his objections the      first day of the next session; and, 5, when, having returned      it with objections of the first day of the next session, it is again passed by the requisite majorities      in both Houses. And it becomes a law at the time when the     event happens which is to give it validity. In the present     case the bill was approved and signed within the ten days,      and, therefore, as we think, it become a law from the date of      the approval, notwithstanding the legislature was not in      session at the time. This is in accordance with the ruling of     the Court of Appeals of New York in The People v. Bowen (21      N. Y. 517); of the Supreme Court of Louisiana in ''State, ex      rel. Belden, Attorney-General, v. Fagan (22 La. Ann. 545),     and of the Supreme Court of Georgia in Solomon v.      Commissioners of Cartersville'' (41 Ga. 157), upon provisions      somewhat similar in the constitutions of those States. In the     last case the decision was put on the ground that the      practice of the governor had been to sign the bills within      the limited time, whether the legislature was in session or      not, but not afterwards. The bill of exceptions in the     present case shows that the practice in Illinois has been to      sign after the legislature had adjourned.

In every view of the case, we think the judgment below was right, and it is consequently

Affirmed.


text: Talk:Seven Hickory v. Ellery/Opinion of the Court


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Railroad Company v. Baldwin

ERROR to the Supreme Court of the State of Nebraska.

This was an action by Baldwin to recover of the St. Joseph and Denver City Railroad Company, or its successor in interest, damages for entering upon his land in Nebraska, and appropriating, in the construction of its road, a strip two hundred feet in width and two hundred road in length. The company claimed a right of way over the land of that width, under the act of Congress of July 23, 1866, c. 212, entitled 'An Act for a grant of lands to the State of Kansas to aid in the construction of the Northern Kansas Railroad and Telegraph.' 14 Stat. 210. The first section of the act, so far as it is material in this case, is as follows:--

'Be it enacted, &c., that there is hereby granted to the State of Kansas, for the use and benefit of the Saint Joseph and Denver City Railroad Company, the same being a corporation organized under the laws of the State of Kansas, to construct and operate a railroad from Elwood, in Kansas, westwardly, via Maryville, in the same State, so as to effect a junction with the Union Pacific Railroad, or any branch thereof, not farther west than the one hundredth meridian of west longitude, every alternate section of land designated by odd numbers, for ten sections in width on each side of said road, to the point of intersection. But in case it shall appear that the United States have, when the line or route of said road is definitely fixed, sold any section, or any part thereof, granted as aforesaid, or that the right of pre-emption or homestead settlement has attached to the same, or that the same has been reserved by the United States for any purpose whatever, then it shall be the duty of the Secretary of the Interior to cause to be selected for the purposes aforesaid, from the public lands of the United States nearest to tiers of sections above specified, so much land in alternate sections, or parts of sections designated by odd numbers as shall be equal to such lands as the United States have sold, reserved, or otherwise appropriated, or to which the rights of pre-emption of homestead settlements have attached as aforesaid, which lands, thus indicated by odd numbers and selected by direction of the Secretary of the Interior as aforesaid, shall be held by the State of Kansas for the use and purpose aforesaid.'

The fourth section is as follows:--

'That as soon as the said company shall file with the Secretary of the Interior maps of its line designating the route thereof, it shall be the duty of the said Secretary to withdraw from the market the lands granted by this act in such manner as may be best calculated to effect the purpose of this act and subserve the public interest.' The sixth section is as follows:--

'That the right of way through the public lands be, and the same is hereby, granted to said Saint Joseph and Denver City Railroad Company, its successors and assigns, for the construction of a railroad as proposed, and the right is hereby given to said corporation to take from the public lands adjacent to the line of said road, material for the construction thereof. Said way is granted to said railroad to the extent of one hundred feet in width on each side of said road where it may pass through the public domain; also, all necessary ground for station buildings, workshops, depots, machine-shops, switches, side-tracks, turn-tables, and water-stations.'

When the grant was made by Congress, the land claimed by Baldwin was vacant and unoccupied land of the United States. But the line of the road over it was not definitely located until October, 1871. He acquired whatever rights he possession in October, 1869. The defendant contends that the plaintiff took the land subject to its right of way. He contends that the grant of the right of way took effect only from the date at which the company filed its maps designating the route with the Secretary of the Interior. The District Court of the State agreed with him and gave judgment in his favor. The Supreme Court affirmed it, and to review it the cause is brought here.

Mr. John F. Dillon for the plaintiff in error.

Mr. E. E. Brown, contra.

MR. JUSTICE FIELD, after stating the case, delivered the opinion of the court.

title: Railroad Company v. Baldwin


text: Talk:Railroad Company v. Baldwin

title: Talk:Railroad Company v. Baldwin


text:
Railroad Company v. Baldwin/Opinion of the Court

The act of Congress of July 23, 1866, c. 212, makes two distinct grants: one of lands to the State of Kansas for the benefit of the St. Joseph and Denver City Railroad Company in the construction of a railroad from Elwood in that State to its junction with the Union Pacific via Maryville; the other of a right of way directly to the company itself. The lands consisted of alternate sections, designated by odd numbers, on each side of the line of the proposed road. The grant of them was subject to the condition that if, at the time the line of the road was definitely fixed, the United States had sold any section or a part thereof, or the right of pre-emption or homestead settlement had attached to it, or the same had been otherwise reserved by the United States for any purpose, the Secretary of the Interior should select an equal quantity of other lands nearest the sections designated, in lieu of those appropriated, which should be held by the State for the same purposes. The limitations upon the grant are similar to those found in numerous other grants of land made by Congress in aid of railroads. Their object is obvious. The sections granted could be ascertained only when the routes were definitely located. This might take years, the time depending somewhat upon the length of the proposed road and the difficulties of ascertaining the most favorable route. It was not for the interest of the country that in the mean time any portions of the public lands should be withheld from settlement or use because they might, perhaps, when the route was surveyed, fall within the limits of a grant. Congress, therefore, adopted the policy of keeping the public lands open to occupation and pre-emption, and appropriation to public uses, notwithstanding any grant it might make, until the lands granted were ascertained, and providing that if any sections settled upon or reserved were then found to fall within the limits of the grant, other land in their place should be selected. Thus settlements on the public lands were encouraged without the aid intended for the construction of the roads being thereby impaired. The language of the act here, and of nearly all the congressional acts granting lands, is in terms of a grant in proesenti. The act is a present grant, except so far as its immediate operation is affected by the limitations mentioned. 'There is hereby granted' are the words used, and they import an immediate transfer of interest, so that when the route is definitely fixed the title attaches from the date of the act to the sections, except such as are taken from its operation by the clauses mentioned. This is the construction given by this court to similar language in other acts of Congress. Missouri, Kansas, & Texas Railway Co. v. Kansas Pacific Railway Co., 97 U.S. 491; Leavenworth, Lawrence, & Galveston Railroad Co. v. United States, 92 id. 733.

But the grant of the right of way by the sixth section contains no reservations or exceptions. It is a present absolute grant, subject to no conditions except those necessarily implied, such as that the road shall be constructed and used for the purposes designed. Nor is there anything in the policy of the government with respect to the public lands which would call for any qualification of the terms. Those lands would not be the less valuable for settlement by a road running through them. On the contrary, their value would be greatly enhanced thereby.

The right of way for the whole distance of the proposed route was a very important part of the aid given. If the company could be compelled to purchase its way over any section that might be occupied in advance of its location, very serious obstacles would be often imposed to the progress of the road. For any loss of lands by settlement or reservation, other lands are given; but for the loss of the right of way by these means, no compensation is provided, nor could any be given by the substitution of another route.

The uncertainty as to the ultimate location of the line of the road is recognized throughout the act, and where any qualification is intended in the operation of the grant of lands, from this circumstance, it is designated. Had a similar qualification upon the absolute grant of the right of way been intended, it can hardly be doubted that it would have been expressed. The fact that none is expressed is conclusive that none exists.

We see no reason, therefore, for not giving to the words of present grant with respect to the right of way the same construction which we should be compelled to give, according to our repeated decisions, to the grant of lands had no limitation been expressed. We are of opinion, therefore, that all persons acquiring any portion of the public lands, after the passage of the act in question, took the same subject to the right of way conferred by it for the proposed road.

The fact that the right of way over land in Nebrasks was granted to a corporation in Kansas does not alter the case. Nebrasks was at the time a Territory of the United States, and it was entirely competent for Congress to confer upon any corporation of a State a right of way for a railroad to be constructed by it through the lands of the United States situated in that Territory. And in February, 1869, after the Territory had become a State, its legislature, by an express enactment, authorized railroad companies organized under the laws of Kansas, Missouri, or Iowa to extend and build their roads into the State, and declared that, upon complying with certain conditions, they should possess all the powers, franchises, and privileges of railroad companies incorporated under its laws. It is not shown that the company here has not complied with the prescribed conditions, even if such an objection could be raised by any other party than the State itself. But independently of this consideration, where Congress has conferred upon a railroad corporation of a State a right of way over the public lands of the United States in any one of their Territories, it may be doubted whether the State subsequently created out of the Territory could prevent the enjoyment by such corporation of the right conferred. It could do so only on the same terms that it could refuse a recognition of its own previously granted right, for in such matters the State would succeed only to the authority of Congress over the Territory.

The judgment of the Supreme Court of Nebraska must, therefore, be reversed, and the cause be remanded to it with directions that further proceedings be had in accordance with this opinion; and it is

So ordered.

MR. CHIEF JUSTICE WAITE dissented.


text: Talk:Railroad Company v. Baldwin/Opinion of the Court


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Fisk v. Arthur

ERROR to the Circuit Court of the United States for the Southern District of New York.

The facts are stated in the opinion of the court.

Mr. Stephen G. Clarke for the plaintiff in error.

The Solicitor-General, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

title: Fisk v. Arthur


text: Talk:Fisk v. Arthur

title: Talk:Fisk v. Arthur


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Fisk v. Arthur/Opinion of the Court

This is a suit to recover back duties paid under protest. The goods imported were manufactured shirtings, not made up, composed of linen and cotton; the cotton being the material of chief value and largely perdominating. There were more than two hundred threads to the square inch, counting the warp and filling.

The act of March 2, 1861, c. 68, sect. 22 (12 Stat. 192), provided for a duty of thirty per cent ad valorem on 'manufactures not otherwise provided for, composed of mixed materials, in part of cotton, silk, wool or worsted, or flax.' The same act, sect. 14, provided for specific duties on all manufactures of cotton not bleached, &c., having certain numbers of threads to the square inch, counting the warp and filling and being of certain weights. An addition was made to the duties on manufactures of mixed materials by the act of July 14, 1862, c. 163, sect. 13. Id. 557. By the act of June 27, 1864, c. 171, sect. 6 (13 id. 208), the duties on manufactured cottons, as provided in the act of 1861, were to some extent changed and a general clause added at the end of the section as follows: 'All other manufactures of cotton, not otherwise provided for, thirty-five per centum ad valorem.' On the 3d of March, 1865, c. 80, sect. 1 (id. 491), the rates of duty on manufactures of cotton dependent on the weight and the number of threads to the square inch were somewhat changed.

By the act of April 30, 1842, c. 270, sect. 20 (5 id. 565), now sect. 2499 of the Revised Statutes, it was provided that there should be levied and collected on each and every non-enumerated article which bears a similitude, either in material, quality, texture, or the use to which it may be applied, to any enumerated article chargeable with duty, the same rate of duty which is levied and charged on the enumerated article it most resembles in any of the above particulars; and if any non-enumerated article equally resembles two or more enumerated articles, on which different rates of duty are chargeable, it shall pay the highest rate, and on all articles manufactured from two or more materials the duty shall be assessed at the highest rate chargeable on any of its component parts.

The collector in this case demanded and collected the duties at the rates chargeable on manufactures of cotton exceeding two hundred threads to the square inch, while the importer claimed the goods were dutiable under the acts of 1861 and 1862, as composed of mixed materials. The suit was brought to recover back the excess charged by the collector, and on the trial the court instructed the jury on the conceded facts to bring in a verdict for the defendant. This instruction is assigned for error here.

We decided in Solomon v. Arthur (102 U.S. 208) that the mixed-material clause of the act of 1861 was descriptive rather than denominative, and that because goods were made of mixed materials they were not necessarily stamped with the name of mixed goods. Consequently goods made of mixed materials were not dutiable under that clause if they came properly within any other description found in the tariff acts. The act of 1864 provides for all manufactures of cotton, so that the question here is, whether these goods are essentially of that character. If they are, they are not dutiable under the mixed-material clause.

In Stuart v. Maxwell (16 How. 150), it was held that the act of 1842 brought goods made of linen and cotton within the provision of the tariff act of 1846, c. 74, sect. 11 (9 Stat. 46), sched. D, which imposed a duty on 'manufactures composed wholly of cotton, not otherwise provided for.' It was conceded that manufactures of cotton and linen were not enumerated in the act of 1846, but we said that, 'By providing for the principal thing, it has provided for all other things which the law declares to be the same. It is only upon this ground that sheer and manifest evasions can be reached. Suppose an article is designedly made to serve the uses and take the place of some article described, but some trifling or colorable change is made in the fabric or some of its incidents. It is new in the market. No man can say he has ever seen it before, or known it under any commercial name. But it is substantially like a known article which is provided for. The law of 1842 then declares that it is to be deemed the same and to be charged accordingly.' The effect of this is to hold that such an article 'is provided for under the name of what it resembles.' Here, all manufactures of cotton are provided for in the act of 1864 and its amendments, and the article now in question, in material, quality, and texture, as well as the use to which it is to be applied, is precisely like cotton shirtings. As cotton largely predominates, we think the burden was cast on the importer to show that the change was substantial and not for the purpose of evading the requirements of the law. It is not pretended that the new article had acquired any distinctive name in commerce, or that it was in any material respect different from similar goods manufactured entirely of cotton. The only difference between this case and that of Stuart v. Maxwell is that here it is claimed the articles are enumerated as mixed goods, while there that they were not enumerated at all. There it was held that they were not non-enumerated because they were substantially cotton goods, and here we think for the same reason they are not mixed goods. They are substantially, and, therefore, within the meaning of the tariff acts, actually manufactures of cotton. Linen has been used to a limited extent, not to make goods of 'mixed materials,' but to make 'manufactures of cotton' more useful for some purposes. To hold, upon the facts as they are admitted to be, that these goods were something radically different from cotton shirtings, would be to encourage evasions of the descriptive terms in the tariff laws, 'by some trifling or colorable change in the fabric, or some of its incidents.' This we are not inclined to do.

Judgment affirmed.

title: Fisk v. Arthur/Opinion of the Court


text: Talk:Fisk v. Arthur/Opinion of the Court


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Insurance Company v. Bangs

ERROR to the Circuit Court of the United States for the District of Minnesota.

This was an action on two policies of insurance upon the life of James H. Bangs, each for $5,000, issued on the 22d of November, 1875, by the New York Life Insurance Company, and made payable to the plaintiff. It was originally commenced in a court of the State of Minnesota, and was removed to a general denial of its States on the petition of the company, averring that he was a citizen of Minuesota, and that the company was a corporation created under the laws of New York. To the complaint the company answered, and, in addition to a general denieal of its allegations, set up that the insured had committed suicide by voluntarily taking poison with the intention of producing death; and when the policies were applied for and obtained, he was represented to the company to be in sound health, correct in habits, to have every prospect of a long life, and to be a person who fully intended to live as long as possible in the course of nature; that the company relied upon these representations, and believed them to be true, and would not otherwise have accepted the risks and issued the policies, or either of them; but that, nevertheless, the representations were false and fraudulent, and, at the time they were made and the policies applied for and obtained, the insured intended to take his life within a short period, and thereby to defraud the company out of the amount of insurance, and that in execution of this fraudulent purpose he took his life. The action was commenced in June, 1876, and in July following the order for its removal was made; but the proceedings were not, in fact, transferred until the subsequent December, when the answer was filed. Nothing further was done in the case until June, 1877, when the company obtained leave to file a supplemental answer setting up a decree which, during that month, it had recovered against the plaintiff in the Circuit Court of the United States for the District of Michigan. It appears that in March, 1876, the company had commenced a suit in equity, in that court, against the plaintiff here and his mother, to obtain a cancellation of the policies of insurance and an injunction against instituting or prosecuting any action at law upon them. The bill averred-what is substantially stated in the answer above, but with much greater detail-that the insured obtained the policies with the intention, at the time, of taking his life soon afterwards, and thereby defrauding the company out of the amount of the insurance, and that he carried out this intention by taking poison, which caused his death. The supplemental answer, after setting forth the institution of the suit, averred that subpoenas were issued and served upon the defendants; that Edson C. Bangs, the son of the insured, to whom the policies were payable, being a minor, one Henry A. Harmon was appointed by the court guardian ad litem for him; that by this guardian he filed an answer denying that the death of the insured was caused by poison, or that the policies were obtained for the purpose of defrauding the company, or that death was effected in pursuance of any such fraudulent design, and all allegations of fraud in the bill; that afterwards proofs were taken and a decree was rendered therein adjudging the policies to be void and ordering their cancellation, and perpetually enjoining the defendants from instituting and carrying on any action at law upon them.

An exemplified copy of the record was annexed to and made part of the supplemental answer. To this answer the plaintiff demurred, on the ground, among other things, that the proceedings of the Circuit Court of the United States were void, in that it appeared from the record that the court never had jurisdiction of the person of Edson C. Bangs, the plaintiff here, and no jurisdiction in equity over the action under the circumstances mentioned. The demurrer was sustained, and subsequently the defendant obtained leave to withdraw the original answer, so as to rest its defence upon the supplemental answer and the matters therein pleaded. Judgment was accordingly rendered for the plaintiff for the amount claimed, and to review that judgment the case is brought to this court on writ of error.

The record of the equity suit in Michigan showed on its face that the subpoena issued in it was never personally served upon the defendant, Edson C. Bangs, the plaintiff in this action; that it was only served on his general guardian after he, Bangs, had left the State and gone to Minnesota to reside; that upon the affidavit of the complainant's solicitor, stating that the subpoena and injunction in the case had been a week in the hands of the marshal, who reported that he could not find the defendants in his district, that they had locked up the house where they resided and had temporarily left the State, and that he was unable to find any one in charge of the house, the court made an order declaring that the service of the subpoena and injunction on the general guardian was a good service upon the infant; that afterwards the general guardian was appointed guardian ad litem for him, but not making any appearance for him, and not intending to submit the rights of the infant to the adjudication of the court, his appointment was revoked, and Henry A. Harmon was substituted as such guardian ad litem in his place, and that he subsequently acted in the case in that capacity for the infant.

Mr. Herbert L. Baker and Mr. William A. Maury for the plaintiff in error.

Mr. Mark S. Brewer, contra.

MR. JUSTICE FIELD, after stating the case, delivered the opinion of the court.

title: Insurance Company v. Bangs


text: Talk:Insurance Company v. Bangs

title: Talk:Insurance Company v. Bangs


text:
Insurance Company v. Bangs/Opinion of the Court

As seen from the statement of the case, the only matter for our consideration relates to the validity of the decree of the Circuit Court of the United States for the District of Michigan, and that depends upon the solution of the question whether the court had jurisdiction of the person of the infant, Edson C. Bangs, the plaintiff here, and of the subject-matter of the suit upon which it acted.

From the view we take of the case, it will only be necessary to examine the proceedings to see whether the infant was ever brought before the court so as to justify the appointment of a guardian ad litem for him. The general authority of courts of equity over the persons and estates of infants, upon which counsel have so much dwelt, is not questioned. It may be exerted, upon proper application, for the protection of both. This jurisdiction in the English courts of chancery is supposed to have originated in the prerogative of the crown, arising from its general duty as parens patrice to protect persons who have no other rightful protector. But partaking, says Story, as the prerogative does, more of the nature of a judicial administration of rights and duties in foro conscientice than of a strict executive authority, it was very naturally exercised by the Court of Chancery as a branch of its original general jurisdiction. 'Accordingly,' he adds, 'the doctrine now commonly maintained is that the general superintendence and protective jurisdiction of the Court of Chancery over the persons and property of infants is a delegation of the rights and duty of the crown; that it belonged to that court, and was exercised by it from its first establishment; and that this general jurisdiction was not even suspended by the statute of Henry VIII., erecting the court of wards and liveries.' The jurisdiction possessed by the English courts of chancery from this supposed delegation of the authority of the crown as parens patrice is more frequently exercised in this country by the courts of the States than by the courts of the United States. It is the State and not the Federal government, except in the Territories and the District of Columbia, which stands, with reference to the persons and property of infants, in the situation of parens patrioe. Accordingly provision is made by law in all the States for the appointment of such guardians, whose duties and powers are carefully defined. The authority of the Federal courts can only be invoked within the limits of a State for such an appointment where property of the infant is involved in legal proceedings before them, and needs the care and supervision of an officer of that kind. In such a case, to preserve the property from destruction or waste, the Federal courts may appoint a guardian to take care of it pending the proceedings. And those courts will always see that a proper guardian ad litem has charge of the infant's interests where his property is involved in proceedings before them. This is the extent of their authority. Nothing is gained, therefore, in this case by reference to the general power of courts of equity over the persons and property of infants. The infant Bangs possessed no property in Michigan when the suit in equity was commenced against him. That suit did not concern any property, real or personal. It was brought to cancel a contract made with his father, and any decree respecting it would necessarily have been coram non judice, unless the parties interested were before the court upon the service of a subpoena or their voluntary appearance. The infant, being absent from the State, could not be personally served.

The statute of Michigan requiring the general guardian of an infant to 'appear for and represent his ward in all legal suits and proceedings unless when another person is appointed for the purpose as guardian or next friend' does not change the necessity of service of process upon the defendants in a case before a court of the United States where a personal contract alone is involved. It may be otherwise in the State courts; it may be that, by their practice, the service of process upon the general guardian, or his appearance without service, is deemed sufficient for their jurisdiction. We believe that in some States such is the fact; but the State law cannot determine for the Federal courts what shall be deemed sufficient service of process or sufficient appearance of parties. Substituted service, by publication, against non-resident or absent parties, allowed in some States in purely personal actions, is not permitted in the Federal courts. Such service can only be resorted to where some claim or lien upon real or personal property is sought to be enforced, and the decision of the court will then only affect property of the party within the district. Rev. Stat., sect. 738.

In all cases brought to enforce or cancel personal contracts, or to recover damages for their violation, the statute requires a personal service of process upon the defendants, or their voluntary appearance. And the equity rules qualify the statute only so far as to allow, in cases of husband and wife, a copy of the subpoena to be delivered to the husband, and in other cases a copy to be left at the dwelling-house, or usual place of abode of the defendant, with some person who is a member of or resident in the family. In either mode, the defendant is to be served within the district, and until such service or his appearance, the court has no jurisdiction to proceed or to render a decree affecting his rights or interest. There being here no property of the infant defendant within the district of Michigan, which the court could lay hold of,-and he being absent from it,-there was no foundation laid for any progress by the court in the case. It never acquired jurisdiction over the infant; it could, therefore, appoint no guardian ad litem for him, and the decree rendered against him was ineffectual for any purpose.

Our attention has been called to several cases of the State courts, in which it has been held that a decree or judgment could not be collaterally attacked, though rendered in a case where a guardian ad litem had been appointed without service of process on the infant. Such are the cases of Preston v. Dunn, 25 Ala. 507; Robb v. Lessee of Irwin, 15 Ohio, 689; and Gronfier v. Puymirol, 19 Cal. 629. All of them are illustrative of the position we have stated; they all relate to the interest of the infant in real property in the State.

In Preston v. Dunn, the bill was filed by an infant, suing by his next friend, to redeem a tract of land which had once belonged to his father, who had mortgaged it, and which had been sold under judicial decree in a foreclosure suit and purchased by the defendant. The father having died pending the foreclosure suit, and a posthumous child to him having been born, a bill of revivor was filed against the administrator and administratrix of his estate, and his infant son. A subpoena was served on the adult defendants, and a guardian ad litem was appointed by the court for the infant, who appeared for him. It was held by the Supreme Court of Alabama that the decree rendered upon such appearance was irregular, but not void, and that it could not be attacked collaterally.

In Robb v. Lessee of Irwin, it appeared that a guardian ad litem for infant heirs had been appointed in a proceeding for the sale of certain real property in which they were interested. In an action of ejectment subsequently brought by the heirs, it was held by the Supreme Court of Ohio that the proceeding was not vitiated by the appointment of the guardian ad litem, without previous service of process on the infant.

In Gronfier v. Puymirol, a general guardian of the estate of non-resident infants had been appointed by the Probate Court upon the representation that they were interested in certain real property in the State. In proceedings for a sale of such property, the general guardian appeared for the infants without being appointed guardian ad litem for them, and it was held by the Supreme Court of California, that the court had jurisdiction to order the sale and that it passed a good title; and that under the practice of the State a general guardian could appear in legal proceedings for his ward when a guardian ad litem was not appointed by the court.

There is nothing in these cases which at all conflicts with the views we have expressed as to the jurisdiction of the Circuit Court for the District of Michigan in appointing a guardian ad litem for a non-resident or absent infant, in a case which did not touch any property in the district, but was brought to cancel a personal contract.

There are, also, some cases in the State courts, in which a judgment upon a personal demand has been sustained against collateral attack, though rendered in an action where a guardian ad litem had been appointed without previous service of process upon the infant; but they are exceptional, and there has generally been in them some circumstance which rendered any disturbance of the judgment likely to lead to great hardship and injustice. Such is the case of Bustard v. Gates and Wife, 4 Dana (Ky.), 429. There an ejectment was brought for land more than twenty years after it had been sold, and which during the interval had greatly increased in value. But in none of the cases to which our attention has been called has a judgment been upheld where a guardian ad litem had been appointed for a non-resident infant against whom a purely personal demand was prosecuted. If such a case exists, the judgment in it can have no greater force than one rendered for a personal demand against a non-resident upon any other form of constructive service; and that constructive service will not give jurisdiction in such cases is the established doctrine of this court. Pennoyer v. Neff, 95 U.S. 714.

Judgment affirmed.


text: Talk:Insurance Company v. Bangs/Opinion of the Court


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Terry v. McLure

APPEAL from the Circuit Court of the United States for the District of South Carolina.

The facts are stated in the opinion of the court.

Mr. Harvey Terry for the appellant.

Mr. James Lowndes and Mr. William E. Earl, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Terry v. McLure


text: Talk:Terry v. McLure

title: Talk:Terry v. McLure


text:
Terry v. McLure/Opinion of the Court

This was a suit in chancery brought by Terry against McLure, as receiver of the Bank of Chester, certain officers of the bank, and one or two of its stockholders. Its main purpose was to obtain a discovery of the names of the stockholders at the date of the failure of the bank, in order to make them, when discovered, liable for the amount of the circulating notes of the bank held by the complainant. It would be a useless task to trace here the interminable amendments to the original bill, none of which varied essentially its character, though some of the later ones attempted to set up fraud in the stockholders in receiving dividends declared and paid on their stock while the bank, as he alleged, was in a state of insolvency. It is enough to say of all these amendments, except the last, that no sufficient statement of the names of the stockholders who received such dividends, and of the amounts received by each, or of the circumstances under which they were declared or received, is found, whereon to charge any one stockholder.

This amended bill gives the names of a large number of stockholders, with a statement of the sum received by each, and is full of the general allegations that the money so received was a trust fund that should have been applied to the payment of the debts of the bank, but was diverted from its proper use to the payment of dividends.

This amended bill, however, was filed on the sixth day of May, 1878, which was eight years after the original bill was filed. It does not appear that any leave of the court was obtained to file it, though some four or five other amended bills show in every instance that they were filed with the leave of the court. It is a fair inference that what counsel on the other side say in their briefs is true, namely, that it was filed without leave and was disregarded by the court. In fact, the record shows that the original bill was dismissed on its merits after hearing on the pleadings, testimony, and argument of counsel, on the same day that this last amended bill was filed. Whether before or after the decree of the court was rendered is not shown. Nor is it material, as it must be understood that however it got to be filed in court it was done without consent of the court or of counsel for the defendants. It must be disregarded, therefore, in the consideration of the case here.

As regards the statutory liability of he stockholders, the allegations of the bill, the answers of the defendants, and the evidence taken in the case all show that the suspension of specie payments took place on the twenty-seventh day of November, 1860, and that the statute of limitations of four years of the State of South Carolina, applicable to such cases, bars the complainant's right of recovery.

This point was adjudged in this court against the present complainant in Godfrey v. Terry, 97 U.S. 171. See also Carrol v. Green, 92 id. 509.

The decree of the Circuit Court is, therefore,

Affirmed.

title: Terry v. McLure/Opinion of the Court


text: Talk:Terry v. McLure/Opinion of the Court


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Jones v. Walker

APPEAL from the Circuit Court of the United States for the District of Kentucky.

The facts are stated in the opinion of the court.

Mr. Martin Bijur and Mr. W. O. Dodd for the appellant.

Mr. John Mason Brown, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

title: Jones v. Walker


text: Talk:Jones v. Walker

title: Talk:Jones v. Walker


text:
Jones v. Walker/Opinion of the Court

W. H. Walker, who was a large dealer in liquors in partnership with his son Frederick, made his will in July, 1870. One of the clauses of the will provided for the continuance of the partnership and the conduct of this business after his death.

It is in this language:--

'It is my wish that my son Frederick carry on the business of W. H. Walker & Co. in that name and style, and in my storehouse where it is now carried on, giving him power to change the place until my youngest child living to be twenty-one years of age arrives at that age, or for a shorter time, if he liabilities; but my other property To that end all my capital and Frederick carries on said business; be continued therein, and shall be chargeable for its debts and liabilities; but my other property shall not be so chargeable while Frederick carries on said business; my share shall pay the salary of an efficient man to aid him therein, or he shall have compensation for his services as to and from my share. Agents and employees of the concern are to be paid by it. Frederick is not to be charged with five thousand dollars advanced by me to him on his coming of age, and he is to have the privilege to purchase, at a fair valuation and upon reasonable time, such portion of my share in said concern and its good-will as will make his share equal to one-half. What he may so pay is to be divided as profits of the concern. While my storehouse is occupied by the concern it shall pay rent therefor. The profits of said concern, which shall be ascertained and declared in the first of January after my death, and annually thereafter, shall be divided between my wife and children, or their descendants, and others. As my personalty is to be divided among them when my youngest child living to be twenty-one years of age arrives at that age, or at the death of my son Frederick before that time, or when he discontinues the business, my interest in the concern and its good-will shall be sold as my executors may direct, and the proceeds divided, as the profits thereof are to be divided, with an obligation, if possible, that the business may be carried on under the old name and style.'

The testator died in 1872, and the business was conducted as directed in the will until Feb. 27, 1877, when the firm, on the petition of its members, was declared bankrupt by the proper court.

The appellant Jones was made assignee, and very shortly afterwards filed the bill in the present case against the devisees of W. H. Walker's will.

The object of the bill is twofold, namely, to subject the property of the deceased, which had not been embarked in the partnership enterprise, in the hands of the devisees, to the payment of the partnership debts, and to recover from the defendants money which they had received as dividends out of the profits of the business after the death of the testator.

In the recent case of Smith v. Ayres (101 U.S. 320), the legal principle lying at the foundation of the first of these grounds of relief was fully discussed and determined. It was there held that a testator might authorize the continuance of a partnership, in which he was engaged at the time of his death, without subjecting any more of his property to the vicissitudes of the business than what was then embarked in it, and that, unless he had expressly placed the whole, or some other part of his estate, under the operation of the partnership, it would not be presumed that he had so intended. See also Burwell v. Mandeville's Executor, 2 How. 560; Ex parte Garland, 10 Ves. Jr. 109. In the case before us the testator declares, in express terms, that his capital and interest in said concern shall be continued therein, and shall be chargeable for its debts and liabilities; but his other property shall not be so chargeable.

We see no reason in the present case for departing from the principle adopted in Smith v. Ayres after much consideration.

If dividends of profits out of the partnership business were honestly and fairly made, and when paid did not diminish the capital, nor withdraw what was necessary to pay the indebtedness of the concern, we see no reason why the persons receiving them should now be called on to refund them.

The will of the testator has a clause authorizing these dividends. The partnership had a long time to run and a large part of his capital was engaged in the business. There were children to be reared and educated, and it would have been very unreasonable that all the profits should be continually converted into capital, and that neither these children, nor Frederick, the other partner, should be permitted to receive dividends of profits, except on the condition of a liability to that extent for any future transactions of the partnership through a period of fifteen or twenty years.

If these dividends had not been declared in good faith, nor really earned, if they had diminished the capital, or if, when they were made, debts existed which would have been left without means of payment, the persons sharing in the dividends would probably have been liable to these creditors to the extent of the money so received.

But we are satisfied that none of these conditions existed.

The case is mainly one of fact, and the testimony is very full. We do not think its discussion here profitable or useful. We are satisfied that at the time the last divided was made the capital of the company was undiminished, and the firm amply able to pay its debts. Its misfortunes followed after this.

It very fully appears that the insolvency was brought about by accommodation indorsements for others, made after the last dividend was paid; that the firm, but for this, would have remained solvent, and that, in regard to this, none of the defendants were to blame except Frederick, who, being a full partner, is liable personally for all the debts of the firm.

An important matter in the case is a stipulation of the parties to the suit that all the debts owing by the firm were contracted subsequently to the declaration and payment of all the dividends, and none of the debts of the firm were in existence at the time these profits were declared and paid.

No creditor whose debt was in existence when these dividends were made was injured. All the debts then existing have been paid. What right had subsequent creditors to reclaim these dividends, who had no interest in the matter when they were paid? These defendants, except Frederick, were not partners. Their money was in the concern, and they received dividends instead of interest.

We repeat that there is no evidence of fraud or intentional wrong.

Decree affirmed.

title: Jones v. Walker/Opinion of the Court


text: Talk:Jones v. Walker/Opinion of the Court


text:
Unity v. Burrage

ERROR to the Circuit Court of the United States for the Southern District of Illinois.

On Feb. 8, 1853, an act of the legislature of Illinois was approved, entitled an act to incorporate 'the Decatur and Indianapolis Railroad Company.' It incorporated the company named for the purpose of 'constructing, completing, and operating a railroad from the town of Decatur, in Marion County, in the State of Illinois, and thence in a direct line, upon the most eligible route, to the east line of the State of Illinois.'

The third section of the act is as follows:--

'Said company is hereby authorized and empowered to unite and form a junction with the Indiana and Illinois Central Railway Company, or any other company which is or may hereafter be organized in the State of Indiana terminating on said line; and also, to unite and consolidate with the said Indiana and Illinois Central Railway Company, upon such terms and conditions as the directors shall mutually agree upon; and in the event that said companies shall consolidate, then and in that case there shall be but thirteen directors on the whole line of road so consolidated, and the number to reside in each State shall be determined as in the case of consolidation.'

Afterwards, on Feb. 20, 1854, an act of the same legislature was approved, entitled 'An Act to amend the act entitled 'An Act to incorporate the Decatur and Indianapolis Railroad Company, approved Feb. 8, 1853."

The preamble and first section of this act are as follows:--

'Whereas, under and in pursuance of the authority conferred in the above-named act, the said Decatur and Indianapolis Railroad Company, after their organization, united, consolidated, and merged their stock with the stock of the Indiana and Illinois Central Railway Company, forming a single corporation by means of such consolidation under the name and style of the 'Indiana and Illinois Central Railway Company,' therefore,

'SECT. 1. That the said Indiana and Illinois Central Railway Company, as existing under the said consolidation, is hereby declared to be entitled to hold, enjoy, and possess all the property, rights, franchises, and powers held, enjoyed, and possessed by either of said original corporations prior to their said consolidation, fully and effectually, to all intents and purposes, and to be entitled to have and hold all the rights, powers, and privileges conferred, or to be hereafter conferred, by law upon railroad corporations, organized under the act entitled 'An Act to provide for a general system of railroad incorporations,' approved Nov. 5, 1849.'

The last section reads as follows: 'This act shall be deemed and taken to be a public act, and shall be liberally construed in all courts of justice, and shall take effect and be in force from and after its passage.'

On Feb. 22, 1861, an act was passed, entitled 'An Act to extend the time for completing the Indiana and Illinois Central Railway Company.' The preamble of this act is as follows:--

'Whereas the Decatur and Indianapolis Railroad Company were legally incorporated under an act entitled 'An Act to provide for a general system of railroad incorporations,' in force November 5, 1849; and whereas said Decatur and Indianapolis Railroad Company afterwards united and consolidated with the Indiana and Illinois Central Railway Company, on the fourth day of May, A. D. 1853, in compliance with the provisions of an act entitled 'An Act to incorporate the Decatur and Indianapolis Railroad Company,' in force February eighth, 1853, and of an act entitled 'An Act to amend an act to incorporate the. Decatur and Indianapolis Railroad Company,' in force February twelfth, 1854, whereby said Decatur and Indianapolis Railroad Company became and was named and styled 'The Indiana and Illinois Central Railway Company;' and whereas said Indiana and Illinois Central Railway Company, in compliance with the provisions of the 44th section of an act entitled 'An Act to provide for a general system of railroad incorporations,' in force November 5th, 1849, began the construction of its roads and expended thereon ten per cent on the amount of its capital within five years after its incorporation.'

The body of the act extended for ten years from and after April 26, 1863, the time for putting in full operation the Indiana and Illinois Central railway.

The forty-fourth section of an act entitled 'An Act to provide for a general system of railroad incorporations,' in force Nov. 5, 1849, is as follows:--

'If any such corporation shall not, within five years after its incorporation, begin the construction of its road, and expend thereon ten per cent on the amount of its capital, and finish the road and put it in full operation in ten years thereafter, its act of incorporation shall become void.'

On March 27, 1869, an act was passed supplementary and amendatory of the act of Feb. 20, 1854, above mentioned, entitled 'An Act supplementary to and amending an act entitled 'An Act to incorporate the Decatur and Indianapolis Railroad Company,' approved Feb. 8, 1853.'

The act legalized an election held by the voters of Macon County in favor of the issuing of bonds of said county, to the amount of $60,000, to aid in building the Indiana and Illinois Central railway, and an election subsequently held by the voters of the same county in favor of a subscription by the county of $40,000 to the capital stock of the said railroad company, and of the issuing of the bonds of the county to pay for said stock, and in favor of subscriptions by said county to three other railroad companies therein named, and the issuing of the bonds of the county to pay therefor.

Sect. 2 of the act provides as follows:--

'The several townships in counties where township organization has been adopted, lying on or near to the line of said railroad, are hereby authorized to subscribe to and to take stock in the said Indiana and Illinois Central Railway Company. Elections may be held in any such township upon the question whether such township shall subscribe for any specified amount of stock of said county, not exceeding one hundred thousand dollars, whenever a petition for that purpose shall be presented as hereinafter specified.'

The subsequent sections of the act prescribe the mode of holding elections mentioned in the second section, and the levy and collection of a tax by the township authorities of the townships which voted to take stock in said railroad company, to pay the interest and principal on the bonds issued in payment thereof.

The last section extends the time for the completion of the railroad of the said Indiana and Illinois Central Railway Company to July 1, 1875.

On April 16, 1869, the legislature passed an act entitled 'An Act to fund and provide for paying the railroad debts of counties, townships, cities, and towns.' This act provides for the registration, in the office of the auditor of public accounts of the State, of bonds issued by counties, townships, &c., in aid of or to pay for stock in railroad companies.

Afterwards, on Sept. 13, 1869, and, as it was claimed, in pursuance of the authority conferred by the act of March 27, 1869, at a special election held on that day, a majority of the legal voters of Unity Township, in the county of Piatt, voted in favor of a subscription of $14,000 to the stock of the Indiana and Illinois Central Railway Company, and an issue of the bonds of the township sufficient to pay for such stock.

Pursuant to this vote, fourteen bonds of the township, for $1,000 each, all dated May 12, 1873, with interest coupons attached, were duly executed by the officers of the township.

The bonds, principal and interest, were made payable to the Indiana and Illinois Central Railway Company, or bearer, at the American Exchange National Bank, New York.

They contained the following recital:--

'This bond is one of a series of fourteen bonds, of one thousand dollars each, numbered from one to fourteen inclusive, issued under and by virtue of the acts of the General Assembly of the State of Illinois, entitled 'An Act supplementary to and amending an act entitled 'An Act to amend the act entitled an act to incorporate the Decatur and Indianapolis Railroad Company,' approved February 8th, 1853, in force March 27th, 1869, and an act entitled 'An Act to fund and provide for paying the railroad debts of counties, townships, cities, and towns," in force 16th April, 1869, and in accordance with the vote of the electors of said township of Unity, at a special election held in said township on the thirteenth day of September, A. D. 1869, under the provisions of said acts, and in accordance therewith, and the faith of said township is hereby pledged for the payment of said principal sum and interest as aforesaid.'

The plaintiffs, being the holders of these bonds, brought this suit against the township on the coupons which fell due May 12, 1878, and May 12, 1879.

The declaration having averred the execution of the bonds (designating them as promissory notes), with the interest coupons attached, proceeded as follows:-- 'And each of said promissory notes recites that it is issued under and by virtue of a law of the State of Illinois, entitled 'An Act supplementary to and amending an act entitled 'An Act to amend the act entitled an act to incorporate the Decatur and Indianapolis Railroad Company,' approved Feb. 8, 1853,' in force Marcy 27, 1869.

'And under a low of the State of Illinois entitled 'An Act to fund and provide for paying the railroad debts of counties, townships, cities, and towns,' in force 16th April, 1869. And in accordance with the vote of the electors of said township of Unity, at a special election held in said township on the thirteenth day of September, A.D. 1869, under the provisions of said acts and in accordance therewith.

'And the plaintiffs further aver that said promissory notes have been duly registered in the office of the auditor of public accounts of the State of Illinois, pursuant to said act of April 16, 1869, as from the certificate of said auditor of public accounts attached to each of said promissory notes will more fully appear.

'That the plaintiffs are the bearers of the coupons for interest on said promissory notes which fell due on the twelfth day of May, A.D. 1878, being seven coupons of one hundred dollars each. And also of the fourteen coupons annexed to said promissory notes and of even number therewith, each of which said coupons became due and payable on the twelfth day of May, A.D. 1879, making in all the sum of twenty-one hundred dollars.

'And the said defendant has failed to provide funds for the payment of said instruments of interest at the American Exchange National Bank, New York. And has utterly neglected to pay the same, although thereunto often requested.'

The township filed a general demurrer to the declaration, which was overruled, and on its electing to stand by the demurrer and refusing to plead, judgment was rendered in favor of the plaintiff, which, by agreement of parties, was for the principal of the bonds and the interest up to June 10, 1880, amounting in all to $17,816.

This writ of error is prosecuted to reverse that judgment.

1. The act under which the bonds purport to have been issued is a private act. It is not specially pleaded, and the court cannot take judicial notice thereof. Leland v. Wilkinson, 6 Pet. 317; Covington Draw Bridge Co. v. Shepherd, 20 How. 227; Beaty v. Lessee of Knowler, 4 Pet. 152; ''Society for Prop. of Gospel v. Young, 2 N. H. 310; Perdicardis v. Bridge Company, 29 N.J. L. 367; Bank v. Wolliston'', 3 Harr. (Del.) 90; City Council v. Plank Road Co., 31 Ala. 76; King v. Doolittle, 1 Head (Tenn.), 77.

2. When the consolidation was completed, the old corporations were destroyed and a new one was created. The powers were granted to it as if the old companies had never enjoyed the franchises which has been conferred by their respective charters. Shields v. Ohio, 95 U.S. 319; Railroad Company v. Georgia, 98 id. 359; Clearwater v. Meredith, 1 Wall. 25; McMahan v. Morrison, 16 Ind. 172; Ohio v. Sherman, 22 Ohio St. 411; Shields v. Ohio, 26 id. 86. As the consolidation of the two companies operated to destroy the charter of each and annul the contract between the State and the corporators, neither of the original corporations was then in existence, or had power to accept the act of March 27, 1869.

That act does not profess to be an amendment of the charter of the Indiana and Illinois Central Railway Company. It is 'An Act supplementary to and amending an act entitled 'An Act to amend the act entitled an act to incorporate the Decatur and Indianapolis Railroad Company,' approved Feb. 8, 1853.' The Indiana and Illinois Central Railway Company, being a new and distinct corporation, with franchises directly conferred upon it by the legislature, under a different name from that company (Private Laws 1861, p. 499), had no authority to accept or reject the attempted amendment of a surrendered charter.

3. Sect. 23 of art. 3 of the Constitution of 1848 provides that 'no private or local law which may be passed by the General Assembly shall embrace more than one subject, and that shall be expressed in the title.'

The amendatory act is therefore void. O'Leary v. County of Cook, 28 Ill. 534; Fireman's Benevolent Association v. Lounsbury, 21 id. 511; Neifing v. Town of Pontiac, 56 id. 172; Prescott v. City of Chicago, 60 id. 121; Ottawa v. People, 48 id. 233; Middleport v. Life Insurance Co., 82 id. 562.

4. The Decatur and Indianapolis Railroad Company was incorporated under, and derived its powers from, an act entitled 'An Act to provide for a general system of railroad incorporations,' in force Nov. 5, 1849 (Private Laws, 1861, p. 499). By the provisions of the special act in force Feb. 8, 1853, it was required to organize in full compliance with the statutory provisions providing such general system.

This ancillary and amendatory act of 1869 attempts to change the corporate powers conferred by the general statute on the company. The legislature had no power to do this. It is an attempt, not to amend or change that statute, but, on the contrary, to leave it in full force and effect as to all other companies organized under it, and to extend the power of this corporation by a special act.

Mr. W. J. Henry for the plaintiff in error.

Mr. James Dinsmoor, contra.

Mr. JUSTICE WOODS, after stating the case, delivered the opinion of the court.

title: Unity v. Burrage


text: Talk:Unity v. Burrage

title: Talk:Unity v. Burrage