11^^ ^ftiiK- i||g^; THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW ACTIONS BY AND AGAINST CORPORATIONS AT LAW AND IN EQUITY EMBRACING ALSO CRIMINAL OFFENSES AND THE CONSTITUTIONAL BASIS OF CORPORATION ACTIONS AND DEFENSES BY JOSEPH ASBURY JOYCE OF THE NEW YORK, CALIFORNIA, AND CONNECTICUT BARS; AUTHOR OF " JOYCE ON INSURANCE," " JOYCE- ON FRANCHISES," AND JOINT AUTHOR OF "JOYCE ON ELECTRIC LAW " THE BANKS LAW PUBLISHING CO. NEW YORK 1910 T Copyright, 1910, by THE BANKS LAW PUBLISHING COMPANY ^ s Ik PREFACE In preparing this treatise the author has fully appreciated the difficulties which a subject of the nature of that covered presents in so far as the question of inclusion and exclusion of subject-matter, and drawing the line of demarkation is con- cerned. Not all cases in which corporations have brought suits or been sued are corporation actions or suits in the sense in which that term is or should be used. This is obvious. Great care has, therefore, been exercised in selection of the entire subject-matter of the work, with the endeavor on the part of the author to keep within the lines of inclusion and ex- clusion and still to present a satisfactory treatise. Having this question of selection constantly in mind the author has considered fully the principles upon which corporate actions are based, especially those constitutional principles which are the basis of corporation actions and defenses, since these must necessarily, at least in the majority of causes, be the first ques- tions involved in corporation actions or suits, as is fully evi- denced by the great and constantly growing number of corpo- ration cases in the Supreme Courts of the United States, which are tested by the principles of constitutional law. The right of action and defenses in matters relating to the supervision and control of corporations by corporation and like commissions is a frequent source of litigation and presents a line of actions or suits peculiar to corporations and has therefore been fully considered. The treatment of these subjects and underlying principles, has been followed by jurisdiction of courts, not only over corporations, but also over corporation supervisory bodies iii 734G97 IV 'PREFACE or commissions and the jurisdiction or powers of such bodies; the removal of suits; parties, including stockholders' rights and liabilities; and the various actions at law and in equity, in- cluding penalties, and criminal offenses, in which corporation questions have been involved. The author has personally written the entire work and has also personally examined the cases and asserts positively that every statement of law and the application of principles is fully and exactly supported by the citation given. The author trusts and believes that the profession will find the work practical, useful and satisfactory. Joseph Asbury Joyce. New York City, 1910 CONTENTS CHAPTER I CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — FUNDA- MENTAL, GOVERNMENTAL POWERS 1. Preliminary Statement. 2. Constitution and Laws of the United States Supreme Law of Land. 3. Powers of Federal and State Governments Distinguished — Territories. Judicial and Legislative Powers. Same Subject. CHAPTER II CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — REGULA- TION AND CONTROL § 6. Power to Regulate and Con- trol, Generally. 7. Police Power — General Prin- ciples as to Extent of. 8. Same Subject — Limitations Continued. 9. Same Subject — Limitations Continued. 10. Same Subject — Legislative Discretion — Interference of Courts. IL Liberty to Contract — Inter- state Commerce — Police Power — Antitrust Act — Combiaations. 12. Liberty to Contract Continued — Police Power — Sales on Margin s — Limitations of Liability — Mechanics' Liens — Insurance. 16. 17. 13. Classification Statutes — Four- teenth Amendment. 14. Same Subject. 15. Police Power — Regulation of Slaughter Houses and Stock- yards. Regulation and Control — In- surance Companies. Same Subject. 18. Regulation and Control — In- stances — Mines — Hours of Labor — Water Companies — Adulteration — Ship Passen- ger Laws — Patent Rights. 19. Regulation and Control — For- eign Corporations — Rule. 20. Same Subject — Limitations upon Rule. VI CONTENTS CHAPTER III CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — REGULA- TION AND CONTROL, CARRIERS 21. Regulation and Control, Gen- erally — Transportation Com- panies — Railroads — Street Railroads — Express C o m - panics. 22. Railroads — Obligation of Con- tract — Due Process of Law. 23. Railroads — Obligation of Con- tract — E X e m p t i o n and Transfer T h e r e o f — D u e Process of Law. 24. State Statutes — Railroad Crossings — V i a d u c t s and Bridges — Expense of Change of Grade or Removal — Po- lice Power — Nonjudicial Question. 25. State Statutes — Railroad Tun- nels, Viaducts and Crossings — Expense of Removals or Repairs — Vested Rights. § 26. Federal and State Regulatio'is as to Employers and Em- ployes — Carriers, etc. — Po- lice Power — Interstate Com- merce. 27. Same Subject. 28. Federal Statute to Insure Humane Treatment of Live Stock by Carriers. 29. Right of State to Augment or Limit Carriers' Liability. 30. State Statutes Providing for Damages — Presentation and Adjustment of Claims — Penalty — Carriers — Rail- roads. 31. Regulation and Control — Tele- graph and Telephone Com- panies — Electrical Sub- ways. CHAPTER IV CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — RATE REGULATION § 32. Rate Regulation — C o m m o n Carriers — Railroads — Ex- press Companies — Police § 36. Power — Interstate Com- merce. 33. Rate Regulation— Constitu- 37. tional Limitations — Ferries — Bridges. 34. Limitation as to Reasonable- 38. ness of Rates. 35. Same Subject — Terminal Charges by Carrier — Pro- ceedings Against Connecting Carrier — Discrimination — Joint Through Rate. Elements in Fixing Rates — Franchises an Element — " Good Will " — Gas Rates. Water Rates^ — Right to Bar- gain Away Power to Regu- late. Rate Regulation — Exemption and Transfer Thereof — Ob- ligation of Contract — Con- solidated Companies — Com- binations as to Rates. CONTENTS Vll § 39. Rate Regulation — Exemption § 40. Rate Regulation — Long and and Transfer Thereof — Obliga- Short Hauls — Interstate tion of Contract — Consolidated Commerce. Companies — Combinations as 41. Same Subject. to Rates. CHAPTER V CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — INTERSTATE COMMERCE 42. Interstate Commerce — Power to Regulate. 43. Same Subject. 44. Same Subject. 45. Regulation of Commerce — District of Columbia — Ter- ritories. 46. Regulation of Commerce — Business Within the State — Combinations — Tele graph Companies — Common Law. 47. Interstate Commerce — Regu- lation and Control — Rail- roads. 48. Interstate Commerce — Regu- lation and Control — Rail- roads Continued — Express Companies. 49. Interstate Commerce — C o n- stitutionality and Construc- tion of Commodities Clause of Hepburn Act — Railroads — Carriers a s Stockholders — Inj unction — Mandamus — Penalty. 60. State Requirement that Inter- state and Other Trains Stop at Specified Stations. 61. Interstate Commerce — Po- lice Power — Intoxicating Liquors — Carriers. 52. Same Subject — Delivery — Wilson Act — Penalty. 53. Interstate Commerce — Intox- 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. icating Liquors Continued — " Arrival "■ — Original Pack- age — Wilson Act. Same Subject. Regulation of Commerce — In- surance. Interstate Commerce — Bridges — Navigable Waters — Powers of Congress and of the State. Interstate Commerce — Police Power — Regulation of Grain Warehouses, Eleva- tors, Warehousemen, etc. Interstate Commerce — Police Power — Quarantine and In- spection Regulations. Same Subject. Interstate Commerce — Taxa- tion, Generally. Interstate Commerce — Taxa- tion — Carriers — Express Companies — Vessels — Railroads — Telegraph Com- panies. Interstate Commerce — Taxa- tion — Railroads Continued — Other Property. Same Subject — Property Left Temporarily in State. Interstate Commerce — Taxa- tion of Bridges and Bridge Companies. VIU CONTENTS CHAPTER VI CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — FEDERAL AGENCIES — TAXATION 65. Instrumentalities of Federal Government — Federal and State Control — National Banks. 66. Same Subject. 67. Taxation — Power of States, Generally. 68. Taxation — Obligation of Con- tract — Equal Protection of Law— Due Process of Law. 69. Taxation — Exemptions — Instrumentalities of Federal Government — State Agen- cies. 70. Taxation — Instrumentalities of Federal Government — Qualification or Limitation of Doctrine of Exemption. 71. Taxation — National Banks. 72. Taxation — Savings Banks — Obligations, Securities, Bonds, Stocks, Notes, etc., of United States. § 73. Same Subject. 74. Same Subject— When Tax Is on Franchise. Taxation — Franchises or Priv- ileges Conferred by Congress — Railroads — Telegraph Companies. Taxation — Railroads. Taxation — Franchises — Cap- ital Stock. 78. Taxation "Franchises" "Cor- porate Franchise " — Bridge Companies — Insurance Companies — Uniformity of Taxation. Exemptioa from Taxation — Power of State as to — Ef- fect of Consolidation, etc. 75. 76. 77. 79. CHAPTER Vn JURISDICTION AND VENUE — DEFINITIONS 80. 81. 82. 83. 84. 85. Definition of Jurisdiction. Definition of Jurisdiction Con- tinued—Nature of Corpora- tion Cases in Which Given or Applied. Same Subject. Same Subject. "General Jurisdiction in Law and Equity" Defined. "Full Jurisdiction in All Mat- ters of Equity" Defined. Concurrent Jurisdiction De- fined. § 87. Jurisdiction in " Special Cases " Defined and Construed. 88. Subject-Matter and Jurisdic- tion Over It Defined. 89. Definitions — "Civil" and "Criminal" Jurisdiction — " Further Civil and Criminal Jurisdiction." 90. Jurisdiction as Applied to a State or to City Council. 91. Venue Defined. CONTENTS IX CHAPTER VIII JURISDICTION OR POWER OF CORPORATION SUPERVISORY BODIES, GENERALLY 92. Jurisdiction or Power of Su- pervisory Bodies or Agen- cies — Delegation of Power, Generally. 93. Jurisdiction of Power of Su- pervisory Bodies or Agen- cies — Delegation of Power — General^ Instances. 94. Jurisdiction or Powers of As- sessment Board — Railroads — Due Process of Law — In- terstate Commerce. 95. Jurisdiction or Power of Su- pervisors, Aldermen or Other Legislative Bodies of Cities, Towns, etc., as to Water Rates — Manda- mus. 96. P o w e r s of Municipality — Railroad Commission and Borough President — Lay- ing Electric Lines — Repay- ing by Street Railroad. 98. 99. 97. Powers of Commission as to Standard Fire Policy. Jurisdiction or Powers of Court of Visitation — Tele- graph and Railroad Lines. Power of Secretary of Agri- c u 1 1 u r e — Regulation of Commerce — Quarantine Regulations. 100. Secretary of Commerce and L a b o r — Enforcement by, Without Judicial Trial, of Penalty on Transportation Company — N o t i c e and Hearing — Civil and Crimi- nal Action. 101. Power of Secretary of State — Reinsurance Contract. 102. Special Tribunal — "Special Commission" to Hear and Adjudicate, Not a "Court" — Gas and Electric Plant. CHAPTER IX JURISDICTION OR POWERS OF SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 103 104. Jurisdiction oflnterstate § lOGa, Commerce Commission — Nature of Powers of. Jurisdiction of In t e r s t a t e Commerce Commission — Rates — Rebates — Dis- crimination. 105. Same Sul)ject — In.stances. 106. Jurisdiction of Interstate Commerce Commission — Rates — Promulgation of General Orders. 107. 108. 109. Jurisdiction of Inter state Commerce Commission — Carrier's Discrimina t o r y Regulations — Railroad Equipment — Coal Car Dis- tribution. Power of State as to Railroad and Like Commissions. Same Subject. Same Suliject — Power to Re- move or Suspend Commis- sions. CONTENTS 110. Jurisdiction and Power of § 118. Railroad and Like Com- missions, Generally. 111. Same Subject. 119. 112. Nature of Jurisdiction and Power of Railroad Com- missions. 113. Jurisdiction of Railroad Com- 120. missions — Rates. 114. Same Subject. 115. When Railroad Commission Is Without Jurisdiction — Rates. 121. 116. Jurisdiction of Railroad Com- mission — Increase of Capi- tal Stock of Corpora- tions. 122. 117. Jurisdiction of Public Serv- ice Commission — Issue of Stocks and Bonds by Cor- poration. Jurisdiction of Railroad Com- mission — Stopping Inter- state Trains. Jurisdiction of Railroad Com- mission — Interstate Com- merce — Delivery of Cars — Train Connections. Jurisdiction of Railroad Com- missions — Railroad Station — Other Facilities — Obliga- t i o n of Contract — Due Process of Law. Jurisdiction of Railroad Com- missions — R a i 1 r o a d or Grade Crossings — Appor- tionment or Expense of. Jurisdiction of Railroad Com- missions — Telegraph Com- p a n i e s — Installing Tele- phone. CHAPTER X JURISDICTION OF COURTS OVER CORPORATION SUPERVISORY COMMISSIONS, ETC. 123. Jurisdiction of Equalization Board— Conclusiveness of Decision of — Review by Courts. 124. Jurisdiction of Courts — Cer- tiorari to Review Assess- ments — Special Franchise Tax — Requirements as to Return by Tax Commis- sioners. 125. Board of Harbor Commis- si o n e r s — Jurisdiction of Courts. 126. Resolution of City Council and Direction to City So- licitor to Enforce Same Against Street Railway — Obligation of Contract — Jurisdiction of Federal Cir- cuit Court — Injunction. § 127. Condemnation Proceedings — Commissioners — State Crossing Board — Jurisdic- tion of Courts — Waiver. 128. Jurisdiction of Courts — In- surance — State Auditor- Superintendent of Insur- ance. 129. Jurisdiction of Officers of Land Department — C o n- trol and Supervision of by Courts — Mandamus — In- junction. 130. Same Subject — Railroads — Right of Way. 131. Jurisdiction of Courts in Re- CONTENTS XI spect of Interstate Com- merce Commission, Gen- erally. § 132. Jurisdiction of Federal Courts in Respect of Interstate Commerce Commission — Rates. 133. Same Subiect. 134. Same Subject — Injunction — Where Redress Must First Be Sought. 135. Same Subject — Compensation of Carrier — Services Ren- dered at Shipper's Request — Practice and Procedure — Remanding Case. 135a. Jurisdiction of Federal Courts in Respect to In- terstate Commerce Com- mission — Regulation of Carriers as to Cars^ — Where Redress Must First Be Sought. 136. Jurisdiction of Federal Courts in Respect to Interstate Commerce Commission — Shipper's Indebtedness for Demurrage — R e f u s a 1 of Carrier to Receive Goods. 137. Use of Process of Federal Circuit Court in Aid of Inquiries Before Interstate Commerce Commission — Testimony — Production of Books, etc. — Fine and Imprisonment — Contempt — Power of Commission. 138. Judicial Functions of Non- judicial Bodies — Power to Compel Corporations to Produce Books, etc. — No- tice — Courts — Due Process and Equal Pro- tection — ■ Contempt — Compensation to Witness. 139. Jurisdiction of Courts in Re- spect to Railroad Commis- sions, Generally. 140. Same Subject. 141. Same Subject. 142. Jurisdiction of Courts — Rail- r o a d Commissioners — Public Service Commission — Certificate of Public Con- venience and Necessity. 143. Jurisdiction of Courts Over Rate Regulations, Gen- erally. 144. Same Subject. 145. Legislative and Judicial Func- tions as to Rate Regulation — Distinctions. 146. Equity Jurisdiction — Rail- road, etc.. Rates — Obli- gation of Contracts — In- junction — Discrimination. 147. Extent of Judicial Interfer- ence as to Rate Regula- tions. 148. Jurisdiction of Courts Before Rate Legislation Goes Into Effect. 149. Jurisdiction of Courts in Re- spect to Railroad Commis- sions — Rates. 150. Same Subject. 151. Same Subject — Where Re- sort Must First Be Had. 152. Same Subject — A p p e a 1 to State Supreme Court Be- fore Suing in Federal Cir- cuit Court. 153. Jurisdiction of Courts in Re- spect to Railroad Commis- sions — Rates — When Con- stitutional Question Not Decided. 154. Public Service Commission — Right to A p p e a 1 — Cer- tiorari — Nature of Powers. 155. Jurisdiction of Courts — Suits Against Railroad Commis- sioners — Whether Suit Against State. Xll CONTENTS CHAPTER XI JURISDICTION OF COURTS OVER CORPORATIONS § 156. Essentials or Prerequisites of Jurisdiction. 157. Federal Supreme Court — Ap- peal and Error — Funda- mental Question Is Juris- diction. 158. Jurisdiction of Federal Su- preme Court — Federal Question — Presentment by Record — Special Alle- gation. 159. Jurisdiction — Appeals Taken After 1891 to Federal Su- preme Court. 160. Jurisdiction of Federal Cir- cuit Court of Appeals — When Invoked — Diverse Citizenship. 161. Original Jurisdiction of Fed- eral Circuit Courts Under Judiciary Act of 1888. 162. Equity Jurisdiction, Gener- ally. 163. Equity Jurisdiction — Ade- quate Remedy at Law. 164. Equity Jurisdiction — Ade- quate Remedy at Law — Collection of Taxes — In- junction. 165. Equity Jurisdiction — Wai- ver of Defense of Remedy at Law. 166. Equity Jurisdiction of Fed- eral Courts — Parties. 167. Equity Jurisdiction to Re- move Cloud Upon or to Quiet Title. 168. Jurisdiction of Federal Cir- cuit Court to Remove In- ciunbrance or Lien or Cloud Upon Title to Property Within District — A b s e n t Defendants — Process — Service — Publication. 169. Equity Jurisdiction of Fed- eral Circuit Courts — Pro- bate Matters — Diverse Citizenship. 170. When Equity Has no Juris- diction of Bill to Recover Lands of Railroad Com- pany. 171. Jurisdiction of Court of Claims of New York — Neg- ligence Causing Death — Nonresidents as Parties — State as Common Carrier. CHAPTER XII JURISDICTION OF COURTS OVER CORPORATIONS CONTINUED § 172. What Constitutes Contro- versy or Dispute Between P a r t i e s — Jurisdiction of Federal Circuit Court — Citi- zenship. 173. When Corporation Is and Is Not a Citizen — Pleadings. 174. Presumption as to Citizen- ship of Members of Cor- poration — President and Stockholders. § 175. Citizenship — Joint- Stock Company Not a Corpora- tion for Jurisdictional Pur- poses. 176. Citizenship — Limited Part- CONTENTS Xlll nership Not a Corporation for Juriadictional Purposes. § 177. Citizenship — Board of Trus- tees Not a Corporation for Jurisdictional Purposes. 178. Citizenship of Corporation of Two or More States — An- cillary or Permissive Char- ters or License. 179. Same Subject — Removal of Causes. 180. Citizenship — Consolidated Corporations. 181. When Federal Court Has Jurisdiction — Corporation — Doing Business — Proc- ess — Service. 182. When Federal Court Has no Jurisdiction — Corj)oration — Doing Business. 183. Where Plaintiffs Citizens of Different States. 184. Citizenship — Territory Di- vided Into Two States. 185. Jurisdiction of Circuit Court — Citizenship of Guardian in Suit Against Corpora- tion. 186. Citizenship of State — Di- verse Citizenship. 187. Jurisdiction — Where "Found"— Suit to Re- strain Enforcement Un- reasonable Rates by Rail- road Corporation. § 188. Jurisdiction — Transitory Action of Trespass — Par- ties Residents of Other States Than That of Suit. 189. When Federal Courts no Ju- risdiction of Suit by As- signee of Chose in Action — Assignment of Judgment. 190. Jurisdiction of Federal Courts — Suits by Assignee — In- quiry Relates to Time When Suit Is Brought. 191. Jurisdiction of Federal Courts — Suits by Assignee of Promissory Note or Chose in Action^ — Exception to Statutory Prohibition. 192. When Federal Courts Have Jurisdiction of Suits by As- signee. 193. When Federal Court no Ju- risdiction of Suit by As- signee — Contract to Con- vey Land. 194. Motive for Bringing Suit or in Obtaining Citizenship — Collusive Assignment or Transfer or Fraud to Give Jurisdiction. 195. Same Subject^ — When Juris- diction Defeated. 196. Jurisdiction — Rearrange- ment of Parties — Diverse Citizenship. CHAPTER XIII JURISDICTION OF COURTS OVER CORPORATIONS CONTINUED § 197. Nature of Jurisdiction of National Courts • — Extent of — R e s o r t to Common Law. 198. Federal Jurisdiction — Effect of State Statutes — Rights and Remedies. 199. Power of State to Limit Jurisdiction of Its Courts — Power to Administer Com- mon Law. § 200. Jurisdiction — Consent of Parties. 201. Jurisdiction — Appearance — Consent — Waiver. 202. Waiver of Jurisdictional De- XIV CONTENTS feet as to Particular Dis- § 212. trict. 203. SubKequent Change in Con- ditions After Jurisdiction 213. of Circuit Court Has At- tached. 214. 204. Where Case Goes More Than Once to Highest State Court — Final Judgment — Writ of Error. 215. 205. Jurisdiction of Federal Cir- cuit Courts Under Ju- diciary Act of 1888— Re- 216. moval of Suits. 206. Removal of Suits— What Re- cord Must Show. 217. 207. No Cause Removable Unless It Is One of Which Cir- cuit Courts Given Original 218. Jurisdiction. 208. Federal Question or Right — When Court Has Juris- diction — Instances. 209. Federal Question or Rights— 219. When Court no Jurisdic- tion — Instances. 210. Presentment of Federal Ques- tion—Record. 220. 211. Removal of Suits — Corpora- tion Created by Congress — Constitution and Laws of 221. United States — Separable Controversy. Removal of Suits — Corpora- tions Created by Congress — National Banks. Removal of Suits — Separable Controversy — Joint Action. Removal of Suits — Separable Controversy — Joint Action — Torts — Diversity of Citi- zenship. Removal of Suits — Separable Controversy — Joint Action — Fraudulent Joinder. Removal of Suits^ — Separable Controversy — Joint Action — What Record Must Show. Denial of Petition for Re- moval — Petitioners' Right to Elect Remedy. Removal of Suit Denied in State Court — Filing Answer and Record — Asserting Af- firmative Remedy and De- nial of Jurisdiction. Federal Circuit Court May Determine Removability of Cause and Protect Such Jurisdiction — Injunction. Effect Upon Jurisdiction of State Court of Removal of Cause. Jurisdiction of Federal Su- preme Court After Remov- al Ordered by Circuit Court. CHAPTER XIV PARTIES 222. Preliminary Statement. 223. Power of Corporations, Gen- erally. 224. Corporation as Entity. 225. Corporation as Entity — Eq- uity. 226. Directors of One Corpora- tion, Directors of Another Does Not Prevent Suits Against — Merger. § 227. Corporations May Sue and Be Sued. 228. Corporations as Necessary or Indispensable Parties. CONTENTS XV 229. Same Subject — Equity. 230. Corporation as Salvors May Maintain Suit for Salvage. 231. Power of Corporation to Sue and Be Sued Includes Power to Arbitrate. 232. State Bank Converted Into National Bank — Right to Sue in Former Name. 233. Corporation's Right to Sue — Waiver — Foreign Corpora- tion. 234. When Corporation Not Enti- tled to Equitable Considera- tion of Courts — Consolida- tion to Prevent Competition — Fraud on Public. 235. Consolidation — Successor of Corporation — Rights of. 236. Foreign Corporations — Par- ties. 237. Foreign Corporation — Parties — Presump tions . 238. Right of Corporation to Sue as Affected by Dissolution. 239. Same Subject. 240. Same Subject. 241. Injuries to Persons in Ex- ecution of Public Trust — Rule as to, When Not Ap- plicable to Private Corpo- rations. 242. Injuries to Property, Gen- erally. 243. Right of Consignor to Sue Corporation. 244. Suits by and Against Con- signee. CHAPTER XV PARTIES CONTINUED J 245. Corporation De Facto May Sue and Be Sued. 246. What Constitutes a Corpo- ration De Facto, Generally — Legislative Power to Cure Defective Organiza- tion. 247. Collateral Attack — De Facto Corporation — Estoppel to Deny Legal Corporate Ex- istence. 248. Same Subject — Instances. 249. Collateral Attack — State or Public Officials as Parties — De Facto Corporation- Instances. 250. State or State Officers as Indispensable or Proper Parties Defendant in Suits by Corporation. 251. State or State Officers as Parties Plaintiff in Suits Against Corporation. 252. United States as Plaintiff — Right to Recover From Bank — Forgery of Payee's Name on Pension Checks — Internal Revenue Taxes — Action Against Rail- roads. 253. Reorganized or Successor Cor- poration. 254. Same Subject. 255. Same Subject. 256. Levee Districts or Levee Boards Whether Public or Private Corporations May Sue and Be Sued. 257. Banks as Parties, Generally. 258. Suit by Corporation as Tax- payer — Suit by Taxpayer Against Corporation. XVI CONTENTS CHAPTER XVI PARTIES CONTINUED — RIGHTS AND LIABILITIES — REMEDIES- PROMOTERS — OFFICERS — DIRECTORS — STOCKHOLDERS 259. Promoters' Duties — Remedy Against Them — Corpo- rate Liability for Acts of, Generally. 260. Internal Management of Cor- porations — General Rule. 261. Officers or Directors — Duties and Liabilities of, Gener- ally — Parties. 262. Smt by Corporation Against Officers or Directors — Damages — Accounting. 263. Suit by Stockholders Against Officers or Directors — Cor- poration as Party. 264. Suit by Stockholders Against Directors — Negligence — Maladministration — Aver- ments Necessary — What Must Be Shown. 265. Individual Liability of Offi- cers and Trustees to Cred- itors Where Capital Stock Not Subscribed — Suit in Equity by Creditors Against Directors. 266. Suits by and Rights of Mi- n o r i t y Stockholders — When Corporation Should Be Made Party. 267. Suits by and Rights of Mi- tt o r i t y Stockholders — Creating New Corporation — Consolidation Agree- ment. 268. When Stockholder May and May Not Sue in Equity. § 269. Right of Stockholders to Sue in Equity in a Federal Court for Surplus Assets After Decree of Forfeiture of Franchises. 270. Suit by Stockholder Against Trustee of Funds for Divi- dends — Defense — Coun- terclaim. 27 L Suit by Stockholder to Com- pel Successor in Interest of Lessee to Pay Rent Re- served. 272. Right of Subsequent Stock- holders to Sue. 273. When Corporation and Not Stockholders Should Sue Under Sherman Antitrust Act. 274. When Corporation Should Sue or Be Made Party to Suit by Stockholder. 275. When Stockholder May Be Made Party Defendant by Court — Refusal to Permit Stockholders to Defend. 276. Stockholders as Necessary Parties in Suit by Policy Holder Against Insurance Company for Accounting and Receivership — Equity Jurisdiction. 277. Transfers of Stock — Pledge for Collateral Security — Liability of Pledgee as Stockholder — - National Banks — Bailment. CONTENTS xvn CHAPTER XVII PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — RIGHTS, LIABILITIES AND REMEDIES OF CONTINUED 278. Suits by Creditors — Parties, Generally. 279. "Trust Fund" Doctrine- Capital Stock — Unpaid Subscriptions. 280. When Unpaid Subscriptions or Unpaid Stock Are and Are Not Assets. 281. Stockholders' Liability to Creditors, Generally. 282. Same Subject. 283. Subscriptions to Aid Organ- i z a t i o n — Fictitious and Colorable Subscriptions — Defense of Illegality of Corporate Scheme. 284. Whether Stockholders Lia- bility Contractual, Statu- tory or Penal. 285. Right of Action by Stock- holder After Receiver Ap- pointed. 286. Liability of Nonresident Stockholder. 287. Liability of Stockholders- Pleading — What Must Be Shown, Generally. 288. Liability of Stockholders to Creditors — Unpaid Sub- scriptions or Stock. 289. Same Subject. 290. Liability of Stockholders — Unpaid Subscriptions — Parties. 291. Liabihty of Stockholders to Creditors Where Stock Re- ceived Without Considera- tion or for Less Than Its Value — "Bonus Stock." 292. Same Subject Continued — Stockholders' Rights. B § 293. Consideration for Issue of Stock — Property, etc. — When Payment in Stock to Contractor Is Not a Stock Subscription. 294. Stock Issued for Property — Valuation Should Be Fair and Just — Necessity of Good Faith in Transaction. 295. Stock Issued for Property — Material Overvaluation — Stockholders Not Necessar- ily Liable to Creditors Therefor — Good Faith. 296. Stock Issued for Property — Shareholder May Be Liable Where Over valuation Shows Fraud Upon Cred- itors Though None In- tended. 297. Stock Issued for Property — Valueless Property — Ma- terial Overvaluation. 298. Stock Issued for Property Which Subsequently Be- comes Valueless or Con- sideration Fails. 299. Judgment Creditors — Stock- holders' Liability to, for Unpaid Stock — Parties. 300. Amount of Creditor's Recov- ery on Stock May Be Lim- ited by His Knowledge of Agreement Under Which Shares Issued. 301. Creditor or Stockholder May Sue After Demand Upon and Refusal of Corporate Authorities .to Act — Stock- holder May Defend. 302. When Demand Upon Corpo- XVlll CONTENTS rate Authorities and Their Refusal a Condition Prece- dent to Suit. 303. When Demand Upon and Refusal of Corporate Au- thorities Not a Condition Precedent to Suit. 304. Effect of Demand and Re- fusal Dependent Upon Cir- cumstances — Discretion of Directors — Simulated De- mand. 305. Demand Upon and Refusal of Corporate Authorities — Necessity of Alleging and Showing Same. 306. Same Subject. 307. Enforcing Stockholders' Lia- bility — Exhausting Rem- edies Against Corporation — When Judgment and Ex- ecution Unsatisfied Are Conditions Precedent. § 308. Enforcing Stockholders' Lia- bility — Exhausting Rem- edies Against Corporation — When Judgment and Ex- ecution Unsatisfied Are Not Conditions Precedent. 309. Stockholders' Liability — Dis- solution as Condition Prece- dent to Enforcing Same. 310. Effect of Equity Rule 94— When Demand Upon Di- rectors for Relief Is and Is Not Condition Precedent — Stockholders — Right to Protect Corporation When Directory Derelict. 311. Judgment Creditor's Right to Sue — Parties — Conditions Precedent. 312. Order of Court Requiring Remedies to Be Exhausted — ^Statute Limitations. CHAPTER XVIII ACTIONS AT LAW — LIABILITY, GENERALLY 313. Form of Action— Effect of Code Provisions, Generally. 314. Actions Under Statutes, Gen- erally. 315. Ejectment. 316. Forcible Entry and Detainer. 317. Liability of Corporations to Third Persons for Negli- gent, Willful, Wanton or Malicious Acts of Serv- ants. § 318. Negligent Acts of Corpora- tions, Generally. 319. Election — Form of Action — Contract or Tort; Waiver. CHAPTER XIX ACTIONS AT LAW CONTINUED — ACTIONS EX CONTRACTU 320. Action Ex Contractu — Con- tracts Express and Implied — Instances, Generally. 321. Assumpsit. 322. Assumpsit — Account Stated. § 323. Assumpsit By and Against Banks. 324. Debt. 325. Covenant. 326. Book Account. CONTENTS XIX CHAPTER XX ACTIONS AT LAW CONTINUED — ACTIONS EX DELICTO 327. Actions Ex Delicto, Generally. § 334. 328. Trespass. 335. 329. Trespass for Mesne Profits. 336. 330. Trespass Quare Clausum Pre- 337. git. 331. False Imprisonment. 338. 332. Trespass on the Case. 339. 333. When Action on Case Lies 340. Concurrently With As- 341. sumpsit. Nuisance. Libel and Slander. Malicious Prosecution. Wrongfully Suing Out At- tachment. Conspiracy — Instances. Fraud and Deceit — Instances. Trover and Conversion. Replevin — Claim and Deliv- ery. CHAPTER XXI ACTIONS AT LAW CONTINUED — MANDAMUS 342 343 345. 346. 347. 348. Mandamus Defined. Nature of Mandamus. 344. Nature of Mandamus Con- tinued—Is a Discretionary Writ. When Mandamus Lies, Gen- erally. Mandamus to Control Ju- dicial Discretion. Mandamus Will Not Be Granted When Fruitless and Unavailing. Mandamus Does Not Lie Where There Is a Plain and Adequate Remedy. 349. Statutory Remedies — When and When Not Exclusive of Mandamus. 350. When Mandamus Is the Proper Remedy Although There Is Another Remedy — Action for Damage — Equity. 351. When Remedy Is by Action at Law and Not by Man- damus. § 352. When Proper Remedy Is Quo Warranto and Not Mandamus. 353. When Remedy to Forfeit Franchise and Not Man- damus, Is Proper. 354. When Remedy in Equity and Not by Mandamus — In- junction — Mandatory In- junction. 355. Mandamus — Enforcement of Private or Personal Rights — Contractual Relations. 356. When Writ Lies to Enforce Discretionary or Ministe- rial Duties. 357. When Writ Does Not Lie to Enforce Discretionary Du- ties. 358. When Mandamus Lies and Does Not Lie to Compel Filing Articles of Incorpo- ration and Certificates — Issuance of Certificates. 359. Wh-en Mandamus Lies — Elec- tion of Corporate Officers. XX CONTENTS 360. When Mandamus Lies to Compel Order RevcJiing Charter to Be Vacated. 361. When Mandamus Lies to Re- instate Member. 362. Mandamus Lies to Enforce Right of Inspection of Books of Corporation. 363. Mandamus Lies to Compel Surrender of Corporation's Books, Seal and Papers. 364. Mandamus to Compel Trans- fer of Certificates of Stock — Lost Certificates. 365. Mandamus to Control Rates, Charges and Fares — Dis- crimination. 366. When Mandamus Lies Against Common Carrier, Generally. 367. Mandamus — Limitation o f Remedy Under Act to Reg- ulate Commerce — Inter- state Commerce Commis- sion. 368. When Mandamus Lies and Does Not Lie Against Rail- road Company. 369. When Mandamus Lies and Does Not Lie Against Street Railroad Com- pany. 370. When Street Railway Com- pany Is and Is Not En- titled to Mandamus. 37 L When Mandamus Lies and Does Not Lie Against Tele- phone Companies. 372. When Mandamus Lies and Does Not Lie Against Tele- graph Companies. 373. When Mandamus Lies and Does Not Lie Against Wa- ter Companies. 374. Jurisdiction of Mandamus Proceedings. 375. Proper or Necessary Parties, Generally. 376. Parties Plaintiff— P r i v a t e Persons. 377. Parties — Attorney-General. 378. Parties — Defendants. 379. Necessity of Demand Upon or Notice to Party Before Bringing Mandamus. 380. Defenses Available, Gener- ally. 381. Pleadings — S ufficiency of Showing — Demurrer — Judgment — Appeal. CHAPTER XXII ACTIONS AT LAW CONTINUED — QUO WARRANTO 382. Nature of Quo Warranto. 383. When Quo Warranto Not Ex- clusive R e m e d y — When Proper Remedy. 384. When Special or Statutory Actions or Proceedings Ex- clusive. 385. Quo Warranto Lies in Case of Unlawful Exercise of Corpo- rate Power or Franchises. 386. Quo Warranto to Forfeit or Annul or Test Franchises of Corporation — Ouster. § 387. Quo Warranto to Forfeit Only Misused Franchise and Leave Corporation Intact. 388. Quo Warranto to Control Rates and Charges. 389. Jurisdiction of Quo Warranto Proceedings. 390. Parties — State — Attorney- General. CONTENTS XXI 391. Parties — Plaintiffs — De- § 393. Pleadings— S ii ffi c i e n c y of fendants — Joinder. Showing. 392. Seeking Other Relief as Con- 394. Defenses Available, Cien- dition Precedent to Grant- erally. ing Quo Warranto. CHAPTER XXIII ACTIONS AT LAW CONTINUED — PROHIBITION § 395. Nature of Prohibition, Gen- § 398. erally. 396. Nature of Prohibition Con- 399. tinued — Is a Discretionary Writ — Effect of Judgment or Sentence. 400. 397. Prohibition Does Not Lie Where There Is a Plain 401. and Adequate Remedy — Exhausting Remedies. Where Act Sought to Be Prohibited Has Been Done. Prohibition to Court Without Jurisdiction or Where It Exceeds Jurisdiction. Prohibition t o Admiralty Court. Prohibition — Parties, G e n - erally. CHAPTER XXIV EQUITABLE REMEDIES 404. 405. 402. Equity, Generally. 403. When Equity Is Without Jurisdiction, Generally. Equity Jurisdiction — Parties, Generally. What Is Not And Is a Con- dition Precedent to Suit — Quieting Title — Specific Performance. 406. Equity — Adequate Remedy at Law. Contract for Co-operation in Procuring Municipal Fran- chise — Validity of — Public Policy — Equity — When Remedy at Law Ad- equate — Illustration. Adequate Statutory Remedy — Application to Munici- pal Body as Condition Precedent to Equity Suit — Rate Regulation. 407. 408. 409. Irreparable Injury. 410. Multiplicity of Suits. 411. Fraud and Trusts. 412. Reformation of or Relief From Written Instruments or Contracts. 413. Accounting. 414. Corporation Mortgages — En- forcement of — Foreclosure — Rights and Remedies of Parties — General Instances. 415. Corporation Liens and Mort- gages — Equity Jurisdiction of Foreclosure — Conflict- ing Claims to Possession. 41G. Corporation Liens and Mort- gages — Enforcement of — Foreclosure — Parties. 417. Rights of Parties ITpon Fore- closure of Mortgages — Jun- ior Bondholder — Judg- ment Creditor — Priorities XXll CONTENTS — Proceeds of Sale — Ad- justment of Claim — Ac- counting — Instances. 418. Foreclosure and Sale of Rail- road Mortgage — Distribu- tion of Proceeds — Unse- cured Creditors — Bank as General Creditor — P r i o r Mortgagee. 419. Foreclosure of Railroad Mort- gage — Rights of Purchaser —Title and Obligations. Foreclosure and Sale — Reor- ganization Agreements by Purchasers — Exceptions to Sale— Constitutional Law. Injunction, Generally — I n- stances. Inj unction — Jurisdiction. Jurisdiction to Enjoin Pros- ecuting Action in Another State — Jurisdiction of Fed- eral Court — Injunction From to State Court. 424. Injunction Against Officers, Directors or Stockholders. Injunction — Rate Regula- tion. Injunction — By and Against Railroads and Street Rail- roads. Injunction — By and Against Telegraph and Telephone Companies. I n j u n c t io n — Interference 420. 421. 422. 423. 425. 426. 427. 428. With Departmental Offi- cers or Executive Depart- ment — Postmaster. § 429. Injunction to Protect Fran- chises of Corporation or to Prevent Their Forfeiture. 430. Injunction — Criminal Pro- ceedings — When Equity Cannot and Can Enjoin. 431. Injunction — Nuisances — ■ Bill in Equity to Abate. 432. Injunction — Nuisances — Parties ^- State or Attor- ney-General — Corporations — Joinder. 433. Injunction to Restrain En- forcement of Orders of In- terstate Commerce Com- mission. 434. Bill Lies in Equity to Revise Ruling of Railroad Com- missioners. 435. E q u i t y — Cancellation and Rescission. 436. Cancellation, Rescission or Setting Aside Sale of Cor- porate Stock — Contracts to Prevent Competition — Pre- tended Purchase of Stock. 437. Specific Performance. 438. Specific Performance — Dis- cretion of Court. 439. Specific Performance — Con- tract to Sell Corporate Stock. CHAPTER XXV PENALTIES — OFFENSES — CRIMINAL LIABILITY OF CORPORATIONS § 440. Penalties — Suit by Consignee to Recover. 441. Right to Inspect Books of Corporation — Penalties for Refusal to Allow. 442. Telegraph and Telephone Companies — Discrimina- tion — Penalties . § 443. Offenses Against United States. 444. Power of Congress — To What Extent Corporation Can Be CONTENTS XXIU Charged Criminally for Agents' Acts — C o m m o n Carriers — Rates. 445. Police Power of States — Crimes and Penalties — Combinations in Restraint of Trade — Extent of Ju- dicial Interference by Fed- eral Courts. 446. Corporation Criminally Lia- ble—May Be Indicted. 447. Indictment of Corporations for Nuisances. 448. Insurance Companies — Com- binations — Conspiracies — Insurance as " Commod- ity " — When and When Not Indictable Offenses. 449. Criminal Offenses by Corpo- rations — Employment of Children Under Certain Age — Penalties. 450. Indictment — While a Corpo- ration Might Be Liable for Misfeasance Under Certain Definitions of Manslaugh- ter It Cannot Be Guilty of Latter Under New York Penal Code. 451. Construction of Antitrust Act — What Prohibitions of Embrace — Intent of — What Are and Are Not Il- legal Combinations Within. § 452. Construction of Elkins Act — Criminal Intent — Accept- ing Rebates — When Carrier Liable as Party to Joint Rate. 453. Construction of Elkins Act — "Device" to Obtain Re- bates. 454. Penal Statute — Retroactive Effect — Liability Under of Party Carrying Out Illegal Agreement Executed Prior to Its Passage. 455. State Jurisdiction Over Vio- lation of Antitrust Law Where Agreement Made Out of State — Extraterri- torial Effect of Conspiracy, etc., Statute. 456. Constitutional Law — Elkins Act — Liquor Laws — Regu- lation of Carriers — Exces- sive Fines. 457. Sufficiency of Indictment. 458. Discrimination in Rates — Rebates — Elkins Act — Criminal Law — Place of Trial — Single Continuous Offense. TABLE OF CASES CITED Aberdeen Bank v. Chehalis Co., 1G6 U. S. 440, § 71. Aberdeen Commercial Co., etc., v. Great North of Scotland Ry. Co., 3 Ry. & Can. Traf. Cas. 205, § 113. Acord V. Western Pocahontas Corpo- ration, 156 Fed. 989, §§ 1G7, 194, 198. Adair v. United States, 208 U. S. 161, §§ 26, 42. Adams Express Co. v. Indiana, 165 U. S. 255, § 61. Adams Express Co. v. Iowa, 196 U. S. 147, § 11. Adams Express Co. v. Kentucky, 206 U. S. 120, §§ 52, 456, 457. Adams Express Co. v. Kentucky, 214 U. S. 218, §§ 1, 2, 7, 8, 42, 43, 44, 47, 51, 52, 78, 208. Adams Express Co. v. Ohio, 165 U. S. 194, §61. Adams Express Co. v. Ohio, 166 U. S. 185, § 61. Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, §§11, 46, 457. JEtna Ins. Co. v. Commonwealth, 106 Ky. 864, § 448. Ahern, Matter of, v. Elder, 195 N. Y. 493, §3. Aiken v. Holyoke Street Ry. Co., 184 Mass. 269, § 317. Alabama Great Southern Rd. Co. v. Carroll, 84 Fed. 772, § 195. Alabama Great Southern Ry. Co. v. Thompson, 200 U. S. 206, §§ 206, 213, 214, 215, 216. Alabama Nat. Bank v. Rivers, 116 Ala. 1, § 323. Albany Hardware & Iron Co. v. Day, 42 N. Y. Supp. 971, §339. Albright v. Texas, S. F. & N. R. Co., 8 N. M. 422, § 279. Albuquerque Bank v. Perea, 147 U. S. 87, § 123. Aldine Mfg. Co. v. Phillips, 118 Mich. 162, § 415. Aldrich v. Campbell, 97 Fed. 663, §421. Aldrich v. Press Printing Co., 9 Minn. 133, § 335. Aldridge v. Fore River Shipbuilding Co., 201 Mass. 131, § 254. Alexander v. Searcy, 81 Ga. 536, §§ 266, 272, 302. Alexander v. United States, 201 U. S. 117, § 137. Alexandria Canal Co. v. Swann, 5 How. (46 U. S.) 83, § 231. Alix, In re, 166 U. S. 136, § 396. Allen V. Curtis, 26 Conn. 256, 456, §§ 263, 301, 305. Allen V. Milwaukee, 128 Wis. 678, §236. Allen V. Riley, 203 U. S. 347, § 18. Allen V. Southern Pac. Co., 173 U. S. 479, § 209. Allgeyer v. Louisiana, 165 U. S. 578, §§ 10, 12, 17. Allyn's Appeal, 81 Conn. 534, §§ 3, 7. Alton Ry. & Illuminating Co. v. Cox, 84 111. App. 202, § 317. Ambler v. Leach, 15 W. Va. 677, §167. American Alkali Co. v. Campbell, 113 Fed. 398, § 247. American Banana Co. v. United Trust Co., 213 U. S. 347, §451. American Bell Telephone Co. v. United States, 68 Fed. 542, § 129. XXV XXVI TABLE OF CASES CITED American Book Co. v. Gates (U. S. C. C), 85 Fed. 729, § 335. American Bridge Co. v. Heidelbach, 94 U. S. 798, § 417. American Building & L. Assoc, v. Bear, 48 Neb. 455, § .339. American Cable R. Co. v. Citizens' R. Co., 44 Fed. 484, § 163. American Construction Co. v. Jack- sonville, T. & K. W. Ry. Co., 148 U. S. 372, § 159. American Creosote Works v. C. Lembeke & Co. (U. S. C. C), 165 Fed. 809, § 254. American Express Co. v. Crawley, 88 Miss. 525, § 314. American Express Co. v. Iowa, 196 U. S. 133, § 11. American Express Co. v. Mullins, 212 U.S. 311, §208. American Express Co. v. United States, 212 U. S. 522, § 32. American Ins. Co. v. Fisk, 1 Paige Ch. (N. Y.) 90, § 422. American Mfg. Co. v. Weintraub, 115 N. Y. Supp. 88, § 89. American Nat. Bank v. Supplee, 115 Fed. 658, § 284. American Radiator Co. v. Kinnear (Wash., 1909), 105 Pac. 630, §§ 265, 311. American Sugar Refining Co. v. Fancher, 145 N. Y. 552, § 163. American Sugar Refining Co. v. New Orleans, 181 U. S. 277, § 160. American Sulphur Min. Co. v. Bren- nan, 20 Colo. App. 439, § 129. American Teleph. Co. v. Connecti- cut Teleph. Co., 49 Conn. 352, §442. American Union Teleg. Co. v. West- ern Union Teleg. Co., 67 Ala. 26, §427. American Waterworks Co. v. Farm- ers' Loan & Trust Co., 73 Fed. 956, §416. American Waterworks v. State, 46 Neb. 194, § 356. American Well Works v. De Aguayo (Tex. Civ. App.), 53 S. W. 350, §181. Ames V. American Telephone & Teleg. Co. (U. C. S. C), 166 Fed. 820, § 273. Ames V. Kansas, 111 U. S. 449, §§ 205, 382. Ames V. Union Pac. R. Co., 64 Fed. 165, § 146. Anderson v. Dunn, 6 Wheat. (19 U. S.) 204, § 137. Anderson v. United States, 171 U. S. 604, §457. Andes v. Ely, 158 U. S. 312, §§ 246, 248. Andrews v. Bacon (U. S. C. C), 38 Fed. 777, § 290. Andrews Bros. Co. v. Youngstown Coke Co., 86 Fed. 586, § 175. Angle V. Chicago, St. Paul, M. & O. Ry. Co., 151 U. S. 1, §§ 4, 426. Anglo-American Land, Mortgage & Agency Co. v. Cheshire Prov. Inst., 124 Fed. 464, § 239. Anglo-American Land, M. & A. Co. V. Lombard, 132 Fed. 729, § 284. Anglo-American Provision Co. v. Davis Provision Co., No. 1, 191 U. S. 373, § 199. Anne Arundel County v. Baltimore Sugar Ref. Co., 99 Md. 481, §356. Antopoeda Baptist Church, Trustees of, V. Mulford, 8 N. J. L. 182, § 321. Appeal of. See name of party. Arkansas v. Kansas & T. Coal Co. & S. F. Ry. Co., 183 U. S. 185, §§ 206, 207, 209. Arkansas Building & Loan A.ssoc. v. Madden, 175 U. S. 269, § 164. Arkansas Coal, G. F. C. & Mfg. Co. v. Haley, 62 Ark. 144, § 201. Arkansas Railroad Rates, In re, 168 Fed. 720, §§ 106, 150. Arkansas, State of, v. Kansas & T. Coal Co., 96 Fed. 353, § 186. TABLE OF CASES CITED XXVll Armour v. E. Bennet's Sons (U. S. C. C. A.), 123 Fed. 56, § 254. Armour Packing Co. v. United States, 209 U. S. 56, §§ 44, 452, 453, 457, 558. Armstrong v. Emmet, 16 Tex. Civ. App. 242, § 91. Asbell V. Kansas, 209 U. S. 251, §§ 42, 43, 44, 58. Ascanaba Co. v. Chicago, 107 U. S. 678, § 2. Ashland v. Wheeler, 88 Wis. 607, §386. Ashley v. Board of Supervisors, 83 Fed. 534, § 195. Ashley v. Ryan, 153 U. S. 436, §§ 19, 60. Astiazarin v. Santa Rita Min. Co., 148 U. S. 80, § 129. Atchfalaya Bank v. Dawson, 13 La. R. 497, § 388. Atchison, Topeka & Santa Fe Rd. Co. V. Denver & New Orleans Rd. Co., 110 U. S. 667, § 40. Atchison, Topeka & Santa Fe Ry. Co. v. Matthews, 174 U. S. 96, §§ 13, 30. Atchison, Topeka & Santa Fe Ry. Co. V. Sowers, 213 U. S. 55, §§ 3, 4, 5, 208. Atchison, Topeka & Santa Fe Ry. Co. V. State (Okla., 1909), 100 Pac. 11, § 122. Atchison, Topeka & Santa Fe Rd. Co. V. Wilkinson, 55 Kan. 83, § 319. Atkin V. Kansas, 191 U. S. 207, §§ 6, 27. Atlanta, K. & N. Rd. Co. v. Barker, 105 Ga. 534, § 315. Atlantic & Pacific Teleg. Co. v. Philadelphia, 190 U. S. 160, §§ 31, 60, 137. Atlantic City Rd., In re, 164 U. S. 633, §§ 348, 374. Atlantic Coast Line R. Co. v. Dun- ning, 166 Fed. 850, § 178. Atlantic Coast Line Ry. Co. v. Mazursky, 216 U. S. 122, § 440. Atlantic Coast Line Rd. Co. v. North Carolina Corporation Commission, 206 U. S. 1, §§ 21, 34, 50, 119, 141. Atlantic Coast Line Rd. Co. v. Wharton, 207 U. S. 328, §§ 42, 47, 50. Atlantic Express Co. v. Wilmington & Weldon Ry. Co., Ill N. C. 463, §140. Atlas Ry. Supply Co. v. Lake & River Ry. Co., 134 Fed. 503, § 239. Atlas Shoe Co. v. Rechard, 102 Me. 197, § 339. Attorney-General v. Adonai Shomo Corp., 167 Mass. 424, § 390. Attorney-General v. Looker, 111 Mich. 498, § 383. Attorney-General v. Moliter, 26 Mich. 444, § 377. Attorney-General v. Old Colony Rd. Co., 160 Mass. 62, § 113. Attorney-General v. Preston, 56 Mich. 177, §3. Attorney-General v. Superior & St. C. Rd. Co., 93 Wis. 604, § 393. Auerbach v. International Wolfram Lampken Aktien Gesellschaft, 173 Fed. 624, § 173. Augir v. Ryan, 63 Minn. 373, § 289. Aultman v. Forgery, 10 Ind. App. 397, § 341. Aultman's Appeal, 98 Pa. St. 505, §284. Austin v. Tecumseh Nat. Bank, 49 Neb. 412, § 254. Austin v. Tennessee, 179 U. S. 343, §53. A vent v. Deep River Lumber Co., 174 Fed. 298, § 218. Ayers, In re, 123 U. S. 443, § 155. B Babcock v. Goodrich, 47 Cal. 488, §368. Bacon v. Irvine, 70 Cal. 221, § 304. Bacon v. Michigan Cent. Rd. Co., 55 Mich. 224, § 335. XXVlll TABLE OF CASES CITED Bacon v. Robertson, 18 How. (5'J U. S.) 480, § 269. Bacon v. Walker, 204 U. S. 311, §7. Bagshaw v. Railway, 7 Hare, 114, §229. Bailey v. Tillinghast, 99 Fed. 808, §247. Baker v. Applcton & Co., 95 N. Y. Supp. 125, § 254. Baker v. Neff, 73 Ind. 68, § 247. Baker v. Spaulding Bros., 71 Vt. 169, §17. Baldwin v. Chicago, N. W. R. Co., 86 Fed. 167, § 180. Baldwin v. Stark, 107 U. S. 463, § 129. Bale V. Michigan Tontine Invest. Co., 132 Mich. 479, § 413. Ball V. Rutland Rd. Co. (U. S. C. C), 93 Fed. 513, § 301. Baltimore v. Baltimore Trust & Guar. Co., 166 U. S. 673, § 21. Baltimore & Ohio Rd. Co. v. An- drews, 50 Fed. 728, § 160. Baltimore & Ohio Rd. Co. v. Ford, 35 Fed. 170, § 201. Baltimore & Ohio Rd. Co. v. Pit- cairn Coal Co., 215 U. S. 481, §§ 106a, 131, 135a, 367. Baltimore & Ohio Rd. Co., Ex parte, 108 U. S. 566, § 374. Baltimore & Potomac Rd. Co. v. Fifth Baptist Church, 137 U. S. 568, §§ 245, 246. Baltimore & Potomac R. R. Co. v. Fifth Baptist Church, 108 U. S. 317, §334. Baltimore Consol. Ry. Co. v. Pierce, 89 Md. 495, § 317. Baltimore University v. Colton, 98 Md. 623, §§ 350, 355. Bangs v. Selden, 13 How. Prac. (N. Y.) 274, § 91. Bank v. CarroUton Ry., 11 Wall. (78 U. S.) 624, § 229. Bank v. Supervisors, 7 Wall. (74 U. S.) 26, § 73. Bankers' Union v. Crawford, 67 Kan. 449, § 223. Bank of British North America v. Barling, 44 Fed. 641, § 198. Bank of Columbia v. Patterson, 7 Cranch (11 U. S.), 299, §321. Bank of Commerce v. New York, 2 Black (67 U. S.), 620, § 73. Bank of Commerce v. Seiittle, 166 U. S. 463, § 71. Bank of Commerce v. Tennessee, 161 U. S. 134, §§ 68, 77. Bank of Fort Madison v. Alden, 129 U. S. 372, § 402. Bank of Leesville v. Wingate, 123 La. 386, § 414. Bank of Louisiana v. Wilson, 19 La. Ann. 1, § 240. Bank of Metropolis v. Ciuttschlink, 14 Pet. (39 U. S.) 19, § 323. Bank of Mississippi v. Duncan, 52 Miss. 740, § 85. Bank of Shasta v. Boyd, 99 Cal. 604, § 248. Bank of United States v. Dandridge, 12 Wheat. (25 U. S.), 91, §§ 224, 227. Bank of United States v. Deveaux, 5 Cranch (9 U. S.), 4, § 181. Banks, The, v. The Mayor, 7 Wall. (74 U. S.) 16, § 73. Bank Tax Case, 2 Wall. (69 U. S.) 200, § 73. Barber Asphalt Paving Co. v. Village of Highland Park, 156 Mich. 178, §§ 348, 380. Barbier v. Connolly, 113 U. S. 27, §§ 9, 13. Barden v. Northern Pacific Rd., 154 U. S. 288, § 129. Bardon v. Land & River Imp. Co., 157 U. S. 327, §§ 167, 402, 404. Barkley v. Levee Commissioners, 93 U. S. 258, § 254. Barling v. Bank of British North America, 50 Fed. 260, § 198. Barnard v. Roane Iron Co., 85 Tenn. 139, § 339. TABLE OF CASES CITED XXIX Barney v. Baltimore, 6 Wall. (73 U. S.) 280, § 166. Barney v. City of New York, 193 N. Y. 430, § 123. Barney v. City of New York, 190 U. S. 430, § 153. Barney v. Surety Co., 131 Mich. 192, §413. Barr v. New York, Lake Erie & Western R. R. Co., 125 N. Y. 263, §271. Barrett v. Minneapolis, St. Paul & Sault Ste. Marie Ry. Co., 106 Minn. 51, §317. Barrick v. Gifford, 47 Ohio St. 180, §308. Barron v. Burnside, 121 U. S. 186, §198. Barrow v. Hill (Todd's Case), 13 How. (54 U. S.) 52, § 137. Barrow Steamship Co. v. Kane, 170 U. S. 100, § 181. Bartol V. Walton & W. Co. (U. S. C. C), 92 Fed. 13, § 339. •Barton Lumber Co. v. Enwright, 131 Ga. 329, § 260. Barwick v. English Joint Stock Bank, L. R. 2 Ex. 259, § 336. Bassick Mining Co. v. Schoolfield, 10 Colo. 46, §§81,88. Bastian v. Modern Woodmen of America, 166 111. 595, § 249. Bates V. Great Western Teleg. Co., 134 111. 536, § 288. Bates & Guild v. Payne, 194 U. S. 106, § 129. Baumstein v. New York City Ry. Co., 107 N. Y. Supp. 23, § 89. Bayard v. United States ex rel. White, 127 U. S. 246, § 348. Bay State Dredging Co. v. United States, 206 U. S. 246, § 27. Beach v. Fulton Bank, 7 Cow. (N. Y.) 485, § 340. Beals V. Amador County Super- visors, 35 Cal. 624, § 3. Becker v. Marble Creek Irrig. Co., 15 Utah, 225, § 402. Beechley v. Mulville, 102 Iowa, 602, §448. Beekman v. Hudson River West Shore Rd. Co., 35 Fed. 3, §§ 415, 416. Beene v. Cahaba & Macon R. Co., 3 Ala. 660, § 321. Beer Co. v. Massachusetts, 97 U. S. 25, § 7. Beers v. Dallas, 16 Oreg. 334, § 223. Beeson v. Chicago (U. S. C. C), 7 Fed. 880, § 242. Behre v. National Cash Register Co., 100 Ga. 213, § 335. Bell V. Bank of California (Cal., 1908), 94 Pac. 889, §§ 313, 341. Bell V. Farwell, 176 111. 489, §§ 284, 286. Bell V. Pennsylvania, S. & N. E. R. Co., 10 N. J. L. 336, § 247. Bellevue Water Co. v. Stockshager (Idaho), 43 Pac. 568, § 397. Bell's Gap Ry. Co. v. Pennsylvania, 134 U. S. 232, § 13. Belt Railway Co. v. Banicki, 102 111. App. 642, § 317. Benedict v. Guardian Trust Co., 86 N. Y. Supp. 376, § 339. Benesh v. Mill Owners' Mut. F. Ins. Co., 103 Iowa, 465, §§ 255, 404. Bennett v. Pierce, 50 W. Va. 604, §167. Benson Mining & S. Co. v. Alta Mining & S. Co., 145 U. S. 428, §240. Bent V. Underdown, 156 Ind. 516, § 280. Benton v. James Hill Mfg. Co., 26 R. I. 192, § 317. Berea College v. Kentucky, 211 U. S. 45, §§ 199, 456. Bergeron v. Hobbs, 96 Wis. 641, §282. Bernheimer v. Converse, 206 U. S. 516, §§ 282, 284. Berry v. Rood, 168 Mo. 316, § 295. Berwind v. Canadian Pac. Ry. Co. (U. S. C. C), 98 Fed. 158, § 310. XXX TABLE OF CASES CITED Bessemer Land & Imp. Co. v. Jenkins, 111 Ala. 135, § 330. Besson v. Crapo, 150 Mich. 655, §249. Best V. Seaboard Air Line Ry. Co., 72 S. C. 479, § 13. Bethlehem Borough v. Perseverance Fire Co., 81 Pa. St. 445, § 321. Bibb V. Hall, 101 Ala. 79, § 246. Bickley v. Schlag, 46 N. J. Eq. 533, §§ 293, 299. Bicknell v. Altman (Kan., 1909), 105 Pac. 694, §§281, 282. Bicknell v. Comstock, 113 U. S. 149, § 130. Bigelow V. Old Dominion Copper Mining & Smelting Co. (N. J. Ch.), 71 Atl. 153, § 10. Big Six Development Co. v. Mitchell, 138 Fed. 279, § 192. Binghamton Trust Co. v. Auten, 68 Ark. 299, § 339. Bitterman v. Louisville & Nashville Ry. Co., 207 U. S. 205, §§ 406, 410, 426. Black v. Brooklyn H. T. Co., 53 N. Y. Supp. 312, § 242. Black v. Caldwell, 83 Fed. 880, § 20. Black v. Huggins, 2 Tenn. Ch. 780, § 229. Blackwall, The, 10 Wall. (77 U. S.) 1, §230. Blair v. Chicago, 201 U. S. 400, §§ 167, 192, 194. Blake v. McClung, 172 U. S. 239, §174. Blake v. Portsmouth & Concord Rd., 39 N. H. 435, § 278. Blanchard v. Page, 74 Mass. 281, §243. Bleakney v. Farmers' & Mechanics' Bank, 17 S. & R. (Pa.) 64, § 239. Bleidorn v. Pilot Mountain Coal & M. Co., 89 Tenn. 166, § 315. Blodgett V. Lanyon Zinc Co., 120 Fed. 893, § 236. Boardman v. Marshalltown Grocery Co., 105 Iowa, 445, § 376. Board of Commissioners v. Aspin- wall, 24 How. 376, § 348. Board of Commissioners of Lake County v. Schradshey, 97 Fed. 1, §195. Board of Directors for Leveeing Wabash River v. Houston, 71 111. 318, § 256. Board of Directors of St. Francis Levee Dist. v. Bodkin (Tenn.), 69 S. W. 270, § 256. Board of Education v. Berry, 62 W. Va. 433, § 249. Board of Home Missions of Presby. Church of U. S. v. Maughan (Utah), 101 Pac. 581, § 397. Board of Levee Inspectors of Chicot County V. Crittenden, 94 Fed. 613, §256. Board of Liquidation v. McComb, 92 U. S. 531, § 155. Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, § 421. Boatmen's Bank v. Fritzlein, 135 Fed. 653, § 220. Boatmen's Bank v. Gillespie, 209 Mo. 217, § 247. Boggs V. Railway Co., 54 Iowa, 435, §349. Boise Artesian Water Co. v. Boise City, 213 U. S. 276, § 164. Bollin V. Nebraska, 176 U. S. 83, § 158. Booker v. Grand Rapids Medical College, 156 Mich. 95, § 355. Boom County v. Patterson, 98 U. S. 403, § 127. Booth V. Illinois, 184 U. S. 425, § 12. Booth V. Town of Woodbury, 32 Conn. 118, § 3. Borden v. Atlantic Highlands, R. B. & L. B. E. R. Co. (N. J. Ch.), 33 Atl. 276, § 242. Borland v. Haven (U. S. C. C), 37 Fed. 394, § 278. Borough. See name of. Bosley v. National Machine Co., 123 N. Y. St. Rep. 277, § 436. TABLE OF CASES CITED XXXI Boston & Montana Con.sol. Copper & Silver Min. Co. v. Montana Ore Purchasing Co., ISS U. S. 032, §§ 207, 404. Boston Blower Co. v. Carman Lum- ber Co., 94 Va. 94, § 403. Boston C. & M. R. Co. v. Boston & L. R. Co., 65 N. H. 393, § 103. Bostwick V. Young, 103 N. Y. Supp. 007, § 293. Bourdette, State ex rel., v. New Orleans Gaslight Co., 49 La. Ann. 1550, § 302. Bowen v. Illinois Cent,. R. Co. 130 Fed. 300, § 317. Bowman v. Chicago & N. W. Ry. Co., 125 U. S. 405, §§11, 44, 46, 47, 51, 53, 58. Boyce, Ex parte, 27 Nev. 299, § 3. Boyd V. American Carbon Black Co., 182 Pa. St. 206, § 103. Boyd V. Sims, 87 Tex. 771, § 302. Brabham v. Phoenix Ins. Co., 41 W. Va. 139, § 181. Bradley v. Michael, 1 Ind. 551, § 341. Bradley v. Richardson, 2 Blatchf. (U. S. C. C.) 343, § 227. Branch v. Charleston, 92 U. S. 077, §180. Brass v. Stoeser, 153 U. S. 391, § 57. Breene v. Merchants' & Mechanics' Bk., 11 Colo. 97, §§ 227, 239. Breimeyer v. Star Bottling Co., 130 Mo. App. 84, § 410. Brennan v. City of Weatherford, 53 Tex. 331, § 247. Brennan v. Titusville, 153 U. S. 289, §§ 8, 58. Brewster v. Hatch, 122 N. Y. 349, §259. Bridge Co. v. United States, 105 U. S. 470, § 56. Bridges v. Shallcross, W. Va. 502, §3. Briggs V Nantucket Bank, 5 Mass. 94, §91. Brimmer v. Rebman, 138 U. S. 78, §59. Brinckenhoff v. Bostick, 88 N. Y. 52, §303 Bristol Bank edict, 67 Fed. 1, § 20U. Oliver v. Liverpool & London Life & Fire Ins. Co., 100 Mass. 531, § 16, 175. Olyphant Sewage-Drainage Co. v. Borough of Olj'phant, 5 Lack. Leg. N. 346, § 247. Omaha Hotel Co. v. Wade, 97 U. S. 14, §416. O'iVeil V. American Fire Ins. Co., 166 Pa. St. 72, § 97. Opperman v. Citizens' Bank of Mich- igan City (Ind. App., 1909), 85 N. E. 990, § 341. Oregon v. Hitchcock, 202 U. S. 60, § 130. Oregon Rd. Comm'rs v. Oregon Rd. & Nav. Co., 17 Ore. 65, §§111, 115, 150. Oregon Ry. & Nav. Co. v. Orego- nian Ry. Co., 130 U. S. 1, § 223. O'Reilly v. Greene, 41 N. Y. Supp. 1056, § 240. Orient Ins. Co. v. Daggs, 172 U. S. 557, §§ 14, 16, 17, 19, 30. Oroville & Virginia Rd. Co. v. Plumas County, 37 Cal. 354, § 245. Orr V. Bank of United States, 1 Ham. (1 Ohio) 28, § 32S. Osborn v. Oakland, 49 Neb. 340, § 383. Osborn v. San Diego Land & Town Co., 178 U. S. 22, §§ 95, 143. Osborn v. United States Bank, 9 Wheat. (22 U. S.) 738, §§ 71, 155, 211, 250, 257, 429. O'Shea, In re, 166 Fed. 180, § 137. Otis V. Parker, 187 U. S. 606, § 12. Otoe County Fair & Driving Park Assoc. V. Doman, 1 Neb. 179, § 247. Ouachita Packet Co. v. Aiken, 121 U. S. 444, § 34. Overland Cotton Mill Co. v. People, 32 Colo. 263, § 449. Overseers of Poor of North White- hall Twp. V. Overseers of Poor of South Whitehall Twp., 3 Serg. & R. (Pa.) 117, § 321. Owens v. Yazoo, Mississippi Delta Levee Rd., 74 Miss. 269, § 315. Owensboro v. Owensboro Water Works Co., 191 U. S. 358, § 37. Owensboro, City of, v. Westing- house, Church, Kerr & Co., 165 Fed. 385, § 320. Owensboro Nat. Bank v. Owensboro, 173 U. S. 664, § 71. Owensboro Wagon Co. v. Bliss, 132 Ala. 253, §§ 246, 247. Owsley V. Montgomery & West Point Rd. Co., 37 Ala. 568, §§ 331, 336. Ozan Lumber Co. v. Union County Bank, 207 U. S. 251, §§ 6, 18. Pabst Brewing Co. v. Crenshaw, 198 U. S. 17, §§ 54, 59. Pacific Express Co. v. Seibert, 142 U. S. 339, §§ 14, 21, 78. Pacific Iron & Steel Works v. Goerig (Wash., 1909), 104 Pac. 151, § 227. Pacific Postal Teleg. Co. v. Western Union Teleg. Co., 50 Fed. 493, § 427. Pacific Railroad v. McGuire, 20 Wall. (87 U. S.) 36, § 23. Padros v. Swarzenbach, 134 App. Div. (N. Y.) 811, I 308. Palatine Ins. Co., Ltd., of Manches- ter, Eng., V. Santa Fe Mercantile Co. (N. M., 1905), 82 Pac. 363. §247. Palos Coal & Coke Co. v. Benson (mem.), 145 Ala. 664, § 317. Parker v. Fort Worth & D. C. R. Co., 71 Tex. 132, § 315. Parks V. Railway Co. (Tex. Civ. App.), 30 S. W. 708, § 243. Parks V. West (Tex., 1908), 111 S. W. 726, § 247. Parrill v. Pittsburg, Cincinnati, Chi- cago & St. Louis Ry. Co., 23 Ind. App. 638, § 319. Parrott v. Bridgeport, 44 Conn. ISO, §348. TABLE OF CASE.S CITED Ixvii Parsons v. Eureka Powder Works, 48 N. H. 66, § 239. Parsons v. Tuolumne County Water Co., 5 Cal. 43, § 87. Parsons v. Venzke, 164 U. S. 89, § 130. Passage v. Dansville & Mt. N. R. Co., 58 N. Y. Supp. 770, § 415. Passenger Cases, 7 How. (48 U. S.) 283, §§ 44, 61. Patch V. Wabash Ry. Co., 207 U. S. 277, §§ 174, 178, 179. Pate (State ex rel. Board of Rd. Comm'rs) v. Wilmington & Wel- don Rd. Co., 122 N. C. 877, §§ 112, 140. Patterson v. Kentucky, 97 U. S. 501, §7. Patterson v. Northern Trust Co., 230 111. 341, § 247. Pattison v. Gulf Bag Co., 116 La. 963, § 247. Paul V. Virginia, 8 Wall. (75 U. S.) 168, §§ 16, 55. Pauly V. Pauly, 107 Cal. 8, § 226. Pauly V. State Loan & T. Co., 165 U. S. 606, § 277. P., C, C. & St. L. R. R. Co. V. Dodd, 24 Ky. Law Rep. 2057, § 306. Peabody Gold Min. Co. v. Gold Min. Co., 97 Fed. 657, § 209. Peik V. Chicago & Northwestern Ry., 94 U.S. 164, §§40, 43. Penabic Min. Co., 66 Fed. 396, § 269. Pendleton v. Kinsley, 3 Cliff. (U. S. C. C.) 416, § 317. Peninsular Trading & F. Co. v. Pacific Steam Whaling Co., 123 Cal. 689, § 413. Penn v. Calhoun, 121 U. 8. 251 , § 418. Penn Collieries Co. v. McKeever, 183 N. Y. 98, § 17. Pennock v. Coe, 23 How. (64 U. S.) 117, §417. Pennoyer v. McConnaughy, 140 U. S. 1, § 155. Penn Refining Co. v. Western New York & Penn Rd. Co., 208 U. S. 208, §§32, 35, 105. Pennsylvania v. Quicksilver Co., 10 Wall. (77 U. S.) 553, § 186. Pennsylvania v. Wheeling & Belmont Bridge Co., 18 How. (59 U. S.) 421, 460, §§44, 56, 402. Pennsylvania v. Wheeling Bri(!p;o Co., 13 How. (54 U. S.) 518, §§ 4(12 404, 409. Pennsylvania Co. v. Waddle, 100 Ind. 138, § 336. Pennsylvania Company, In re, 137 U. S. 451, § 374. Pennsylvania Ins. Co. v. Franklin F. Ins. Co., 181 Pa. St. 40, § 436. Pennsylvania Rd. Co. v. Hughes, 191 U. S. 477, §§ 29, 199. Pennsylvania Rd. Co. v. Knight, 192 U.S. 21, §§47,48. Pennsylvania R. Co. t. Montgomery Pass. Ry. Co., 167 Pa. St. 62, § 242. Pennsylvania Rd. Co. v. St. Louis, Alton & Terre Haute Ry. Co., 118 U. S. 290, § 179. Pennsylvania Teleph. Co., Matter of Taxation, 48 N. J. 91, § 427. Pensacola Teleg. Co. v. Western Union Teleg. Co., 96 U. S. 1, §§ 2, 46. People v. Bellett, 99 Mich, 151, § 13. People (ex rel. Cecil) v. Bellevue Hospital, 60 Hun (N. Y.), 107, §355. People V. Board of Railroad Commrs., 175 N. Y. 516, § 142. People (ex rel. Linton) v. Brooklyn Heights Rd. Co., 172 N. Y. 90, § 154. People (ox rel. Lord) v. Bruenncmer, 168 111. 482, § 382. People (ex rel. Tiffany) v. Campbell, 144 N. Y. 166, § 223. People (ex rel. Oneida Teleph. Co.) v. Central New York Teleph. & Teleg. Co., 58 N. Y. Supp. 221, §371. People V. Chicago & A. R. Co., 130 111. 175, § 3.53. People V. Chicago Telephone Co., 220 111. 238, § 386. Ixviii TABLE OF CASES CITED People V. Delaware & H. Canal Co., 52 N. Y. Supp. 850, § 108. People V. Detroit White Lead Works, 82 xMich. 471, § 447. People V. Duke, 19 Misc. Rep. 292, §432. People (ex rel.) v. Dulaney, 96 111. 503, § 355. People V. Equitable Life Assur. Soc., 109 N. Y. Supp. 53, §§ 261, 262, 264. People V. Flagg, 46 N. Y. 401, § 3. People (ex rel. Rhodes) v. Fleming, 10 Colo. 553, § 3. People V. Gilson, 109 U. S. 389, § 8. People V. Goff, 98 N. Y. Supp. 66, 557, §399. People V. Grand Trunk Ry. Co., 232 111. 292, § 92. People V. Hall, 80 N. Y. 117, § 384. People V. Hawkins, 47 N. Y. Supp. 56, §8: People V. Heidelberg Garden Co., 233 111. 290, § 393. People (ex rel. Postal Teleg. Cable Co.) V. Hudson River Teleph. Co., 10 N. Y. St. Rep. 282, § 371. People V. Illinois Cent. Rd. Co., 233 111. 378, §§ 223, 403. People (ex rel. Lehmaier) v. Inter- urban Ry. Co., 117 N. Y. 296, §§ 344, 376. People V. Knickerbocker Trust Co., 77 N. Y. Supp. 1000, § 441. People V. Linda Vista Irrig. Dist., 128 Cal. 477, § 247. People V. Manhattan Gas Light Co., 45 Barb. (N. Y.) 136, § 373. People V. Medical Society of E. N., 24 Barb. (N. Y.) 570, § 361. People V. Michigan Sanitarium & Benev. Soc, 151 Mich. 452, §§ 383, 393. People (ex rel. Mt. Vernon Trust Co.) V. Millard, 127 App. Div. 77, §381. People V. Murphy, 113 N. Y. Supp. 855, §9. People V. Murray Hill Bank, In re, 43 N. Y. Supp. 836, § 81. People (ex rel. Frost) v. New York Cent. & Hudson R. Rd. Co., 168 N. Y. 187, §§ 350, 381. People V. New York, Lake Erie & Western Rd. Co., 104 N. Y. 58, §§ 154, 353. People (ex rel. Brush) v. New York Suburban W^ater Co., 56 N. Y. Supp. 364, § 365. People V. Nichols, 79 N. Y. 582, § 397. People (ex rel. Bacon) v. Northern Cent. Rd. Co., 164 N. Y. 2, §§ 374, 375, 376. People V. North River Refining Co., 3 N. Y. Supp. 40, 401, § 224. People V. North River Sugar Ref. Co., 22 Abb. N. C. 16, § 432. People V. Oakland Water Front Co., 118 Cal. 234, § 251. People V. O'Brien, 111 N. Y. 1, § 36. People (ex rel. Levenson) v. O'Don- nel, 99 App. Div. 253, § 381. People (ex rel. Bath & Hammonds- port Rd. Co.) V. Public Service Commission et al., 127 App. Div. 480, § 142. People (ex rel. New York Central & Hudson River Rd. Co.) v. PubHc Service Commission, 195 N. Y. 157, § 142. People (ex rel. Town of West Seneca) V. Public Service Commission, 130 App. Div. 335, § 121. People (Moloney) v. Pullman's Pal- ace Car Co., 175 111. 125, § 223. People (ex rel. Coughran) v. Railroad Commissioners, 158 N. Y. 421, §154. People (ex rel. Attorney-General) v. Reis, 76 Cal. 269, § 379. People (ex rel. Municipal Gas Co.) v. Rice, 138 N. Y. 151, § 358. People v. Rochester Ry. & Light Co., 195 N. Y. 102, §§ 444, 450. People V. Rome, W. & O. Rd. Co., 103 N. Y. 106, § 345. TABLE OF CASES CITED Ixix People V. Rose, 219 111. 46, § 446. People V. Sheldon et al., 139 N. Y. 251, §432. People V. Smith, 108 Mich. 527, §13. People (ex rel. Delaware & Iliulson Co.) V. Stevens, 134 App. Div. 99, §117. People V. St. Francis Benev. See, 24 How. Pr. (N. Y.) 216, § 361. People (ex rel. Cantrell) v. St. Louis, A. D. T. H. Rd. Co., 176 III. 512, §366. People V. Sturdevant, 9 N. Y. 263, §81. People V. Sutter Street Ry. Co., 117 Cal. 604, §§ 377, 383. People (ex rel. New York, Ontario & Western Ry. Co.) v. Tax Commrs., 132 App. Div. 604, § 124. People V. Utica Ins. Co., 15 Johns. (N. Y.) 357, §§ 385, 393. People V. Walbridge, 6 Cow. (N. Y.) 512, § 13. People V. Westbrook, 89 N. Y. 252, § 397. People (ex rel. Cairo Teleph. Co.) v. Western Union Teleg. Co., 166 111. 15, § 372. People (ex rel. South Shore Traction Co.) V. Willcox, 196 N. Y. 212, §154. People (ex rel. Jolino) v. Willcox, 113 N. Y. Supp. S61, § 154. People V. Young, 45 N. Y. Supp. 772, §3. People's Bank v. Calhoun, 102 U. S. 256, §415. People's Gas Light & Coke Co. v. Chicago, 194 U. S. 1, §39. People's Inv. Co. v. Crawford (Tex. Civ. App., 1898), 45 S. W. 738, §301. People's Nat. Bank v. Marye, 191 U. S. 272, §§67, 71. People's Postal Teleg. Cable Co. v. Hudson R. Teleph. Co., 19 Abb. N. C. (N. Y.) 466, § 442. Peoria, Decatur & Evansville Rd. Co. v. Duggan, 109 111. 537, § 14. Peoria Gas & Electric Co. v. Peoria, 200 U. S. 48, § 38. Pepperday v. Citizens' Nat. Bank, 183 Pa. St. 519, § 323. Percy Summer Club v. Astle, 163 Fed. 1, § 194. Percy Summer Clul) v. Astle, 16() Fed. 1020, § 194. Perine v. North Jersey St. Ry. Co., 69 N. J. L. 230, § 319. Perry County v. Stebbins, 66 111. App. 427, § 302. Peterson v. Chicago, Rock Island & Pacific Ry. Co., 205 U. S. 364, §lf^l. Peterson v. Western Union Teleg. Co., 72 Minn. 41, § 317. Petri v. Commercial Nat. Bank, 142 U. S. 644, § 213. Petty V. Brunswick & Western Ry. Co., 109 Ga. 666, § 247. Phelps V. Church of Our Lady Help of Christians, 99 Fed. 683, § 319. Philadelphia & Reading R. R. Co. v. Derby, 14 How. (55 U. S.) 468, § 317. Philadelphia & Southern Steam.ship Co. V. Pennsylvania, 122 U. S. 326, §§ 44, 58, 61. Philadelphia & T. R. Co. v. Phila- delphia & B. Pass. R. Co., 6 Pa. Dist. Rep. 269, § 242. Philadelphia Fire Assoc, v. New York, 119 U.S. 110, §§ 16, 55. Philadelphia, W. & B. Rd. Co. v. Maryland, 10 How. (51 U. S.) 376, §79. Philadelphia, Wilmington & Bait. Rd. Co. V. Quigley, 21 How. (62 U. S.) 202, §§ 335, 336. Phillips V. Southwestern Teleg. & Teleph. Co., 72 Ark. 478, § 442. Phillips V. Western Terra Cotta Co., 174 Fed. 873, §§ 218, 220. Phillips Village Corporation v. Phil- lips Water Co., 104 Me. 103, § 437. Ixx TABLE OF CASES CITED Phoenix Fire & Marine Ins. Co. v. Tennessee, 161 U. S. 174, § 79. Pha?nix Ins. Co. v. Pennsylvania Rd. Co., 134 Ind. 215, § 236. Pickard v. Pullman Southern ( iir Co., 117 U. S. 34, § 44. Pickens v. South Carolina & Georgia Rd. Co., 54 S. C. 498, § 319. Pickford's, Limited, v. London & Northwestern Ry. Co., 12 Ry. & Can. Traff. Cas. 154, § 113. Pierce v. New Hampshire, 5 How. (46 U. S.) 504, § 53. Pierce v. North Carolina Rd. Co., 124 N. C. 83, § 317. Pierce v. Somerset Ry. Co., 171 U. S. 641, § 209. Pierce v. Tenn. Coal, Iron & R. R. Co., 173 U. S. 1, § 320. Pierson v. Fries, 38 N. Y. Supp. 765, §89. Pietsch V. Milbrath, 123 Wis. 647, §259. Pingree v. Mutual Gas Co., 107 Mich. 156, § 314. Piquignot v. Pennsylvania Ry. Co., 16 How. (57 U. S.) 104, § 173. Pittsburg, Allegheny & Manchester Pass. Rd. Co. V. Donahue, 70 Pa. St. 119, § 317. Pittsburg & L. A. Iron Co. v. Lake Superior Iron Co., 118 Mich. 109, § 435. Pittsburg & Southern Coal Co. v. Bates, 156 U. S. 577, § 63. Pittsburg & T. Copper Min. Co. v. Quintrell, 91 Tenn. 693, § 259. Pittsburg & West End Ry. Co. v. Point Bridge Co., 223 Pa. St. 133, §406. Pittsburg, Cincinnati & St. Louis Ry. Co. V. Keokuk & H. Bridge Co., 68 Fed. 19, § 163. Pittsburg, Cincinnati & St. Louis Ry. Co. V. Montgomery, 152 Ind. 1, §26. Pittsburg, Cincinnati & St. Louis Rd. Co. V. Theobald, 51 Ind. 240, § 317. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Backus, 154 U. S. 421, §§ 14, 76. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Board Public Works West Virginia, 172 U. S. 32, §§ 64, 123. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Call, 37 Ind. App. 232, § 319. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Dodd, 115 Ky. 176, § 305. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. German Ins. Co. (Ind. App.), 87 N. E. 995, § 236. Pittsljurg, Cincinnati, Chicago & St. Louis Ry. Co. v. Higgs, 165 Ind. 694, § 319. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Hunt (Ind., 1908), 86 N. E. 328, § 139. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Street, 26 Ind. App. 224, § 319. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Sullivan, 141 Ind. 83, § 317. Plainview v. Winona & St. P. Rd. Co., 36 Minn. 505, § 254. Planters' & Merchants' Bk. of Mo- bile V. Andrews, 8 Port. (Ala.) 404, § 227. Planters' Bank v. Union Bank, 16 Wall. (S3 U. S.) 483, § 162. Plant Investment Co. v. Jackson- ville, T. & K. W. Ry. Co., 152 U.S. 71, § 193. Plaquemines Trop. Fruit Co. v. Hen- derson, 170 U. S. 511, § 186. Piatt V. Le Cocq, 150 Fed. 391, §3. Piatt V. Wilmot, 193 U. S. 602, §284. Plumley v. Massachusetts, 155 U. S. 461, § 58. Plummer v. Struby-Estabrooke Mer- cantile Co., 23 Colo. 190, § 247. TABLE OF CASES CITED Ixxi Pokegama Sugar Pine Lumber Co. v. Klamath lliver Lumber Co., 'J6 Fed. 34, § 163. Polhemus v. Fitchburg Rd. Co., 123 N. Y. 502, § 254. Police Jury Parish of Iberville v. Texas & Pacific Ry. Co., 122 La. 388, § 227. Pollard V. Bailey, 20 Wall. (87 U. S.) 520, § 278. PoUitz, In re, 206 U. S. 323, § 346. Pollock V. Carolina Interstate Bldg. & L. Assoc, 48 S. C. 65, § 181. Pollock V. Farmers' Loan & Trust Co., 157U. S. 429, §§404,411. Pollock V. Farmers' Loan & Trust Co., 158 U. S. 601, § 67. Poole V. Paris Mountain Water Co., 81 S. C. 438, § 373. Porter v. Sabin, 149 U. S. 472, § 285. Port Huron Savings Bank v. St. Clair Circuit Judge, 147 Mich. 551, §397. Portland Co. v. Hall & Grant Con- struction Co., 108 N. Y. Supp. 821, §237. Port of Mobile v. Louisville & Nash- ville R. Co., 84 Ala. 116, §§409, 429. Postal Teleg. Cable Co. v. Adams, 155 U. S. 688, §§31, 75. Postal Tel. Cable Co. v. Alabama, 155 U. S. 482, § 186. Postal Teleg. Cable Co. v. Charles- ton, 153 U. S. 692, § 442. Postal Teleg. Cable Co. v. Eaton, 170 111. 513, § 315. Postmaster General v. Corporation of Glasgow, 10 Ry. & Can. Cas. 238, §141. Potomac Elect. Power Co. v. United States Elect. L. Co., 26 Wash. L. Rep. (Dist. Col.) 19, § 258. Potter V. Hall, 189 U. S. 292, § 129. Potter V. Necedah Lumber Co., 105 Wis. 25, § 292. Potwin Place, City of, v. Topeka Ry. Co., 51 Kan. 609, § 369. Poultney v. Wills, 1 Aiken (Vt.), 180, §321. Powers V. Chesapeake & Ohio Rail- way Co., 169 U. S. 92, § 215. Powers V. Detroit, Grand Haven & M. Ry. Co., 201 U. S. 543, §§ 23, 79, 123. Poyser v. Trustee of Salem Church, 114 Ind. 389, §§348, 355. Prairie State Loan & B. Assoc, v. Gorrie, 167 111. 414, § 321. Pray v. Todd, 75 N. Y. Supp. 947, §441. Preferred Tontine Mercantile Co. v. Nevada, 199 U. S. 613, § 93. Preferred Tontine Mercantile Co. v. Secretary of State, 133 Mich. 395, §347. Prentis v. Atlantic Coast Line Co., 211 U. S. 210, §§ 4, 5, 32, 36, 106, 112, 148, 151, 152, 154, 155. Price V. Powell, 3 N. Y. 322, § 243. Price V. Riverside Land & Irrig. Co., 56 Cal. 431, § 348. Proctor V. Webler, 1 D. Chip. (Vt.) 371, § 321. Proprietors of White School House v. Port, 31 Conn. 242, § 227. Prout V. Starr, 188 U. S. 537, § 155. Providence Bank v. Billings, 4 Pet. (29 U. S.) 514, § 67. Provident Bank & Trust Co. v. Saxon, 116 La. 408, § 247. Provident Institution v. Massachu- setts, 6 Wall. (73 U. S.) 642, § 74. Pugh V. Fairmount Gold & Silver Min. Co., 112 U.S. 238, §414. Pullman Palace Car Co. v. Harrison, 122 Ala. 149, §§ 81, 156, 181. Pullman Palace Car Co. v. Hayward, 141 U. S. 36, § 62. Pullman Palace Car Co. v. Lawrence, 74 Miss. 782, § 188. Pullman Palace Car Co. v. Mis- souri Pac. Ry. Co., 115 U. S. 587, § ISO. Pullman Palace Car Co. v. Pennsyl- vania, 141 U. S. 18, § 62. Ixxii TABLE OF CASES CITED Purczell V. Smidt, 21 Iowa, 54, § 3. Pyane v. Hook, 7 Wall. (74 U. S.) 425, § 166. Q Quaker Realty Co., In re, 122 La. 43, § 397. Quigley v. Central Pacific R. Co., 11 Nev. 350, §317. Quimby v. Conlan, 104 U. S. 420, §129. Quincy v. Steele, 120 U. S. 241, § 310. R Rahrer, In re, 140 U. S. 545, § 53. Railroad Commission v. Chicago, Rock Island & Gulf Ry. Co. (Tex., 1909), 117 S. W. 794, § 120. Railroad Commission v. Houston & Texas Cent. Ry. Co., 90 Tex. 340, §§111, 141. Railroad Commission v. Weld (Tex. Civ. App.), 66 S. W. 122, § 141. Railroad Commission Cases (Stone v. Farmers' Loan & Trust Co.), 116 U. S. 307, §§21, 32, 107, 114. Railroad Commissioners (State ex rel. Ry. Comm'rs) v. Western Union Teleg. Co., 113 N. C. 213, §§ 122, 140. Railroad Co. v. Commissioners, 103 U. S. 1, § 79. Railroad Co. v. County of Hamblen, 102 U. S. 273, § 79. Railroad Co. v. Fuller, 17 Wall. (84 U. S.) 560, § 32. Railroad Co. v. Gaines, 97 U. S. 697, §§ 23, 79. Railroad Co. v. Hammersley, 104 U. S. 1, § 120. Railroad Co. v. Harris, 12 Wall. (79 U. S.) 65, § 227. Railroad Co. v. Hecht, 95 U. S. 168, §22. Railroad Co. (Hannibal & St. Joseph Rd. Co.) V. Husen, 95 U. S. 465, §§ 7, 8, 10, 44, 58, 108. Railroad Co. v. Koontz, 104 U. S. 5, §§ 178, 181, 220. Railroad Co. v. Maine, 96 U. S. 499, §§ 79, 180. Railroad Co. v. Maryland, 21 Wall. (88 U. S.) 456, §§ 32, 62, 75, 76. Railroad Co. v. Orr, 18 Wall. (85 U. S.) 471, § 416. Railroad Co. v. Peniston, 18 Wall. (85 U. S.) 5, § 70. Railroad Co. v. Richmond, 96 U. S. 521, § 23. Railroad Co. v. Richmond, 19 Wall. (86 U. S.) 584, §§ 11, 56. Railroad Company v. Smith, 48 Ohio St. 219, §§281, 287. Railway Co., Ex parte, 103 U. S. 794, §374. Railway Co. v. Barnett (Tex. Civ. App.), 26 S. W. 783, § 243. Railway Co. v. Klepper (Tex. Civ. App.), 24 S. W. 568, § 243. Railway Co. v. Smith, 84 Texas, 348, §243. Railway Co. v. State, 55 Ark. 200, §§83,156. Railway Co. v. Whitton, 13 Wall. (80 U. S.) 270, §§4, 173. Ramagnano v. Crook, 85 Ala. 226, §356. Rankin v. Brewery & Ice Co., 12 Mex. 54, § 272. Rannels v. Rowe, 145 Fed. 296, § 247. Raphael Weil & Co. v. Crittenden, 139 Cal. 488, § 247. Raritan River R. Co. v. Middlesex & S. Traction Co., 70 N. J. L. 732, §144. Ratcliff V. Louisville Courier Journal Co., 99 Ky. 416, § 335. Ratcliff V. Wichita Union Stock Yards Co., 74 Kan. 1, § 15. Rathbone v. Ayer, 82 N. Y. Supp, 235, §284. Rathbone v. Ayer, 121 App. Div. 355, § 266. Rathbone v. Parkersburg Gas Co., 31 W. Ya. 798, § 302. TABLE OF CASES CITED Ixxiii Ratterman v. Western Union Tcleg. Co., 127 U. S. 411, §61. Raymond v. Chicago Traction Co., 207 U. S. 20, §§ 123, 164. Re. See name. Read v. Brayton, 143 N. Y. 342, §341. Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, §§ 34, 112, 144, 146, 149, 155. Reagan v. Mercantile Trust Co., 154 U. 8. 413, § 75. Recknagel v. Empire Self-Lighting Oil Lamp Co., 52 N. Y. Supp. 635, §441. Rector v. Gibbon, 111 U. S. 276, § 129. Reed v. Chicago, Burlington & Quincy Rd. Co., 84 Neb. S, § 327. Reed v. Home Savings Bank, 130 Mass. 443, §§317, 336. Reelfoot Lake Levee Dist. v. Daw- son, 97 Tenn. 151, § 3. Rees V. Olmstead, 135 Fed. 301, § 177. Rehberg v. Surety Co., 131 Mich. 135, §413. Rehm v. German Ins. & Sav. Inst., 125 Ind. 135, § 181. Reid V. Colorado, 187 U. S. 137, § 58. Reilly v. Crown Petroleum Co., 213 Pa. St. 595, §§321, 329. Reinartson v. Chicago Great West- ern Ry. Co., 174 Fed. 707, § 216. Reinecke v. Bailey, 33 Ky. L. Rep. 977, §306. Remmers v. Remraers, 217 Mo. 541, §339. Renick v. Bank of West Union, 13 Ohio, 298, § 240. Renville, In re, 61 N. Y. Supp. 549, § 372. Rex V. Passmore, 3 T. E. 199, § 239. Reynes v. Dumont, 130 U. S. 354, §341. Reynolds v. Crawfordsville First Nat. Bank, 112 U. S. 405, § 167. Rhawn v. Edge Hill Furnace Co., 201 Pa. St. 637, § 224. Rhode Island v. Massachusetts, 12 Pet. (37 U. S.) 657, §§ 81, 82, 197. Rhodes v. Iowa, 170 U. S. 412, §§ 11, 52. Rice, In re, l.',5 U. S. 153, 39(;, §§346, 348, 396. Richardson v. Buhl, 77 Mich. 632, §432. Richardson v. Graham, 45 W. Va. 134, § 259. Richardson v. McCreary & Co., 158 Ala. 65, § 320. Richmond Ry. & Electric R. Co. v. Brown, 97 Va. 26, §§ 348, 355, 369, 376. Rickerson Roller Mill Co. v. Farrell Foundry & M. Co. (U. S. C. C. A.), 75 Fed. 554, § 291. Riddle v. Proprietors, 7 Mass. 169, §332. Rieger, Kapner & Altmark, 157 Fed. 609, § 225. Riemann v. Tyroler & Vorarlbergor Verein, 104 111. App. 413, § 245. Riggs, Matter of, 214 U. S. 9, §§ 34(i, 348. Riggsbee, In re, 151 Fed. 701, § 137. Ripley v. McBarron, 125 Mass. 272, §336. Ripon Knitting Works v. Schreiber, 101 Fed. 810, § 137. Ripstein v. Haynes Medina Valley Ry. Co. (Tex. Civ. App.), 85 S. W. 314, §386. Rishworth v. Northeastern Ry., 12 Ry. & Can. Traff. Cas. 34, § 113. Risley v. Phcenix Bank, 83 N. Y. 318, §200. Ritchie v. People, 155 111. 98, § 18. Ritter v. Mutual Life Ins. Co., 169 U. S. 139, § 17. Riverside Oil Co. v. Hitchcock, 190 U. S. 316, § 129. Roake v. American Teleph. & Teleg. Co., 41 N. J. Eq. 35, §427. Roberts v. Lewis, 144 U.S. 653, § 173. Ixxiv TABLE OF CASES CITED Roberts v. Northorn Pacific Ry. Co., 158 U. S. 1, § 315. Roberts, Ex parte, lOG Mo. 207, § 3. Robbins v. Shelby Taxing Dist., 120 U. S. 489, §§ 31, 44, 60. Robinson v. City of Wilmington, 65 Fed. 858, § 123. Robinson v. Lowe, 50 W. Va. 75, §167. Robinson v. McNeill, 18 Wash. 163, §317. Robinson v. Northampton St. Ry. Co., 157 Mass. 224, § 319. Robinson v. 'West Virginia Loan Co., 90 Fed. 770, § 305. Rochester v. Gate City Mining Co., 86 Mo. App. 447, § 316. Rochester, Corning & Elmira Trac- tion Co., Matter of, 102 N. Y. Supp. 1112, § 142. Rochester Ry. Co. v. Rochester, 205 U. S. 236, §§ 23, 79, 180. Rocky Mountain Nat. Bank v. Bliss, 89 N. Y. 338, § 307. Rogers v. Alabama, 192 U. S. 226, §208. Rogers v. Galloway Female College, 64 Ark. 627, § 227. Rogers v. Nashville, C. & St. L. R. Co. (U. S. C. C. A.), 91 Fed. 294, §266. Rogers Lumber Co. v. McRea (Ind. Ty. Ct. App.), 104 S. W. 803, § 237. Rogers Park Water Co. v. Fergus, 180 U. S. 624, § 95. Roman v. Woolfolk, 98 Ala. 219, §305. Rose V. Cash, 58 Ind. 278, § 341. Rose V. Imperial Engine Co., 112 N. Y. Supp. 8, §§317, 335. Rosenbaum v. Rice, 83 N. Y. Supp. 494, § 306. Roseneau v. Empire Circuit Co., 115 N. Y. Supp. 511, § 338. Rothchild Bros. v. Mahoney, 51 Wash. 633, § 233. Rothmiller v. Stein, 143 N. Y. 581, §339. Rothstein v. Brooklyn Heights R. Co., 114 N. Y. Supp. 344, § S9. Rowell V. Boston & M. R. Co., 68 N. H. 358, § 317. Ruby-Chief Min. & Mill. Co., 17 Colo. 199, § 259. Russ V. Pennsylvania Teleph. Co., 15 Pa. Co. Ct. Rep. 26, § 242. Rutherford v. Hill, 22 Oreg. 218, § 246. Rutter V. Shoshone Mining Co., 75 Fed. 37, § 208. Ryan v. Seaboard & Rd. Co., 89 Fed. 397, §436. Ryan Livestock & Feeding Co. v. Kelley, 71 Kan. 874, § 236. S Sabin v. Vermont Central Rd. Co., 25 Vt. 363, § 332. Safe Deposit & Trust Co. of Balti- more V. City of Anniston, 96 Fed. 661, § 163. Sage V. Shepard & Morse Lumber Co., 39 N. Y. Supp. 449, § 319. Saint. See St. Salina National Bank v. Prescott, 60 Kan. 400, § 201. Salisbury Gas Co. v. Salisbury, 138 Pa. St. 250, § 163. Salt Lake City v. Christensen Co., 34 Utah, 38, § 3. Salt Lake Hardware Co. v. Tintic Mill Co., 13 Utah, 423, §§297, 308. Saltman v. Nesson, 201 Mass. 534, §350. Saltmarsh v. Planters' & Merchants' Bk., 17 Ala. 761, § 239. San Antonio & Arkansas Pass. Ry. Co. V. Graves (Tex. Civ. App.), 49 S. W. 1103, §319. San Antonio, City of, v. Lewis, 9 Tex. 69, §321. San Antonio St. Ry. Co. v. State, Elmendorf, 90 Tex. 520, § 353. Sanborn, In re, 148 Fed. 222, § 137. TABLE OF CASES CITED Ixxv Sanders v. St. Louis & New Orleans Anchor Line, 97 Mo. 26, § 90. Sanderson v. Whitmcyer, 2 Dauph. Co. Rep. 174, § 163. San Diego Gas Co. v. France, 148 Cal 252, §405. San Diego Land & Town Co. v. Jasper, 189 U. S. 430, 439, §§34, 408. San Diego Land & Town Co. v. Na- tional City, 174 U. S. 739, 839, §§ 36, 37, 95, 147. San Diego Water Co. v. San Diego, 118 Cal. 556, § 143. Sands v. Manistee River Imp. Co., 123 U. S. 288, § 56. Sanford v. Sanford, 139 U. S. 642, § 130. San Francisco Gas & Electric Co. v. Superior Court, 155 Cal. 30, § 349. San Joaquin & King's River Canal & Irrig. Co. V. Stanislaus County, 155 Cal. 21, § 408. San Joaquin & King's River Canal & Irrig. Co. v. Stanislaus County, 90 Fed. 516, § 208. San Joaquin Land & Water Co. v. West, 94 Cal. 399, § 259, San Jose Land & Water Co. v. San Jose Ranch Co., 189 U. S. 177, § 421. Santa Cruz Rock Pavement Co. v. Broderick, 113 Cal. 628, § 90. Santa Rosa Lighting Co. v. Wood- ward, 119 Cal. 30, § 379. Saratoga Springs, Village of, v. Saratoga Gas, etc., Co., 191 N. Y. 123, § 154. Satterlee v. Matthewson, 2 Pet. (27 U. S.) 380, § 4. Satterlee v. Struder, 31 W. Va. 781, §356. Saunders v. Kohnke, 109 La. 838, § 391. Saunders v. Memphis & R. S. R. Co., 101 Tenn. 206, § 315. Savannah, F. & W. Ry. Co. v. Parish, 117 Ga. 893, § 334. Savannah, T. & I. of H. Ry. Co. v. Savannah, 198 U. S. 392, §§ 23, 123. Savings & Trust Co. of Cleveland v. Bear Valley Irrig. Co., 112 Fed. 693, § 305. Savings Bank v. Archbold, 104 U. S. 708, §72. Sawyer, In re, 124 U. S. 200, § 430. Saxby v. Southern Land Co., 109 Va. 196, §339. Scarsdale Pub. Co. Colonial Press Co. V. Carter, 116 N. Y. Supp. 731, §339. Scatcherd Lumber Co. v. Pike, 113 Ala. 555, § 198. Schlemmer v. Buffalo, Rochester & Pittsburg Ry. Co., 205 U. S. 1, §27. Schlosser v. Hemphill, 198 U. S. 173, §204. SchoUenberger v. Pennsylvania, 171 U. S. 1, §§ 53, 58. School District v. Hodgin, 180 Mo. 70, § 247. Schroeder v. Merchants' & Mechan- ics' Ins. Co., 104 111. 71, § 83. Schultz V. German-American Real Estate Co., 47 N. Y. Supp. 500, §413. Schwab V. Potter Co., 194 N. Y. 409, §§ 260, 267., Schwartz v. Interborough Rapid Transit Co., 103 N. Y. Supp. 80, §89. Scott V. Donald, 165 U. S. 58, 107, §§ 53, 155. Scott V. Mineral Development Co., 130 Fed. 497, § 195. Scott County Macadamized Rd. Co. v. Hines, 215 U. S. 336, § 429. Scottish Security Co.'s Receiver v. Starks, 25 Ky. L. Rep. 1722, § 289. Scoville Plumbing Co. v. Highland Park Land Co., 99 Iowa 303, § 320. Scran ton Electric Light & Heat Co.'s Appeal, 122 Pa. St. 154, § 421. Ixxvi TABLE OF CASES CITED Scran ton Elec. L. & II. Co. v. Scranton Ilium. H. rent in the States, and is not affected by the interstate commerce pro- vision nor by the Post Roads Act.^« Again, in a late Federal Supreme Court case, it is determined that generally speaking the police power belongs to, and is to be exercised, by the State, but it must yield to Congress wherever it conflicts with the powers belonging exclusively to Congress.^" So in another Federal case it is held that the States have full power to regu- late within their limits matters of internal police, including in that general designation whatever will promote the peace, com- fort, convenience and prosperity of the people, provided, how- ever, that the exercise of such power does not come in conflict with the powers, as exercised by Congress under the Federal Constitution making laws of the United States passed in pursu- ance thereof supreme with relation to the States.^^ Notwith- standing the general police power is reserved to the States it is subject to this limitation, that it may not trespass on the rights and powers vested in the National Government; ^^ and it must be exercised in subordination to the Constitution,'^ for it is not above the express or necessarily implied constitutional prohibi- tions-^"* And neither the unlimited powers to tax, nor any of Gilson, 109 N. Y. 389, 401, 4 Am. St. Rep. 465, 17 N. E. 343; New Orleans Gas Light Co. v. Louisiana L. & H. P. & Mfg. Co., 115 U. S. 650, 29 L. ed. 516, 6 Sup. Ct. 252; Brennan v. Titusville, 153 U. S. 289, 299, 4 Inters. Comm. Rep. 658, 38 L. ed. 719, 722, 14 Sup. Ct. 829; Jacobs, In re, 98 N. Y. 98, 108, 50 Am. St. Rep. 636. Examine Gibbons v. Ogden, 9 Wheat. (22 U.S.) 1, 6 L. ed. 23. 19 Western Union Teleg. Co. v. Mayor of New York, 38 Fed. 552, 2 Inters. Comm. Rep. 533, 3 L. R. A. 449, 6 Ry. & Corp. L. Jour. 105, 2 Am. Elec. Cas 195. 20 Adams Express Co. v. Kentucky, 214 U. S. 218, 29 Sup. Ct. 633, 53 L. ed. 972. 21 Escanaba Company v. Chicago, 107 U. S. 678, 683, 27 L. ed. 442, 2 Sup. Ct. 185 (appHed to the power of the State to regulate and control the construction, use and repair of bridges, by delegation of its authority to a municipal body of such power, over bridges within the city limits, even though over navigable waters, provided, however, that Congress has not acted in the matter under the commerce clause of the Constitution. 22 Heflf, Matter of, 197 U. S. 488, 49 L. ed. 848, 25 Sup. Ct. 506. 23 Stehmeyer v. Charleston, 53 S. C. 259, 31 S. E. 222. 24 State V. Chittenden, 127 Wis. 468, 107 N. W. 500. 18 REGULATION AND CONTROL § 9 its large police powers, can be exercised to such an extent by the State as to work a practical assumption of the powers con- ferred by the Constitution upon Congress.^^ Nor should there be an arbitrary invasion of personal rights or of private prop- erty, nor should such burdens be imposed upon property rights that the owner will thereby be unlawfully deprived of the same/^ § 9. Same Subject — Limitations Continued. In New York the Federal and State Constitutions control the exercise of the police power; and the public generally rather than the interests of a particular class must be considered; the exercise of the power must not be unnecessarily or unduly op- pressive but must be reasonable in its application, while the public safety, welfare, health and morals must be protected, nor can the liberty or property rights of individuals be arbi- trarily taken away, nor can they unreasonably be restricted or prevented from exercising any particular profession or lawful occupation or pursuit or contracting concerning the same.^^ And in another case it is held that the exercise of the police power may and should have reference to the peculiar situation and needs of the community, and is not necessarily invalid be- cause it may have the effect of levying a tax upon the property affected, if its main purpose is to protect the people against fraud and wrong.^* So in Wisconsin this power is limited to the extent that the exercise thereof must be reasonable both as to the regulation itself and the subjects to be regulated.'^ But uncompensated obedience to a regulation enacted for the pub- lic safety under the police power of the State is not a taking 25 Railroad Co. (Hannibal & St. Joseph Rd. Co.) v. Husen, 95 U. S. 465, 24 L. ed. 527. 28 Chicago, BurUngton & Quincy Rd. Co. v. State, 47 Neb. 549, 66 N. W. 624. 27 People V. Murphy, 113 N. Y. Supp. 855, 129 App. Div. 260, rev'g 113 N. Y. Supp. 854, 60 Misc. 536, aff'd 88 N. E. 17; O. J. Gude & Co. v. Murphy, 113 N. Y. Supp. 860, 129 App. Div. 266, aff'd 88 N. E. 21. 28 McLean v. Denver & Rio Grande R. Co., 203 U. S. 38, 51 L. ed. 78, 27 Sup. Ct. 1, aff'g 78 Pac. 74. 28 State V. Chittenden, 127 Wis. 468, 107 N. W. 500. 10 § 10 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — of property without due compensation, and the constitutional prohibition against the taking of private property without compensation is not intended as a limitation of the exercise of those police powers which are necessary to the tranquillity of every well-ordered community, nor that general power over private property which is necessary for the orderly existence of all governments.^" The Fourteenth Amendment to the Con- stitution does not limit the subjects in relation to which the police power may be exercised for the protection of its citi- zens.^^ And restraints upon the proper exercise of this power by the States are not imposed by the due process of law clause of the Federal Constitution .^^ So the interdiction of statutes impairing the obligation of contracts does not prevent a State from properly exercising its police powers for the public good notwithstanding contracts previously entered into between individuals may be affected.^^ § 10. Same Subject — Legislative Discretion— Interference of Courts. While the police power of the State is subject to limitations there is a wide discretion as to its exercise in the legislature, with whose determination as to what is and what is not neces- sary the courts ordinarily will not interfere, except where prop- erty is taken for which compensation must be made, private interests are subservient to the police power and must give way to general schemes for the public health.^'* So in New Jersey the public policy of that State is a creature of the legislature, the courts do not form it but merely take cognizance thereof 30 Chicago, Burlington & Quincy Rd. Co. v. Drainage Comm'rs, 200 U. S. 561, 50 L. ed. 596, 26 Sup. Ct. 341, aff'g 212 111. 10.3, 72 N. E. 219. 31 Minneapolis & St. Louis Ry. Co. v. Beckwith, 129 U. S. 26, 32 L. ed. 585, 9 Sup. 207, considering and following Missouri Pacific Ry. Co. v. Humes, 115 U. S. 512, 6 Sup. Ct. 110, 29 L. ed. 463; Soon Hing v. Crowley, 113 U. S. 703, 28 L. ed. 1145, 5 Sup. Ct. 730; Barbier v. Connolly, 113 U. S. 27, 28 L. ed. 923, 5 Sup. Ct. 357. 32 Sprigg V. Garrett Park, 89 Md. 406, 411, 43 Atl. 813. 33 Manigault v. Springs, 198 U. S. 473, 50 L. ed. 274, 26 Sup. Ct. 127. 31 Manigault v. Springs, 198 U. S. 473, 50 L. ed. 274, 26 Sup. Ct. 127. Sco §§4, 5, herein. 20 REGULATION AND CONTROL § 11 the same as in case of other public laws.^^ Again, it is held that in the exertion of its police power the legislature is vested with a large discretion, which, if exercised bona fide for protection of the public, is beyond the reach of judicial inquiry.^ But a wide range of discretion is necessary to make legislation prac- tical and the courts cannot be made a refuge from ill-advised, unjust or oppressive laws.^' It has also been decided, that in- asmuch as the range of the States' police power comes very near to the field committed by the Constitution to Congress, it is the duty of the courts to guard vigilantly against any need- less intrusion.^* And generally, when and how far this power may be legitimately exercised by a State must be left for de- termination in each case as it arises.^'' The police power may, it is held, be asserted directly by the legislature, or may, in the absence of constitutional restrictions, be delegated to several municipal corporations or other agencies provided for its ex- ercise.''" § 11. Liberty to Contract— Interstate Commerce— Police Power— Anti-Trust Act —Combinations. The United States Supreme Court recognizes in its decisions the broad principle of the freedom of commerce between the States, and the right of citizens of one State to freely contract and receive and send merchandise from and to another State, 35 Bigelow V. Old Dominion Copper Mining & Smelting Co. (N. J. Ch.), 71 Atl. 153. 36 Louisville & Nashville R. Co. v. Kentucky, 161 U. S. 677, 40 L. ed. 849, 16 Sup. Ct. 714 (a case of railroad competition; consolidation of parallel lines; construction of charter power to unite with other roads as not au- thorizing purchase or lease, or any union of franchises; construction of State statute as not authorizing purchase of other or parallel lines, and constitutional provision forbidding consolidation as constituting legitimate exercise of the police power of the State). 37 District of Columbia v. Brooke, 214 U. S. 138, 53 L. ed. 941, 29 Sup. Ct. 560, rev'g 29 App. D. C. 563. 38 Railroad Co. (Hannibal & St. Joseph Rd. Co.) v. Husen, 95 U. S. 465, 24 L. ed. 527. 39 Allgeyer v. Louisiana, 165 U. S. 578, 17 Sup. Ct. 427, 41 L. ed. 832. 40 Chicago, Burlington & Quincy Rd. Co. v. Nebraska, 47 Neb. 549, 3 Am. & Eng. R. Cas. (N. S.) 573, 41 L. R. A. 481, 66 N. W. 624. 21 § 11 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — and also the want of power of one State to destroy contracts concerning interstate commerce, valid in the States where made.^^ The power to regulate commerce among the several States was vested in Congress in order to secure equality and freedom in commercial intercourse against discriminating State legisla- tion; it was not intended that the power should be exercised so as to interfere with private contracts not designed at the time they were made to create impediments to such intercourse. Accordingly, a contract between a railroad company and an elevator company, that the latter company, in consideration of erecting and using for that purpose an elevator, should have for a prescribed term the handling, at a stipulated price, of all grain brought by the railroad company in its cars to the city of Dubuque, on the Mississippi River, to be transmitted to a place beyond, did not cease to be valid and binding upon the parties because afterwards, by the construction of a railroad bridge across the Mississippi at Dubuque, it became unnecessary for the railroad company or its lessee, and a useless expense to it, to have the grain brought by it to Dubuque handled at that place. The enforcement of the contract after the construction of the bridge was not an interference with the power of Congress to regulate commerce between the States .''^ Congress may, however, under the commerce clause of the Federal Constitu- tion enact such legislation as shall declare void and prohibit the performance of any contract between individuals or cor- porations where the natural and direct effect of such a contract shall be, when carried out, to directly and not as a mere inci- dent to other and innocent purposes, regulate to any extent interstate or foreign commerce. And although the provision in the Constitution regarding the liberty of the citizen is to « Adams Express Co. v. Iowa, 196 U. S. 147, 49 L. ed. 424, 25 Sup. Ct. 185; American Express Co. v. Iowa, 196 U. S. 133, 49 L. ed. 417, 25 Sup. Ct. 182; Vance v. Vanderhook Co., 170 U. S. 438, 18 Sup. Ct. 674, 42 L. ed. 1100; Rhodes v. Iowa, 170 U. S. 412, 18 Sup. Ct. 664, 42 L. ed. 1088; Leisy v. Hardin, 135 U. S. 100, 34 L. ed. 128, 10 Sup. Ct. 681; Bowman v. Chicago, 125 U. S. 465, 31 L. ed. 700, 8 Sup. Ct. 689, 1062. 4; Railroad Co. v. Richmond, 19 Wall. (86 U. S.) 584, 22 L. ed. 173. 22 REGULATION AND CONTROL § 11 some extent limited by this commerce clause, still the power of Congress to regulate commerce comprises the right to enact a law prohibiting a citizen from entering into those private con- tracts which directly and substantially, and not merely indi- rectly, remotely, incidentally and collaterally regulate to a greater or less degree, commerce among the States. ^^ So even though there is a certain freedom of contract which the States cannot destroy by legislative enactment, in pursuance whereof parties may seek to further their business interests, the police power of the States extends to and may define and prohibit, under penalties, trusts or secret arrangements by which, al- though there is no merger of interests through partnerships or incorporation, an apparently existing competition among all the dealers in a community in one of the necessaries of life is substantially destroyed; and such an enactment is not in con- flict with the Fourteenth Amendment as to a person convicted of combining with others to pool and fix the price, divide the net earnings and prevent competition in the purchase and sale of grain. ^ So a State statute prohibiting combinations of in- surance companies as to rates, commissions, and manner of transacting business is not unconstitutional as depriving the companies of their property or of their liberty of contract, *3 Addyston Pipe & Steel Co. v. United States, 175 U. S. 1, 44 L. ed. 136, 20 Sup. Ct. 96. In this case it was held that under the act of Congress of July 2, 1890, c. 647, entitled, "An act to protect trade and commerce against unlawful restraints and monopolies," any agreement or combination which directly operates, not alone upon the manufacture, but upon the sale, transportation and delivery of an article of interstate commerce, by pre- venting or restricting its sale, thereby regulates interstate commerce to that extent, and thus trenches upon the power of the National Legislature, and violates the statute. The contracts considered in this case relate to the sale and transportation to other States of specific articles, not incidentally or collaterally, but as a direct and immediate result of the combination entered into by the defendants; and they restrained the manufacturing, purchase, sale or exchange of the manufactured articles among the several States, and enhanced their value, and thus came within the provisions of said act; and when the direct, immediate and intended effect of a contract or combina- tion among dealers in a commodity is the enhancement of its price, it amounts to a restraint of trade in the commodity, even though contracts to buy it at the enhanced price are being made. « Smiley v. Kansas, 196 U. S. 447, 49 L. ed. 546, 25 Sup. Ct. 276. 23 § V2 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — within the meaning of the Fourteenth Amendment, and the auditor of the State will not be enjoined from enforcing the provisions of the statute.^ § 12. Liberty to Contract Continued — Police Power — Sales on Margins — Limitation of Liability — Mechanics' Liens — Insurance. A State constitutional provision may prohibit sales on mar- gins without intrenching upon the liberty of contract, and such prohibition is not contrary to the first section of the Four- teenth Amendment.'*^ Nor is a statute declaring invalid any contract limiting the liability of a railway company for the negligence of a fellow servant an unwarranted interference with the right of private contracts; nor is such enactment an arbitrary and unreasonable exercise of the police power of the State.^^ Nor is liberty to contract unreasonably interfered with, nor is the owner deprived of his property without due process of law by a State statute relating to the filing and en- forcement of mechanics' Hens, and such enactment is not un- constitutional.^* Again, a State statute which provides that any person, firm or corporation, who in any manner whatever does an act in the State, to effect for himself or another, insur- es Carroll v. Greenwich Ins. Co., 199 U. S. 401, 50 L. ed. 246, 26 Sup. Ct. 66. 48 Otis V. Parker, 187 U. S. 606, 23 Sup. Ct. 168, 47 L. ed. 323, aff'g 130 Cal. 322, 62 Pac. 521, 927 (under Art. IV, § 26, Const. Cal., providing that "all contracts for the sales of shares of the capital stock of any corporation or association, on margin, or to be delivered at a future day, shall be void, and any money paid on such contracts may be recovered by the party pay- ing it, by suit in any court of competent jurisdiction"). See Booth v. IlUnois, 184 U. S. 425, 46 L. ed. 623, 22 Sup. Ct. 425. 47 McGuire v. Chicago, Burlington & Quincy Rd. Co., 131 Iowa, 340, 108 N. W. 902, and cases cited Id., 383. 48 Great Southern Fireproof Hotel Co. v. Jones, 193 U. S. 532, 48 L. ed. 778, 24 Sup. Ct. 576. When State labor law limiting hours of work is not a legitimate exercise of the poHce power of the State, but an unnecessary, unreasonable and arbi- trary interference with the right and liberty of the individual to contract, in relation to labor, and as such in conflict with and void under, the Federal Constitution. Lochner v. New York, 198 U. S. 45, 25 Sup. Ct. 539, 49 L. ed. 93; § 110, Labor Law of N. Y. 24 REGULATION AND CONTROL § 13 ance on property then in the State, in any marine insurance company which has not complied in all respects with the laws of the State, shall be subject to a fine, etc., is, when applied to a contract of insurance made in another State with an insurance company of such State, where the premiums were paid and where the losses were to be paid, a violation of the Constitution of the United States.''" § 13. Classification Statutes — Fourteenth Amendment. The difference between the extent of the power which the State may exert over the doing of business within its borders by an individual, and that which it can exercise as to corpora- tions, furnishes a distinction authorizing a classification be- tween the two which does not violate the equal protection clause of the Fourteenth Amendment.^" So a reasonable classification of persons according to occupation, business or other circumstances, for legislative purposes, by which all per- sons of that class are affected alike, is not a violation of the Fourteenth Amendment to the Federal Constitution, or of a corresponding provision of a State Constitution.^^ It is also a « Allgeyer v. Louisiana, 165 U. S. 578, 41 L. ed. 832, 17 Sup. Ct. 427; Hooper v. California, 155 U. S. 648, 39 L. ed. 297, 15 Sup. Ct. 207, distin- guished, and held that above decision is not intended to shake its authority. The business of insurance is not commerce. See § 55, herein, as to in- terstate commerce insurance. 50 Hammond Packing Co. v. Arkansas, 212 U. S. 322, 29 Sup. Ct. 370, 53 L. ed. 530. 51 McGuire v. Chicago, Burlington & Quincy Rd. Co., 131 Iowa, 340, 108 N. W. 902. The court, per Weaver, J. (at p. 350), says: "But the rea- sonable classification of persons for the purposes of legislation, according to occupation, business, or other circumstances, by which one class or por- tion of the people is differentiated from other portions or classes, has often been held not to be a violation of this constitutional guaranty. The mere fact that legislation is special, and made to apply to certain persons and not to others, does not affect its validity, if it be so made that all persons sub- ject to its terms are treated alike under like circumstances and condi- tions. * * * Such also has been the vmiform holding of this court with reference to the corresponding provision in our State Constitution," citing the following cases: United States: Duncan v. Missouri, 152 U. S. 377, 14 Sup. Ct. 570, 38 L. ed. 485; Walston v. Nevin, 128 U. S. 578, 9 Sup. Ct. 192, 32 L. ed. 544; Hayes v. Missouri, 120 U. S. 68, 30 L. ed. 578, 7 Sup. Ct. 350. 25 § 13 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — general rule that a State may, without violating the equal pro- tection clause of the Fourteenth Amendment, put into one class all engaged in business of a special and public character, and require them to perform a duty which they can do better and more quickly than others, and impose a not exorbitant penalty for the nonperformance thereof.^^ Massachusetts: Commonwealth v. Railroad Co., 187 Mass. 436, 73 N. E. 530. Michigan: People v. Smith, 108 Mich. 527, 66 N. W. 382, 32 L. R. A. 853, 62 Am. St. Rep. 715; People v. Bellett, 99 Mich. 151, 57 N. W. 1094, 22 L. R. A. 696, 41 Am. St. Rep. 589. Missouri: State v. Tower, 185 Mo. 79, 84 S. W. 10, 68 L. R. A. 402. New York: People v. Walbridge, 6 Cow. (N. Y.) 512. North Carolina: Broadfoot v. Fayetteville, 121 N. C. 422, 28 S. E. 515, 39 L. R. A. 245, 61 Am. St. Rep. 668. Ohio: State v. Nelson, 52 Ohio St. 88, 39 N. E. 22, 26 L. R. A. 317. Tennessee: Dugger v. Insurance Co., 95 Tenn. 245, 32 S. W. 5, 28 L. R. A. 796. 52 Seaboard Air Line Ry. v. Seegers, 207 U. S. 73, 52 L. ed. 108, 28 Sup. Ct. 28, aff'g 73 S. C. 71. The court, per Mr. Justice Brewer, said: "It is contended that the equal protection of the laws, guaranteed by the first section of the Fourteenth Amendment, is denied. The power of classifica- tion is conceded, but this will not uphold one that is purely arbitrary. There must be some substantial foundation and basis therefor. It is as- serted that this is merely legislation to compel carriers to pay their debts within a given time, by an unreasonable penalty for any delay, while no one else is so punished, and that there is no excuse for such distinction. (The case involved the constitutionahty of a State statute providing for penalty on common carriers for not promptly adjusting damage claims.) We have had before us several cases involving classification statutes, and while the principles upon which classifications maj^ rightfully be made are clear and easily stated, yet the application of those principles to the different cases is often attended with much difficulty. See among others on the gen- eral principles of classification: Barbier v. Connolly, 113 U. S. 27, 28 L. ed. 923, 5 Sup. Ct. 357; Bell's Gap Rd. Co. v. Pennsylvania, 134 U. S. 232, 33 L. ed. 892, 10 Sup. Ct. 533, and of cases making application of those principles: Gulf, Colorado & Santa Fe Ry. Co. v. Ellis, 165 U. S. 150, 41 L. ed. 666, 17 Sup. Ct. 255; Atchison, Topeka & Santa Fe Rd. Co. v. Mat- thews, 174 U. S. 96, 43 L. ed. 909, 19 Sup. Ct. 609, and cases cited in the opinion; Erb v. Morasch, 177 U. S. 584, 44 L. ed. 897, 20 Sup. Ct. 819; FideUty Mutual Life Assoc, v. Mettler, 185 U. S. 308, 46 L. ed. 922, 22 Sup. Ct. 662; Farmers' & Merchants' Ins. Co. v. Dobney, 189 U. S. 301, 23 Sup. Ct. 565, 47 L. ed. 821 (aff'g 62 Neb. 213, 86 N. W. 1070); Missouri, Kansas & T. Ry. Co. v. May, 194 U. S. 267, 48 L. ed. 971, 24 Sup. Ct. 638. We are of the opinion that this case comes within the limits of constitutionality. It is not an act imposing a penalty for the nonpayment of debts." The 2() REGULATION AND CONTROL § 14 § 14. Same Subject. There is no unjust discrimination, and no denial of the equal protection of the laws, in regulations regarding railroads, which are applicable to all railroads alike."^^ " It is too late in the day to insist that special legislation affecting the rights and liabili- ties of railroad companies, or other distinct class or kind of corporations, constitutes a denial of the equal protection of the laws simply because the same regulation or restriction is not extended over other corporations or other kinds of business." ^ court then quotes from Best v. Seaboard Air Line Rd. Co., 72 S. C. 479, 484, and adds: "It is not an act levelled against corporations alone, but includes all common carriers. The classification is based solely upon the nature of the business, that being of a public character. It is true that no penalty is cast upon the sliipper, yet there is some guarantee against excessive claims in that * * * there can be no award of a penalty unless there be a recovery of the full amount claimed. Further, the matter to be adjusted is one pecuHarly watliin the knowledge of the carrier." 63 New York & New England Rd. Co. v. Bristol, 151 U. S. 556, 14 Sup. Ct. 437, 33 L. ed. 269, case aff'd and followed in New York & New England Rd. Co. v. Woodruff, 153 U. S. 689, 38 L. ed. 869, 14 Sup. Ct. 976. M McGuire v. Chicago, Burlington & Quincy Rd. Co., 131 Iowa, 340, 383, 108 N. W. 902, 917. See the following cases: United States: Cincinnati Street Ry. Co. v. Snell, 193 U. S. 30, 24 Sup. Ct. 319, 48 L. ed. 604; Tulhs v. Lake Erie & Western Rd. Co., 175 U. S. 348, 20 Sup. Ct. 136, 44 L. ed. 192; St. Louis, Iron Mountain & St. Paul Ry. Co. v. Paul, 173 U. S. 404, 19 Sup. Ct. 419, 43 L. ed. 746; Orient Insurance Co. v. Daggs, 172 U. S. 557, 19 Sup. Ct. 281, 43 L. ed. 552; Magoun v. Illinois Trust & Sav. Bk., 170 U. S. 283, 42 L. ed. 1037, 18 Sup. Ct. 594; St. Louis & San Francisco Ry. Co. v. Matthews, 165 U. S. 1, 17 Sup. Ct. 243, 41 L. ed. 611; Chicago, Kansas & Western Rd. Co. v. Pontius, 157 U. S. 209, 15 Sup. Ct. 585, 39 L. ed. 675; Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. V. Backus, 154 U. S. 421, 14 Sup. Ct. 1114, 38 L. ed. 1031; Pacific Ex- press Co. V. Seibert, 142 U. S. 339, 35 L. ed. 1035, 12 Sup. Ct. 250; Minne- apolis & St. Louis Ry. Co. v. Beckwith, 129 U. S. 26, 9 Sup. Ct. 207, 32 L. ed. 585; Missouri Pacific Ry. Co. v. Mackey, 127 U. S. 205, 209, 8 Sup. Ct. 116, 32 L. ed. 107; Dow v. Beidelman, 125 U. S. 680, 8 Sup. Ct. 1028, 31 L. ed. 841; Kentucky Raih-oad Tax Cases (Cincinnati, New Orleans & Tex. Pac. Rd. Co. v. Kentucky), 115 U. S. 321, 29 L. ed. 414, 6 Sup. Ct. 57; Soon King v. Crowley, 113 U. S. 703, 28 L. ed. 1145, 5 Sup. Ct. 730. Illinois: Peoria, Decatur & Evansville Rd. Co. v. Duggan, 109 111. 537, 50 Am. Rep. 619. Iowa: Gano v. Minneapolis & St. Louis Rd. Co., 114 Iowa, 713, 719, 87 N. W. 714, 55 L. R. A. 263, 89 Am. St. Rep. 393; Burlington, Cedar Rapids 27 § 14 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — But the mere fact of classification is not sufficient to relieve a statute from the reach of the equality clause of the Fourteenth Amendment, and in all cases it must appear not merely that a classification has been made, but also that it is based upon some reasonable ground, something which bears a just and proper relation to the attempted classification and not a mere arbitrary selection. ^^ Again, a State statute putting all non- resident domestic corporations having their places of business and works outside the State, and all foreign corporations com- ing into the State, on the same footing in respect to service of process, and making the State auditor their attorney in fact to accept process, is a reasonable classification and not unconsti- tutional as denying equal protection of the laws, because such provision does not apply to all corporations; nor does it deprive such corporations, without due process of law, of their liberty of contract ; nor does the requirement that they pay such auditor a small specified annual fee for services amount to a taking of property without due process of law.^^ Nor does the Four- teenth Amendment deprive the States of the power of classifi- cation or require the classification to be logically and scientifi- cally accurate; and sufficiently practical reasons exi.st for a classification of resident and nonresident property owners in the enforcement of police regulations, provided that the act is impartial as between the classes. So while the enforcement of a & Northern Ry. Co. v. Dey, 82 Iowa, 312, 48 N. W. 98, 12 L. R. A. 436, 31 Am. St. Rep. 477. Kansas: Missouri, Kansas & Texas Ry. Co. v. Simonson, 64 Kan. 802, 68 Pac. 653. Minnesota: Cameron v. Chicago, Milwaukee & St. Paul Ry. Co., 63 Minn. 384, 65 N. W. 652, 31 L. R. A. 553. Missouri: Campbell v. Missouri Pacific Ry. Co., 121 Mo. 340, 25 S. W. 936, 25 L. R. A. 175, 42 Am. St. Rep. 530. Ohio: State v. Nelson, 52 Ohio St. 88, 39 N. E. 22, 26 L. R. A. 317. 55 Applied in case of State statute providing as to presentation of certain claims, the institution of certain suits against railway corporations and for recovery of attorney's fees in addition to amount claimed; statute tested by above principles held not sustainable. Gulf, Colorado & Santa Fe Ry. Co. V. ElUs, 165 U. S. 150, 41 L. ed. 666, 17 Sup. Ct. 255. 56 St. Mary's Petroleum Co. v. West Virginia, 203 U. S. 183, 51 L. ed. 144, 27 Sup. Ct. 132. 28 REGULATION AND CONTROL § 15 statute enacted under the police power by criminal proceed- ings against resident ov/ners, and by civil proceedings against nonresident owners is a discrimination, if, however, it is justi- fied by the circumstances it does not render the statute un- constitutional, nor is it so rendered by the fact that the remedy as to one class may be more efficient than the remedy as to the other.^' So a provision in a gas rate statute establishing one rate for the municipality and another for individual consumers is not an unreasonable classification and does not render the act unconstitutional under the equal protection clause of the Fourteenth Amendment. And where none of the different classes of consumers complain of different rates the corporation cannot complain of such differences provided the total receipts are sufficient to yield an adequate return.^* § 15. Police Power — Regulation of Slaughter Houses and Stock Yards. A State may provide by police regulation for slaughter houses of a corporation by a grant of exclusive right or privi- lege, guarded by proper limitation as to prices, imposing also the duty of providing ample conveniences with permission to all owners of stock to land, and of all butchers to slaughter at such places.^^ So the legislature may define public stock yards and regulate them and their charges when not made unreasonable and unjust as denying their owners a reasonable return on their money invested; and such enactment does not constitute a tak- ing of private property without due process of law or just com- pensation .®° But a State statute entitled, " an act defining what shall con- fix District of Columbia v. Brooke, 214 U. S. 138, 53 L. ed. 941, 29 Sup. Ct. 560, rev'g 29 App. D. C. 563, citing Field v. Barber Asphalt Co., 194 U. S. 618, 48 L. ed. 1142, 24 Sup. Ct. 784, and, in qucere as to police power of District of Columbia, considering United States v. Delaware & Hudson Co., 213 U. S. 366, 53 L. ed. 8.36, 29 Sup. Ct. 527. As to power of Congress to enact discriminatory legislation under the commerce clause see § 45, herein. 58 Willcox V. Consolidated Gas Co., 212 U. S. 19, 29 Sup. Ct. 392, 53 L. ed. 382. 59 Slaughter House Cases, 16 Wall. (S3 U. S.) 36, 21 L. ed. 394. 60 Ratcliff V. Wichita Union Stock Yards Co., 74 Kan. 1, 86 Pac. 150. 29 § 16 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — stitute public stock yards, defining the duties of the person or persons operating the same, and regulating all charges thereof, and removing restrictions in the trade of dead animals, and providing penalties for violation of this act," is in violation of the Fourteenth Amendment of the Constitution of the United States, where it applies only to one stock yards company, and not to other companies or corporations engaged in like business in the State and thereby denies to that company the equal pro- tection of the laws.^^ § 16. Regulation and Control— Insurance Companies. What has been said elsewhere in regard to the right of a State to prohibit foreign corporations from doing business within its limits, or, in allowing them to do so, to impose such conditions as it pleases, applies to foreign insurance com- panies .'^^ And as the State has the right to exclude such com- pany, the means by which she causes such exclusion, or the motives of her action, are not the subject of judicial inquiry .«» 50 the State may make the grant or privilege of doing business therein dependent upon the payment of a specific license tax, or tax on its franchise or business, or a sum proportioned to the amount of its capital used within the State, and except life and foreign insurance companies from its operation ; ^^ or it may im- pose a license tax or fee, or like tax by whatever name it may be called, upon foreign insurance companies for the privilege of doing business in the State.^^ Returns may also be required of 61 Getting V. Kansas City Stock Yards Co., 183 U. S. 79, 22 Sup. Ct. 30, 46 L. ed. 92. 62 Whitfield V. ^tna Life Ins. Co., 205 U. S. 489, 51 L. ed. 894, 27 Sup. Ct. 578, rev'g 144 Fed. 356; Swing v. Weston Lumber Co., 205 U. S. 275, 51 L. ed. 799, 27 Sup. Ct. 497, aff'g 140 Mich. 344; Orient Ins. Co. v. Daggs, 172 U. S. 557, 19 Sup. Ct. 281, 43 L. ed. 552, 28 Ins. L. J. 97, aff'g 136 Mo. 382, 35 L. R. A. 227, 38 S. W. 85, 26 Ins. L. J. 67; Doyle v. Continental Ins. Co.,' 94 U. S. 535, 24 L. ed. 148. See § 18, herein. «3 Doyle V. Continental Ins. Co., 94 U. S. 535, 24 L. ed. 148. 64 New York v. Roberts, 171 U. S. 658, 43 L. ed. 345, 19 Sup. Ct. 235. 65 Philadelphia Fire Assoc, v. New York, 119 U. S. 110, 30 L. ed. 342, 7 Sup. Ct. 108; Home Insurance Co. v. Augusta, 93 U. S. 116, 23 L. ed. 825; Liverpool Ins. Co. v. Massachusetts, 10 Wall. (77 U. S.) 566, 19 L. ed. 1029, 30 REGULATION AND CONTROL § 17 insurance companies to the proper State officers of their busi- ness condition, losses, premiums, taxes, dividends, expenses, etc., which may be enforced against a company even though its special charter does not require such returns; ^ so a statute may constitutionally prohibit the combination of insurance companies for fixing rates of premium except in cities having a certain population; nor is such an enactment class legislation.^^ § 17. Same Subject. A legislative enactment of a State, which as construed by its highest court, cuts off any defense by a life insurance com- pany based upon false and fraudulent statements in the ap- plication, unless the matter misrepresented actually contributed to the death of the insured, and which applies alike to domestic and foreign corporations is not repugnant to the Fourteenth Amendment, and does not deprive a foreign corporation coming into the State of its liberty or property without due process of law, nor deny to it the equal protection of the laws; and the liberty referred to in the Fourteenth Amendment is the liberty of natural, not of artificial persons.®^ A State statute may also regulate the measure of damages on fire policies in such terms that it will not as applied to a foreign insurance company insuring property within the State be in conflict with the pro- visions of the Fourteenth Amendment, forbidding a State to make or enforce a law which shall abridge the privileges or im- munities of citizens of the United States, or to deprive any per- son of life, liberty or property without due process of law; or to aff'g Oliver v. Liverpool & London Life & Fire Ins. Co., 100 Mass. 531; Paul V. Virginia, 8 Wall. (75 U. S.) 168, 19 L. ed. 357. «> Eagle Ins. Co. v. Ohio, 153 U. S. 446, 38 L. ed. 778, 14 Sup. Ct. 868. 87 State, Crow, v. .Etna Ins. Co., 150 Mo. 113, 51 S. W. 413, 28 Ins. L. J. 856. 68 Northwestern Life Ins. Co. v. Riggs, 203 U. S. 243, 27 Sup. Ct. 126, 51 L. ed. 168, aff'g 129 Fed. 207; Rev. Stat. Mo., §§ 7890, 7891. As to State statute making suicide no defense in actions on life policies, see Whitfield V. ^tna Life Ins. Co., 205 U. S. 489, 51 L. ed. 894, 27 Sup. Ct. 678 (rev'g 144 Fed. 356, distinguishing Ritter v. Mutual Life Ins. Co., 169 U. S. 139, 154, 42 L. ed. 693, 18 Sup. Ct. 300); Knights Templars' and Masons' Life Ins. Co. v. Jarman, 187 U. S. 197, 47 L. ed. 139, 23 Sup. Ct. 108. 31 § 18 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — deny to any person within its jurisdiction, the equal protection of the laws.^" An insurance company created and existing under the laws of a State has a constitutional right to enter into a contract in that State for the purpose of insuring prop- erty in another State, and the provisions of an insurance law of the latter State are void so far as they interfere with such right7° § 18. Regulation and Control — Instances — Mines — Hours of Labor — Water Companies — Adulteration — Ship Passen- ger Laws— Patent Rights. The use and enjoyment of mining properties may be regu- 89 Orient Ins. Co. v. Daggs, 172 U. S. 557, 19 Sup. Ct. 281, 43 L. ed. 552, 28 Ins. L. J. 97, aff'g 136 Mo. 382, 35 L. R. A. 227, 38 S. W. 85, 26 Ins. L. J. 67. As to State statutes providing for damages, etc., see § 30, herein. 70 Hammond v. International Ry. Co., 116 N. Y. Supp. 854, a case of an action to recover assessments on a fire policy on property located in New York State, issued by a mutual insurance company created and existing under the laws of Massachusetts and not authorized pursuant to the pro- visions of the Insurance Law of New York, Laws 1892, pp. 1934, 1941, c. 690, §§ 9, 25 (Consol. Stat. N. Y., 1909, "Insurance Law"), to transact the business of insurance therein. The defense was that the contract sued upon was made in the State of New York and was therefore void under the Insurance Law, Laws 1892, p. 1999, c. 690 (Consol. Stat. N. Y., 1909, "In- surance Law"), § 137, providing that: "All fire insurance policies issued to residents of this State on property located herein by companies that have not complied with the requirements of the general insurance laws of the State shall be void, except such as shall have been procured " by duly licensed agents to procure such insurance. The company had no officers or agents in New York, and the insurance was not procxired by a duly licensed agent, but was obtained through letter and by wire, and the poHcy was mailed in Boston. It was dated in Massachusetts and was executed and payable there; the premium was paid there; the policy was held a Massachusetts contract which took effect when mailed in Boston. The court cites to the point in the text Allgeyer v. Louisiana, 165 U. S. 578, 17 Sup. Ct. 427, 41 L. ed. 832. The court in the principal case also cites to point that the contract loas the policy and not the preliminary contract to insure, not amounting to the transaction of business in New York. Penn Collieries Co. v. McKeever, 183 N. Y. 98, 75 N. E. 935, 2 L. R. A. (N. S.) 127, citing further to point that policy was a Massachusetts contract which took effect when mailed in Boston. Western v. Genesee Mutual Ins. Co., 12 N. Y. 258; Baker v. Spaulding Bros., 71 Vt. 169, 42 Atl. 982; Western Mass. 32 REGULATION AND CONTROL § 18 lated by the State7^ So the hours of labor in mines, smelters,, and reduction or refining works may be regulated by the police power of a State^^ A water company may also be subject to legislative action where there is nothing in the statute under which it is organized or in any contract with a city for supply- ing water which give it rights excluding such legislation/^ A State has power to prevent the adulteration of articles and to provide for the publication of their composition without depriving the manufacturers thereof of their property or liberty without due process of law or denying them the equal protection of the law/'* A State may also enact {)assenger regulations requiring certain reports from masters of vessels to be made under penalty where such law is not a regulation of commerce but of police, and the operation of the law only begins when that of the laws of Congress end, and is not of the same subject although it operates upon the same person/^ F. Ins. Co. V. Hilton, 58 N. Y. Supp. 996, 42 App. Div. 52, and, therefore, that this action would lie. 71 Washington Star Mining Co. v. Fulton, 205 U. S. 60, 51 L. ed. 708, 27 Sup. Ct. 412. 72 Short V. Bullion-Beck & C. Min. Co., 20 Utah, 20, 45 L. R. A. 603, 57 Pac. 720. See Holden v. Hardy, 169 U. S. 366, 18 Sup. Ct. 383, 42 L. ed. 780; Commonwealth v. Hamilton Mfg. Co., 120 Mass. 383; State v. Holden (Holden v. Hardy), 14 Utah, 71, 96, 46 Pac. 756, 1105, 37 L. R. A. 103, 108. But compare Eight Hours Bill, In re, 21 Colo. 29, 39 Pac. 328; Ritchie v. People, 155 111. 98, 40 N. E. 454, 29 L. R. A. 79; Low v. Rees Printing Co., 41 Neb. 127, 59 N. W. 362, 24 L. R. A. 702; Wheeling Bridge & T. R. Co. V. Gilmore, 8 Ohio C. C. 658. See §§ 26, 27, herein, as to employees, etc. 73 Long Island Water Supply Co. v. Brooklyn, 166 U. S. 685, 41 L. ed. 1165, 17 Sup. Ct. 718. 74 Heath & Milligan Mfg. Co. v. Worst, 207 U. S. 338, 52 L. ed. 236, 28 Sup. Ct. 114. 75 New York v. Miln, 11 Pet. (36 U. S.) 102, 9 L. ed. 648. Case criticised and weight due as authority considered in Henderson v. New York, 92 U. S. 259, 23 L. ed. 543, where the court holds that the case decides no more than that the requirement from the master of a vessel of a catalogue of his passengers landed in the city, rendered to the mayor on oath, with a correct description of their names, ages, occupations, places of birth and last legal settlement, was a police regulation within the power of the State to enact, and not inconsistent with the Constitution of the United States. Examine Oceanic Steam Navigation Co. v. Stranahan, 214 U. S. 320, 53 L. ed. 1013, 29 Sup. Ct. 671, aff'g 155 Fed. 428. 3 33 § 19 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — So a State may, until Congress legislates, make such reason- able regulations in regard to the transfer of patent rights as will protect its citizens from fraud 7^ § 19. Regulation and Control— Foreign Corporations — Rule." A State has power to regulate and control its own creations, and, a fortiori, foreign corporations permitted to do business within its limits; '^ and it may admit the latter on prescribed conditions, that is, it may impose such conditions upon per- mitting them to do business within its limits as it may judge expedient or exclude them from its borders.'''' So the right under the Constitution to pursue a lawful business is not abridged by the imposition by a State of conditions upon the right of a foreign insurance company to transact business within its territorial limits.**" A State also has power to im- pose conditions upon a foreign corporation in permitting it to become one of the constituent elements of a consolidated corporation organized under its laws, and the acceptance of the franchise implies a submission to the conditions without which the franchise could not have been granted.*^ 76 Ozan Lumber Co. v. Union County Bank, 207 U. S. 251, 52 L. ed. 195, 28 Sup. Ct. 89, following Woods & Sons v. Carl, 203 U. S. 358, 51 L. ed. 219, 27 Sup. Ct. 99; Allen v. Riley, 203 U. S. 347, 51 L. ed. 216, 27 Sup. Ct. 95. 77 See § 16, herein. 78 St. Mary's Petroleum Co. v. West Virginia, 203 U. S. 183, 51 L. ed. 144, 27 Sup. Ct. 132; Orient Insurance Co. v. Daggs, 172 U. S. 557, 19 Sup. Ct. 281, 43 L. ed. 552, 28 Ins. L. J. 97, aff'g 136 Mo. 382, 35 L. R. A. 227, 38 S. W. 85, 26 Ins. L. J. 67. See Joyce on Franchises, §§ 342, 352-364 et seq. 79 Whitfield V. ^tna Life Insurance Co., 205 U. S. 489, 51 L. ed. 894, 27 Sup. Ct. 578, rev'g 144 Fed. 356; Swing v. Weston Lumber Co., 205 U. S. 275, 51 L. ed. 799, 27 Sup. Ct. 497, aff'g 140 Mich. 344; Waters-Pierce Oil Co. V. Texas, 177 U. S. 28, 20 Sup. Ct. 518, 44 L. ed. 657; New York v. Roberts, 171 U. S. 658, 43 L. ed. 345, 19 Sup. Ct. 235; La Moine Lumber & Trading Co. v. Kesterson (U. S. C. C), 171 Fed. 980. See Doyle v. Conti- nental In.s. Co., 94 U. S. 535, 24 L. ed. 148. 80 Hickman v. State, 62 N. J. L. 499, 41 Atl. 942, 44 Atl. 1099. See Whit- field V. ^tna Life Ins. Co., 205 U. S. 489, 51 L. ed. 894, 27 Sup. Ct. 578, rev'g 144 Fed. 356; Swing v. Weston Lumber Co., 205 U. S. 275, 51 L. ed. 799, 27 Sup. Ct. 497, aff'g 140 Mich. 344. 81 Ashley v. Ryan, 153 U. S. 436, 38 L. ed. 773, 17 Sup. Ct. 865. 34 REGULATION AND CONTROL § 20 § 20. Same Subject— Limitations Upon Rule. The rule stated under the preceding section is subject to certain limitations as to interstate and foreign commerce; thus, statutes which inliibit foreign corporations from doing business within a State, or which impose restrictions thereon cannot be permitted to impair the power of Congress to regu- late commerce among the several States, nor can they operate to restrict the rights of citizens or corporations to engage in commerce between the States ;*2 nor can such conditions be repugnant to the Constitution and laws of the United States, or inconsistent either with those rules of public law which secure the jurisdiction and authority of each State from en- croachment by all others, or those principles of natural justice which forbid condemnation without opportunity for defense.®^ Again, a foreign corporation lawfully doing business in a State is no more bound by a general unconstitutional enact- ment than a citizen of that State. ^ So where a foreign corporation holds a valid mortgage upon property within a State it cannot be precluded by State legis- lation from foreclosing the same because it has not complied with such laws, as such an enactment violates the Fourteenth Amendment in not affording the equal protection of the laws.®^ 82 New York v. Roberts, 171 U. S. 658, 43 L. ed. 345, 19 Sup. Ct. 235; La Moine Lumber & Trading Co. v. Kesterson (U. S. C. C), 171 Fed. 980. 83 Cable V. United States Life Ins. Co., 191 U. S. 288, 24 Sup. Ct. 74, 4S L. ed. 188. See Whitfield v. ^tna Life Ins. Co., 205 U. S. 489, 51 L. ed. 894, 27 Sup. Ct. 578, rev'g 144 Fed. 356. 84 Carroll v. Greenwich Ins. Co., 199 U. S. 401, 50 L. ed. 246, 26 Sup. Ct. 66. 85 Black V. Caldwell (U. S. C. C), 83 Fed. 880. 35 § 1?1 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES- CHAPTER III CON-iTITUTIONAL BASIS OF ACTIONS AND DEFENSES— REGULA- TION AND CONTROL, CARRIERS ^ § 21. Resulation and Control — Transportation Companies — Railroads — Street Railroads — Express Companies. 22. Railroads — Obligation of Con- tract — Due Process of Law. 23. Railroads — Obligation of Con- tract — E xemption and Transfer T h e r e o f — D u e Process of Law. 24. State Statutes — Railroad Crossings — Viaducts and Bridges — Expense of Change of Grade or Removal — Police Power — Nonjudicial Question. 25. State Statutes — Railroad Tun- nels, Viaducts and Crossings — Expense of Removal or Repairs — Vested Rights. § 26. Federal and State Regulations as to Employers and Em- ployees — C-arriers, etc. — Po- lice Power — Interstate Com- merce. 27. Same Subject. 28. Federal Statute to Insure Hu- mane Treatment of Live Stock by Carriers. 29. Right of State to Augment or Limit Carrier's Liability. 30. State Statutes Providing for Damages — Presentation and Adjustment of Claims — Pen- alty — Carriers — Railroads. 31. Regulation and Control — Tele- graph and Telephone Com- panies — Electrical S u b - ways. § 21. Regulation and Control— Transportation Companies —Railroads— Street Railroads— Express Companies. The business of a transportation company operating under a franchise is not purely private, but is so affected by a public interest that it is subject, within constitutional limits, to the governmental power of regulation.^ So a railroad charter is taken and held subject to the power of the State to regulate and control the grant in the interest of the public.^ So rail- 1 See § 1, herein. 2 Honolulu Rapid Transit & Land Co. v. Hawaii, 211 U. S. 282, 29 Sup. Ct. 55, 53 L. ed. 186, rev'g 15 Hawaii, .553. 3 Louisville & Nashville Rd. Co. v. Kentucky, 183 U. S. 503, 46 L. ed. 298, 22 Sup. Ct. 95. 36 REGULATION AND CONTROL, CARRIERS § 21 road corporations are subject to such legislative control as may be necessary to protc-ct the public against danger, in- justice and oppression/ Such companies may also be regu- lated as to their State business either by direct State legisk. tion or by administrative bodies endowed with power to that end, as the business of such corporations is of a public nature and the public has an interest in their operation; but the {)ower to regulate cannot be so arbitrarily exercised as to infringe upon the right of ownership in conflict with the due process and equal protection clauses of the Fourteenth Amend- ment.^ So within the power of the State to regulate and con- trol it may require railroad companies to fence their roads.* The power to regulate the operation of railroads also includes regulation of the schedule for running trains ' and, as it is the proper duty of a railroad company to establish stations at proper places, it is within the power of the States to make it prima facie a duty of such companies to establish them at all villages and boroughs on their respective lines.^ So the im- position upon a railroad corporation of the entire expense of a change of grade at a highway crossing does no violation to the Constitution of the United States, if the statute imposing it provides for an ascertainment of the result in a mode suited to the nature of the case,^ and requiring the burden of a pub- lic service by a corporation, in consequence of its existence and of the exercise of privileges obtained at its request, to be borne by it, is neither denying to it the equal protection of 4 New York & New Eng. Rd. Co. v. Bristol, 151 U. S. 556, 14 Sup. Ct. 437, 38 L. ed. 269. 5 Atlantic Coast Line Rd. Co. v. North Carolina Corp. Comm., 206 U. S. 1, 51 L. ed. 93, 27 Sup. Ct. 585. e Minneapolis & St. Louis Ry. Co. v. Emmons, 149 U. S. 364, 37 L. ed. 769, 13 Sup. Ct. 870. 7 Honolulu Rapid Transit & Land Co. v. Hawaii, 211 U. S. 282, 29 Sup. Ct. 55, 53 L. ed. 186, rev'g 15 Hawaii, 553. 8 Minneapolis & St. Louis Ry. Co. v. Minnesota ex rel., 193 U. S. 53, 48 L. ed. 614, 24 Sup. Ct. 396. 8 New York & New England Rd. Co. v. Bristol, 151 U. S. 556, 14 Sup. Ct. 437, 33 L. ed. 269, case aff'd and followed in New York & New England Rd. Co. V. Woodruff, 153 U. S. 689, 38 L. ed. 869, 14 Sup. Ct. 976. 37 § 21 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES the laws, nor making any unjust discrimination against it. Therefore the provisions of a State statute requiring the salaries and expenses of the State Railroad Commission to be borne by the several corporations owning or operating rail- roads within the State, are not in conflict with the provision in the Fourteenth Amendment to the Constitution that a State shall not "deprive any person of life, liberty or property without due process of law ; nor deny to any person within its jurisdiction the equal protection of the laws." ^° So the State may regulate consolidation of common carrier corporations;" and a railroad forming a continuous line in two or more States, and owned and managed by a corporation whose corporate powers are derived from the legislature of each State in which the road is situated, is, as to the domestic traffic in each State, a corporation of that State, subject to State laws not in con- flict with the Constitution of the United States.^^ Again, a city has power to make a reasonable regulation concerning the use of the street by a street railroad company by directing the maintenance of but one track between certain points instead of a double track as originally granted to the company .^^^ A State statute which defines an express company to be persons and corporations who carry on the business of trans- portation on contracts for hire with railroad or steamboat companies does not invidiously discriminate against the ex- press companies defined by it, and in favor of other com- panies or persons carrying express matter on other conditions, or under different circumstances.^^ 10 Charlotte, Columbia & Augusta R. R. Co. v. Gibbes, 142 U. S. 386, 35 L. ed. 1051, 12 Sup. Ct. 255, 48 Am. & Eng. R. Cas. 595; Gen'l Stat. S. C. 1882, c. 4. " Louisville & Nashville Rd. Co. v. Kentucky, 161 U. S. 677, 40 L. ed. 849, 16 Sup. Ct. 714. 12 Railroad Commission Cases (Stone v. Farmers' Loan & Trust Co.), 116 U. S. 307, 29 L. ed. 636, 6 Sup. Ct. 334. 13 Baltimore v. Baltimore Trust & Guar. Co., 166 U. S. 673, 41 L. ed. 1160, 17 Sup. Ct. 696. See Wabash Rd. Co. v. Defiance, 167 U. S. 88, 98, 17 Sup. Ct. 748, 42 L. ed. 87. Examine Joyce on Electric Law (2d ed.), §§ 353 et seq. H Pacific Express Co. v. Seibert, 142 U. S. 339, 35 L. ed. 1035, 12 Sup. Ct. 250. 38 REGULATION AND CONTROL, CARRIERS § 22 § 22. Railroads— Obligation of Contract— Due Process of Law. The prohibition in the Federal Constitution against the passage of laws impairing the obligation of contracts applies to the Constitution as well as to the laws of each State .^^ So municipal legislation passed under supposed legislative au- thority from the State is within the prohibition of the Federal Constitution and void if it impairs the obligation of a contract.^^ But a municipal ordinance giving permission to a street rail- road compan}^ to construct a tunnel under a navigable stream, the law of the State providing that railways shall not be con- structed so as to interrupt the navigation of any w^ater in the State, does not amount to a contract under the contract clause of the Constitution, so that the city could not subsequently require the company to lower the tunnel so as not to interfere with the increased demands of navigation; nor, in the absence of any provision to that effect, would it be construed as con- taining an implied covenant that the municipality would bear the expense of such alterations required by subsequent ordi- nances. A municipality is under the duty of protecting the unobstructed navigation of navigable rivers under its jurisdic- tion; and it cannot be exempted therefrom by making agree- ments in regard thereto.^'' So a statute w^hich describes a mode of serving process upon railroad companies different from that pro\'ided for in a charter previously granted to a particular company, does not impair the obligation of the contract be- tween such company and the State .^* And a State legislature may make any alteration or amendment of a charter of a public service corporation which will not defeat or substan- 15 New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650, 29 L. ed. 615, 6 Sup. Ct. 252. As to obligation of contract, impairment thereof and exemptions, see Joyce on Franchises, §§ 301-340. 16 Northern Pacific Ry. Co. v. Duluth, 208 U. S. 583, 52 L. ed. 630, 28 Sup. Ct. 341. 17 West Chicago Street Railroad Co. v. Chicago, 201 U. S. 506, 50 L. ed. 845, 26 Sup. Ct. 518, aff'g 214 111. 9, 73 N. E. 393. 18 Raikoad Co. v. Hecht, 95 U. S. 168, 24 L. ed. 423. 39 § 23 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — tially impair the object of the grant or any rights vested under it where such charter is granted subject to the power reserved by statute to alter, amend or repeal the same.^** So a general law requiring street railways to keep a certain space between and outside their tracks paved and repaved and assessing them therefor amounts, in respect to companies whose charters contain other provisions, to an amendment thereof, and as such a purpose is consistent with the object of the grant it falls within the reserved power of the State to alter, amend or repeal the original charter, and if imposed in good faith and not in sheer oppression the act is not void either as depriving the company of property without due process of law or as im- pairing the obligation of the original grant.^" § 23. Railroads— Obligation of Contract— Exemption and Transfer Thereof — Due Process of Law.^^ Although the obligations of a legislative contract granting immunity from the exercise of governmental authority are protected by the Federal Constitution from impairment by the State, the contract itself is not property which as such can be transferred by the owner to another, but is personal to him to whom it is made and incapable of assignment, unless by the same or a subsequent law the State authorizes or directs such transfer, and this applies to a contract of exemption with a street railway company from assessments from paving be- tween its tracks. Nor does a legislative authority to transfer the estate, property, rights, privileges and franchises of a cor- poration to another corporation authorize the transfer of a legislative contract of immunity from assessment. And where a corporation incorporates under a general act which creart;es 18 New York & New England Rd. Co. v. Bristol, 151 U. S. 556, 38 L. ed. 269, 14 Sup. Ct. 437. As to reserved power to alter, amend or repeal charter or franchise see Joyce on Franchises, §§ 317 et seq. 20 Fair Haven Rd. Co. v. New Haven, 203 U. S. 379, 51 L. ed. 237, 27 Sup. Ct. 74, aff'g 77 Conn. 677. So hold as to Connecticut law of 1899. 21 See § 79, herein. 40 REGULATION AND CONTROL, CARRIERS § 23 certain obligations and regulations, it cannot receive by transfer from another corporation an exemption which is inconsistent with its own charter or with the Constitution or laws of the State then applicable, even though under legislative authority the exemption is transferred by words which clearly include it. Again, although two corporations may be so united by one of them holding the stock and franchises of the other, that the latter may continue to exist and also to hold an exemption under legislative contract, that is not the case where its stock is exchanged for that of the former and by operation of law it is left without stock, officers, property or franchises, but under such circumstances it is dissolved by operation of the law which brings this condition into existence .^^ A provision in the Constitution of a State that a carrier must deliver cars 22 Rochester Ry. Co. v. Rochester, 205 U. S. 236, 51 L. ed. 237, 27 Sup. Ct. 74. See Powers v. Detroit, Grand Haven & M. Ry. Co., 201 U. S. 543, 26 Sup. Ct. 556, 50 L. ed. 860, aff'g 138 Fed. 264 (when exemption from tax- ation not destroyed; reorganization of railroad; obligation of contract); Metropolitan St. Ry. Co. v. New York State Board Tax Commissioners, 199 U. S. 1, 50 L. ed. 65, 25 Sup. Ct. 23 [(taxation; exemption; ecfual protection; due process of law; obHgation of contract) case followed in Twenty-Third St. Ry. Co. V. New York State Board Tax Commissioners, 199 U. S. 53, 50 L. ed. 85, 25 Sup. Ct. 715; which also follows Brooklyn City Rd. Co. v. New York, 199 U. S. 48, 50 L. ed. 79, 25 Sup. Ct. 713]; Savannah, Thunderbolt & Isle of H. Rd. Co. v. Savannah, 178 U. S. 392, 49 L. ed. 1097, 25 Sup. Ct. 690 (contract between street railroad and city; no exemption; obligation of contract not impaired); Wisconsin & Michigan Ry. Co. v. Powers, 191 U. S. 379, 48 L. ed. 229, 24 Sup. Ct. 107 (when exemption not a contract between State and railroad the obligation of which cannot be impaired^i ; Stearns v. Minnesota, 179 U. S. 223, 21 Sup. Ct. 23, 45 L. ed. 162, rev'g 72 Minn. 200, 75 N. W. 210 (exemption; effect of subsequent law repealing); Wilmington & W. Rd. Co. V. Alsbrook, 146 U. S. 279, 36 L. ed. 972, 13 Sup. Ct. 72 (ef- fect of exemption and rule as to being a contract between State and corpo- ration protected against legislative impairment considered and prior cases examined); Railroad Companies v. Gaines, 97 U. S. 697, 24 L. ed. 1091 (no exemption after period specified in charter; grant to A. did not convey exemption to B.); Tucker v. Ferguson, 22 Wall. (89 U. S.) 527, 22 L. ed. 805 (exemption must be based upon consideration, otherwise no "contract"; no presumption in favor of contract of exemption and such a claimed con- tract must be strictly construed) ; Pacific Railroad Co. v. Maguire, 20 Wall. (87 U. S.) 36, 22 L. ed. 282 (exemption; obligation of contract impaired); Tomlinson v. Jessup, 15 Wall. (82 U. S.) 454, 21 L. ed. 204 (exemption; power reserved to State authorized change in contract). 41 § 23 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — to connecting carriers without providing adequate protection for their return, or compensation for their use, amounts to a taking of property without due process of law within the meaning of the Fourteenth Amendment .^^ 23 Louisville & Nashville Rd. Co. v. Central Stock Yards Co., 212 U. S. 132, 29 Sup. Ct. 146, rev'g 97 S. W. 778. As to railroads and due process of law see the following cases: New York Central & Hudson R. Rd. Co. v. Miller, 202 U. S. 584, 26 Sup. Ct. 714, 50 L. ed. 1155 (taxation of cars under New York franchise tax law; owner not deprived of property without due process of law) ; Savannah, Thunderbolt & Isle of H. Rd. Co. v. Savannah, 198 U. S. 392, 49 L. ed. 1097, 25 Sup. Ct. 690 (classification between street railway and steam railroad making extra charge for local deliveries of freight from outside city; tax not void as de- priving street railway of property without due process of law) ; Minneapolis & St. L. Rd. Co. V. Minnesota, 193 U. S. 53, 48 L. ed. 614, 24 Sup. Ct. 396 (statutes requiring railroad to erect and maintain stations on order of com- mission not a taking of property without due process of law) ; Detroit, Fort Wayne & Belle Isle Ry. Co. v. Osborn, 189 U. S. 383, 47 L. ed. 860, 23 Sup. Ct. 540, aff'g 127 Mich. 219, 86 N. W. 842 (commissioner of railroads has power to compel street railroads to install safety appliances and apportion cost between it and steam railroad on same street) ; Wheeler v. New York, New Haven & Hartford Rd. Co., 178 U. S. 321, 44 L. ed. 1085, 20 Sup. Ct. 949 (contract with city to pay certain proportion of expense of abolishing grade crossings; defendants whose lands were sought to be condemned, not alleging that they were taxpayers or specially interested not deprived of property without due process of law) ; Lake Shore & Michigan Southern Ry. Co. V. Smith, 173 U. S. 684, 19 Sup. Ct. 565, 43 L. ed. 858, rev'g Smith v. Lake Shore & Michigan Southern Ry. Co., 114 Mich. 460, 72 N. W. 328, 4 Det. L. N. 662, 8 Am. & Eng. R. Cas. (N. S.) 496 (statute as to mileage tickets on railroads a violation of due process of law clause); Smyth v. Ames, 169 U. S. 466, 42 L. ed. 819, 18 Sup. Ct. 418, 30 Chicago Leg. N. 243, 171 U. S. 361, 18 Sup. Ct. 888, 43 L. ed. 197 (act to regulate railroads, clas- sify freights, and fix reasonable maximum rates a deprivation of just com- pensation secured by Constitution) ; St. Louis & San Francisco Ry. Co. v. Mathews, 165 U. S. 1, 41 L. ed. 611, 17 Sup. Ct. 243 (statute making rail- roads liable in damages for fire communicated by locomotives held not to deprive company of property without due process of law) ; St. Louis & S. F. Ry. Co. V. Gill, 156 U. S. 649, 15 Sup. Ct. 484, 39 L. ed. 567 (railroad rates; unreasonable legislative regulation; company deprived of property with- out due process); Charlotte, Columbia & Augusta Rd. Co. v.' Gibbes, 142 U. S. 386, 35 L. ed. 1051, 12 Sup. Ct. 255, 48 Am. & Eng. R. Cas. 595 (stat- ute requiring railroads to bear expenses of State Railroad Commission not a deprivation of property without due process); Chicago, Minneapolis & St. Paul Ry. Co. v. Minnesota, 134 U. S. 418, 33 L. ed. 970, 10 Sup. Ct. 462 (railroad freight rate act in conflict with due process clause); Huling v. Kaw Valley R. & I. Co., 130 U. S. 559, 32 L. ed. 1045, 9 Sup. Ct. 603 (pub- 42 REGULATION AND CONTROL, CARRIERS § 24 § 24. State Statutes— Railroad Crossings — Viaducts and Bridges— Expense of Change of Grade, or Removal — Police Power — Nonjudicial Question.-^ The act of the legislature of a State relating to railway grade crossings, which is directed to the extinction of grade crossings as a means of public safety, is a proper exercise of the police power of the State .^ So in view of the paramount duty of a State legislature to secure the safety of the community at an important railroad crossing within a populous city, it was and is within its power to supervise, control and change agreements from time to time entered into between the city and the rail- road company as to a viaduct over such crossing, saving any rights previously vested .^^ It is likewise competent for the legislature of the State to put the burdens of the repairs of such a viaduct, crossing sev- eral railroads, upon one of the companies, or to apportion it among all, as it sees fit; and an apportionment may be made through the instrumentality of the City Council .^^ A State may also impose upon a railroad corporation the entire expense of a change of grade at a highway crossing, if the statute im- lished notice in proceedings to condemn land for railroad is " due process of law"); Nashv-ille, Chattanooga & St. Louis Rd. Co. v. Alabama, 128 U. S. 96, 9 Sup. Ct. 28, 32 L. ed. 352 (examination of railroad employes; color blindness; not a taking of property without due process of law); Dow v. Beidelman, 125 U. S. 680, 8 Sup. Ct. 1028, 31 L. ed. 841 (maximum fare statute; not a taking of property as applied to reorganized corporation); Railroad Co. v. Richmond, 96 U. S. 521, 24 L. ed. 734 (ordinance prohibiting steam cars of specified railroad in city limits not a taking of company's property without due process of law). 2-1 See §§ 107 et seq., herein, Railroad Commissioners. 25 New York and New England Rd. Co. v. Bristol, 151 U. S. 556, 14 Sup. Ct. 437, 38 L. ed. 269, case aff'd and followed in New York & New England Rd. Co. V. Woodruff, 153 U. S. 689, 38 L. ed. 869, 14 Sup. Ct. 976. Act of June 19, 1889, c. 220, Laws 1889, 134. 26 Chicago, B. & Q. R. R. Co. v. Nebraska, 170 U. S. 57, 18 Sup. Ct. 513, 42 L. ed. 948. That city has power to change grade of streets, crossing on bridges over a railroad, to the level of the railroad, see Wabash Railroad Co. v. Defiance, 167 U. S. 88, 42 L. ed. 87, 17 Sup. Ct. 748. 27 Chicago, B. & Q. R. R. Co. v. Nebraska, 170 U. S. 57, 18 Sup. Ct. 513, 42 L. ed. 946. 43 § 24 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — posing it provides for an ascertainment of the result in a mode suited to the nature of the case.^* Under the laws of Illinois the draining of bodies of land so as to make them fit for human habitation and cultivation, is a public purpose, to accomplish which the State may by ap- propriate agencies exert the general powers it possesses for the common good, and the Farm Drainage Act of that State was a proper exercise of its police power. The rights of a rail- road company to a bridge over a natural water course crossing its right of way, acquired under its general corporate power of Illinois are not superior and paramount to the right of the public to use that water course for the purpose of draining lands in its vicinity in accordance with plans adopted by a drainage commission lawfully constituted under such Farm Drainage Act. So where the proper drainage of the land in a certain district was impossible without the removal of a railroad bridge over the natural water course into which the lands drained and the construction of a bridge with a larger opening for the increased volume of water, it was held that it was the duty of the railroad company, at its own expense, to remove the then existing bridge, and also, unless it abandoned or surrendered its right to cross a creek at or in that vicinity, to erect at its own expense and maintain a new bridge in conformity with regulations established by the Drainage Com- missioners, under the authority of the State; and such require- ment, if enforced, does not amount to a taking of private property for public use within the meaning of the Constitution, nor to a denial of the equal protection of the laws.^*' What is the best method of eliminating a grade crossing in a given case is an administrative question pure and simple which cannot constitutionally be made the subject-matter of judicial de- termination; and, therefore, a statute which purports to give jurisdiction of such a question to a purely judicial body or 28 New York & New England Rd. Co. v. Bristol, 151 U. S. 556, 38 L. ed. 269, 14 Sup. Ct. 437. 29 Chicago, Burlington & Quincy Ry. Co. v. Drainage Comm'rs, 200 U. S. 561, 26 Sup. Ct. 341, 50 L. ed. 596, aff'g 212 111. 103, 72 N. E. 219. 44 REGULATION AND CONTROL, CARRIERS § 25 court, on apj^eal from the action of railroad commissioners is, to tliat extent, null and void.^° § 25. State Statutes— Railroad Tunnels, Viaducts and Crossings— Expense of Removal or Repairs — Vested Rights.'*^ The right of a railroad company to maintain a tunnel under a navigable river is subject to the paramount public right of navigation, and where it has been constructed under municipal ordinance and State law that it shall not interrupt navigation, the duty of not obstructing the navigation is a continuing one; and if the increased demands of navigation at any time require a deeper channel than when the tunnel was originally con- structed, it is within the power of the municipality to compel the railroad company at the latter's own expense to either remove the tunnel or lower it to conform with the necessities of commerce, and, as in this case, to the rule established by act of Congress; and such action of the municipahty is not unconstitutional, and does not amount either to taking the property for public use without compensation, or depriving the company of its property without due process of law.^^ An ordinance of a municipality, valid under the law of the State as construed by its highest court, compelling a railroad to repair a viaduct constructed after the opening of the railroad, by the city in pursuance of a contract relieving the railroad, for a substantial consideration, from making any repairs thereon for a term of years was not void under the contract, or the due process clause of the Constitution.^^ But the right of a State to alter or repeal existing charters is not without limitation when the question of vested property rights under the charter is involved. The power is one of regulation and 30 Spencer's Appeal, 78 Conn. 301. 31 See §§ 107 et seq., herein, Railroad Commissioners. 32 West Chicago Street Railroad Co. v. Chicago, 201 U. S. 506, 50 L. ed. 845, 26 Sup. Ct. 578, aff'g 214 111. 9, 73 N. E. 393. Following Chicago, Burlington & Quincy Rd. Co. v. Drainage Commission, 200 U. S. 561, 50 L.ed. 596, 26Sup. Ct. 341. 33 St. Paul, Minneapolis & Manitoba Ry. Co. v. Minnesota, 214 U. S. 497, 29 Sup. Ct. 698, aff'g Northern Pacific Ry. v. Duluth, 208 U. S. 583, 52 L. ed. 630, 28 Sup. Ct. 341, as involving almost the same question. 45 § 26 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — control and does not authorize interference with property rights vested under the power granted. This applies to a case where a railroad company has, by acquiring a right of way and by constructing its railroad under a statute in force at the time, requiring railroads thereafter crossing to pay all the expense of constructing and maintaining such crossing, ac- quired a vested property right which cannot be divested with- out compensation under a reserve power to alter or amend its charter, and it cannot therefore be charged with such expense by a subsequent statute where another railroad thereafter seeks to cross its lines .^^ § 26. Federal and State Regulations as to Employers and Employes— Carriers, etc. — Police Power — Interstate Com- merce. It is within the power of the State to change or modify, in accord with its conceptions of public policy, the principles of the common law in relation to master and servant; and in cases within the proper scope of the police power, to impose upon the master liability for the willful act of his employe.^^ The power of Congress to regulate interstate commerce is plenary, and, as an incident to this power, Congress may regulate by legislation the instrumentalities engaged in the business, and may prescribe the number of consecutive hours an employe of a carrier so engaged shall be required to remain on duty; and when it does legislate upon the subject, its act supersedes any and all State legislation on that particular subject.^^ So the act of Congress of March 4, 1907, making 34 State ex rel. Northern Pac. Ry. Co. v. Railroad Commission (Wis., 1909), 121 N. W. 919. 35 Wilmington Mining Co. v. Fulton, 205 U. S. 60, 51 L. ed. 708, 27 Sup. Ct. 412. 38 State ex rel. Atkinson v. Northern Pacific Ry. Co., 53 Wa^. 673, 676, 102 Pac. 876, 877, " In fact these propositions can hardly be said to be de- batable in the State courts, since the Federal courts, whose decisions are authoritative on questions of this character, have repeatedly announced them as governing principles in determining the validity of regulative leg- islation concerning carriers of interstate commerce. Escanaba Co. v. Chi- cago, 107 U. S. 678, 2 Sup. Ct. 185, 27 L. ed. 442; Morgan Steamship Co. v. Louisiana Board of Health, 118 U. S. 455, 6 Sup. Ct. 1114, 30 L. ed. 237; 46 REGULATION AND CONTROL, CARRIERS § 26 it unlawful for any common carrier to require employes to remain on duty for a long(!r period than sixteen consecutive hours, and providing that the act shall ''take effect and be in force one year after its passage," did not take effect as a law until the end of such period, and it did not supersede, during such year, a prior State statute on the same subject ^^ upon any principle of comity, or upon the theory that Congress had occupied the field of statutory regulation and fixed a reason- able time to allow carriers to comply with the regulations.^* But an act addressed to all common carriers engaged in inter- state commerce, and imposing a liability upon them in favor of any of their employes, without qualification or restriction as to the nature of the business at the time of an injury, of necessity includes subjects wholly outside of the power of Congress under the commerce clause of the Constitution. By virtue, however, of the constitutional grant of authority to regulate interstate commerce and to use all means appropriate to the exercise of the powers conferred, Congress has power to regulate the relation of master and servant to the extent that such regulations are confined solely to interstate commerce.^'' So the Employers' Liability Act of Congress does not constitute either an unreasonable or arbitrary classification although it abolishes the fellow servant rule and restricts or limits its application to carriers by rail.'**^ The Federal Supreme Court Nashville, Chattanooga & St. Louis Ry. v. Alabama, 128 U. S. 96, 9 Sup. Ct. 28, 32 L. ed. 352; Gladson v. Minnesota, 166 U. S. 427, 17 Sup. Ct. 627, 41 L. ed. 1064; Lake Shore & Michigan Southern Ry. Co. v. Ohio, 173 U. S. 285, 19 Sup. Ct. 465, 43 L. ed. 702; Erb v. Morasch, 177 U. S. 1, 20 Sup. Ct. 819, 44 L. ed. 897," per Fullerton, J. 37 Laws 1907, p. 25. 38 State ex rel. Atkinson v. Northern Pac. Ry. Co., 53 Wash. 673, 102 Pac. 876. 39 Employers' Liability Cases, 207 U. S. 463, 52 L. ed. 297, 28 Sup. Ct. 141. See Watson v. St. Louis, I. M. & S. Ry. Co. (U. S. C. C), 169 Fed. 942, 944- 946, 948, 950, 952; Fulgham v. Midland Valley R. Co. (U. S. C. C), 167 Fed. 66o' 66 1'; United States v. Wheehng & L. E. R. Co. (U. S. C. C), 167 Fed. 198, 199, 200; Ivy v. Western Union Teleg. Co. (U. S. C. C), 165 Fed. 371, 377; United States v. Southern Ry. Co., 164 Fed. 347, 350. 40 Watson v. St. Louis, I. M. & S. Ry. Co., 162 Fed. 942; Act of April 22, 1908, 35 Stat. 65. 47 § 26 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSP]S — did not, however, in its decision of the Employers' Liability Cases ''I hold the act of 1906^ unconstitutional so far as it related to the District of Columbia and the Territories, and expressly refused to interpret the act as applying only to such employes of carriers in the District and Territories as were engaged in interstate commerce. The evident intent of Con- gress in enacting said Employers' Liability Act, was to enact the curative provisions of the law as applicable to the District of Columbia and the Territories under its plenary power ir- respective of the interstate commerce feature of the act, and although unconstitutional as to the latter as held in the above- mentioned case, it is constitutional and paramount as to com- merce wholly in the District and Territories. Said enactment of 1906 being, therefore, a constitutional regulation of com- merce in the District of Columbia and the Territories neces- sarily supersedes prior territorial legislation on the same subject, and noncompliance by a plaintiff employe with a pro- vision of a territorial statute cannot be pleaded by the de- fendant employer as a bar to an action for personal injuries.'" As to classification, unreasonable discrimination, fellow servants and dif- ferent class of employes, see the following cases: United States: TuUis v. Lake Erie & Western Rd. Co., 175 U. S. 348, 20 Sup. Ct. 136, 44 L. ed. 192; St. Louis, Iron Mountain & St. Paul Ry. Co. v. Paul, 173 U. S. 404, 19 Sup. Ct. 419, 43 L. ed. 746; MinneapoUs & St. Louis Ry. Co. V. Herrick, 127 U. S. 210, 8 Sup. Ct. 1176, 32 L. ed. 109; Missouri Pac. Ry. Co. v. Mackey, 127 U. S. 205, 8 Sup. Ct. 1161, 32 L. ed. 107; Kane V. Erie Rd. Co., 133 Fed. 681, 67 C. C. A. 653, 68 L. R. A. 790. Indiana: Pittsburgh, Cincinnati & St. Louis Ry. Co. v. Montgomery, 152 Ind. 1, 49 N. E. 582, 69 L. R. A. 875, 71 Am. St. Rep. 301. Maryland: Shaffer & Munn v. Union Mining Co., 55 Md. 74. Minnesota: Herrick v. Minneapolis & St. Louis Ry. Co., 31 Minn. 11, 16 N. W. 413, 47 Am. Rep. 771. Tennessee: Harbison v. Knoxville Iron Co., 103 Tenn. 421, 53 S. W. 955, 56 L. R. A. 316, 76 Am. St. Rep. 682. Vermont: Kilpatrick v. Grand Trunk Ry. Co., 74 Vt. 288, 52 Atl. 531, 93 Am. St. Rep. 887. « 207 U. S. 463, 52 L. ed. 297, 28 Sup. Ct. 141. 42 Act of June 11, 1906, c. 3073, 34 Stat. 232. 43 El Paso & Northeastern Ry. Co. v. Gutierrez, 215 U. S. 87, 54 L. ed. — , 30 Sup. Ct. — , aff'g 117 S. W. 426, and approving Hyde v. Southern Ry. Co., 30 App. D. C. — . 48 ]iio(u;lation and control, carriers § 26 A State statute which imposes upon railway companies lia- bility for damages for the negligence of fellow servants regard- less of any contract of insurance, or relief entered into between the person injured and the corporation, prior to the injury, by which such liability was limited, is not repugnant to the Con- stitution.^ Nor does a State statute which provides that, "Every railroad company organized or doing business in this State shall be liable for all damages done to any employe of such company in consequence of any negligence of its agents, or by any mismanagement of its engineers, or other employes, to any person sustaining such damage," deprive a railroad company of its property without due process of law; and does not deny to it the equal protection of the laws; and is not in conflict with the Fourteenth Amendment to the Constitution of the United States in either of these respects.^ But the real and substantial relation or connection with the commerce to be regulated which is necessary to the power to regulate inter- state commerce, or to prescribe rules by which such commerce must be governed, does not exist between the membership of an employe in a labor organization and the interstate commerce with which he is connected ; and an act of Congress making it a criminal offense against the United States for a carrier engaged in interstate commerce, or an agent or officer thereof, to dis- charge an employe simply because of his membership in a labor organization cannot be sustained as a regulation of interstate commerce and as such within the competency of Congress. Such an enactment concerning interstate carriers is also an invasion of personal liberty, as well as of the right of property guaranteed by the Fifth Amendment to the Federal Constitu- tion, and is therefore unenforceable as repugnant to the declara- « McGiiire v. Chicago, Burlington & Quincy Rd. Co., 131 Iowa, 340, 108 N. W. 902, Code, § 2071. 45 Missouri Pac. Ry. Co. v. Mackey, 127 U. S. 205, 8 Sup. Ct. 1161, 32 L. ed. 107. Compiled Laws, Kan., 1881, p. 784. See Tullis v. Lake Erie & Western R. Co., 175 U. S. 348, 44 L. ed. 192, 20 Sup. Ct. 136 (State statute providing for liability for damages for personal injury suffered by its em- ploy6 in certain cases; negligence of fellow servant; held not to violate Fourteenth Amendment) 4 49 § 27 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — lion of that amendment that no person shall be deprived of liberty or property without due process of law.-*^ § 27. Same Subject. A State may provide for the protection of servants and em- ployes of a railroad.'*^ So the object of the Safety Appliance Act was to protect the lives and limbs of railroad employes by rendering it unnecessary for men operating the couplers to go between the ends of the cars, and the words "used in moving interstate traffic" occurring therein are not to be taken in a narrow sense. This enactment, which declares it to be un- lawful for any common carrier engaged in interstate com- merce to haul or permit to be hauled or used on its line any car used in moving interstate commerce not equipped with couplers coupling automatically by impact, and which can be un- coupled without the necessity of men going between the ends of the cars, also relates to all kinds of cars running on the rails, including locomotives and steam shovel cars.^^ A statute may provide for the examination and licensing of locomotive en- gineers by a board of examiners where such regulation relates to persons within the territorial jurisdiction and is intended to secure the safety of persons and property for the public, and it does not burden or impede interstate commerce, or conflict with the Federal Constitution, or with any express enactments of Congress upon the subject.^^ A State statute which requires locomotive engineers and other persons, employed by a railroad company in a capacity which calls for ability to distinguish and discriminate between color signals, to be examined in this respect from time to time by a tribunal established for the purpose, and which exacts a 46 Adair v. United States, 208 U. S. 161, 28 Sup. Ct. 277, 52 L. ed. 436. 47 St. Louis, I. M. & St. P. R. Co. v. Paul, 173 U. S. 404, 43 L. ed. 746, 19 Sup. Ct. 419, 64 Ai-k. 83, 37 L. R. A. 504, 7 Am. & Eng. Corp. Cas. 772, 40 S. W. 705. 48Schlemmer v. Buffalo, Rochester & Pittsburg Ry. Co., 205 U. S. 1, 51 L. ed. 681, 27 Sup. Ct. 407, rev'g 207 Pa. St. 98; Safety AppUance Act of March 2, 1893, § 2, as amended April 1, 1896. See Johnson v. Southern Pacific Co., 196 U. S. 1, 16, 21, 49 L. ed. 872, 25 Sup. Ct. 158. 49 Smith V. Alabama, 124 U. S. 465, 31 L. ed. 508, 8 Sup. Ct. 564. 50 REGULATION AND CONTROL, CARRIERS § 27 fee from the company for the service of examination, does not deprive the company of its property without due process of law and so far as it affects interstate commerce, is within the competency of the State to enact, until Congress legislates on the subject.^" So a State may, in the exercise of its police powers, regulate, by an eight-hour law, the period of employ- ment by corporations of workingmen in mines, smelters and other institutions for the reduction or refining of ores or metals, with an exception in certain cases of emergency, and such enact- ment does not violate the provisions of the Fourteenth Amend- ment by abridging the privileges or immunities of its citizens, or by depriving them of their property or by denying them the equal protection of the laws.^^ In the exercise of its powers the State may by statute pro- vide that eight hours shall constitute a day's work for all laborers employed by or on behalf of the State or any of its municipalities, and make it unlawful for anyone thereafter con- tracting to do any public work to require or permit any laborer to work longer than eight hours per day except under certain specified conditions and require such contractors to pay the current rate of daily wages. And one who after the enact- ment of such a statute contracts for such public work is not by reason of its provisions deprived of his liberty or his prop- erty without due process of law nor denied the equal protec- tion of the laws within the meaning of the Fourteenth Amend- ment even though it appear that the current rate of wages is based on private work where ten hours constitute a day's work or that the work in excess of eight hours per day is not dangerous to the health of the laborers. Qucere, whether a similar statute applicable to laborers on purely private work would be constitutional, not decided.^^ Congress may, within its constitutional powers, enact a law limiting the hours of 50 Nashville, Chattanooga & St. Louis Rd. Co. v. Alabama, 128 U. S. 96, 9 Sup. Ct. 28, 32 L. ed. 352. 51 Holden v. Hardy, 169 U. S. 366, 42 L. ed. 780, 18 Sup. Ct. 383. See § 17, herein. 52 Atkins V. Kansas, 191 U. S. 207, 24 Sup. Ct. 124, 48 L. ed. 148, aff'g State V. Atkins, 64 Kan. 174, 67 Pac. 519, 97 Am. St. Rep. 343. 51 § 28 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — laborers and mechanics employed by the United States, or contractor, or subcontractor, upon any of the public works of the United States to eight hours a day except in cases of extraordinary emergency, and impose penalties for the viola- tion of such law.^^ A State may provide for the payment monthly of employes of corporations and give a lien for wages with preference over other liens, with certain exceptions, and allow a reasonable attorney's fee in case of action brought, and such enactment does not violate a State constitutional pro- vision as to deprivation of property without due process of law nor interfere with liberty of contract.^^ A State enactment may also provide for the payment of wages of discharged em- ployes then earned at the contract rate, without deductions for prepayment and for the continuance of the wages at such rate until the same are paid, with a time limit, however, unless action is commenced within the time, and such a statute does not deprive a railroad company of the equal protection of the laws.^^ So a State enactment requiring the redemption in cash of store orders or other evidences of indebtedness issued by employers in payment of wages due to employes, does not conflict with any Federal constitutional provisions relating to contracts .^^ § 28. Federal Statute to Insure Humane Treatment of Live Stock by Carriers. An act of Congress to insure the humane treatment of ani- mals while in transportation by carriers by limiting their period of confinement in transit without unloading for rest, 53 Ellis V. United States (Eastern Dredging Co. v. United States; Bay State Dredging Co. v. United States), 206 U. S. 246, 51 L. ed. 1047, 27 Sup. Ct. 600. 54 Skinner v. Gamett Gold Min. Co., 96 Fed. 735, Cal. Stat. 1897, p. 231, §§■1,2. 55 St. Louis, I. M. & St. P. R. Co. v. Paul, 64 Ark. 83, 37 L. R. A. 504, 7 Am. & Eng. Corp. Cas. 772, 40 S. W. 705, 173 U. S. 404, 43 L. ed. 746, 19 Sup. Ct. 419. 56 Knoxville Iron Co. v. Harbison, 183 U. S. 13, 46 L. ed. 55, 22 Sup. Ct. 5 (S. C, 78 Iowa, 746). followed in Dayton Coal & Iron Co. v. Barton, 183 U. S. 23, 46 L. cd. 61, 22 Sup. Ct. 5. 52 REGULATION AND CONTROL, CARRIERS § 29 water and feed, and the other purpose of which is to subserve the interests of the owner or shipper as far as possible in consonance with such treatment by permitting an extension of the time so limited upon written request of the owner or person in custody of the shipment does not constitute a dele- gation of legislative pow^r or authority to the owner of the stock shipped; nor does such legislation deal with a classifica- tion and is, therefore, not unconstitutional.^^ § 29. Right of State to Augment or Limit Carriers' Lia- bility. In the absence of action by Congress a State may by statute determine, and either augment or lessen a carrier's liability, and such a statute limiting the right of recovery of certain classes of persons does not deprive a person injured thereafter of a vested right of property. And although a citizen has a right to travel from one State to another, in the absence of con- gressional action he does not possess as an incident of such travel the right to exert in a State in which he may be injured a right of recovery not given by the laws thereof, although that right may be given by the laws of other States including the one in which suit is brought. A classification with a railroad company's employes of all persons, including railway postal clerks, not passengers, but so employed in and about the rail- road as to be subject to greater peril than passengers, is not so arbitrary as to deprive the railway postal clerk of the equal protection of the laws within the meaning of the Fourteenth Amendment. So a State statute providing that any person, not a passenger, employed in or about a railroad but not an employe, shall in case of injury or loss of life have only the same right of recovery as though he were an employe, is not void, either because contrary to the power delegated to Con- gress to establish post offices and post roads; or because re- pugnant to the commerce clause of the Constitution; or in conflict with the due process or equal protection clauses of the 57 United States v. Oregon R. & Nav. Co. (U. S. C. C), 163 Fed. 640; Act of Congress, June 29, 1906, c. 3594, 34 Stat. 607; U. S. Comp. Stat. Supp. 1907, p. 918. 53 § 30 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — Fourteenth Amendment; or because it abridges the privileges and immunities of citizens of the United States; and whether a railway postal clerk is a passenger or whether his right of re- covery is limited by such statute is not a Federal question.^* It is also held that while Congress under its power may provide for contracts for interstate commerce permitting the carrier to limit its liability to a stipulated valuation, it does not appear that Congress has, up to the present time, sanctioned contracts of this nature; and, in the absence of congressional legislation on the subject, a State may require common carriers, although in the execution of interstate business, to be liable for the whole loss resulting from their own negligence, a contract to the contrary notwithstanding. There is no difference in the application of a principle based on the manner in which a State requires a degree of care and responsibility, whether enacted into a statute or resulting from the rules of law enforced in its courts .^'^ § 30. State Statutes Providing for Damages — Presenta- tion and Adjustment of Claims — Penalty — Carriers — Rail- roads. Where Congress has power to make acts illegal it can au- thorize a recovery for damage caused by those acts although suffered wholly within the boundaries of one State .^° A State may provide that railroad companies owning or operating a railroad in the State shall be responsible in damages to the owner of any property injured or destroyed by fire communi- cated directly or indirectly by locomotive engines in use upon the railroad; and that it shall have an insurable interest in the property upon the route of the railroad and may procure in- surance thereon in its own name, and such a statute does not deprive such company of its property without due process of 58 Martin v. Pittsburg & Lake Erie Rd. Co., 203 U. S. 284, 27 Sup. Ct. 100, 51 L. ed. 184, aff'g 72 Ohio St. 659. 59 Pennsylvania R. R. Co. v. Hughes (1903), 191 U. S. 477, 24 Sup. Ct. 132, 48 L. ed. 268, aff'g 202 Pa. 222, 51 Atl. 990. 60 Chattanooga Foundry v. Atlanta, 203 U. S. 390, 27 Sup. Ct. 65, 51 L. ed. 24L 54 REGIILATION AND CONTROL, CARRIERS § 30 law, or deny to it the equal protection of the laws, or impair the obligation of the contract made between the State and the company by its incorporation under general laws imposing no such liability .^^ A State may also provide for the recovery of damages for the killing of live stock .^^ If a State statute provides for the presentation of certain claims, the institution of certain suits against railroad companies and for the recovery of a specified sum for attorney's fees in addition to the amount recovered, it cannot be sustained where it operates to deprive such companies of property without due process of law, and denies to them the equal protection of the law in that it singles them out of all citizens and corporations, and requires them to pay in certain cases attorneys' fees to the parties success- fully suing them, while it gives to them no like or correspond- ing benefit .^^ A State may impose a penalty on all common 61 St. Louis & S. F. Ry. Co. v. Matthews, 165 U. S. 1, 123, 41 L. ed. 611, 17 Sup. Ct. 243. 62 Minneapolis & St. Louis Rd. Co. v. Beckwith, 129 U. S. 26, 32 L. ed. 585, 9 Sup. Ct. 207. As to State statute providing for measure of damages on fire insurance policies, see Orient Insurance Co. v. Daggs, 172 U. S. 557, noted under § 16, herein. 63 Gulf, Colorado & Santa Fe Ry. Co. v. Ellis, 165 U. S. 150, 17 Sup. Ct. 255, 41 L. ed. 666; Texas Act of April 5, 1889, providing that: " Any person in this State having a valid bona fide claim for personal services rendered or labor done, or for damages, or for overcharges on freight, or claims for stock killed or injured by the train of any railway company, provided such claims for stock killed or injured shall be presented to the agent of the com- pany nearest to the point where such stock was killed or injured, against any railway corporation operating a railroad in this State, and the amount of such claim does not exceed $50, may present the same, verified by his affidavit, for payment to such corporation by filing it with any station agent of such corporation in any county where suit may be instituted for the same, and if, at the expiration of thirty days after such presentation, such claim has not been paid or satisfied, he may immediately institute suit thereon in the proper court; and if he shall finally establish his claim, and obtain judgment for the full amount thereof, as presented for payment to such corporation in such court, or any court to which the suit may have been ap- pealed, he shall be entitled to recover the amount of such claim and all costs of suit, and in addition thereto all reasonable attorney's fees, provided he has an attorney employed in such case, not to exceed $10, to be assessed and awarded by the court or jury trying the issue." When State statute allowing reasonable attorney's fees in actions for 55 § .'51 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — carriers for failure to adjust damage claims within a certain and specified number of days, and such an enactment is not as to intrastate shipments unconstitutional as violative of the Fourteenth Amendment, neither the classification, the amount of the penalty or the time of adjustment being beyond the power of the State to determine; and this applies to small claims, as small shipments are the ones which especially need the protection of penal statutes of this nature.'^'* § 31. Regulation and Control— Telegraph and Telephone Companies — Electrical Subways. A State may provide for regulation of carriers of electricity and of electrical conductors.^^ So the legislature may make lawful the occupation of streets for telegraph, telephone, street railway and other electrical purposes.*'*^ The State may also, within the reservation that it does not encroach upon the free exercise of the powers vested in Congress, make all necessary provisions in respect of the buildings, poles and wires of tele- damages against railroad companies is constitutional, see Atchison, Topeka & Santa F6 Rd. Co. v. Matthews, 174 U. S. 96, 19 Sup. Ct. 609, 43 L. ed. 909. 64 Seaboard Air Line Ry. Co. v. Seegers, 207 U. S. 73, 52 L. ed. 108, 28 Sup. Ct. 28, aff'g 73 S. C. 71. The penalty imposed by statute in this case was fifty dollars, and the time limit for adjusting claims was forty days. The court, per Mr. Justice Brewer, says: "The difference between the value of the goods shipped and the freight charges $1.75, and the amount of the penalty, $50, naturally excites attention. * * * While in this case the penalty may be large as compared with the value of tlie shipment, yet it must be remembered that small shipments are the ones which especially need the protection of penal statutes hke this. If a large amount is in con- troversy, the claimant can afford to htigate. But he cannot well do so when there is but the trifle of a dollar or two in dispute, and yet justice requires that his claim be adjusted and paid with reasonable promptness. Further, it must be remembered that the purpose of this legislation is not primarily to enforce the collection of debts, but to compel the performance of duties which the carrier assumes when it enters upon the discharge of its public functions. We know there are limits beyond which penalties may not go — even in cases where classification is legitimate — but we are not prepared to hold that the amount of penalty imposed is so great or the length of time mthin which the adjustment and payment are to be made is so short that the act imposing the penalty and fixing the time is beyond the power of the State." 65 New York v. Squire, 145 U. S. 175, 12 Sup. Ct. 880, 36 L. ed. 666. 6" Joyce on Electric Law (2d ed.), § 143. 56 REGULATION AND CONTROL, CARRIERS § 31 graph companies within its jurisdiction which the comfort and convenience of the community may require .^^ So property of a telephone company, being property devoted to a public use, is a legitimate subject of legislative regulation and control.^* So the Constitution and laws of a State may authorize a city to impose upon a telegraph company putting its poles in the streets of such city a charge in the nature of rental for the exclusive use of the parts so used.^^ A State tax may also be enforced against a telegraph company organized under the law of another State and engaged in interstate commerce in the State of the enactment of the statute, when graduated accord- ing to the amount and value of the company's property meas- ured by miles, and it is in lieu of taxes directly levied on the property, and the exercise of such power does not amount to a regulation of interstate commerce, or put an unconstitutional restraint thereon 7" Where telegraph companies, engaged in interstate com- merce, carry on their business so as to justify police super- vision, the municipality is not obliged to furnish such super- vision for nothing, but it may, in addition to ordinary property taxation, subject the corporations to reasonable charges, for the expense thereof. The reasonableness of such charges will depend upon all the circumstances involved in the particular case; if in a case tried before a jury the evidence in regard thereto is not such as to exclude every conclusion except one, the question of reasonableness should be submitted to the jury/^ 87 Western Union Teleg. Co. v. Pendleton, 122 U. S. 347, 30 L. ed. 1187, 7 Sup. Ct. 1126. As to Post Roads Act and hostile legislation, see Joyce on Electric Law (2d ed.), §§ 65-67. 68 Joyce on Electric Law (2d ed.), § 143a. 69 St. Louis V. Western Union Teleg. Co., 149 U. S. 465, 13 Sup. Ct. 990, 37 L. ed. 810. See Joyce on Electric Law (2d ed.), §§ 106, 911-940b. 70 Postal Teleg. Cable Co. v. Adams, 155 U. S. 688, 15 Sup. Ct. 360, 39 L. ed. 311; Miss. Code 1880, c. 10, § 585, Sess. Laws 1888, c. 3. See Joyce on Electric Law (2d ed.), §§ 97-113a, 911-940b. 71 Atlantic & Pacific Telegraph Co. v. Philadelphia, 190 U. S. 160, 47 L. ed. 995, 23 Sup. Ct. 817, citing Robbins v. Shelby Taxing Dist., 120 U. S. 489, 492, 30 L. ed. 694, 7 Sup. Ct. 592. See Joyce on Electric Law (2d ed.), §§ 99-lOlb. 57 § 31 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES— The transmission and delivery of telegrams with due diligence may also be required by the State, under penalty for non- compliance, where the messages are from some point without the State to some point within it7^ But the State cannot im- pose any impediment to interstate commerce by attempting to regulate the delivery in other States of messages received within the State; nor does the reserved police power of the State extend to the regulation of the delivery at points without the State of telegraph messages received within the State^^ Again, a State may require electrical companies operating or intending to operate within the State to file with the board of commissioners of electrical subways, maps and plans before constructing their conduits, and assess the expenses and salaries of such board upon the several companies operating electrical conductors/'* 72 Western Union Teleg. Co. v. James, 162 U. S. 650, 40 L. ed. 1105, 16 Sup. Ct. 934. See Joyce on Electric Law (2d ed.), §§ 114-128. 73 Western Union Teleg. Co. v. Pendleton, 122 U. S. 347, 7 Sup. Ct. 1126, 30 L. ed. 1187. See Joyce on Electric Law (2d ed.), §§ 114-128. 74 New York v. Squire, 145 U. S. 175, 38 L. ed. 666, 12 Sup. Ct. 880. See Joyce on Electric Law (2d ed.), §§ 420-437a. 58 RATE REGULATION § 32 CHAPTER IV CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — RATE REGULATION ^ § 32. Rate Regulation — Common Franchises an Element — Carriers — Railroads — Ex- " Good Will " — Gas Rates, press Companies — Police § 37. Water Rates — Right to Bar- Power — Interstate Com- gain Away Power to Regu- merce. late. 33. Rate Regulation — Constitu- 38. Regulation of Gas Companies' tional Limitations — Ferries Rates. — Bridges. 39. Rate Regulation — Exemption 34. Limitation as to Reasonable- and Transfer Thereof — Obli- ness of Rates. gation of Contract — Con- 35. Same Subject — Terminal solidated Companies — Com- Charges by Carrier — Pro- binations as to Rates, ceedings Against Connecting 40. Rate Regulation — Long and Carrier — Discrimination — Short Hauls — Interstate Joint Through Rate. Commerce. 36. Elements in Fixing Rates — 41. Same Subject. § 32. Rate Regulation — Common Carriers — Railroads- Express Companies — Police Power ^Interstate Commerce. Rate-making is a legislative function whether exercised by the legislature or by a subordinate or administrative body to which power has been delegated, such as a municipality. The completed act derives its authority from the legislature and must be regarded as the exercise of a legislative power.^ So common carriers cannot unreasonably or unduly discriminate, and are subject to reasonable and just regulation as to rates and to prevent discrimination.^ It was early decided that 1 See § 1, herein. 2 Knoxville, City of, v. Knoxville Water Co., 212 U. S. 1, 29 Sup. Ct. 148, 53 L. ed. 371, citing Honolulu Rapid Transit & Land Co. v. Hawaii, 211 U. S. 282, 29 Sup. Ct. 55, 53 L. ed. 1086; Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 Sup. Ct. 67, 53 L. ed. 150. 3 Interstate Commerce Commission v. Chicago (Jreat Western Ry. Co., 141 Fed. lOO:]; Southern Express Co. v. R. M. Rose Co., 124 Ga. 581, 53 S. E. 185. See Penn Refining Co. v. Western New York & Penn. Rd. Co., 59 § 32 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES relief from onerous and burdensome rates of transportation imposed under State autliority must be sought in the com- petition of different lines, and, perhaps, in the power of Con- gress to establish post roads and facilitate military and com- mercial intercourse between the different parts of the country.^ And until Congress acts it remains with the States, through which a railroad, incorporated by act of Congress, passes, to fix rates for transportation beginning and ending within their respective limits.^ Where a statute grants to a railroad com- pany the right "from time to time to fix, regulate and receive, the tolls and charges by them to be received for transporta- tion," it does not deprive the State of its power, within the limits of its general authority, as controlled by the Constitution of the United States, to act upon the reasonableness of the tolls and charges so fixed and regulated.^ So a State statute pro- viding that a railroad corporation shall fix its rates annually for the transportation of passengers and freight, post the same in all its stations and depots, and that a failure to fulfill the conditions, or the charging of a higher rate, should subject the offending company to certain penalties, is, in the case of rail- roads running through several States, including that where the State enactment above mentioned had been made, but a police law, and therefore constitutional.^ But a statute which makes it unlawful for a railroad company in the State to charge and collect a greater sum for transporting freight than is specified in the bill of lading, is, when applied to freight transported into the State from a place without it in conflict with that provision of the Interstate Commerce Act which makes it un- lawful for such carrier to charge and collect a greater or less compensation for the transportation of the property than is 208 U. S. 208, 28 Sup. Ct. 268, 52 L. ed. 456, aff'g 137 Fed. 34.3, 70 C. C. A. 23; Joyce on Franchises, §§ 404-416; Joyce on Electric Law (2d ed.), §§ 518- 527b. 4 Railroad Co. v. Maryland, 21 V^^all. (88 U. S.) 456, 22 L. ed. 678. 5 Smyth V. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 819, 30 Chicago Leg. News, 243, 171 U. S. 361, 18 Sup. Ct. 888, 43 L. ed. 197. 6 Railroad Commission Cases (Stone v. Farmers' Loan & Trust Co.), 116 U. S. 307, 29 L. ed. 636, 6 Sup. Ct. 334. 7 Railroad Co. v. Fuller, 17 Wall. (84 U. S.) 560, 21 L. ed. 710. 60 ratp: regulation § 32 specified in tlic published sclicdule of rates provided for in the act, and in force at the time, and being thus in conflict, it is not applicable to interstate shipments.^ The power of Con- gress over interstate transportation embraces all manner of carriage whether gratuitous or otherwise; and in the absence of express exceptions, the intention of Congress in enacting the Elkins Act was to prevent any departure whatever from pub- lished rates. Whether or not the issuing of express franks to officers and employes of express companies and their families is prohibited by the Interstate Commerce Act ^ an injunction is authorized by the Elkins Act ^° wherever a common carrier is engaged in the carriage of passengers or freight at less than the published rate, and by the Hepburn Act ^^ express com- panies are brought within the act and obliged to file and publish their rates. The exceptions contained in the Hepburn Act,^^ allowing a common carrier to issue passes for free transporta- tion of passengers to certain classes of persons cannot be ex- tended to give express companies the right to issue passes to the same classes of persons for transportation of merchandise. The purpose of the Elkins Act is to require publication of tariff and to prevent and prohibit all discrimination, and the issuance of express franks falls within such prohibition.^^ The right of a State to reasonably limit the amount of charges by a railroad company for the transportation of per- sons and property, within its jurisdiction, cannot be granted away by its legislature unless by words of positive grant, or words equivalent in law.^^ 8 Gulf, Colorado & Santa Fe Ry. Co. v. Hefley, 158 U. S. 98, 30 L. ed. 910, 15 Sup. Ct. 802. 9 Act of February 4, 1889, c. 104, § 2, 24 Stat. 379. 10 Act of February 19, 1903, c. 708, § 3, 32 Stat. 846, U. S. Comp. Stat. Supp. 1907, p. 880. 11 June 29, 1906, c. 3591, 34 Stat. 584, U. S. Comp. Stat. Supp. 1907, pp. 892, 898. 12 Act of June 29, 1906, c. 3591, § 1, 34 Stat. 584, U. S. Comp, Stat. Supp. 1907, pp. 892, 898. 13 American Express Co. v. United States, 212 U. S. 522, 29 Sup. Ct. 315, 53 L. ed. 635. 1* Railroad Commission Cases (Stone v. Farmers' Loan & Trust Co.), 116 61 §§ 33, 34 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — § 33. Rate Regulation — Constitutional Limitations — Fer- ries — Bridges. It is well settled that, within certain limitations, public service corporations are subject to the legislative right to fix rates; ^^ and the limitation by legislative enactment of the rate of charge for services rendered in a public employment, or for the use of property in which the public has an interest, establishes no new principle of law, but only gives effect to an old one.^^ The power, however, of the State to prescribe rates and charges or to prevent unjust discrimination and unreasonable rates and charges is governed by the limitation that it cannot be exercised to deprive owners of their property without due process of law or without compensation, nor can they be denied the equal protection of the law.^' The several States have also the power to establish and regulate ferries and bridges, and the rates of toll thereon, whether within one State, or between two adjoining States, subject to the paramount authority of Congress over inter- state commerce.^* § 34. Limitation as to Reasonableness of Rates. Rates when fixed by legislative authority, for public service corporations, should allow a fair return upon the reasonable value of the property at the time of being used; they should not be confiscatory; and whether a rate yields such a fair re- turn as not to be confiscatory, depends upon circumstances, locality and risk, and no particular rate can be established for, and no particular rule given which will be applicable to all classes. The rule seems to be well settled, however, that the U. S. 307, 29 L. ed. 636, 6 Sup. Ct. 334. See also Louisville & Nashville Rd. Co. V. Kentucky, 183 U. S. 503, 46 L. ed. 298, 22 Sup. Ct. 95. 15 Willcox V. Consolidated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. Ct. 392, rev'g 157 Fed. 849. See Joyce on Franchises, §§ 298, 299, 390-416; Joyce on Electric Law (2d ed.), §§ 518-527b. 16 Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77. " Western Union Teleg. Co. v. Myatt, 98 Fed. 335. 18 Covington & Cincinnati Bridge Co. v. Kentucky, 154 U. S. 204, 14 Sup. Ct. 1087, 36 L. ed. 962. 62 KATE REGULATION § 34 legislative act will not be held invalid unless the rat(>s are [)lainly unreasonable to the extent that their enforcement would be equivalent to the taking of property for public use without such compensation as under the circumstances is just both to the owner and the public.^'' It is also settled that a State cannot so regulate rates for the transportation of per- sons and property as will not admit of the carrier earning such compensation as under all the circumstances is just to it and the public and thereby deprive such carrier of property without due process of law and deny to it the equal protection contrary to the Fourteenth Amendment.^*' It is also determined that the grant to the legislature of a State in its Constitution, of the power to establish maximum rates for the transportation of passengers and freight on railroads in such State will be held to have reference to reasonable maximum rates, as the words strongly imply that it was not intended to give a power to fix maximum rates without regard to their reasonableness, and it cannot be admitted that the power granted may be exerted in derogation of rights secured by the Constitution of the United States, and that the judiciary may not, when its juris- diction is properly invoked, protect those rights.^^ But while the enforcement by a State of a general scheme of maximum rates so unreasonably low as to be unjust and unreasonable may be confiscatory and amount to taking property without due process of law, the State has power to compel a railroad company to perform a particular and specified duty necessary for the convenience of the public even though it may entail 19 Willcox V. Consolidated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. Ct. 392, rev'g 157 Fed. 849, citing San Diego Land & Town Co. v. Jasper, 189 U. S. 439, 442, 47 L. ed. 892, 23 Sup. Ct. 892; San Diego Land & Town Co. V. National City, 174 U. S. 739, 767, 43 L. ed. 1154, 14 Sup. Ct. 804. Reasonableness of rates, see Southern Pac. Co. v. Bartine (U. S. C. C), 170 Fed. 725. 20 Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 819, 30 Chicago L. News, 243, 171 U. S. 361, 18 Sup. Ct. 888, 43 L. ed. 197. See also Missouri, Kansas & Texas Ry. Co. v. Interstate Commerce Commission (U. S. C. C), 164 Fed. 645. 21 Smyth V. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 819, 30 Chicago Leg. News, 243, 171 U. S. 361, 18 Sup. Ct. 888, 43 L. ed. 197. 63 § 35 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — some pecuniary loss, for a distinction exists between the two cases.^^ It is held, however, as to wharfage that it is, in the absence of Federal legislation, governed by local State laws, and if the rates authorized by them and by municipal ordi- nances enacted under their authority are unreasonable, the remedy must be sought by invoking the laws of the State.^^ § 35. Same Subject — ^Terminal Charges by Carrier — Pro- ceedings Against Connecting Carrier — Discrimination — Joint Through Rate. A carrier may charge and receive compensation for services that it may render, or procure to be rendered, off its own line, or outside the mere transportation thereover. Where the terminal charge is reasonable it cannot be condemned, or the carrier charging it required to change it because prior charges of connecting carriers make the total rate unreasonable, and in determining whether the charge of a terminal company is or is not reasonable the fact that connecting carriers own the stock of the terminal company is immaterial, nor does that fact make the lines of the terminal company part of the lines or property of such connecting carriers. Again, the inquiry authorized under the Hepburn Act^^ relates to all charges 22 Atlantic Coast Line Rd. Co. v. North Carolina Corp. Comm., 206 U. S. 1, 51 L. ed. 933, 27 Sup. Ct. 585, distinguishing Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 819, 30 Chicago Leg. News, 243, and citing as illustrating the distinction, Minneapolis & St. Louis R. Co. v. Minnesota, 186 U. S. 257, 46 L. ed. 1151, 22 Sup. Ct. 900; St. Louis & San Francisco Ry. Co. V. Gill, 156 U. S. 649, 15 Sup. Ct. 484, 39 L. ed. 567. This last case examines in detail the following decisions: Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, 38 L. ed. 1014, 14 Sup. Ct. 1047; Chicago & Grand Trunk Ry. Co. V. Wellman, 143 U. S. 339, 30 L. ed. 176, 12 Sup. Ct. 400; Chicago, Milwaukee & St. Paul Ry. Co. v. Minnesota, 134 U. S. 418, 33 L. ed. 970, 10 Sup. Ct. 462; Dow v. Beidelman, 125 U. S. 681, 31 L. ed. 841, 8 Sup. Ct. 1028. The principal case (Atlantic Coast Line Co., etc.) is cited in Willcox v. Consolidated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. Ct. 392, in dis- cussion of the point therein decided as to illegal discrimination in a gas rate act between the city and the consumers individually, the sufficiency of the return of profits and the constitutionality of the statute. 23 Ouachita Packet Co. v. Aiken, 121 U. S. 444, 30 L. ed. 976, 7 Sup. Ct. 907. 24 Hepburn Act of June 29, 1906, § 15, c. 3591, 34 Stat. 584. 64 RATE REGULATION § 35 made by the carrier, and on siicli an incjuiry the carrier is entitled to have a finding that a particular charge is unrea- sonable before he is required to change it. If the charge of a terminal carrier is itself reasonable the wrong of a shipper by excessive aggregate charges should be corrected by proceed- ings against the connecting carrier guilty of the wrong. But the convenience of the commission or the court is not the measure of justice and will not justify striking down a terminal charge when the real overcharge is the fault of a prior carrier .^^ It is the duty of a connecting carrier on a joint through rate to accept the cars delivered to it by the initial carrier, and it is not thereby rendered liable for any wrongful discrimination of the initial carrier merely because of the adoption of a joint through rate, which in itself is reasonable; nor is such con- necting carrier rendered liable for any such wrongful act of the initial carrier by § 8 of the Interstate Commerce Act.^^ 25 Interstate Commerce Commission v. Stickney, 215 U. S. 98, 30 Sup. Ct. — , 54: L. ed. — . In this case it appeared that: On December 10, 1907, the Interstate Commerce Commission entered an order requiring certain rail- roads running into Chicago to cease and desist from making a terminal charge of two dollars per car for the transportation of live stock beyond the tracks of said railroads in Chicago, and for delivery thereof at the Union Stock Yards, and requiring them to establish and put in force for said services a charge of one dollar per car; compliance with this order was postponed by the Commission until May 15, 1908. On May 7, 1908, the appellees filed this bill in the Circuit Court of the United States for the District of Minne- sota, to restrain the enforcement of said order, averring that the actual cost to them for such terminal services exceeded in each instance the sum of two dollars per car, and that the companies were making delivery at a charge less than such actual cost; that, therefore, the reduction of the charge by the commission to one dollar per car was unreasonable, oppressive and un- lawful. A hearing was had before three judges of the Eighth Circuit and a restraining order entered as prayed for by the railroad companies, from which order an appeal was taken to the Supreme Court and the order was affirmed. The controversy as to this terminal charge was of long duration. A history of it antecedent to this case will be found in Interstate Commerce Commission v. Chicago, Burlington & Quincy Rd. Co., 186 U. S. 320, 46 L. ed. 1182, 22 Sup. Ct. 824. Examine Southern Pacific Co. v. Interstate Commerce Commission, 200 U. S. 536, 50 L. ed. 585, 26 Sup. Ct. 330, rev'g Interstate Commerce Commission v. Southern Pac. Ry., 132 Fed. 829, con- sidered elsewhere, herein. zoPenn Refining Co. v. Western New York & Penn. Rd. Co., 208 U. S. 208, 28 Sup. Ct. 268, 52 L. ed. 456, aff'g 137 Fed. 343, 70 C. C. A. 23. 5 65 § 30 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — § 36. Elements in Fixing Rates -—Franchise an Element— " Good Will "—Gas Rates. As stated under a preceding section,^^ a fair return should be allowed upon the reasonable value of the property, based upon the particular circumstances of each case, the locality and risk. The value of the property is an essential element in determining whether or not a rate is confiscatory and this is largely a matter of opinion as to r(>al estate and a plant, also as to personal estate when not based upon the actual cost of material and construction ; and the same, as to matter of opin- ion, is to some extent true concerning deterioration of value of a plant .2» So whether a railroad rate is confiscatory so as to deprive the company of its property without due process of law within the meaning of the Fourteenth Amendment depends upon the valuation of the property, the income de- rivable from the rate, and the proportion between the two, which are matters of fact which the company cannot be pre- vented from trying before a competent tribunal of its own choosing.2^ Again, where a public service corporation raises more money in a particular year than required for actual depreciation it cannot carry the excess to capital for the pur- pose of estimating the amount on which it is entitled to pay dividends in determining whether a rate is unconstitutional as confiscatory, and the onus of showing that this has not been done is on complainant where the books show that such an excess has been collected. While in some businesses where 27 See § 34, herein. 28 Willcox V. Consolidated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. Ct. 392, rev'g 157 Fed. S40. See Knoxville v. Knoxville Water Co., 212 U. S. 1, 29 Sup. Ct. 148, 53 L. ed. 371; Stanislaus County v. San Joaquin & King's River Canal & Irrig. Co., 192 U. S. 201, 213, 48 L. ed. 406, 24 Sup. Ct. 241, rev'g 113 Fed. 930; Cotting v. Kansas City Stock Yards Co., 183 U. S. 79, 22 Sup. Ct. 30, 46 L. ed. 92, 82 Fed. 839; San Diego Land & Town Co. V. National City, 174 U. S. 739, 757, 43 L. ed. 1154, 19 Sup. Ct. 804; Smyth V. Ames, 169 U. S. 466, 546, 18 Sup. Ct. 418, 42 L. ed. 819, 30 Chicago Leg. News, 243, 171 U. S. 361, 18 Sup. Ct. 888, 43 L. ed. 197; Southern Pac. Co. V. Bartine (U. S. C. C), 170 Fed. 725. 29 Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 Sup. Ct. 67, 53 L. ed. 150. 66 RATE REGULATION § 36 increased demand docs not involve a corresponding increase in expense, increased profits may result from decreased rates, this rule does not api)ly to a business, such as that of a tele- l)hone company, where expenses are prot)ortionately increased with increased demand and service.^*^ Again, to be just and leasonable, within the meaning of the constitutional guaranty, the rates must be prescribed with reasonable regard for cost to the carrier of the service rendered and for the value of the property employed therein; but this does not mean that regard is to be had only for the interests of the carrier, or that the rates must be necessarily such as to render its business profit- able, for reasonable regard must also be had for the value of the service to the public. And where the cost to the carrier is not kept within reasonable limits, or, where for any reason its busi- ness cannot reasonably be so conducted as to render it profit- able, the misfortune must fall upon the carrier, the same as it would be in any other line of business .^^ Another important rule has been laid down as follows, in a case as to gas rates : For the purpose of fixing rates the value of the property employed should be determined as of the time when the inquiry is made, and as a general rule the corporation is entitled to the benefit of increased value since acquisition; and the same case holds that a provision in a State statute, requiring a public service corporation to perform its service in such a manner that its entire plant would have to be rebuilt at a cost on which no return could be obtained at the rate fixed, deprives the com- pany of its ability to secure such return and is unconstitutional and void. But the court excluded "good will" as an element of value of the property employed where a public service corporation has a monopoly, such as of supplying gas in a large city. The court also concurred with the opinion below that under all the circumstances of the case, six per cent v\as a 30 Louisiana Railroad Commission v. Cumberland Teleg. Co., 212 U. S. 414, 53 L. ed. 577, 29 Sup. Ct. 357, rev'g 156 Fed. 823. But quare and not decided whether it would be entitled to dividends on the excess above men- tioned if invested in extensions and additions. 31 Missouri, Kansas & Texas Ry. Co. v. Interstate Commerce Commission (U. S. C. C), 1G4 Fed. 645. 67 § 37 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES— fair return on the value of the property employed, and that a rate yielding that return was not confiscatory. It was further held that franchises of a public service corporation are property which cannot be taken or used by others without compensa- tion; and, therefore, where a State has by legislative enactment permitted such corporations to capitalize such franchises, their value at the time of such capitalization should be included in the value of the property as an element for fixing rates, but no increased value of such franchises should be allowed ; also, that in estimating the value of franchises, for the purpose of fixing rates, it is immaterial that the corporation is taxed on a greater value than that allowed if it charges its taxes as operating expenses in determining net income. The action, however, having been brought before the rate took effect and com- plainant having failed to sustain the burden of clearly show- ing that the rate act was confiscatory, the bill for injunction was dismissed without prejudice to complainant's right to bring another action when the rate should go into effect if it then proved to be confiscatory.^^ § 37. Water Rates — Right to Bargain Away Power to Regulate. Water rates may be regulated .•'^^ And the power to regulate water rates is a governmental power continuing in its nature which, if it can be bargained away at all, can only be by words of positive grant, and if any reasonable doubt exists in regard 32 Willcox V. Consolidated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. Ct. 392, rev'g 157 Fed. 849, citing upon the point that franchises are prop- erty, etc., Monongahela Nav. Co. v. United States, 148 U. S. 312, 37 L. ed. 4G3, 13 Sup. Ct. 622; People v. O'Brien, 111 N. Y. 1, 19 N. Y. St. Rep. 173, 18 N. E. 692. Six per cent was also fixed as a fair return in Stanislaus County V. San Joaquin & King's River Canal & Irrig. Co., 192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. 241, rev'g 113 Fed. 930. 33 Tampa Water Works Co. v. Tampa, 199 U. S. 241, 50 L. ed. 178, 26 Sup. Ct. 55; Stanislaus Co. v. San Joaquin & King's River Canal & Irriga- tion Co., 192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. 241; Owensboro v. Owens- boro Water Works Co., 191 U. S. 358, 48 L. ed. 217, 24 Sup. Ct. 82; San Diego Land & Town Co. v. National City, 174 U. S. 739, 43 L. ed. 1154, 19 Sup. Ct. 804. See Knoxville v. Knoxville Water Co., 212 U. S. 1, 29 Sup. Ct. 148, 53 L. ed. 371. 68 RATE REGULATION § 38 thereto it must be resolved in favor of the existence of the power. Thus, to illustrate, an ordinance of a city of Kentucky before it became a city of the third class, giving a water com- pany a right to make and enforce, as part of the conditions upon which it would supply consumers, all needful rules and regulations not inconsistent with the law must be construed as to the law, as it might be altered, and when the city became a city of the third class and thus had power under the general law to provide the city with water by contract or by works of its own and to make regulations for the management thereof and to fix prices to consumers, an ordinance subsequently enacted during the life of the franchise, fixing the price of water, is not void as against the water company under the impairment of contract clause of the Federal Constitution, and in the absence of other grounds the Circuit Court of the United States has no jurisdiction of a suit in equity to restrain the enforcement of such enacted ordinance, no question of un- reasonableness of rates being involved.^"* But, on the other hand, although a city may have power to regulate water rates, yet the power to reduce them may be so affected by contract with a corporation as to preclude additional burdens being subsequently imposed as a condition to the exercise of a corporate franchise to supply water .^^ § 38. Regulation of Gas Companies' Rates. Gas companies are also subject to the legislative power to fix rates.^^ In a comparatively recent Federal case a peculiar question arose as follows : A gas company brought an action against a city in Illinois to restrain the enforcement of an ordinance fixing the price of gas, on the ground that the low price practically amounted to taking property without compensation and that the ordi- 34 Owensboro v. Owensboro Water Works Co., 191 U. S. 358, 48 L. ed. 217, 24 Sup. Ct. 82. 35 Los Angeles v. Los Angeles City Water Co., 177 IT. S. 558, 20 Sup. Ct. 736, 44 L. ed. 886. 38 Willcox V. Consolidated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. Ct. 392, rev'g 157 Fed. 849. 69 § 39 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — nance impaired contract rights. The case was tried on these questions, but they were ignored by the court which decided adversely to the company, although the master had reported that the rates were confiscatory, on the single ground that the company had for a period violated the anti-trust law of Illinois and thereby was not entitled to relief. It was held that al- though parties making an agreement by the anti-trust act of Illinois might while the agreement was in force be subject to its penalties and whenever they ceased to act under the agree- ment the penalties also ceased. As the case had been tried on one theory and decided on another and injustice had probably resulted the judgment was reversed and the case sent back so that the terms and duration of the illegal agreement might be ascertained and taken into consideration in determining the case.^^ § 39. Rate Regulation — Exemption and Transfer Thereof — Obligation of Contract — Consolidated Companies — Com- binations as to Rates. Where a contract claimed to have been impaired was made with one of several corporations merged into the complainant, and concededly affected only the property and franchises originally belonging to such constituent company, it was determined that divisional relief could not be granted affecting only such property, when the bill was not framed in that aspect but prayed for a suspension of the impairing ordinance as to all of complainant's property. It was also held that the rule that a special statutory exemption does not pass to a new corporation succeeding others by consolidation or purchase in the absence of express direction to that effect in the statute, was applicable where the constituent companies are held and operated by one of them, under authority of the legislature. It was further decided that even if an asserted exemption from change of rates existed and had not been lost by consolidation, the bill could not be sustained where no such contract rights 37 Peoria Gas & Electric Co. v. Peoria, 200 U. S. 48, 50 L. ed. 365, 26 Sup. Ct. 214. 70 RATE REGULATION § 40 as alleged had been impaired or destroyed by the ordinance.^* Again, a State statute prohibiting combinations of insurance companies as to rates, commissions, and manner of transacting business is not unconstitutional as dei)riving the companies of their property or of their liberty of contract within the meaning of the Fourteenth Amendment, and th(; auditor of the State will not be enjoined from enforcing the provisions of the statute. A company lawfully doing business in the State is no more bound by a general unconstitutional enactment than a citizen of that State .^'' § 40. Rate Regulation— Long and Short Hauls— Inter- state Commerce. A State statute which enacts that if any railroad company shall, within the State, charge or receive for transporting passengers or freight of the same class, the same or a greater sum for any distance than it does for a longer distance, it shall be liable to a penalty for unjust discrimination, includes, by construction, a transportation of goods under one contract and by one voyage from the interior of the State to another State and is therefore commerce among the States even as to such part of the voyage as lies within the State although there might be a transportation of goods which is begun and ended within the State limits, and disconnected with any carriage outside the State and so not constitute commerce among the States; this latter would be subject to State regulation and the statute valid, but the former is National in its character and within the exclusive power of Congress to regulate.'*'^ 38 People's Gas Light & Coke Co. v. Chicago, 194 U. S. 1, 48 L. ed. 851, 24 Sup. Ct. 520. See St. Louis & San Francisco Ry. Co. v. Gill, 156 U. S. 049, 15 Sup. Ct. 484, 39 L. ed. 567. 39 Carroll v. Greenwich Ins. Co., 199 U. S. 401, 26 Sup. Ct. 66, 50 L. ed. 246, Iowa Code of 1897, § 1754. 40 Wabash, St. Louis & Pac. Ry. Co. v. Illinois, 118 U. S. 557, 30 L. ed. 244, 7 Sup. Ct. 4. The statute was held void as to the transportation in question. The court examined, and held that they do not establish a con- trary doctrine, the following cases: Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77; Chicago, Burlington & Quincy Rd. Co. v. Iowa, 94 U. S. 155, 24 L. ed. 94; Peik v. Chicago & Northwestern Ry., 94 U. S. 164, 24 L. ed. 97. That a State Constitution may prohibit discrimination as to rates, charges 71 § 40 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES When competition which controls rates prevails at a given point a dissiniilarit}^ of circumstances and conditions is created justifying a cai'rier in charging a lesser rate to such point it being the longer distance, than it exacts to a shorter distance, and noncompetitive point on the same line. A nearer and noncompetitive point on the same line is not entitled to lower rates prevailing at a longer distance and competitive place on the theory that it could also be made a competitive point if designated lines of railway carriers by combinations between themselves agreed to that end. The competition necessary to produce a dissimilarity of conditions must be real and con- trolling and not merely conjectural or possible. Where a charge of a higher rate for a longer than a shorter haul over the same line is lawful because of the existence of controlling competition at the longer distance place, the mere fact that the less charge is made for the longer distance does not alone suffice to cause the lesser rate for the longer distance to be unduly discriminatory. And where the commission had found a rate to be unreasonable solely because it was violative of the act which forbids a greater charge for a lesser than for a longer distance under stated conditions and which prohibits undue discrimination, it was held that as the grounds upon which such holding was based resulted from an error of law it was proper not to conclude the question of the inherent unreasonableness of the rates, but to leave it open for the further action by the commission to be considered free from the errors of law which had previously influenced the commission. A carrier, in order to give particular places the benefit of their proximity to a competitive point and thereby afford them a lower rate than they would otherwise enjoy, may take into consideration the rate to the point of competition and make it the basis of rates to the points in question. To give a lower rate as the result oi competition does not violate the provisions of the act to regu- late commerce. It w^as also held, that where a rate was based and facilities, and as to the effect upon connecting roads and through rates, see Atchison, Topeka & Santa Fe Rd. Co. v. Denver & New Orleans Rd. Co., 110 U. S. 607, 28 L. ed. 291, 4 Sup. Ct. 185, rev'g 15 Fed. 650. 72 RATE REGULATION § 41 Oil an error of fact, which was not complained of before, or acted on by the commission, and had been corrected by the carriers long before the decision below, and the corrected rate had been in force for a long period, it was not necessary to revise the decnje of the court behjw, which was in all other respects correct, so as to secure a continuance of the corrected rate/i § 41. Same Subject. In a case decided in the Federal Supreme Court, in 1900, it was held that although the Interstate Commerce Commission found in that case as a fact that the competition at Nashville, which formed the basis of contention therein, was of such a preponderating nature that the carriers must either continue to charge a lesser rate for a longer haul to Nashville than was asked for the shorter haul to Chattanooga, or to abandon all Nashville traffic, nevertheless they were forbidden by the act of 1887 "^^ to make the lesser charge for the longer haul ; but since that ruling of the commission was made it has been settled ^^ that competition which is controlling on traffic and rates produces in and of itself the dissimilarity of circumstance and condition described in the statute, and that where this condition exists a carrier has a right of his own motion to take it into view in fixing rates to the competitive point; and it follows that the construction affixed by the commission to the statute upon which its entire action in this case was predicated was wrong. It was also decided that the only principle by which it was possible to enforce the whole statute was the con- struction adopted in previous opinions of the Federal Supreme Court; that is, that a competition which is real and substantial, and exercises a potential influence on rates to a particular point, brings into play the dissimilarity of circumstance and condition provided by the statute, and justifies the lesser « Interstate Commerce Commission v. Clyde Steamship Co., 181 U. S. 29, 47 L. ed. 1047, 23 Sup. Ct. 687. <2 Act of February 4, 1887, c. 104, 24 Stat, 379. « Louisville & Nashville Rd. Co. v. Behlmer, 175 U. S. 648, 44 L. ed. 309, 20 Sup. Ct. 209, and other cases cited. 73 § 41 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — charge to the more distant and competitive point than to the nearer and noncompetitive place, and that this right is not destroyed by the mere fact that, incidentally, the lesser charge to the competitive point may seemingly give a preference to that point, and the greater rate to the noncompetitive point may apparently engender a discrimination against it.'*^ A State railroad corporation voluntarily formed cannot exempt itself from the control reserved to the State by its Constitu- tion, and, if not protected by a valid contract, cannot success- fully invoke the interposition of Federal courts, in respect to long and short haul clauses in a State Constitution simply on the ground that the railroad is property.'*^ « East Tennessee, etc., Ry. Co. v. Interstate Commerce Commission, 181 U. S. 1, 45 L. ed. 719, 21 Sup. Ct. 516. Examine Louisville & Nashville Rd. Co. V. Eubank, 184 U. S. 27, 22 Sup. Ct. 277, 46 L. ed. 416. « Louisville & Nashville Rd. Co. v. Kentucky, 183 U. S. 503, 46 L. ed. 298, 22 Sup. Ct. 95. 74 INTERSTATE COMMERCE §42 CHAPTER V CONSTITITTIONAL IJASIS OF ACTIONS AND DEFENSES — INTERSTATE COMMERCE ^ 42. Interstate Commerce — Power to Regulate. 43. Same Subject. 44. Same Subject. 45. Regulation of Commerce — Dis- trict of Columbia — Terri- tories. 46. Regulation of commerce — Business Within the State — Combinations — Telegraph Companies — Common Law. 47. Interstate Commerce — Regu- lation and Control — Rail- roads. 48. Interstate Commerce — Regula- tion and Control- — Railroads Continued — Express Com- panies. 49. Interstate Commerce — Consti- tutionality and Construction of Commodities Clause of Hepburn Act — Railroads — Carriers as Stockholders — Injunction — Mandamus — Penalty. 50. State Requirement That In- terstate and Other Trains Stop at Specified Stations. 51. Interstate Commerce — Police Power — Intoxicating Liq- uors — Carriers. 52. Same Subject — Delivery — Wil- son Act — Penalty. 53. Interstate Commerce — Intoxi- 54. 55. eating Liquors Continued — " Arrival "- — Original Pack- age — Wilson Act. Same Subject. Regulation of Commerce — In- 50 57 58 surance. Interstate Commerce — Bridges — Navigable Waters — Pow- ers of Congress and of the State. Interstate Commerce — Police Power — Regulation of Grain Warehouses, Elevators, Warehousemen, etc. Interstate Commerce — Police Power- — Quarantine and In- spection Regulations. 59. Same Subject. 60. Interstate Commerce — Taxa- tion Generally. 61. Interstate Commerce — Taxa- tion — Carriers — Express Companies — Vessels — Rail- roads — Telegraph Compan- ies. 62. Interstate Commerce — Taxa- tion — Railroads Continued — Other Property. Same Subject — Property Left Temporarily in State. Interstate Commerce — Taxa- tion of Bridges and Bridge Companies. 63 64 § 42. Interstate Commerce— Power to Regulate. The power to regulate interstate commerce is the power to 1 See § 1, herein. As will appear from the index to this treatise other rules and decisions as /75 § 43 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — prescribe rules by which such commerce must be governed but the rules prescribed must have a real and substantial rela- tion to, or connection with, the commerce regulated ; and while this power to regulate is great and paramount it cannot be exerted in violation of any fundamental right secured by other provisions of the National Constitution.^ Franchises of a corporation chartered by the State are, however, so far as they involve questions of interstate commerce, exercised in sub- ordination to the power of Congress to regulate such com- merce; and while Congress may not have general visitatorial power over State corporations its powers in vindication of its own laws are the same as if the corporation had been created by an act of Congress.^ But one engaging in interstate com- merce does not thereby submit all his business to the regulating power of Congress.^ And any exercise of State authority, in whatever form manifested, which directly regulates interstate commerce is repugnant to the commerce clause of the Constitu- tion. This is positively asserted.^ But while the State may not legislate for the direct control of interstate commerce, a proper police regulation which does not conflict with con- gressional legislation on the subject involved is not necessarily unconstitutional because it may have an indirect effect upon interstate commerce.^ § 43. Same Subject. A State or Territory has the right to legislate for the safety to interstate commerce and its effect upon corporate actions and defenses are considered elsewhere herein under other appropriate headings. 2 Adair v. United States, 208 U. S. IGl, 28 Sup. Ct. 277, 52 L. ed. 436. This case involved the constitutionaUty of provisions of the Act of Congress of June 1, 1898, 30 Stat. 424, c. 370, U. S. Comp. Stat. 1901, p. 3205, concern- ing carriers engaged in interstate commerce and their employes. 3 Hale V. Henkel, 201 U. S. 43, 50 L. ed. 652, 26 Sup. Ct. 370. 4 Employers' Liabihty Cases, 207 U. S. 463, 28 Sup. Ct. 141, 52 L. ed. 297. See United States v. Erie R. Co. (U. S. D. C), 166 Fed. 352, 355. 5 Adams Express Co. v. Kentucky, 214 U. S. 218, 223, 29 Sup. Ct. 633, 634; Atlantic Coast Line Rd. Co. v. Wharton, 207 U. S. 328, 334, 52 L. ed. 230, 234, 28 Sup. Ct. 121, 123. 6 Asbell V. Kansas, 209 U. S. 251, 28 Sup. Ct. 485, 52 L. ed. 778. 76 INTERSTATE COMMERCE § 43 and welfare of its i)eopl(', which is not taken from it because of the exclusive right of Congress to regulate interstate com- merce; and an inspection law affecting interstate commerce is not for that reason invalid unless it is in conflict with an act of Congress or an attempt to regulate interstate commerce.''' Again, the power of the Federal Government to regulate com- merce is not in conflict with the reserved rights of the several States under the Constitution, nor does it deprive them of the power to pass laws in the nature of police regulations under what is known as the police power, but on all matters that are the subjects of commerce within the meaning of the Federal Constitution, such regulations must be limited to subjects of police control and must not in themselves be regulations of commerce.* And the rule is fully recognized that, "The effect of a State constitutional provision or of any State legislation upon interstate commerce must 1)e direct and not merely incidental and unimportant; but it seems that where the neces- sary result of enforcing the provision may be to limit or pro- hibit the transportation of articles from without the State to a point within it, or from a point within to a point without the State, interstate commerce is thereby affected, and may be thereby to a certain extent directly regulated, and in that event the effect of the provision is direct and important and not a mere incident." ^ Legislation, therefore, which is an 7 McLean v. Denver & Rio Grande Rd. Co., 203 U. S. 38, 27 Sup. Ct. 1, 51 L. ed. 78. 8 Gibbons v. Ogden, 9 Wheat. (22 U. S.) 1, 6 L. ed. 23. See §§ 7-9, herein. 9 Louisville & Nashville Rd. Co. v. Eubank, 184 U. S. 27, 38, 22 Sup. Ct. 277, 46 L. ed. 416 (a case of carriers; regulation of rates; long and short hauls; Kentucky Constitution; held invalid so far as made applicable to or affecting interstate commerce), per Mr. Justice Peckham, citing and con- sidering Wabash, St. Louis & Pacific Ry. Co. v. Illinois, 118 U. S. 557, 30 L. ed. 244, 7 Sup. Ct. 4 (a case as to constitutional law; railroads; transpor- tation charge; discrimination in; invalidity of Illinois statute; interstate commerce; what constitutes; interference with; power of Congress; and reg- ulation of State statutes. Distinguisliing Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77; Chicago, Burlington & Quincy Rd. Co. v. Iowa, 94 U. S. 155, 24 L. ed. 94; Peik v. Chicago & Northwestern Ry., 94 U. S. 164, 24 L. ed. 97); Hall V. De Cuir, 95 U. S. 485, 24 L. ed. 547 (a case of constitutional law; commerce regulation; transportation of passengers; and Louisiana statute; 77 § 44 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — attempt, in virtue of the police power of the State, to regulate interstate commerce must yield, so far as there is a conflict, to the powers which belong exclusively to Congress.^'* So a State may not under pretense of protecting the pubHc health exclude the products of merchandise of other States, and the court will determine for itself whether it is a genuine exercise of the police power or really and substantially a regulation of interstate commerce.^^ § 44. Same Subject. A State may, however, in the absence of express action by Congress or by the Interstate Commerce Commission, regulate for the benefit of its citizens local matters affecting interstate commerce .^2 The following general rules have also been as- serted: (a) The power to regulate commerce, interstate and foreign, vested in Congress, is the power to prescribe the rules by which it shall be governed, that is, the conditions upon which it shall be conducted; to determine when it shall be free and when subject to duties or other exactions. (6) Such com- merce is a subject of national character and requires uniformity of regulation, (c) Interstate commerce by corporations is en- titled to the same protection against State exactions which is given in such commerce when carried on by individuals. (d) As to those subjects of commerce which are local or limited in their nature or sphere of operation, the State may prescribe regulations until Congress assumes control of them. And (e) as to such as are national in their character, and require uniformity of regulation, the power of Congress is exclusive; and until Congress acts, such commerce is entitled to be free from State exaction and burdens .^^ The regulation of commerce held unconstitutional and void to the extent that it was a regulation of interstate commerce). Principal case is cited in State, ex rel. Railroad Commission, v. Adams Express Co. (Ind., 1908), 85 N. E. 966, 967. 10 Adams Express Co. v. Kentucky, 214 U. S. 218, 222, 29 Sup. Ct. 633,634. 11 Asbell V. Kansas, 209 U. S. 251, 52 L. ed. 778, 28 Sup. Ct. 485. 12 Missouri Pacific Ry. Co. v. Larabee Flour Mills Co., 211 U. S. 612, 29 Sup. Ct. 214. 13 Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 29 L. ed. 158, 5 78 INTEKSTATIO COMMERCE § 44 between the States is of such comprehensive reach as to affect all the citizens of all the States of the Union, and it is unneces- sary that Congress should first exercise its authority to regulate before the States would be restricted in their legislative power. The Federal Constitution is itself restrictive; of such local au- thority, and the power of Congress is accordingly exclusive.^^ It is held, however, that the question whether, when Congress Sup. Ct. 826. See Butterfield v. Stranahan, 192 U. S. 470, 24 Sup. Ct. 349, 48 L. ed. 252; Bowman v. Chicago & N. W. Ry. Co., 125 U. S. 465, 31 L. ed. 700, S Sup. Ct. 689, 1062; Cooper Mfg. Co. v. Ferguson, 113 U. S. 727, 28 L. ed. 1137, 5 Sup. Ct. 739; Railroad Co. (Hannibal & St. Joseph Rd. Co.) v. Husen, 95 U. S. 465, 24 L. ed. 527 (now can such power be exercised over the interstate transportation of subjects of commerce). 1* La Moine Lumber & Trading Co. v. Kesterson (U. S. C. C), 171 Fed. 980, 983, per Wolverton, Dist. J. Compare next following section, herein. Commerce regulation — as to exclusive or concurrent powers of Congress and the States, see the following cases: Adams Express Co. v. Kentucky, 214 U. S. 218, 29 Sup. Ct. 633, 53 L. ed. 972; Missouri Pacific Ry. Co. v. Larabee Flour Mills Co., 211 U. S. 612, 620, 622, 29 Sup. Ct. 214, 53 L. ed. 352; Asbell v. Kansas, 209 U. S. 251, 28 Sup. Ct. 485, 52 L. ed. 778; McLean V. Denver & Rio Grande Ry. Co., 203 U. S. 38, 51 L. ed. 78, 27 Sup. Ct. 1; New York, New Haven & Hartford Rd. Co. v. Interstate Commerce Com- mission, 200 U. S. 361, 26 Sup. Ct. 272, 50 L. ed. 596; Northern Securities Co. V. United States, 193 U. S. 197, 48 L. ed. 679, 24 Sup. Ct. 436; Coving- ton & Cincinnati Bridge Co. v. Kentucky, 154 U. S. 204, 14 Sup. Ct. 1087, 38 L. ed. 962; Manchester v. Massachusetts, 139 U. S. 240, 35 L. ed. 159, 11 Sup. Ct. 559; Philadelphia & Southern Steamship Co. v. Pennsylvania, 122 U. S. 32(3, 7 Sup. Ct. 1118, 30 L. ed. 1200; Robbins v. Shelby Co. Tax Dist., 120 U. S. 489, 7 Sup. Ct. 592, 30 L. ed. 694; Wabash, St. Louis & P. Ry. Co. V. Illiiiois, 118 U. S. 557, 30 L. ed. 244, 7 Sup. Ct. 4; Morgan's Steam- ship Co. V. Louisiana Board of Health, 118 U. S. 455, 30 L. ed. 237, 6 Sup. Ct. 1114; Pickard v. Pullman Southern Car Co., 117 U. S. 34, 6 Sup. Ct. 635, 29 L. ed. 785; Brown v. Houston, 114 U. S. 622, 29 L. ed. 257, 5 Sup. Ct. 1091; Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 29 L. ed. 158, 5 Sup. Ct. 826; Head Money Cases, 112 U. S. 580, 28 L. ed. 798, 5 Sup. Ct. 247; Mobile, County of, v. Kimball, 102 U. S. 091, 26 L. ed. 238; Sherlock v. Ailing, 93 U. S. 99, 23 L. ed. 819; Henderson v. New York, 92 U. S. 259, 23 L. ed. 543; Lottawanna, The, 21 Wall. (88 U. S.) 558, 22 L. ed. 654; State Freight Tax Case, 15 Wall. (82 U. S.) 232, 21 L. ed. 146; Crandall v. Nevada, 6 Wall. (73 U. S.) 35, 18 L. ed. 745; License Tax Cases, 5 Wall. (72 U. S.) 462, 18 L. ed. 497; Gilman v. Philadelphia, 3 Wall. (70 U. S.) 713, 18 L. ed. 96; Pennsylvania v. Wheeling & Belmont Bridge Co., 18 How. (59 U. S.) 421, 15 L. ed. 435; Passenger Cases, 7 How. (48 U. S.) 283, 12 L. ed. 702; License Cases, 5 How. (46 U. S.) 504, 573, 12 L. ed. 256; Gib- bons v. Ogden, 9 Wheat. (22 U. S.) 1, 6 L. ed. 23. 79 § 45 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES fails to provide a regulation by laws as to any particular sub- ject of commerce among the States, it is conclusive of its in- tention that that subject shall be free from positive regula- tion, or that, until Congress intervenes, it shall be left to be dealt with by the States, is one to be determined by the cir- cumstances of each case as it arises.^^ The Interstate Com- merce Act embraces the whole field of interstate conmierce; it does not exempt such foreign commerce as is carried on a through bill of lading, but in terms applies to the transporta- tion of property shipped from any place in the United States to a foreign country and carried from such place to a port of transhipment.^® § 45. Regulation of Commerce — District of Columbia — Territories. The power of Congress to regulate commerce in the District of Columbia and Territories is plenary and does not depend upon the commerce clause, and a statute regulating such com- merce necessarily supersedes a teiTitorial statute on the same subject. So an act of Congress may be unconstitutional as measured by the commerce clause, and constitutional as measured by the power to govern the District of Columbia and the Territories, and the test of separability is whether Con- gress would have enacted the legislation exclusively for the District and the Territories.^^ 15 Bowman v. Chicago & Northwestern Ry. Co., 125 U. S. 465, 8 Sup. Ct. 689, 31 L. ed. 700. Commerce regulation — effect of nonexercise of power of Congress, see Union Bridge Co. v. United States, 204 U. S. 364, 27 Sup. Ct. 367, 51 L. ed. 523; Walling v. Michigan, 116 U. S. 446, 29 L. ed. 691, 6 Sup. Ct. 454; Brown V. Houston, 114 U. S. 622, 5 Sup. Ct. 1091, 29 L. ed. 257; Escanaba Co. v. Chicago, 107 U. S. 678, 2 Sup. Ct. 185, 27 L. ed. 442; Welton v. Missouri, 91 U. S. 275, 23 L. ed. 347; Crandall v. Nevada, 6 Wall. (73 U. S.) 35, 18 L. ed. 745. 18 Armour Packing Co. v. United States, 209 U. S. 56, 28 Sup. Ct. 428, 52L. ed. 681. 17 El Paso & Northeastern Ry. Co. v. Gutierrez, 215 U. S. 87, 54 L. ed. — , 30 Sup. Ct. — , aff'g 117 S. W. 426, and approving Hyde v. Southern Ry. Co., 31 App. D. C. — . As to power of Congress to enact discriminatory legislation under the 80 INTERSTATE COMMERCE § 46 § 46. Regulation of Commerce — Business Within the State — Combinations — Telegraph Companies — Common Law. The fact that a corporation is engaged in interstate com- merce does not deprive the State of power to exercise reason- able control over its business done wholly within the State.^^ So, although the jurisdiction of Congress over commerce among the States is full and complete, it is not questioned that it has none over that which is wholly within a State, and therefore none over combinations or agreements so far as they relate to a restraint of such trade or commerce; nor does it acquire any jurisdiction over that part of a combination or agreement which relates to commerce wholly within a State, by reason of the fact that the combination also covers and regulates commerce which is interstate.^** Again, a statute of a State, intended to regulate or to tax or to impose any other restriction upon the transmission of persons or property or telegraphic messages from one State to another, is not within that class of legislation which the States may enact in the absence of legislation by Congress; and such statutes are void commerce clause of the Constitution, see United States v. Delaware & Hud- son Co., 213 U. S. 366, 53 L. ed. 836, 29 Sup. Ct. 527, noted in District of Columbia v. Brooke, 214 U. S. 138, 149, 53 L. ed. 941, 29 Sup. Ct. 560, as holding, " that Congress may in the exercise of the powers to regulate com- merce among the States, discriminate between commodities and between carriers engaged in such commerce, and it was said that the assertion that 'injustice and favoritism' might 'be operated thereby,' could 'have no weight in passing upon the question of power.' " In the citing case (214 U. S. 138, 149) it was held that if the power of Congress to enact discrimi- natory legislation as to the District of Columbia is limited either expressly or by implication, the prohibition cannot be stricter or more extensive than the due process and equal protection clauses of the Fourteenth Amendment upon the States. But, quare, and not decided whether there is any pro- hibition on Congress from enacting discriminatory legislation, and whether, in the absence of any express proliibition to that effect, any prohibition can be implied, especially in regard to the exercise of poUce power in the District of Columbia. 18 McGuire v. Chicago, Burlington & Quincy Rd. Co., 131 Iowa, 340, 108 N. W. 902. 19 Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 44 L. ed. 136, 20 Sup. Ct. 96. 6 81 § 46 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES even as to that part of such transmission which may be v\'ithin the State.20 The giving telegraph companies the right to construct aiitl operate their lines through, along and over the public domain, military or post roads and navigable waters of the United States, was a legitimate regulation of commercial intercourse by telegraph among the States and appropriate legislation to carry into execution the power of Congress over the postal service; it was merely an exercise of national power to with- draw such intercourse from State control and interference.^^ Again, the powers conferred upon Congress to regulate com- merce with foreign nations and among the several States, and to establish post offices and post roads, are not confined to the instrumentalities of commerce, or of the postal service known or in use when the Constitution was adopted, but keep pace with the progress of the country, and adapt themselves to the new developments of time and circumstances. They were intended for the government of the business to which they relate, at all times and under all circumstances; and it is not only the right but the duty of Congress to take care that intercourse among the States and the transmission of intelli- gence are not obstructed or unnecessarily incumbered by State legislation.^^ There is no body of Federal common law, separate and dis- tinct from the common law existing in the several States, in the sense that there is a body of statute law enacted by Con- gress separate and distinct from the body of statutes enacted 20 Wabash, St. Louis & Pac. Ry. Co. v. Illinois, 118 U. S. 557, 30 L. ed. 244, 7 Sup. Ct. 4. Examine Lake Shore & Michigan Southern Ry. Co. v. Ohio, 173 U. S. 285, 298, 43 L. ed. 702, 19 Sup. Ct. 451, per Mr. Justice Har- lan. Compare Bowman v. Chicago & N. W. Ry. Co., 125 U. S. 465, 31 L. ed. 700, 8 Sup. Ct. 689, 1062; McGuire v. Chicago, Burlington & Quincy Rd. Co., 131 Iowa, 340, .369, 108 N. W. 902. 21 Western Union Telegraph Co. v. Pennsylvania Rd. Co., 105 U. S. 540, 49 L. ed. 412, 25 Sup. Ct. 133; Act of Congress, July 24, 1866, 14 Stat. 221, Rev. Stat., §§ 5263 et seq. See Joyce on Electric Law (2d ed.), §§ 38-67. See also Id., §§ 30-37c, 68-83, 130-140a. 22 Pensacola Telegraph Co. v. Western Union Teleg. Co., 96 U. S. 1, 24 L. ed. 708. 82 INTERSTATE COMMERCE § 47 by the several States. The pnnciples of the coiiimoii law are operative upon all interstate commercial transactions, except so far as they are modified by congressional enactment.^^ § 47. Interstate Commerce — Regulation and Control — Railroads. Congress has undoubted power to subject to regulations adopted by it every carrier engaged in interstate commerce.^'* But so far as the will of Congress respecting commerce among the States by means of railroads can be determined from the enactment of the provisions of the law to be found in the Revised Statutes,^^ they are indications of an intention that such transportation of commodities between the States shall be free except when restricted by Congress, or by a State with the express permission of Congress .^^ And Congress has authorized every railroad company in the United States to carry all passengers and freight over its road from one State to another State and receive compensation therefor;'^ and any exercise of State authority directly regulating interstate commerce is repugnant to the commerce clause of the Constitution.^^ 23 Western Union Telegraph Co. v. Call Pub. Co., 181 U. S. 92, 45 L. ed. 765, 21 Sup. Ct. 561. As to abrogation by Interstate Commerce Act of common-law remedy for recovery of unreasonable charges, see Texas & Pacific Ry. Co. v. Cisco Oil Mill Co., 204 U. S. 449, 51 L. ed. 562, 27 Sup. Ct. 358. 24 New York, New Haven & Hartford Rd. Co. v. Interstate Commerce Commission, 200 U. S. 361, 26 Sup. Ct. 272, 50 L. ed. 596. 25 Rev. Stat. U. S., §§ 4252-4289; Id., chap. 6, title 48, § 5258. 26 Bowman v. Chicago & Northwestern Ry. Co., 125 U. S. 465, 8 Sup. Ct. 689, 31 L. ed. 700. 27 "Section 5258 of the Revised Statutes of the United States (U. S. Comp. Stat., 1901, p. 3564) provides, 'Every railroad company in the United States * * * is hereby authorized to carry upon and over its road * * * all passengers * * * freight, and property on their way from any State to another State, and to receive compensation there- for.' New Orleans Gas Light Co. v. Louisiana Light & H. P. & Mfg. Co., 115 U. S. 650, 29 L. ed. 516, 6 Sup. Ct. 252; Wabash, St. Louis & Pac. R. Co. V. Illinois, 118 U. S. 557, 30 L. ed. 244, 1 Inters. Comm. Rep. 31, 7 Sup. Ct. 4." Adams Express Co. v. Kentucky, 214 U. S. 218, 223, 29 Sup. Ct. 633, 53 L. ed. 972. 28 Adams Express Co. v. Kentucky, 214 U. S. 218, 29 Sup. Ct. 633; At- 83 § t7 CJONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — While railways are bound to provide primarily and ade- quately for the accommodation of those to whom they are directly tributary, they have the legal right, after all these local conditions have been met, to adopt special provisions for through traffic, and legislative interference therewith is an infringement upon the clause of the Constitution which re- quires that commerce between the States shall be free and unobstructed .2^ vSo the interstate transportation of cars from another State which have not been delivered to the consignee, but remained on the track of the railroad company in the con- dition in which they were originally brought into the State is not completed and they are still within the protection of the commerce clause of the Constitution.'"' Again, an absolute requirement that a railroad engaged in interstate commerce shall furnish a certain numbers of cars on a specified day, to transport merchandise to another State, regardless of every other consideration except strikes and other public calamities, transcends the police power of the States and amounts to a burden upon interstate commerce; and articles of a State statute which constitute such a requirement, are, when applied to interstate commerce shipments, void as a violation of the commerce clause of the Federal Constitution. Such a regula- tion cannot be sustained as to interstate commerce shipments as an exercise of the police power of the State .^^ But a statute of a State, providing that no contract shall exempt any railroad corporation from the liability of a common carrier, or carrier of passengers, which would have existed if no contract had been made, does not, as applied to a claim for an injury hap- pening within the State under a contract for interstate trans- lantic Coast Line v. Wharton, 207 U. S. 328, 52 L. ed. 230, 28 Sup. Ct. 121. See Bowman v. Chicago & Northwestern Ry. Co., 125 U. S. 465, 8 Sup. Ct. 689, 31 L. ed. 700. 29 Cleveland, C. C. & St. L. Ry. Co. v. lUinois, 177 U. S. 514, 20 Sup. Ct. 722, 44 L. ed. 868. 30 McNeill V. Southern Railway Co., 202 U. S. 543, 50 L. ed. 1143, 26 Sup. Ct. 722. 31 Houston & Texas Central R. Co. v. Mayes, 201 U. S. 321, 50 L. ed. 772, 26 Sup. Ct. 491; Rev. Stat. Tex., Articles 4997-5000. 84 INTERSTATE COMMERCE § 48 portation, contravene the provision of the Constitution of the United Stat(>s empowering C()nij;r(>ss to regulate interstate commerce.^2 So tfic statutes of New York regulating the heating of steani passenger cars, and directing guards and guard posts to be placed on railroad bridges and trestles and the approaches thereto, were passed in the exercise of powers resting in the State in the absence of action by Congress, and, when api3lied to interstate commerce, do not violate^ the Con- stitution of the United States.^^ Again, a cab service main- tained by the Pennsylvania Railroad Company to take passen- gers to and from its terminus in the city of Ninv York, for which the charges are separate from those of other transportation and wholly for service within the State of New York, is not interstate commerce, although all persons using the cabs within the company's regulations are either going to or coming from the State of New Jersey by the company's ferry; such cab service is subject to the control of the State of New York and the railroad company is not exempt, on account of being engaged in interstate commerce, from the State privilege tax of carrying on the business of running cabs for hire between points wholly within the State .^^ § 48. Interstate Commerce — Regulation and Control— Railroads Continued — Express Companies. Although a railroad corporation may be largely engaged in interstate commerce it is amenable to State regulation and taxation as to any of its service which is wholly performed within the State and not as a part of interstate commerce.^^ Where a State statute applies to both intrastate and interstate 32 Chicago, M. & St. P. Ry. Co. v. Solan, 169 U. S. 133, 18 Sup. Ct. 289, 42 L. ed. 688. 33 New York, New Haven & Hartford Rd. Co. v. New York, 165 U. S. 628, 41 L. ed. 853, 17 Sup. Ct. 418; Laws of 18S7, c. 616; Laws of 1888, c. 189. 34 Pennsylvania Rd. Co. v. Knight, 192 U. S. 21, 48 L. ed. 325, 24 Sup. Ct. 202, aff'g 171 N. Y. 354. 35 Pennsylvania Rd. Co. v. Knight, 192 U. S. 21, 48 L. ed. 325, 24 Sup. Ct. 202, aff'g 171 N. Y. 354. 85 § 48 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — shipments, but the shipment involved is wholly intrastate thj court will not consider the validity of the statute when applied to interstate shipments.^^ A State may also, in the exercise of its police power, by a regulation designed to secure the well- being and to promote the general welfare of the people within the State, prohibit the running of freight trains within it;< limits on Sunday; and even though such legislation may affec. interstate commerce in a limited degree it is not for that reason a regulation of that commerce or a needless intrusion upon the domain of Federal jurisdiction, especially where there is noth- ing in the legislation that suggests an intent to regulate in- terstate commerce or that the enactment was for any other purpose than to prescribe a rule of civil duty for all who, on Sunday, are within the territorial jurisdiction of the State; and such regulation will be held in force until superseded and dis- placed by some act of Congress, passed in the execution of the power granted to it by the Constitution.^^ Although carriers by express have the common-law right to reasonably fix their tolls with reference to the extent of the service rendered and may establish reasonable delivery limits within a city or town, still, in Indiana the legislature may require, under penalty, express companies to deliver to the consignee express matter received by them free of any delivery charge in cities having a population of more than a certain number specified in the statute, and may, on refusal of the company to comply with the statute, enforce the penalty in the absence of any Federal statute governing the interstate shipment of goods by ex- press. If, however, such an act should be so construed, as to apply to interstate shipments, it could not be said that it is not a regulation of commerce, much less that it could not come in conflict with the power of regulation imposed in the interstate commerce commission. It might be, however, that if it were found that the companies were casting upon their other traffic the expense of long and burdensome free deliveries an order 36 Seaboard Air Line Ry. v. Seegers, 207 U. S. 73, 52 L. ed. 108, 28 Sup. Ct. 28, arg73S. C. 71. :<7 Hennington v. Georgia, 163 U. S. 299, 41 L. ed. 166, 16 Sup. Ct. 1086. 86 INTERSTATE COMMERCE § 49 would be made forbidding the same and substituting a reason- able regulation or practice designed to give greater equality. Such a consideration would operate to suspend the State statute as to interstate shipments by express; and besides, any State enactment which imposes a local burden of transporta- tion which in its operation would require the carrier to adjust his interstate rate with reference thereto, amounts to an attempted regulation of interstate commerce and is, therefore, void as to such transactions. The Interstate Commerce Act, however, as amended by the Railroad Act of 1906, supersedes a State statute legislating as to the same subject-matter .^^ § 49. Interstate Commerce— Constitutionality and Con- struction of Commodities Clause of Hepburn Act— Railroads — Carriers as Stockholders —Injunction —Mandamus — Penalty. In an important case recently decided in the Federal Supreme Court it appeared that: after the first day of May, 1908, the Government of the United States commenced proceedings by bill in equity against each of certain corporations, to enjoin each from carrying in interstate commerce any coal produced under the circumstances hereinafter stated. At the same time a petition in mandamus was filed against each corporation, seeking to accomplish the same result. Both the equity cases and the mandamus proceedings were based upon the assump- tion that the first section of the act to regulate commerce, as amended and re-enacted by the law usually referred to as the Hepburn Act,^'' contained a provision, generally known as the commodities clause, which caused it to be illegal for the cor- porations after May 1, 1908, to transport in interstate com- merce coal with which the railroad companies were or had been connected or associated in any of the modes below stated. 38 state V. Adams Express Co. (Ind., 1908), 85 N. E. 966, 83 N. E. 337; Ind. Acts of 1901, p. 97, c. 62; Burns' Ann. Stat., 1901, § 3312a; Act of Con- gress of Feb. 4, 1887, c. 104, § 0, 24 Stat. 380 (U. S. Comp. Stat., 1901, p. 3156) as am'd by Rd. Act of June 29, 1906, c. 3591, § 3, 34 Stat. 589 (U. S. Comp. Stat., 1907, pp. 899 et seq.). 39 Approved June 29, 1906, c. 3591, 34 Stat. 584. 87 § 49 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — Except in the particular that one of. the corporations claimed that it was not a railroad company within the meaning of the commodities clause, they all defended substantially upon the ground that when correctly interpreted the commodities clause did not forbid the interstate commerce traffic in coal by them carried on. If it did, the clause was assailed as inherently repugnant to the Constitution because the right to enact it was not embraced within the authority conferred upon Congress to regulate commerce. In addition it was contended that even if, abstractly considered, the grant might be embraced within the grant of power to regulate commerce, nevertheless its pro- visions were in conflict with the due process clause of the Fifth Amendment to the Constitution, because of the destructive effect which the enforcement of its provisions would produce on the rights of property which the corporations possessed and had long enjoyed under the sanction of valid State laws. It was besides insisted that in any event the clause was repug- nant to the Constitution, because of the discrimination caused by the exception as to timber and the manufactured products thereof. Aside from the contention of one of the corporations, above noted, that it was not a railroad company within the meaning of that term as used in the statute, because it was merely a coal company whose transporting operations were but incidental to its mining operations, the corporations, parties to the record, by means of railroads owned and operated by them, were engaged in transporting coal from the anthracite coal fields in Pennsylvania to points of market for ultimate delivery in other States. With much of the coal so transported the corporations had been or were connected by some relation distinct from the association which was necessarily engendered by the transportation of the commodity by the corporations as common carriers in interstate commerce. While the busi- ness of the corporations, generally speaking, had these char- acteristics, there were differences between them. Some of the corporations owned and worked mines and transported over their own rails in interstate commerce the coal so mined, either for their own account or for the account of those who had 88 INTERSTATE COMMERCE § 49 acciuired title to the coal prior to the beginning of tlie trans- portation. Others, while o])ei'ating railroads not only owned but also leased and operated coal mines, and carried the coal l)roduced from such mines in the same way. Again, others of the railroad companies, although not operating mines, were the owners of stock in corporations engaged in mining coal, the coal so produced by such corporations being carried in interstate commerce by the railroad companies holding the stock in the producing coal companies, either for account of the producing corporations or for persons to whom the coal had been sold at the point of production prior to the beginning of interstate commerce. This, moreover, was, additionally, the ca^e as to some of the railroad companies who, as above stated, were engaged both in the production of coal from mines owned by them and in interstate transportation of such product. All the attributes thus enjoyed by the corporations had been possessed by them for a long time and were expressly conferred by the laws of Pennsylvania, and, in some instances, also by the laws of other States, in which the companies like- wise, in part, carried on their business. The cases were sub- mitted on the pleadings, and were heard and decided at one and the same time. Treating the clause of the above statute as having the meaning which the Government contended for, the court came to consider the alleged repugnancy of the enactment to the Constitution. In the principal opinion the subject was at least formally approached, not for the purpose of determining whether inherently the commodities clause was within the competency of Congress to enact as a regulation of commerce, but whether the provisions of that clause were repugnant to the Constitution because of the destructive effect of its prohibitions upon the vast sum of property rights which the corporations were found to enjoy as a result of valid State laws. It was decided below that, as applied to the defendants, the commodities clause was not within the power of Congress to enact as a regulation of commerce ; a member of the court dissented in a written opinion. Judgments and decrees were entered denying the application for mandamus and dismissing 89 § 49 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES— the bills of complaint. The Federal Supreme Court, in revers- ing and remanding with directions for such further proceedings as might be necessary to apply and enforce the statute as interpreted by it, held that: (1) Although a limitation to its operation might be reasonable and thus assuage the radical results of a prohibitory statute, if it is not expressed in the statute, to engraft such a limitation would be pure judicial legislation. In construing the commodities clause of the Hepburn Act the suggestion of the Government to limit its application to commodities while in the hands of a carrier or its first vendee, and, as thus construed, extend the indirect interest prohibition to commodities belonging to corporations the stock whereof is owned in whole or in part by the carrier, or those which had been mined, manufactured or produced by the carrier prior to the transportation, cannot be accepted . (2) The duty of the Federal Supreme Court in construing a statute which is reasonably susceptible of two constructions, one of which would render it unconstitutional and the other valid, to adopt that construction which savors its constitutionality"" includes the duty of avoiding a construction which raises grave and doubtful constitutional questions if the statute can be reasonably con- strued so as to avoid such questions.-*! (3) This rule applied to the commodities clause of the Hepburn Act so as to avoid decid- ing the constitutional questions which would arise if the clause v\ere construed so as to prohibit the carrying of commodities owned by corporations of which the carrier is a shareholder, or which it had mined, manufactured or produced at some time prior to the transportation. (4) Where ambiguity exists it is the duty of a court construing a statute to restrain the wider and doubtful provisions so as to make them accord with the narrow and more reasonable provisions and thus harmonize the statute. (5) A prohibition in an act of Congress will not be extended to include a subject where the extension raises 40 Citing Knights Templar Indemnity Co. v. Jarman, 187 U. S. 197, 47 L. ed. 139, 23 Sup. Ct. 108. « Citing Harriman v. Interstate Com. Comm., 211 U. S. 407, 53 L. ed. 253, 29 Sup. Ct. 115. 90 INTERSTATE COMMERCE §49 grave constitutional questions as to the power of Congress, where one branch of that body rejected an amendment specifi- cally including such subject within the prohibition. (6) In the construction of a statute the power of the lawmaking body to enact it, and not the consequences resulting from the enact- ment, is the criterion of constitutionality. (7) The provision contained in the Hepburn Act^' commonly called the com- modities clause, does not prohibit a railway company from moving commodities in interstate commerce because the com- pany has manufactured, mined or produced them, or owned them in whole or in part, or has had an interest, direct or in- direct, in them, wholly irrespective of the relation or connection of the carrier with the commodities at the time of transporta- tion. (8) The provision of the commodities clause relating to interest, direct or indirect, does not embrace an interest which a carrier may have in a producing corporation as the result of ownership by the carrier of stock in such corporation, provided the corporation has been organized in good faith. (9) Reject- ing the construction placed by the Government upon the commodities clause, it is decided that that clause, when all its provisions are harmoniously construed, has solely for its object to prevent carriers engaged in interstate commerce from being associated in interest at the time of transportation with the commodities transported, and it therefore only prohibits rail- road companies engaged in interstate commerce from trans- portating in such commerce commodities under the following circumstances and conditions: (a) When the commodity has been manufactured, mined or produced by a railway company or under its authority and at the time of transportation the railway company has not in good faith before that act of transportation parted with its interest in such commodity; {h) when the railway company owns the commodity to be transported in whole or in part; (c) when the railway company at the time of transportation has an interest, direct or indirect, in a legal sense in the commodity, which last prohibition does not apply to commodities manufactured, mined, produced, 42 Approved June 29, 1906, c. 3591, 34 Stat. 584. 91 § 49 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES owned, etc., by a corporation because a railway company is a stockholder in such corporation. Such ownership of stock in a producing company by a railway company does not cause it as owner of the stock to have a legal interest in the commodity manufactured, etc., by the producing corporation. (10) As thus construed the commodities clause is a regulation of com- merce inherently within the power of Congress to enact .^ The contention that the clause if applied to pre-existing rights will operate to take property of railroad companies and there- fore violate the due process provision of the Fifth Amendment, having been based upon the assumption that the clause pro- hibited and restricted in accordance with the construction which the Government gave that clause is not tenable as to the act as now construed which merely enforces a regulation of commerce by which carriers are compelled to dissociate themselves from the products which they carry and does not prohibit where the carrier is not associated with the commodity carried. (11) The constitutional power of Congress to make regulations for interstate commerce is not limited by any re- quirement that the regulations should apply to all commodities alike, nor does an exception of one commodity from a general regulation of interstate commerce necessarily render a statute unconstitutional as discriminating between carriers; and the exception of timber in the commodities clause of the Hepburn Act does not render the act unconstitutional, nor can the question of the expediency of such an exception affect the question of power. (12) Where, as in this instance, the pro- vision for penalties is separable from the provisions for regula- tions, the court will not consider the question of the constitu- tionality of the penalty provisions in a suit brought by the Government to enjoin carriers from violating the regulations and in which no penalties are sought to be recovered. (13) As the construction now given the act differs widely from the construction which the Government gave to the act and which it was the purpose of these suits to enforce, it is not necessary *3 Citing New Haven Railroad v. Interstate Com. Comm., 200 U. S. 361, 50 L. ed. 515, 26 Sup. Ct. 272. 92 INTERSTATE COMMERCE § 50 in reversing and rcmandin;^;, to direct the character of decrees which shall be entered, but simply to reverse and remand the case with directions to enforce and apply the statute as it is now construed. (14) Although the Delaware and Hudson Company may originally have been chartered principally for mining purposes, as it is now engaged as a common carrier by rail in the trans]3ortation of coal in th(^ channels of interstate commerce, it is a railroad company within the purview of the commodities clause and is subject to the provisions of that clause as they are now construed.'*^ § 50. State Requirement That Interstate and Other Trains Stop at Specified Stations.^^ Whether an order stopjiing interstate trains at specified stations is a direct regulation of interstate commerce depends on the local facilities at those stations, inability of fast inter- state trains to make schedule, loss of patronage and compen- sation for carrying the mails, and the inability of such trains to pay expenses if additional stops are required are all matters to be considered in determining whether adequate facilities « United States v. Delaware & Hudson Co., 213 U. S. 366, 53 L. ed. 836, 29 Sup. Ct. 527, rev'g 164 Fed. 215, cited in District of Columbia v. Brooke, 214 U. S. 138, 149, 53 L. ed. 941, 29 Sup. Ct. 560, as holding, "That Congress may in tlie exercise of the powers to regulate commerce among the States, discriminate between commodities and between carriers engaged in such commerce. And it was said that the assertion that 'injustice and favorit- ism' might 'be operated thereby,' could 'have no weight in passing upon the question of power.' " In the citing case the question, in connection with the citation, was discrimination, the power of Congress and police power. In a case as to tlie construction of the Commerce Act and the reasonable- ness of terminal charges the court, per Mr. Justice Brewer, in discussing the case in delivering the opinion of the court, said: "Further, it is shown by the affidavits that the amount of such terminal charge is not entered upon the general freight charges of the companies, but is kept as a separate item. The Union Stock Yards Company is an independent corporation and the fact, if it be a fact, that most or even all of its stock is owned by the several railroad companies entering into Chicago does not make its line or property part of the lines or property of the separate railroad companies." Interstate Commerce Commission v. Stickney, 215 U. S. 98, 54 L. ed. — , 30 Sup. Ct.— . *5See § 118, herein. 93 § 50 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — have been furnished to the stations at which the company is ordered by State authorities to stop such trains; and while the sufficiency of the facilities above mentioned is not of itself a Federal question, it may be considered by the United States Supreme Court for the purpose of determining whether an order, requiring interstate trains to stop at stations within the State already adequately suppUed with transportation facilities, does or does not regulate interstate commerce, and such an order made directly or through the instrumentality of a commission is void where the local facilities are, as above stated, adequate.'*® So where a State statute required all regular passenger trains to stop a sufficient length of time at county seats to receive 46 Atlantic Coast Line Rd. Co. v. Wharton, 207 U. S. 328, 52 L. ed. 230, 28 Sup. Ct. 121, 123, rev'g 74 S. C. 80, 53 S. E. 290. The court, per Justice Peckham, says: "The term" adequate or reasonable facilities "is not in its nature capable of exact definition. It is a relative expression, and has to be considered as caUing for such facihties as might be fairly demanded, re- gard being had, among other things, to the size of the place, the extent of the demand for transportation, the cost of furnishing the additional accom- modations asked for, and to all other facts which would have a bearing upon the convenience and cost. * * * That the inhabitants of a place de- mand greater facihties than they have is not at all conclusive as to the reasonableness of their demand for something more. * * * To stop these trains at Latta " (the station covered by the order) " and other stations like it, which could bring equally strong reasons for the stoppage of trains at their stations would wholly change the character of the trains" (as to speed) "and would result in the inabihty of what had been fast trains to make their schedule time, and a consequent loss of patronage, also the loss of compensation for carrying the mails, which would be withdrawn from them, and the end would be the withdrawal of the trains, because of their inability to pay expenses. All these are matters entitled to consideration when the question of convenience and adequate facilities arises. * * * Of course it is not reasonable to suppose that the same facihties can be given to places of very small population that are suppUed to their neighbors who live in much larger communities. * * * Nevertheless the fair needs of the locality for transportation to other local points must be con- sidere ! and provided for. This, as we think, has been done." See Mississippi Railroad Commission v. Illinois Central Rd. Co., 203 U. S. 335, 27 Sup. Ct. 90, 51 L. ed. 209. Examine Atlantic Coast Line Rd. Co. v. North Carolina Corporation Commission, 206 U. S. 1, 51 L. ed. 933, 27 Sup. Ct. 585. The judgment of the State Supreme Court, in the principal case, directing a mandamus was held erroneous and reversed and the case remanded. 94 INTERSTATE COMMERCE § 50 and let off passengers with safety, it appeared that the de- fendant company furnished four regular passenger trains per day each way, which were sufficient to accommodate all the local and through business, and that all such trains stopped at county seats; the act was held to be invalid as applied to an express train intended only for through passengers from St. Louis to New York.'*'' But it has been held that the statute of Ohio relating to railroad companies, in that State, which provides that, "Each company shall cause three, each way, of its regular trains carrying passengers, if so many are run daily, Sundays excepted, to stop at a station, city or village, contain- ing over three thousand inhabitants, for a time sufficient to receive and let off passengers; if a company, or any agent or employe thereof, violate, or cause or permit to be violated, this provision, such company, agent or employe shall be liable to a forfeiture of not more than one hundred nor less than twenty-five dollars, to be recovered in an action in the name of the State, upon the complaint of any person, before a justice of the peace of the county in w^hich the violation occurs, for the benefit of the general fund of the county; and in all cases in which a forfeiture occurs under the provision of this section, the company whose agent or employe caused or permitted such violation shall be liable for the amount of the forfeiture, and the conductor in charge of such train shall be held, prima facie, to have caused the violation" is not, in the absence of legis- lation by Congress on the subject, repugnant to the Constitution of the United States, when appHed to interstate commerce through the State of Ohio on the Lake Shore and Michigan Southern Railway.'** In another case it is decided that a State may require all regular passenger trains running wholly within the State to stop at stations at county seats long enough to discharge and take on passengers with safety.^^ 47 Cleveland, C. C. & St. L. Ry. Co. v. Illinois, 177 U. S. 514, 20 Sup. Ct. 722, 44 L. ed. 868. <8 Lake Shore & M. S. Ry. Co. v. Ohio, 173 U. S. 285, 43 L. ed. 702, 19 Sup. Ct. 465. «GIadson v. Minnesota, 166 U. S. 427, 41 L. ed. 1064, 17 Sup. Ct 627. 95 § 51 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — § 51. Interstate Commerce— Police Power— Intoxicating Liquors — Carriers. The right to send liquors from one State into another, and the act of sending the same is interstate commerce the regula- tion of which has been committed by the Federal Constitution to Congress.^" A State statute, therefore, which operates as an interference with interstate commerce by prohibiting the bring- ing intoxicating liquors into a State from another State by interstate carriers is void.^^ And this applies not only to a State law which denies such rights, but also to one which substantially interferes with or hampers the same.^^ So a State cannot, for the purpose of protecting its people against the evils of intemperance, enact laws which regulate commerce between its people and those of other States of the Union, unless the consent of Congress, express or impHed, is first obtained .^3 The respective States have, however, plenary 50 Vance v. W. A. Vandercook Co., 170 U. S. 438, 18 Sup. Ct. 674, 42 L. ed. 1100. "In Vance V. W. A. Vandercook Co., 170 U. S. 438, 444, 42 L. ed. 1100, 1103, 18 Sup. Ct. 674, 676, Mr. Justice White delivering the opinion of the court said: 'Equally well estabHshed is the proposition that the right to send liquors from one State into another, and the act of sending the same, is interstate commerce, the regulation whereof has been committed by the Constitution of the United States to Congress, and, hence, that a State law which denies such a right or substantially interferes with or hampers the same, is in conflict with the Constitution of the United States,' " per Mr. Justice Brewer, in Adams Express Co. v. Kentucky, 214 U. S. 218, 222, 29 Sup. Ct. 633, 634, 53 L. ed. 972. "Liquor, however obnoxious and hurtful it may be in the judgment of many, is a recognized article of commerce. License Ca-ses, 5 How. (46 U. S.) 504, 577, 12 L. ed. 256, 289; Leisy v. Hardin, 135 U. S. 100-110, 34 L. ed. 128-133,' 3 Inters. Com. Rep. 36, 10 Sup. Ct. Rep. 681," per Mr. Justice Brewer in Adams Express Co. v. Kentucky, 214 U. S. 218, 222, 29 Sup. Ct. 633, 634, 53 L. ed. 972. 81 Louisville & Nashville Rd. Co. v. F. W. Cook Brewing Co. (U. S. C. C. A.), 172 Fed. 117. See last preceding note. 52 Vance v. W. A. Vandercook Co., 170 U. S. 438, 42 L. ed. 1100, 18 Sup. Ct. 674. See first note under this section. 53 Bowman v. Chicago & Northwestern Ry. Co., 125 U. S. 465, 8 Sup. Ct. 689, 1062, 31 L. ed. 700. In this case a statute of Iowa (Iowa Code, § 1553, as amended by chap. 143 of the Acts of the Twentieth General Assembly in 1886) forbidding common carriers to bring intoxicating liquors into the State from any other State or Territory, without being first furnished with 96 INTERSTATE COMMERCE § .'i'Z power to regulate the sale of intoxicating liquors within their borders, and the scope and extent of such regulations depend solely on the judgment of the lawmaking power of the States, provided, always, they do not transcend the limits of State authority by invading rights which are secured by the Federal Constitution, and provided further that the regulations as adopted do not operate as a discrimination against the rights of residents and citizens of other States of the Union .^^ § 52. Same Subject — Delivery — Wilson Act — Penalty. Transportation of an article in interstate commerce is not complete until the article is delivered to the consignee :^^ nor does the Wilson Act ^^ cause State laws to attach to an inter- state shipment until the completion of the transit by delivery a certificate, under the seal of the auditor of the county to which it is to be transported or consigned, certifying that the consignee or person to whom it is to be transported or dehvered is authorized to sell intoxicating liquors in the county, although adopted without a purpose of affecting interstate commerce, but as a part of a general system designed to protect the health and morals of the people against the evils resulting from the unrestricted sale and manufacture of intoxicating liquors within the State, was held to be neither an inspection law, nor a quarantine law, but essentially a regula- tion of commerce among the States, affecting interstate commerce in an essential and vital part, and not being sanctioned by the authority, express or implied, of Congress, was repugnant to the Constitution of the United States. 54 Vance v. W. A. Vandercook Co., 170 U. S. 438, 18 Sup. Ct. 674, 42 L. ed. 1100. States may control hquor traffic. Lloyd v. Dollison, 194 U. S. 445, 48 L. ed. 1062, 24 Sup. Ct. 703. 55 Rhodes V. Iowa, 170 U. S. 412, 42 L. ed. 1088, 18 Sup. Ct. 664. "That the transportation is not complete until delivery to the consignee is also settled. In Rhodes v. Iowa, 170 U. S. 412, 426, 42 L. ed. 1088, 1096, 18 Sup. Ct. 664, 669, it was held that the Wilson Act (26 Stat. 313, chap. 728, U. S. Comp. Stat., 1901, p. 3177) 'was not intended to and did not cause the power of the State to attach to an interstate commerce shipment, whilst the merchandise was in transit under such shipment and until its arrival at the point of destination, and delivery there to the consignee,' " per Mr. Justice Brewer, in Adams Express Co. v. Kentucky, 214 U. S. 218, 222, 29 Sup. Ct. 633, 634, 53 L. ed. 972. 58 Act of Aug. 8, 1890, chap. 728, 26 Stat. 313. As to purpose of this act see Delameter v. South Dakota, 205 U. S. 93, 51 L. ed. 724, 27 Sup. a. 447. 7 97 § 52 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES— to the consignee.^'^ So where a code provided that: "If any express company, railway company or any agent or person in the employ of any express company, or of any common carrier, or any person in the employ of any common carrier, or if any other person shall transport or convey between points, or from one place to another within this State, for any other persons or corporation, any intoxicating liquors, without having first been furnished with a certificate from and under the seal of the county auditor of the county to which said liquor is to be trans- ported or is consigned for transportation, or within which it is to be conveyed from place to place, certifying that the consignee or person to whom said liquor is to be transported, conveyed or delivered, is authorized to sell such intoxicating liquors in such county, such company, corporation or person so offending, and each of them, and any agent of said company, corporation or person so offending, shall upon conviction thereof, be fined in the sum of one hundred dollars for each offense and pay costs of prosecution, and the costs shall include a reasonable attorney fee to be assessed by the court, which shall be paid into the county fund, and stand committed to the county jail until such fine and costs of prosecution are paid;" it was decided that such statute could not be held to apply to a box of spirituous liquors, shipped by rail from a point in another State to a citizen of the State of enactment of said code provision, at his residence in the latter State while in transit from its point of shipment to its delivery to the consignee, without causing the statute to be repugnant to the Federal Constitution. It was further deter- mined that moving such goods in the station from the platform on which they were put on arrival to the freight warehouse was a part of the interstate commerce transportation.^^ And a State cannot by statute make penal all shipments of liquor which are to be paid for on delivery, commonly called C. 0. D. shipments, and provide that the place where the money is paid or the goods delivered shall be deemed to be the place of sale, 67 Adams Express Co. v. Kentucky, 214 U. S. 218, 29 Sup. Ct. 633, 53 L. ed. 972. 58 Rhodes V. Iowa, 170 U. S. 412, 18 Sup. Ct. 664, 42 L. ed. 1088. 98 INTERSTATE COMMERCE § 53 and that the carrier aiui his agents delivering the goods shall be jointly liable with the vendor, as such a law as applied t(j shipments from other States is an attempt to regulate inter- state commerce.'^'* § 53. Interstate Commerce — Intoxicating Liquors Con- tinued — " Arrival " — Original Package — Wilson Act. In the absence of congressional legislation, goods moving in interstate commerce cease to be such commerce only after de- livery and sale in the original package, and the word "arrival " as used in the Wilson law means delivery of the goods to the consignee and not merely reaching their destination. Nor does the power of the State over intoxicating liquors from other States in original packages after delivery and before sale, given by the Wilson law, attach before notice and expiration of a reasonable time for the consignee to receive the goods from the carrier, and this rule is not affected by the fact that under the State law the carrier's liability as such may have ceased and become that of a warehouseman.^" Again, a State statute prohibiting the sale of any intoxicating liquors, except for pharmaceutical, medicinal, chemical or sacramental purposes, and under a license from a county court of the State, is, as applied to a sale by the importer in the original packages or kegs, unbroken and unopened, of such liquors manufactured in and brought from another State, unconstitutional and void, as repugnant to the clause of the Constitution granting to Congress 59-Adams Express Co. v. Kentucky, 206 U. S. 129, 51 L. ed. 987, 27 Sup. Ct. 609. "In Adams Express Co. v. Kentucky, 200 V. S. 129, 135, 51 L. ed. 987, 991, 27 Sup. Ct. 606, 607, it was said: 'The testimony showed that the package containing a gallon of whiskey, was shipped from Cincinnati, Ohio, to George Meeze, at East Bernstadt, Kentucky. The transaction was therefore one of interstate commerce, and within the exclusive jurisdiction of Congress. The Kentucky statute is obviously an attempt to regulate such interstate commerce. This is hardly questioned by the Court of Appeals, and is beyond dispute vmder the decisions of tliis court,' " per Mr. Justice Brewer, in Adams Express Co. v. Kentucky, 214 U. S. 218, 223, 29 Sup. Ct. 633, 634, 53 L. ed. 972. eoHeyman v. Southern Ry. Co., 203 U. S. 270. 27 Sup. Ct. 104, 51 L. ed. 178, rev'g 118 Ua. 016. 99 § 53 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — the power to regulate commerce with foreign nations and among the several States.''^ So the power to ship merchandise from one State into another carries with it, as an incident, the right of the receiver of the goods, to sell them in the original packages, any State regulation to the contrary notwithstanding; that is to say, that the goods received by interstate commerce remain under the shelter of the interstate commerce clause of the Constitution, until by a sale in the original package they have been commingled with the general mass of property in the State; but since the enactment of 1890^^ which provides: "That all fermented, distilled or other intoxicating liquors or liquids transported into any State or Territory, or remaining therein for use, consumption, sale or storage therein, shall upon arrival in such State or Territory be subject to the operation and effect of the laws of such State or Territory enacted in the exercise of its police powers, to the same extent and in the same manner as though such liquids or liquors had been produced in such State or Territory, and shall not be exempt therefrom by reason of being introduced therein in original packages or otherwise," while the receiver of intoxicating liquors in one State, sent from another State, has the constitutional right to receive them for his own use, without regard to the State laws to the contrary, he can no longer assert the right to sell them in the original packages in defiance of law. A State statute, therefore, is uncon- stitutional in so far as it compels the resident of the State who desires to order alcholic liquors for his own use, to first communi- cate his purpose to a State chemist, and in so far as it deprives any nonresident of the right to ship by means of interstate commerce any liquor into the State enacting such law unless previous authority is obtained from the officers of that State, where, on the face of such regulations, it is clear that they ^^ubject the constitutional right of the nonresident to ship into the State and of the resident of the State to receive for his own 61 Leisy v. Hardin, 135 U. S. 100, 10 Sup. Ct. 681, 34 L. ed. 128, overruling Pierce v. New Hampshire, 5 How. (46 U. S.) 504, 12 L. ed. 256. 62 Act of Aug. 8, 1890, chap. 728, 26 Stat. 313, U. S. Comp. Stat., 1901, p. 3177. 100 INTERSTATE COMMERCE § 54 use, to conditions whicli are wholly incompatible with and repugnant to the existence of the right which the statute itself acknowledges.^^ § 54. Same Subject. Although a State may not forbid a resident therein from ordering for his own use intoxicating li(|uors from another State it may forbid the carrying on within its borders of the business of soliciting orders for such liquor although such orders may only contemplate a contract resulting from final acceptance in another State.^^ In another case it is held that: (1) A State statute which operates upon beer and malt liquors shipped from other States after their arrival and while held for sale and com- sumption within the State, is not an interference with inter- state commerce in view of the provisions of the Wilson Act. (2) A State regulation, valid under the Wilson Act, as to liquors shipped from another State after delivery at destination, is not an interference with interstate commerce because it affects traffic in, and deters shipment of, the article into that State. (3) The regulation of the sale of liquor is essentially a police power of the State, and a provision in a State law, tending to determine the purity of malt liquors sold in the State, is an exercise of the same power. And (4) The purpose of the Wilson Act is to make liquor, after its arrival in a State, a domestic 03 Vance v. W. A. Vandercook Co., 170 U. S. 438, 18 Sup. Ct. 674, 42 L. ed. 1100; S. C, act of March 5, 1897, No. 340, amending act of March 6, 1896, No. 61. See Scott v. Donald, 165 U. S. 58, 41 L. ed. 632, 17 Sup. Ct. 265. "Original package." Whether the right of transportation of an article of commerce from one State to another includes by necessary implication the right of the consignee to sell it in unbroken packages at the place where the transportation terminates, quwre. Bowman v. Chicago & Northwestern R5\ Co., 125 U. S. 465, 8 Sup. Ct. 689, 31 L. ed. 700. Examine Cook v. Marshall County, Iowa, 196 U. S. 261, 25 Sup. Ct. 233, 49 L. ed. 271; Austin v. Ten- nessee, 179 U. S. 343, 45 L. ed. 225, 21 Sup. Ct. 1.32; Schollenberger v. Pennsylvania, 171 U. S. 1, 21, 43 L. ed. 49, 18 Sup. Ct. 757; Rahrer, In re 140 U. S. 545, 35 L. ed. 572, 11 Sup. Ct. 865. As to purpose of Wilson Act and also as to original package, see Dela- meter v. South Dakota, 205 U. S. 93, 51 L. ed. 724, 27 Sup. Ct. 447. ir construction does not contravene an act of Congress making it unlawful to deviate in tlie construction of any bridges over navigable waters from the plan approved by said Secretary 7^ 76 Stone V. Southern Illinois Bridge Co., 20G U. S. 267, 51 L. ed. 1057, 27 Sup. Ct. 615, afY'g 194 Mo. 175. See also as to bridges the following cases: Chicago, Burlington & Quincy Ry. Co. V. Drainage Comm'rs, 200 U. S. 561, 26 Sup. Ct. 341, 50 L. ed. 596, aff'g 212 111. 103, 72 N. E. 219 (constitutional law; police power of State; drainage; removal of railroad bridge); Keokuk & Hamilton Bridge Co. v. Illinois, 175 U. S. 626, 20 Sup. Ct. 205, 44 L. ed. 299 (interstate bridge; Federal franchise; interstate commerce; taxation; assessment of entire cap- ital) ; Henderson Bridge Co. v. Henderson City, 173 U. S. 592, 624, 43 L. ed. 823, 835, 19 Sup. Ct. 545, 553 (bridge extending to State water boundary; bridge authorized by Congress; State's power of taxation; mvinicipal tax- ation; nonexemption from taxation; constitutional law); Lake Shore & Michigan Southern Ry. Co. v. Ohio, 165 U. S. 365, 17 Sup. Ct. 357, 41 L. ed. 747 (interstate commerce; bridges; navigable waters); Covington & Cincinnati Bridge Co. v. Kentucky, 154 U. S. 204, 14 Sup. Ct. 10S7, 38 L. ed. 962 (interstate bridge; regulation of interstate commerce; con.stitutional law; powers of Congress; limitation of State's authority; tolls; corporation contract with States); Luxton v. North River Bridge Co., 153 U. S. 525, 14 Sup. Ct. 891, 38 L. ed. 808 (commerce regulation; power of Congress; inter- state bridge; constitutional law); Henderson Bridge Co. v. Henderson City, 141 U. S. 679, 35 L. ed. 900, 12 Sup. Ct. 114 (taxation of bridge; commerce; agency of Government); Hannibal & St. Joseph Rd. Co. v. Missouri River Packet Co., 125 U. S. 260, 31 L. ed. 731, 8 Sup. Ct. 874 (interstate bridge; when not a lawful structure within meaning of act of Congress) ; Willamette Iron Bridge Co. v. Hatch, 125 U. S. 1, 31 L. ed. 629, 8 Sup. Ct. 811 (bridging navigable river below port of entry; police power of State); Washer v. Bul- litt County, 110 U. S. 558, 28 L. ed. 249, 4 Sup. Ct. 249 (counties; common law and statutory powers as to bridges); Escanaba Co. v. Chicago, 107 U. S. 678, 2 Sup. Ct. 185, 27 L. ed. 442 (commerce regulation; concurrent powers; authority of State and city over bridges over navigable waters) ; Bridge Co. v. United States, 105 U. S. 470, 26 L. ed. 1143 (bridges over navigable waters; power of Congress to regulate); Wright v. Nagle, 101 U. S. 791, 25 L. ed. 921 (State legislative power; toll bridge franchise; obUgation of contract); Railroad Co. v. Richmond, 19 Wall. (86 U. S.) 584, 22 L. ed. 173 (interstate commerce; bridges over Mississippi River; enforcement of grain elevator contract) ; Clinton Bridge, The, 10 Wall. (77 U. S.) 454, 19 L. ed. 969 (inter- state bridge as post route; powers of Congress; constitutional law); Oilman V. Philadelphia, 3 Wall. (70 U. S.) 713, 18 L. ed. 96 (commerce regulation; bridges over navigable waters; power of Congress; injunction; suit by ri- parian owner); Pennsylvania v. Wheeling & Belmont Bridge Co., 18 How. (59 U. S.) 421, 15 L. ed. 435 (commerce regulation; power of Congress; ob- structions of navigation; bridge over Ohio river; concurrent powers of State and Federal Covernments). 105 § 57 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES § 57. Interstate Commerce — Police Power — Regulation of Grain Warehouses, Elevators, Warehousemen, etc. As a matter of domestic concern a State may prescribe regu- lations for warehousing and inspecting grain and for public warehouses generally, situated and carrying on their business exclusively within her borders, even though they are used as instruments by those engaged in interstate as well as in State commerce; and until Congress acts in reference to their inter- state relations, such regulations are enforceable, notwithstand- ing they may indirectly operate upon commerce beyond her immediate jurisdiction. A case may exist, however, which precludes a State, under the form of regulating her own affairs, from encroaching in the above matters upon the exclusive domain of Congress in respect to interstate commerce.'' It is also a legitimate exercise of the police power over a business affected by a public interest and not in violation of the Federal Constitution for a State to provide by statute for a maximum charge for elevating, recei\dng, weighing and discharging grain, and that in the process of handling grain by means of floating and stationary elevators, the lake vessels or propellers, the ocean vessels or steamships, and canal boats, shall only be required to pay the actual cost of trimming or shoveling to the leg of the elevator when unloading, and trimming cargo when loading.'* But a statute regulating grain warehouses and weighing and handling of grain and declaring elevators, etc., to be public warehouses, and their owners to be public warehousemen, and requiring them to give bond for the faithful performance of their duty as such, also fixing rates of storage, and requiring them to keep insured for the owner's benefit all grain stored with them, does not apply to elevators built by a person only for the purpose of storing his own grain, and not to receive and store the grain of others, and, being so construed, such an enactment does not deny the equal protection of the 77 Munn V. Illinois, 94 U. S. 113, 24 L. ed. 77. 78 Budd V. New York, 143 U. S. 517, 12 Sup. Ct. 468, .36 L. ed. 247. Ex- plaining Chicago, Minneapolis & St. Paul Ry. Co. v. Minnesota, 134 U. S. 418, 33 L. ed. 970, 10 Sup. Ct. 462. 106 INTERSTATE COMMERCE § 58 laws to the owner of an elevator made a public warehouse by it, nor docs it deprive him of his property without due process of law, nor amount to a regulation of commerce between the States, and is not in conflict with the Federal Constitution.'^ § 58. Interstate Commerce — Police Power — Quarantine and Inspection Regulations. While a State may enact sanitary laws, and for the purpose of self-protection, establish quarantine and reasonable inspec- tion regulations, and prevent persons and animals having contagious or infectious diseases from entering the State, it cannot, beyond what is absolutely necessary for self-protection, interfere with transportation into or through its territory; and the power vested in Congress to regulate commerce precludes State cjuarantine regulations affecting the transportation of cattle by interstate railroads and interfering with interstate commerce. Such regulations are not a legitimate exercise of the police power of a State; that power cannot be exercised over the interstate transportation of subjects of commerce .*° 79 Brass v. Stoeser, 153 U. S. 391, 38 L. ed. 757, 14 Sup. Ct. 857. 80 Railroad Co. (Hannibal & St. Joseph Rd. Co.) v. Husen, 95 U. S. 465, 24 L. ed. 527. Examine Asbell v. Kansas, 209 U. S. 251, 52 L. ed. 778, 28 Sup. Ct. 485, aff'g 60 Kan. 51; Reid v. Colorado, 187 U. S. 137, 47 L. ed. 108, 23 Sup. Ct. 92, aff'g 29 Colo. 333, 68 Pac. 228; Missouri, Kansas & T. R. Co. V. Haber, 169 U. S. 613, 628, 42 L. ed. 878, 18 Sup. Ct. 488. The principal case is cited in Keller v. United States, 213 U. S. 138, 144, 53 L. ed. 941, 29 Sup. Ct. 470; Jacobson v. Massachusetts, 197 U. S. 11, 28, 49 L. ed. 643, 25 Sup. Ct. 358; Crossman v. Lurman, 192 U. S. 189, 196, ^4 Sup. Ct. 234, 48 L. ed. 401 ; Compagnie Frangaise, De Navigation A. Vapeur V. Board of Health, 186 U. S. 380, 399, 46 L. ed. 1209, 22 Sup. Ct. 811; Louisiana v. Texas, 176 U, S. 1, 24, 44 L. ed. 347, 20 Sup. Ct. 251; Lake Shore & Michigan S. Ry. Co. v. Oliio, 173 U. S. 285, 300, 325, 19 Sup. Ct. 465, 43 L. ed. 702; New York v. Roberts, 171 U. S. 658, 677, 19 Sup. Ct. 235, 43 L. ed. 345 (in dissenting opinion) ; Schollenberger v. Pennsylvania, 171 U. S. 1, 13, 43 L. ed. 49, 18 Sup. Ct. 757; Hennington v. Georgia, 163 U. S. 299, 313, 41 L. ed. 166, 16 Sup. Ct. 1086; Louisville & Nashville Rd. Co. V. Kentucky, 161 U. S. 677, 700, 40 L. ed. 849, 16 Sup. Ct. 714; Plumley V. Massachusetts, 155 U. S. 461, 468, 39 L. ed. 223, 15 Sup. Ct. 154; Bren- nan v. Titusville, 153 U. S. 289, 300, 14 Sup. Ct. 829, 38 L. ed. 719; Lawton v. Steele, 152 U. S. 133, 137, 14 Sup. Ct. 499, 38 L. ed. 385; Minnesota v. Barber, 136 U. S. 313, 324, 34 L. ed. 455, 10 Sup. Ct. 862; Leisy v. Hardin, 135 U. S. 100, 120, 153, 10 Sup. Ct. 681, 34 L. ed. 128; Bowman v. Cliicago & 107 § 58 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — But until Congress acts upon the subject a State may in the exercise of its police power enact laws for the inspection of cattle coming from other States. «^ So a State may establish a system of quarantine laws for the protection of health, even though some of the rules may amount to a regulation of commerce, provided that Congress has not acted in the matter by covering the same ground or by forbidding State laws.^^ And a State or Territory has the right to legislate for the safety and welfare of its people, which is not taken from it because of the exclusive right of Congress to regulate interstate commerce; and an inspection law affecting interstate commerce is not for that reason invalid unless it is in conflict with an Act of Congress cr is an attempt to regulate interstate commerce. So a law of a Territory ^^ making it an offense for any railroad com- pany to receive for shipment beyond the limits of the Territory, hides, which had not been inspected as required by the law is not unconstitutional as an unwarranted regulation of, or bur- den on, interstate commerce. The law being otherwise valid the amount of an inspection fee is not a judicial question; it rests with the legislature to fix the amount, and will only present a valid objection if so unreasonable and dispropor- tionate to the services rendered as to attack the good faith of the law. It was also held, concerning the above stated law, that the court would take judicial notice of the fact that cattle run at large in the great stretches of country in the West, identified only as to ownership by brands, and of the necessity for, and use of, branding of such cattle, and that it would not strike down State or territorial legislation, essential for prevention of crime, requiring the inspection of hides to be shipped without Northwestern Ry. Co., 125 U. S. 465, 491, 492, 513, 31 L. ed. 700, 8 Sup. Ct. 689, 1062; Philadelpliia & Southern Steamship Co. v. Pennsylvania, 122 U. S. 326, 345, 30 L. ed. 1200, 7 Sup. Ct. 1118; New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650, 662, 29 L. ed. 516, 6 Sup. Ct. 252; Brown V. Houston, 114 U. S. 622, 631, 5 Sup. Ct. 1091, 29 L. ed. 257. 81 Asbell V. Kansas, 209 U. S. 251, 52 L. ed. 778, 28 Sup. Ct. 485. 82 Morgan's Steamship Co. v. Louisiana Board of Health, 118 U. S. 455, 30 L. ed. 237, 6 Sup. Ct. 1114. Examine Oceanic Steam Navigation Co. v. Stranahan, 214 U. S. 320, 53 L. ed. 1013, 29 Sup. Ct. 671, aff'g 155 Fed. 428. 83 Act of New Mexico of March 19, 1901. 108 INTERSTATE COMMERCE § 59 the State, although the statute did not require such inspection of hides not to be so shipped. It was also decided that the provision in § 10, Art. I, of the Constitution of the United States that States shall not lay imposts and duties on imports and exports was not contravened by a State inspection law ap- plicable only to goods shipped to other States, and not to goods shipped directly to foreign countries.*'* § 59. Same Subject. While in a proper case Federal authorities may adopt a quarantine line adopted by a State, where the Secretary makes regulations adopting it as applying to all commerce whether interstate or intrastate, and nothing on the face of the order indicates whether he would have made such an order if limited to interstate commerce, the order is not divisible, and the court cannot declare that it relates solely to interstate com- merce but must declare it void as an entirety.*^ Again, the rule that State inspection laws, which do not provide adequate inspection and impose a burden beyond the cost of inspection, are repugnant to the commerce clause of the Constitution, does not apply to liquors after they have ceased to be articles of interstate commerce under the provisions of the Wilson Act.*^ But a State law requiring the inspection of meats and the payment by the owner thereof of a certain per cent to the inspector for his compensation is void as being in restraint of interstate commerce and as imposing a discriminating tax upon the products and industries of some States in favor of those of another. The principle is also applicable, in such a case, that a State enactment is void, if, by its necessary opera- tion, it destroys rights granted or secured by the Constitution of the United States." A State statute providing for the 84 McLean v. Denver & Rio Grande R. Co., 203 U. S. 38, 51 L. ed. 78, 27 SupCt. l,aff'g78Pac. 74. 85 Illinois Central Rd. v. McKendree, 203 U. S. 514, 51 L. ed. 298, 27 Sup. Ct. 153. 86 Pabst Brewing Co. v. Crenshaw, 198 U. S. 17, 49 L. ed. 925, 25 Sup. Ct. 552. 87 Brimmer v. Rebman, 138 U. S. 78, 34 L. ed. 862, 11 Sup. Ct. 213. 109 § (30 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — inspection of oil i.'^ not an unconstitutional bunlcn on interstate commerce as applied to oil coming from other States but mean- while stored in the State enacting the statute for convenience of distribution and for rcshipping from tank cars and barrel- ing.** A State may require all logs running out of a boom, chartered or to be chartered, to be surveyed, inspected and sealed, and improvements made in a navigable river by the construction of the boom and its works, and the exaction of reasonable charges for the use of such works, including fees of State officials for inspecting and sealing, cannot, when done under State authority be considered in any just sense a burden upon interstate commerce.*^ § 60. Interstate Commerce — Taxation — Generally.^" Interstate commerce by corporations is entitled to the same protection against State exactions which is given to such commerce when carried on by individuals.*^ Interstate com- merce cannot be taxed at all by a State, even though the same amount of tax should be laid on domestic commerce, or that which is carried on solely within the State.*^ Again, the follow- ing propositions as to the taxation by States and their mu- nicipalities or corporations engaged in carrying on interstate commerce have been settled; the Constitution of the United States having given to Congress the power to regulate com- merce, not only w^ith foreign nations, but among the several States, that power is necessarily exclusive whenever the sub- jects are national in their character, or admit of only one uniform system or plan of regulation. No State can compel a 88 General Oil Co. v. Grain, 209 U. S. 211, 52 L. ed. 754, 28 Sup. Ct. 475; Tenn. act of 1899, chap. 349, pp. 811, 814. See Diamond Match Co. v. On- tonagon, 188 U. S. 82, 23 Sup. Ct. 266, 47 L. ed. 394. 89 Lindsay & Phelps Co. v. Mullen, 176 U. S. 126, 20 Sup. Ct. 325, 44 L. ed. 400. 90 As to taxation, see also §§ 67 et seq., herein. 91 Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 5 Sup. Ct. 826, 29 L. ed. 158. Taxation of Franchises, see Joyce on Franchises, §§ 417-461. 92 Robbins v. Shelby Taxing Dist., 120 U. S. 489, 30 L. ed. 694, 7 Sup. Ct. 592. 110 INTERSTATE COMMERCE §61 party individual or corporation, to pay for the privilege of engaging in interstate comniorcc. This immunity does not prevent a State from imposing ordinary property taxes upon property having a situs within its territory and employed in interstate commerce. The franchise of a corporation, although that franchise is the business of interstate commerce, is, as a part of its property, subject to State taxation, providing at least the franchise is not derived from the United States. No corporation, even though engaged in interstate commerce, can appropriate to its own use property public or private, without liability to a charge therefor.^^ A State may also impose upon a consolidated company composed of several foreign corpora- tion a charge of a percentage upon its entire authorized stock as a fee to the State for filing the articles of consolidation in the office of the Secretary of State without which filing it could not possess the powers, immunities and privileges of a cor- poration in such State, and such charge is not a tax on inter- state commerce, or the right to carry on the same, or the in- struments thereof; and its enforcement involves no attempt on the part of the State to extend its taxing power beyond its territorial limits.^"* The protection of the commerce clause of the Federal Constitution is not, however, available to defeat a State stamp tax law on transactions wholly within a State because they afi"ect property without that State, or because one or both of the parties previously came from other States. ^^ § 61. Interstate Commerce — Taxation — Carriers — Ex- press Companies — Vessels — Railroads — Telegraph Com- panies.^^ Although, as above stated, it is well settled that no State can interfere with interstate commerce through the imposition 93 Atlantic & Pacific Telegraph Co. v. Philadelphia, 190 U. S. 160, 47 L. ed. 995, 23 Sup. Ct. 817, citing Robbins v. Shelby Taxing District, 120 U. S. 489, 492, 30 L. ed. 694, 7 Sup. Ct. 592. M Ashley v. Ryan, 153 U. S. 436, 17 Sup. Ct. 865, .38 L. ed. 773. 85 Hatch V. Reardon, 204 U. S. 152, 51 L. ed. 415, 27 Sup. Ct. 188, aff'g 184N. Y. 431. ^ As to taxation, see also §§ 67 ct seq., herein. Ill § 61 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — of a tax which is, in effect, a tax for the privilege of transacting such commerce, still such restriction upon the power of a State does not in the least degree abridge its right to tax at their full value all the instrumentalities used for such commerce. The capital stock of a corporation and the shares in a joint- stock company represent not only its tangible property, but also its intangible property, including therein all corporate franchises and all contracts, privileges and good will of the concern; and when, as in the case of an express company, the tangible property of the corporation is scattered through differ- ent States by means of which its business is transacted in each, the situs of this tangible property is not simply where its home office is, but is distributed wherever its tangible property is located and its work is done. So it is declared in this connection that no fine-spun theories about situs should interfere to enable these large corporations, whose business is of necessity carried on through many States, from bearing in each State such burden of taxation as a fair distribution of the actual value of their property among those States requires.*'^ It is further decided that although the transportation of the sub- jects of interstate commerce, or the receipts received there- from, or the occupation or business of carrying it on, cannot be directly subjected to State taxation, yet property belong- ing to corporations or companies engaged in such commerce may be; and whatever the particular form of the exaction, if it is essentially only property taxation, it will not be con- sidered as falling within the inhibition of the Constitution. The property of corporations engaged in interstate commerce, situated in the several States through which their lines or business extends, may be valued as a unit for the purposes of taxation, taking into consideration the uses to which it is put -ind all the elements making up the aggregate value; and a ;)roportion of the whole fairly and properly ascertained may be taxed by the particular State, without violating any Federal restriction. While there is an undoubted distinction between 87 Adams Express Co. v. Ohio, 166 U. S. 185, 41 L. ed. 965, 17 Sup. Ct. 604. 112 INTERSTATE COMMEHCB § 61 the property of railroad and telegraph companies and that of express companies, there is the same unity in the use of the entire property for the specific purposes, and there are the same elements of value, arising from such use. The classifica- tion of express companies with railroad and telegraph com- panies, as subject to the unit rule, does not deny the equal protection of the laws; as that provision in the Fourteenth Amendment was not intended to prevent a State from adjust- ing its system of taxation in all proper and reasonable ways, and was not intended to compel a State to adopt an iron rule of equal taxation.^* Nor is the general rule that tangible per- sonal property is subject to taxation by the State in which it is, no matter where the domicile of the owner may be, affected by the fact that the property is employed in interstate trans- portation on either land or water. Vessels registered or en- rolled are not exempt from ordinary rules respecting taxation of personal property. The artificial situs created as the home port of a vessel, under § 4141, Rev. Stat., only controls the place of taxation in the absence of an actual situs elsewhere. Vessels, though engaged in interstate commerce, employed in such commerce wholly within the limits of a State, are subject to taxation in that State although they may have been registered or enrolled at a port outside its limits.*"^ So the business of receiving and landing of passengers and freight is incident to their transportation, and a tax upon such receiving and land- ing is a tax upon transportation and upon commerce, interstate or foreign, involved in such transportation. The only inter- ference by a State with the landing and receiving of passengers or freight arriving by vessels from another State or from a foreign country which is permissible, is confined to measures to prevent confusion among the vessels, and collisions between them, to insure their safety and convenience, and to facilitate 98 Adams Express Co. v. Ohio, 165 U. S. 194, 17 Sup. Ct. 305, 41 L. ed. 683. Case followed in Adams Express Co. v. Kentucky, 166 U. S. 171, 17 Sup. Ct. 527, 41 L. ed. 960; Adams Express Co. v. Indiana, 165 U. S. 255, 41 L. ed. 707, 17 Sup. Ct. 901. 99 Old Dominion Steamship Co. v. Virginia, 198 U. S. 299, 25 Sup. Ct. 686, 49 L. ed. 1059. 8 113 § 61 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — the discharge or receipt of their passengers or freight. Free- dom of transportation between the States, or between the United States and foreign countries, implies exemption from charges other than such as are imposed by way of compensation for the use of the property employed, or for faciUties afforded for its use, or as ordinary taxes upon the value of the property.^ A State statute, however, which levies a tax upon the gross receipts of railroads for the carriage of freight and passengers, into, out of, or through the State is a tax upon commerce among the States and is, therefore, void. While a State may tax the money actually within the State, after it has passed beyond the stage of compensation for carrying persons or property, as it may tax other money or property within its limits, a tax upon receipts for this class of carriage specifically is a tax upon the connnerce out of which it arises, and, if that be interstate commerce, it is void under the Constitution. The States cannot be permitted, under the guise of a tax upon business transacted within their borders, to impose a burden upon commerce among the States, when the business so taxed is itself interstate commerce.^ So a State statute imposing a tax upon railroad companies equal to one per cent of their gross receipts is, as to those companies whose receipts include receipts from interstate business a burden on interstate com- merce and as such violative of the commerce clause of the Constitution.^ 1 Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 5 Sup. Ct. 826, 29 L. ed. 158. See Henderson v. New York, 92 U. S. 259, 23 L. ed. 543 [criti- cising Passenger Cases, 7 How. (48 U. S.) 283, 12 L. ed. 702; New York v. Miln, 11 Pet. (36 U. S.) 102, 9 L. ed. 648]; State Freight Tax Case, 15 Wall. (82 U. S.) 232, 21 L. ed. 146. Compare Head Money Cases, 112 U. S. 580, 28 L. ed. 798, 5 Sup. Ct. 247, where act of Congress imposing a charge upon every passenger not a citizen of this country was held a valid exercise of its power to regulate commerce. 2 Fargo V. Michigan, 121 U. S. 230, 30 L. ed. 888, 7 Sup. Ct. 857. 3 Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, 210 U. S. 217, 52 L. ed. 1031, 28 Sup. Ct. 638, rev'g 97 S. W. 71, following Philadelphia & Southern Mail S. S. Co. v. Pennsylvania, 122 U. S. 326, 30 L. ed. 1200, 7 Sup. Ct. 1118, distinguishing Maine v. Grand Trunk Ry. Co., 142 U. S. 217, 35 L. ed. 994, 12 Sup. Ct. 121, 163, and held that the latter case does not over- rule the former. 114 INTERSTATE (COMMERCE § 62 A single tax, assessed under the laws of a State upon receipts of a telegraph company which were [)artly derived from inter- state commerce and partly from commerce within the State, and which were capable of separation but were returned and assessed in gross and without separation or apportionment, is invalid in proportion to the extent that such receipts were de- rived from interstate commerce, but is otherwise valid; and while a Circuit Court of the United States should enjoin the collection of the tax upon the portion of the receipts derived from interstate commerce, it should not interfere with those derived from commerce entirely within the State."* § 62. Interstate Commerce — Taxation — Railroads Con- tinued — Other Property.^ While a State cannot impose a tax on the movement or transportation of persons or property from one State to another and such a tax is an interference with and a regulation of commerce between the States, beyond the power of the State to impose, ^ still a State tax against a railroad corporation, incorporated under its laws, on account of transportation done by it from one point within the State to another point within it, but passing during the transportation without the State and through part of another State, is not a tax upon interstate commerce, and does not infringe the provisions of the Con- stitution of the United States.^ So a statute of a State, im- posing a tax on the capital stock of all corporations engaged in the transportation of freight or passengers within the State, under which a corporation of another State, engaged in running railroad cars into, through and out of the State, and having at all times a large number of such cars within the State, is taxed * Ratterman v. Western Union Tel. Co., 127 U. S. 411, 32 L. ed. 229, 8 Sup. Ct. 1127. (The decisions of this court respecting the taxation of tele- graph companies reviewed in this case.) See Joyce on Electric Law (2d ed.), §§83a-11.3a, 911-940b. s As to taxation, see also §§ G7 et seq., herein. 8 Railroad Co. v. Maryland, 21 Wall. (88 U. S.) 456, 22 L. ed. 678. 7 Lehigh Valley R. R. Co. v. Pennsylvania, 145 U. S. 192, 36 L. ed. 672, 12 Sup. Ct. 806, 45 Atl. L. J. 511, 11 Ry. & Corp. L. J. 302. 115 § (i.'j CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — by taking as the basis of assessment such proportion of its capital stock as the number of miles of railroad over which its cars are run within the State bears to the whole number of miles in this and other States over which its cars are run, does not, as applied to such a corporation, violate the clause of the Constitution of the United States granting to Congress the power to regulate commerce among the several States.^ Again, a State statute which requires every corporation, person or association operating a railroad within the State to pay an annual tax for the privilege of exercising its franchises therein, to be determined by the amount of its gross transportation receipts, and further provides that, when applied to a railroad lying partly within and partly without the State, or to one operated as a part of a line or system extending beyond the State, the tax shall be equal to the proportion of the gross receipts in the State, to be ascertained in the manner provided by the statute, does not conflict with the Constitution of the United States; and the tax thereby imposed upon a foreign corporation, operating a line of railway, partly within and partly without the State, is one within the power of the State to levy.^ § 63. Same Subject— Property Left Temporarily in State.^" Another factor of importance is that merchandise may cease to be interstate commerce at an intermediate point between the place of shipment and ultimate destination; and if kept at such point for the use and profit of the owners and under the protection of the laws of the State, it becomes subject to the taxing and police power of the State .^^ So there may be an interior movement of property through the State which does not constitute interstate commerce even though the property 8 Pullman's Palace Gar Co. v. Pennsylvania, 141 U. S. 18, 35 L. ed. 613, 11 Sup. Ct. 876, followed in Pullman's Palace Car Co. v. Hayward, 141 U. S. 36, 35 L. ed. 621, 11 Sup. Ct. 883. 9 Maine v. Grand Trunk Ry. Co., 142 U. S. 217, 35 L. ed. 994, 12 Sup. Ct. 121, 163, 11 Ry. & Corp. L. J. 52, 48 Am. & Eng. R. Cas. 602. 10 As to taxation, see also §§ 66 ei seq., herein. 11 General Oil Co. v. Crain, 209 U. S. 211, 52 L. ed. 754, 28 Sup. Ct. 475. 116 interstatp: commerce § 64 come from or be destined to another State there to be trans- ported by railroad, so that logs left in a sorting boom or gap after those intended to be actually used are taken away are not property engaged in interstate commerce so as to be exempt from taxation in the State where located .^^ But sheep driven through a State from a point without to another point without such State for the purpose of being shipped by rail from the latter point is property engaged in interstate com- merce to such an extent as to be exempt from taxation by the State through which they are driven.^^ Again, while a State may tax property which has moved in the channels of inter- state commerce after it is at rest within the State and has become commingled with the mass of property therein, it may not discriminate against such property by imposing upon it a burden of taxation greater than that imposed upon similar domestic property .^'* § 64. Interstate Commerce — Taxation of Bridges and Bridge Companies. ^^ A tax on the capital stock of an interstate bridge, which is not a tax on franchises conferred by the Federal Government, but on those conferred by the State, is not a tax on interstate commerce .^^ So a railroad bridge across a navigable river forming the boundary line between two States is not by reason of being an instrument of interstate commerce exempt from taxation by either State upon the part within it.^^ And a tax 12 Diamond Match Co. v. Ontonagon, 1S8 U. R. 82, 23 Sup. Ct. 266, 47 L. ed. 394, following Coe v. Errol, 116 U. S. 517, 2!) L. ed. 715, 6 Sup. Ct. 475. 13 Kelley v. Rhodes, 188 U. S. 1, 47 L. ed. 359, 23 Sup. Ct. 259. Distin- guishing Pittsburg & Southern Coal Co. v. Bates, 156 U. S. 577, 15 Sup. Ct. 415, 39 L. ed. 53S; Coe v. Errol, 116 U. S. 517, 6 Sup. Ct. 475, 29 L. ed. 715; Brown v. Houston, 114 U. S. 622, 29 L. ed. 257, 5 Sup. Ct. 1091. " Darnell & Son Co. v. Memphis, 208 U. S. 113, 28 Sup. Ct. 247, 52 L. ed. 413. IS As to taxation, see also §§ 67 ei seq., herein. 18 Keokuk & Hamilton Bridge Co. v. Illinois, 175 U. S. 626, 44 L. ed. 299, 20 Sup. Ct. 205. 1^ Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Board Public Works West Virginia, 172 U. S. 32, 43 L. ed. 354, 19 Sup. Ct. 90. See Hen- 117 § 64 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — is not one on interstate business carried on, over, or by means of an interstate bridge, where the company does not transact such business but it is carried on by the persons and corpora- tions which pay the company tolls for the privilege of using such bridge; and the fact that the tax may to some extent be affected by, and might be supposed to increase the rate of tolls, is too remote and incidental to make it a tax on the business transacted.^* derson Bridge Co. v. Henderson City, 141 U. S. 679, 35 L. ed. 900, 12 Sup. Ct. 114. 18 Henderson Bridge Co. v. Kentucky, 166 U. S. 150, 41 L. ed. 953, 17 Sup. Ct. 532. 118 FEDERAL AGENCIES — TAXATION 65 CHAPTER VI CONSTITUTIONAI. BASIS OF ACTIONS AND DEFENSES — FEDERAL AGENCIES — TAXATION ^ G5. Instrumentalities of Federal Government — Federal and State Control — National Banks. 66. Same Subject. 67. Taxation — Power of States — Generally. 68. Taxation — Obligation of Con- tract — Equal Protection of Law — Due Process of Law. 69. Taxation — Exemptions^ — In- strumentalities of Federal Government — State Agen- cies. 70. Taxation — Instrumentalities of Federal Government — Qual- ification or Limitation of Doctrine of Exemption. 7L Taxation — National Banks. 72. Taxation — Savings Banks — Obligations, Securities, Bonds, Stocks, Notes, etc., of United States. Same Subject. Same Subject — When Tax Is on IVanchise. Taxation — Franchises or Privi- leges Conferred by Congress — Railroads — Telegraph Companies. Taxation — Railroads. 77. Taxation — Franchises — Capi- tal Stock. Taxation — "Franchise" — " Corporate Franchise " — Bridge Companies — Insur- ance Companies — Uniform- ity of Taxation. Exemption from Taxation — Power of State as to — Effect of Consolidation, etc. 76 78 79 § 65. Instrumentalities of Federal Government — Federal and State Control — National Banks. In 1875 the Federal Supreme Court held that national banks which are organized under and brought into existence by an act of Congress,^ which body is the sole judge of the necessity for their creation, are the instruments designed to be used to aid the Government in the administration of an important 1 See § 1, herein. As to interstate commerce and taxation, see §§ 60-64, herein. 2 Act of June 3, 1S64, chap. 106, 13 Stat. 99, 100, 18 Stat. 123; Rev. Stat. U.S., §§ 5133-5243; Comp. Stat. U. S., 1901, pp. 3454 et seq.; Comp. Stat. U. S., 1907, p. 1035. 119 § 05 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — branch of the public service, and the States can exercise no control over them, nor in anywise affect their operation, except so far as Congress may see proper to permit.^ In Waite V. Dowley,^ a case as to the validity of a State statute relating to the taxation of stockholders, decided in 1876, Mr. Jus- tice Miller said: "The proposition on which this statute is asserted to be void is that Congress has legislated ujjon the same subject, and that, where there exists a concurn^nt right of legislation in the States and in Congress, and the latter has exercised its power, there remains in the States no authority to legislate on the same matter. It is not necessary to dispute that proposition, nor, when stated in this general language, can it be controverted. It is none the less true, however, that the line which divides what is occupied exclusively by any legislation of Congress from what is left open for the action of the States is not always well defined, and is often distinguished by such nice shades of differences on each side as to require the closest scrutiny when the principle is invoked, as it is in this case. We have more than once held in this court that the national banks organized under the acts of Congress are sub- ject to State legislation, except when such legislation is in con- flict with some act of Congress, or where it tends to impair or destroy the utility of such banks, as agents or instrumentalities of the United States, or interferes with the purposes of their creation." In Davis v. Elmira Savings Bank,^ a case decided in 1895, it was held that a State law which provides for the payment by the receiver of an insolvent bank, in the first place, of deposits in the bank by savings banks, when applied to an insolvent national bank, is in conflict with a statute ^ of the United States, directing the Comptroller of the Currency to make ratable dividends of the money paid over to him by such receiver, on all claims proved to his satisfaction, or 3 Farmers' & Mechanics' Nat. Bk. v. Bearing, 91 U. S. 29, 23 L. ed. 196. ^ 94 U. S. 527, 533, 24 L. ed. 181. 5 161 U. S. 275, 283, 40 L. ed. 700, 16 Sup. Ct. 502. 6 Rev. Stat. U. S., § 5236; Comp. Stat. U. S., 1901, p. 3508; see Scott & Beamen's Index Analyses of Fed. Stat., title Nat. Bks. 120 FEDERAL AGENCIES TAXATION § 66 adjudicated in a court of competent jurisdiction, and is there- fore void when attempted to be applied to a national bank. It was declared by Mr. Justice White in this case that national banks are instrumentalities of the Federal Government created for a public purpose, and as such subject to the paramount authority of the United States. It follows that an attempt by the State, to define their duties or control the conduct of their affairs is absolutely void, wherever such attempted exercise of authority expressly conflicts with the laws of the United States, and either frustrates the purpose of the national legis- lation or impairs the efficiency of these agencies of the Fed- eral Government to discharge their duties, for the performance of which they were created. These principles are axiomatic, and are sanctioned by the repeated adjudications of the Fed- eral Supreme Court .'^ § 66. Same Subject. It was held, in 1896, that State statutes invalidating prefer- ences made by insolvent debtors and assignments or transfers made in contemplation of insolvency, do not conflict with the provisions of the Revised Statutes of the United States * re- lating to national banks and to mortgages of real estate made to them in good faith by way of security for debts previously contracted, and are valid when applied to claims of such banks against insolvent debtors. It was further decided in the same case that it is only when a State law incapacitates a national bank from discharging its duties to the Government that it becomes unconstitutional. This proposition is harmonious with the proposition that national banks are instrumentalities of the Federal Government, created for a public purpose, and ^ Davis v. Elmira Savings Bank, 161 U. S. 275, 283, 40 L. ed. 700, 16 Sup. Ct. 502, per Mr. Justice White, quoted from in Easton v. Iowa, 188 U. S. 220, 238, 47 L. ed. 452, 23 Sup. Ct. 288, per Mr. Justice Shiras, restated in McClellan v. Chipman, 164 U. S. 347, 357, 41 L. ed. 461, 17 Sup. Ct. 85. Principal case is affirmed as to the first part of the above proposition in Mc- Clellan V. Chipman, 164 U. S. 347, 41 L. ed. 461, 17 Sup. Ct. 85. «Rev. Stat. U. S., §§5136, 5137; Comp. Stat. U. S., 1901, pp. 3455 et seq.; Comp. Stat. U. S., 1907, p. 1035. See 1 Scott & Beamen's Index Analyses of Fed. Stat., imder title, Banks, also National Banks. 121 § ()() CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — as such necessarily subject to the paramount authority of the United States.'* Again, in 1902 it was held that it rests upon principle and authority that Congress, having power to create a system of national banks, is the judge as to the extent of the powers which should be conferred upon them, and has the sole power to regulate and control the exercise of their operations. State legislatures are, therefore, precluded from interfering, whether with friendly or hostile intentions, with such banks or their officers in the exercise of the powers conferred upon them by the General Government. This rule especially applies where Congress has acted expressly in exercising its powers of control and supervision over national banks for the protection of creditors and has vested the power of control and visitation over them in Federal officers. It was also decided in the same case that while a State has the legitimate power to define and punish crimes by general laws applical)le to all persons within its jurisdiction, and it may declare, by special laws, certain acts to be criminal offenses when committed by officers and agents of its own banks and institutions, it is without lawful power to make such special laws applicable to banks organized and operated under the laws of the United States. ^° This last case is cited to the first point in a case decided in 1905 which holds that although in a limited sense there is an element of contract in becoming a shareholder of a national bank, the liability for debts of the institution is not contractual but is based upon the provisions to that effect in the national banking law. The Government creating the bank has prescribed the terms upon which ownership of its shares can be acquired, and only those are exempted from liability who are specially de- scribed in the statute; nor can any shareholders be exempted from such liability by a State statute.^^ It was again decided in 1905 that States have no power to enact legislation con- 9 McClellan v. Chipman, 164 U. S. 347, 41 L. ed. 461, 17 Sup. Ct. 85, aff'g on the first point. National Bank v. Commonwealth, 9 Wall. (76 U. S.) 353, 19 L. ed. 701; aff'g on the second point Davis v. Elmira Savings Bank, 161 U. S. 275, 40 L. ed. 700, 16 Sup. Ct. 502. 10 Easton v. Iowa, 188 U. S. 220, 23 Sup. Ct. 288, 47 L. ed. 252. 11 Christopher v. Norvell, 201 U. S. 210, 50 L. ed. 732, 20 Sup. Ct. 495. 122 FEDERAL AGENCIES — TAXATION § 67 travelling Federal laws for the control of national banks.^^ No loss of the entire debt is incurred by a national bank, as a penalty or otherwise, by reason of the provisions of the usury law of a State, where the only forfeiture provided by an act of Congress ^^ is of the entire interest which the note, bill, or other evidence of debt, carries with it, when the rate knowingly received or charged by such bank is in excess of that allowed by such enactment.^^ But §§ 3411 and 5214 of the Revised Statutes, cannot be so construed together, and effect given to both, as to leave a national bank liable to the duty imposed by § 5214 and yet entitle it to the exemption provided by §3411 under the contingency stated therein. The provisions of this latter section, exempting banks from taxation on cir- culation, does not relate to national banks but to State banks only. One of the public policies of the National Bank Act was to secure the public credit and encourage the issue of notes to circulate as currency founded upon United States bonds, and § 3411 will not be construed as intending to exempt those national banks that allowed their circulation to fall below five per cent of their capital stock from the taxation provided by § 5214 to create a fund to bear the burden common to all national banks for engraving and printing the notes.^^ § 67. Taxation— Power of States— Generally. In distributing the power of taxation the Constitution re- tained to the States the absolute power of direct taxation, but granted to the Federal Government the power of the same taxation upon condition that, in its exercise, such taxes should be apportioned among the several States according to num- bers; and this was done, in order to protect to the States, who were surrendering to the Federal Government so many sources 12 Guthrie v. Harkness, 199 U. S. 148, 50 L. ed. 130, 26 Sup. Ct. 4. 13 Act of June 3, 1864, chap. 106, 13 Stat. 99, 100, 18 Stat. 123; Rev. Stat. XJ. S., §§ 5133-5243; Comp. Stat. U. S., 1901, pp. 3454 et seq.; Comp. Stat. U. S., 1907, p. 1035. 14 Farmers' & Mechanics' Nat. Bk. v. Bearing, 91 U. S. 29, 23 L. ed. 196. 15 Merchants' National Bk. v. United States, 214 U. S. 33, 53 L. ed. 899, 29 Sup. Ct. 593, aff'g 42 Ct. CI. 6. 123 §67 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — of income, the power of direct taxation, which was their prin- cipal remaining resource.^^ Presumptively all property within the territorial limits of a State is subject to its taxing power, and the burden of proof is on one claiming that any particular property is by contract or otherwise beyond the reach thereof.^'' The power of legislation, and consequently, of taxation, operates on all the persons and property belonging to the body politic; this is an original principle, which has its foundation in society itself; it is granted by all, for the benefit of all; it resides in government, as a part of itself; and need not be reserved, where property of any description, or the right to use it in any manner, is granted to individuals or corporate bodies.^* Owing, however, to the conditions of modern busi- ness a large proportion of valuable property is now found in intangible things, such as franchises, and these are, like other property, subject to taxation .^^ And it is not beyond the power of a State, so far as the Federal Constitution is concerned, to tax the franchise of a corporation at a different rate from the tangible property in the State .^^ The State may impose taxes upon the corporation as an entity existing under its laws, as well as upon the capital stock of the corporation or its separate corporate property. And the manner in which its value shall be assessed and the rate of taxation, however arbitrary or capricious, are mere matters of legislative discretion. A tax upon a corporation may be proportioned to the income received as well as to the franchise granted or the property possessed. The fact that taxation increases the expenses attendant upon the use or possession of the thing taxed, of itself constitutes no objection to its con- stitutionality. The exercise of the authority which every 16 Pollock V. Farmers' Loan & Trust Co., 158 U. S. 601, 39 L. ed. 1108, 15 Sup. Ct. 912. See s. c, 157 U. S. 429, 39 L. ed. 759, 15 Sup. Ct. 673. 17 Metropolitan St. Ry. Co. v. New York State Board of Tax Comm'rs, 199 U. S. 1, 50 L. ed. 65, 25 Sup. Ct. 23. 18 Providence Bank v. Billings, 4 Pet. (29 U. S.) 514, 8 L. ed. 939. 19 Metropolitan St. Ry. Co. v. New York State Board of Tax Comm'rs, 199 U. S. 1, 50 L. ed. 65, 25 Sup. Ct. 23. 20 Coulter v. Louisville & N. Rd. Co., 196 U. S. 599, 25 Sup. Ct. 342, 49 L. ed. 615. 124 FEDERAL AGENCIES — TAXATION § 08 State possesses to tax its corporations and all their property, real and personal, and their franchises, and to graduate the tax upon the corporations according to their business or income, or the value of their property, when this is not done by dis- criminating against rights held in other States, and the tax is not on imports or tonnages or transportation to other States, cannot be regarded as conflicting with any constitutional power of Congress.-^ Before a special assessment, levied by legislative authority of a State, as in case of a provision for back taxes in a State, can be actually enforced, or during the process of its enforcement, the taxpayer must have an opportunity to be heard as to its validity and extent; but this rule is met where the State Court has afforded the taxpayer full opportunity to be heard on both of those questions, and after such opportunity has rendered a judgment providing for the enforcement of such amount of the tax as it finds actually due. In so deter- mining the amount due and reducing the amount assessed the State Court does not assume the legislative function of making an assessment, made by the assessor under color of legislative authority/' The mere lack of a provision in a tax law for notice does not take away the jurisdiction of the taxing officer to make an assessment under any circumstances. If the tax could be imposed for a certain amount it is not void, but at most void- able for the illegal amount, if any.^^ If a State has not the power to levy a tax it will not be sustained merely because another tax which it might lawfully impose would have the same ultimate incidence.^ § 68. Taxation— Obligation of Contract— Equal Protec- tion of Law — Due Process of Law. A State taxing law may be operative as to a savings bank and 21 Delaware Railroad Tax, 18 Wall. (8.5 U. S.) 206, 21 L. ed. 888. 22 Security Trust Co. v. Lexington, 203 U. S. 323, 27 Sup. Ct. 87, 51 L. ed. 204. 23 People's Nat. Bank v. Marye, 191 U. S. 272, 24 Sup. Ct. 68, 48 L. ed. 180. 24 Home Savings Bank v. Des Moines, 205 U. S. 503, 51 L. ed. 901, 27 Sup. Ct. 571. 125 § (38 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — not violate the contract clause of the Federal Constitution where such bank is unprotected by the creation of an irrevo- cable contract on the part of the State .^^ A bank charter may limit the amount of tax on shares of stock in stockholders' hands so that any subsequent imposition of an additional tax will imi^air the obligation of contract and be void.^^ Where the charter of a bank, granted by the legislature of Tennessee, provided, that the bank "shall pay to the State an annual tax of one-half of one per cent on each share of the capital stock subscribed, which shall be in lieu of all other taxes," it was held (1) That this provision was a contract between the State and the bank, limiting the amount of tax on each share of the stock. (2) That a subsequent revenue law of the State, imposing an additional tax on the shares in the hands of stockholders, im- paired the obligation of that contract, and was void. 2'' The mere grant for a designated time of an immunity from taxa- tion does not take it out of the rule subjecting such grant to the general law retaining the power to amend or repeal, unless the granting act contains an express provision to that effect.^* A tax of two cents a share imposed on transfers of stock, made within a State by a tax law does not violate the equal protection clause of the Fourteenth Amendment as an arbitrary discrimi- nation because only imposed upon transfers or stock, or because based on par, and not market value; nor does it deprive non- 25 Citizens' Savings Bank v. Owensboro, 173 U. S. 636, 43 L. ed. S40, I'J Sup. Ct. 530, 571. In this case the act of Ky. of Feb. 14, 1856, and the act of May 12, 1884, chap. 1412, incorporating the Savings Bank and the act of May 17, 1886, known as the Hewitt Act and other statutes were held not to create an irrevocable contract and that the Kentucky taxing law of Nov. 11, 1892, chap. 108, did not violate such obligation clause. See Kentucky Bank Cases, 174 U. S. 408, 43 L. ed. 1027, 19 Sup. Ct. 880 (there were twenty-six of these cases — five decided in 1899— five affirmed by a divided court in 1899). 28 Bank of Commerce v. Tennessee, 161 U. S. 134, 16 Sup. Ct. 456, 40 L. ed. 645. 27 Farrington v. Tennessee, 95 U. S. 679, 24 L. ed. 558. 28 Citizens' Savings Bank v. Owensboro, 173 U. S. 636, 43 L. ed. 840, 19 Sup. Ct. 530, 571. See Kentucky Bank Cases, 174 U. S. 408, 43 L. ed. 1027, 19 Sup. Ct. 880 (there were twenty-six of these cases — five decided in 1899 and five affirmed by a divided court in 1899). Examine Citizens' Bank v. Parker, 192 U. S. 73, 48 L. ed. 346, 42 Sup. Ct. 181. 126 IKDKllAL ACJKNCIES — TAXyVTION § 08 rcsidoiit owners of .stock transferring in the State of such •statutory enactment, shares of nonresident corporations of their property without due process of law; nor is it as to such transfers of stock an interference with interstate cominerce.^^ AVhere a State law for the valuation of property and the assess- ment of taxes thereon, provides for the classification of property subject to its provisions into different classes, and makes for one class one set of provisions as to modes and methods of ascertaining the value, and as to right of appeal, and different provisions for another class as to those subjects, but which provides for the impartial application of the same means and methods to all constituents of each class, so that the law shall operate equally and uniformly on all persons in similar circum- stances, it denies to no person affected by it "equal protection of the laws," within the meaning of the Fourteenth Amendment to th(> Constitution of the United States.^" A State statute for raising public revenue by the assessment and collection of taxes, which gives notice of the proposed assessment to an owner of property to be affected, by requiring him at a time named to present a statement of his property, with his estimate of its value, to a designated official charged with the duty of receiving the statement; which fixes time and place for public sessions of other officials, at which this state- ment and estimate are to be considered, where the official valuation is to be made, and when and where the party inter- ested has the right to be present and to be heard; and VA^hich affords him opportunity, in a suit at law, for the collection of the tax, to judicially contest the validity of the proceeding, does not necessarily deprive him of his property " without due process of law," within the meaning of the Fourteenth Amend- ment to the Constitution of the United States .^^ The power of 29 Hatch V. Reardon, 204 U. S. 152, 51 L. ed. 415, 27 Sup. Ct. 188, aff'g 184 N. Y. 431. 30 Kentucky Railroad Tax Cases (Cincinnati, New Orleans & Texas Pac. Rd. Co. V. Kentucky), 105 U. S. 321, 29 L. ed. 414, 6 Sup. Ct. 57. 31 Kentucky Railroad Tax Cases (C'incinnati, New Orleans & Texas Pac. Rd. Co. V. Kentucky), 105 U. 8. 321, 29 L. ed. 414, 6 Sup. Ct. 57. Tax law of New York imposing taxes on certain public franchises held not 127 § 09 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — taxation conferred by law enters into the obligation of a con- tract, and subsequent legislation withdrawing or lessening such power and which leaves creditors without adequate means of satisfaction impairs the obligation of their contracts.^^ Other decisions as to taxation and the obligation of contract, equal protection of the laws and due process of law clauses appear under the next following sections. § 69. Taxation— Exemptions— Instrumentalities of Fed- eral Government— State Agencies. The State governments have no right to tax any of the constitutional means employed by the Government of the Union to execute its constitutional powers; nor have they any power, by taxation or otherwise, to retard, impede, burden or in any manner control the operations of the constitutional laws enacted by Congress to carry into effect the powers vested in the National Government. A tax therefore on the operation of an instrument, such as a branch of a bank incorporated by an act of Congress, employed by the Government of the United States to carry its powers into execution is unconstitutional. The above principle does not extend to a tax paid by the real property of such bank, in common with other real property in a particular State, nor to a tax imposed upon the proprietary interest which the citizens in that State may hold in that institution in common with other property of the same descrip- tion throughout the State. ^^ This doctrine is substantially reasserted in a case which holds that although all subjects over which the power of a State extends are, as a general rule, proper subjects of taxation, yet the power of a State to tax does not extend to those means which are employed by Congress repugnant, with respect to the case before it, to the equal protection, due process, or impairment of obligation of clauses of the Federal Constitution and of the Fourteentli Amendment thereto. Metropolitan St. Ry. Co. v. New York State Board of Tax Comm'rs, 199 U. S. 1, 50 L. ed. 65, 25 Sup. Ct. 23. 32 Hubert v. New Orleans, 215 U. S. 170, 54 L. ed. — , 30 Sup. Ct. — , rev'g 119 La. 623. 33 McCuUoch V. Maryland, 4 Wheat. (17 U. S.) 316, 436, 4 L. ed. 579. 128 FEDERAL AGENCIES — TAXATION § 70 to carry into execution the powers conferred in the Federal Constitution. "Un(iuestionably the taxing power of the States is very comprehensive, but it is not without its limits. State tax laws cannot restrain the action of the national government, nor can they abridge the operation of any law which Congress may constitutionally pass. They may extend to every object of value within the sovereignty of the State, but they cannot reach the administration of justice in the Federal Courts, nor the collection of public revenue, nor interfere with any con- stitutional regulation of Congress.^ The true reason for the rule is that the Constitution of the United States and the laws of Congress made in pursuance thereof are the supreme law of the land, and the express provision is that the judges in every State Court shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding." ^^ The exemption of State agencies and instrumentalities from national taxation is limited to those which are of a strictly governmental character, and does not extend to those used by the State in carrying on an ordinary private business, such as the control of the sale of intoxicating liquors by the dispensary system .^^ And the principle that the States cannot tax official agencies of the Federal Government does not apply to obli- gations such as checks and warrants available for immediate use. A tax upon them is virtually a tax upon the money which can be drawn upon their present action.^^ § 70. Taxation — Instrumentalities of Federal Govern- ment — Qualification or Limitation of Doctrine of Exemption. The doctrine which exempts the instrumentalities of the 34 Citing Brown v. State of Maryland, 12 Wheat. (25 U. S.) 419, 44S, 6 L. ed. 678; Weston v. City Council of Charleston, 12 Wheat. (27 U. S.) 419, 467, 7L. ed. 481. 35 Society for Savings v. Coite, 6 Wall. (73 U. S.) 594, 605, 18 L. ed. 897, per Mr. Justice Clifford, citing Const., Art. VI. 38 South CaroUna v. United States, 190 U. S. 437, 47 L. ed. 1126, 23 Sup. Ct. 811. 37 Hibemia Savings & Loan Society v. San Francisco, 200 U. S. 310, 50 L. ed. 495, 26 Sup. Ct. 265. 9 129 § 71 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES— Federal Government from the influence of State legislation, is not founded on any express provision of the Constitution, but in the implied necessity for the use of such instruments by the Federal Government. It is, therefore, limited by the principle that State legislation, which does not impair the usefulness or capability of such instruments to serve the Government, is not within the rule of prohibition.^* An exemption of agencies of the Federal Government from taxation by the States is depend- ent, not upon the nature of the agents, nor upon the mode of their Constitution, nor upon the fact that they are agents, but upon the effect of the tax; that is, upon the question whether the tax does in truth deprive them of the power to serve the Government as they were intended to serve it, or hinder the efficient exercise of their power. A tax upon their propert}'- merely, having no such necessary effect, and leaving them free to discharge the duties they have undertaken to perform, may be rightfully laid by the States. A tax upon their operations being a direct obstruction to the exercise of Federal powers may not be.^^ § 71. Taxation — National Banks. A State cannot tax the banks of the United States.'^'' A State is wholly without power to levy any tax, either direct or indirect, upon national banks, their property, assets or franchises, except when permitted so to do by the legislation of Congress. Section 5219 of the Revised Statutes is the measure of the power of States to tax national banks, their property or their franchises, that power being confined to a taxation of the shares of stock in the names of the shareholders, and to an as- sessment of the real estate of the bank. And where the fact complained of, was of having been assessed on the franchises or intangible property of the corporation, it was held not within 38 National Bank v. Commonwealth, 9 Wall. (76 U. S.) 353, 19 L. ed. 701. 59 Railroad Co. v. Peniston, 18 Wall. (85 U. S.) 5, 21 L. ed. 787, followed in Central Pac. Rd. Co. v. California, 162 U. S. 91, 16 Sup. Ct. 766, 40 L. ed. 903. *o Osborn v. United States Bank, 9 Wheat. (22 U. S.) 738, 6 L. ed. 204. 130 FEDERAL AORXriES — TAXATION §71 tho purview of thc> authoiiiy conferred by the act of C\mjx.ress, and was therefore illcpil.''' While a State may only tax shares of a national bank in accordance with the Federal statute, a State law, which does not give th(> shareholders the benefit of all deductions to which they are entitled is not necessarily void altogether, but may hv sustained as to the amount jiropcrly taxable. ''^ Money invested in corporations or in industrial enterprises that carry or thr^ business of railroads, of manufacturing (enterprises, mining « Owensboro Nat. Bank v. Owensboro, 173 U. S. 664, 43 L. ed. 850, lU Sup. Ct. 537, cited and quoted from in Home Savings Bank v. Des Moines, 205 U. S. 503, 51 L. ed. 901, 27 Sup. Ct. 571, where the court, per Mr. Jus- tice Mood J', says: "There it appeared that a tax upon the intangible property of a national bank had been levied under the name of a franchise tax. Such a tax upon one of the agencies of the National Government is beyond the power of the State. But it was contended that although the tax was not in form upon shares in the hands of shareholders (a tax lawful by the permis- sion Congress has given), it was the equivalent of such a tax. To this con- tention the court, by Mr. Justice White, replied: 'To be equivalent in law involves the proposition that a tax on the franchise and property of a bank or corporation is the equivalent of a tax on the shares of stock in the names of the shareholders. But this proposition has been frequently denied by this court, as to national banks, and has been overruled to such an extent in many other cases relating to exemptions from taxation, or to the power of the State to tax, that to maintain it now would have the effect to anni- hilate the authority to tax in a multitude of cases, and as to vast sums of property upon which the taxing power is exerted in virtue of the decision of this court liolding that a tax on a corporation or its property is not the legalequivalent of a tax on the stock, in the name of the stockholders. * * * If the mere coincidence of the sum of the taxation is to be allowed to frus- trate the provisions of the act of Congress, then that act becomes meaning- less and the power to enforce it in any given case will not exist. * * * The argument that public poHcy exacts that where there is an equality in amount between an unlawful tax and a lawful one, the unlawful tax should be held valid, does not strike us as worthy of serious consideration.' These words apply with equal force to the case at bar." See further as to State taxation of national banks, Cummings v. National Bk., 101 U. S. 153, 25 L. ed. 903 (State Constitution; uniformity of taxa- tion; bank shares; equalization board; unequal valuation; different classes of property; injunction); Lionberger v. Rouse, 9 Wall. (76 U. S.) 468, 19 L. ed. 721 (tax on shares; uniform assessment; meaning of forty-first section of National Banking Act). <2 People's Nat. Bank v. Marve, 191 U. S. 272, 24 Sup. Ct. 68 48 L ed 180. 131 § 72 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — investments and investments in mortgages, does not come into competition with the business of national banks, and is, there- fore, not within the meaning of that provision of the Federal statutes,^^ which forbids the taxation of its shares at a greater rate than is assessed upon other moneyed capital in the hands of citizens of the State. So insurance stocks may be taxed on income instead of value, and deposits in savings banks and moneys belonging to charitable institutions may be exempted without infringing upon the above statutory provision.^^ A difference in methods of assessing shares of national banks from that of taxing State banks does not necessarily amount to a discrimination, rendering the act invalid '^ and justify the judicial interference of courts for the protection of the share- holders, unless it appears that the difference in method actually results in imposing a greater burden on the national banks than is imposed on other moneyed capital in the State .^ A State statute may, for the purposes of taxation, require, under penalty for his neglect or refusal, the cashier of each national bank within the State to transmit, on or before a specified day in a certain month in each year, to the clerks of the several towns in the State in which any stock or shareholders of such bank shall reside, a true list of the names of such stock or shareholders on the books of such bank, together with the amount of money actually paid in on each share on the first day of the month on which said report is to be transmitted.^^ § 72. Taxation — Savings Banks — Obligations, Securities, Bonds, Stocks, Notes, etc., of United States. It is certain that there is a want of authority in the States 43 Rev. Stat. U. S., § 5219. « Aberdeen Bank v. Chehalis Co., 166 U. S. 440, 41 L. ed. 1069, 17 Sup. Ct. 629, affirmed, followed and applied in Bank of Commerce v. Seattle, 166 U. S. 463, 42 L. ed. 1079, 17 Sup. Ct. 618. 45 Under § 5219. 46 Covington v. First National Bank of Covington, 198 U. S. 100, 49 L. ed. 963, 25 Sup. Ct. 562. As to taxation of national banks and shares therein, assessment and dis- crimination and claim of violation of rights under § 5219, U. S. Rev. Stat., see Lander v. Mercantile Bank, 186 U. S. 458, 46 L. ed. 1247, 22 Sup. Ct. 908. 47 Waite V. Dowley, 94 U. S. 527, 533, 24 L. ed. 181. 132 FEDERAL AGENCIES — TAXATION § 72 to tax securities of the United States issued in the exercise of the admitted power of Congress to borrow money on the credit of the United States, even though there is no express prohibition in the Constitution to that effect. Outside of those provisions, however, the power of the State to tax extends to all objects except the instruments and means of the Federal Government within the sovereign power of the State.^* So the last clause of § 3408 of the Revised Statutes of the United States ex- empts savings banks of the character there mentioned from taxation of so much of their deposits as they have invested in securities of the United States, and on all sums which they have on deposit in the name of any one person, not exceeding two thousand dollars; and the act of 1879 does not change the effect of that clause >^ A State has no power to burden, impede or in any way affect by its action the power conferred upon the Government to borrow money on the credit of the United States. It cannot by any form of taxation impose any burden upon any part of the national public debt; and it may well be doubted whether Congress has the power to confer upon the States the right to tax obligations of the United States; Congress, however, has never yet attempted to confer such a right. So a tax upon the property of a bank in which United States secur- ities are included is beyond the power of the State, and is also witliin the prohibition of the acts of Congress.^*^ While a tax on an individual in respect to his shares in a corporation is not a tax on the corporation, and the value of the shares may be assessed without regard to the fact that the assets of the corporation include government securities, if the tax is actually « Hamilton Company v. Massachusetts, 6 Wall. (73 U. S.) 632, 639, 18 L. ed. 904, per ;\Ir. Justice Clifford. "Savings Bank v. Archbold, 104 U. S. 708, 26 L. ed. 901, § 3408, Rev. Stat. U. S., legislated in the above matter as to "associations or companies known as provident institutions, savings-banks, savings-funds, or savings- institutions, having no capital stock and doing no other business than re- ceiving deposits to be loaned or invested for the sole benefit of the parties making such deposits without profit or compensation to the association or company." See Comp. Stat. U. S., 1901, p. 2247, as to what parts of this section are superseded, etc. See also Comp. Stat. U. S., 1907, p. 643. ^ Rev. Stat., § 3701 and other acts. 133 § 73 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — on the corporation although nominally on the shares such securities ma}'^ not be included in assessing the value of the shares for taxation. So where the substantial effect of a State Code, providing that shares of stock of a State and savings banks and loan and trust companies shall be assessed to such banks and companies and not to the individual stockholders, and that in fixing the value of the shares, capital, surplus and undivided earnings shall be taken into account, is to tax the propert}' of the bank and not the shares of stock, an assessment which includes government bonds owned by the bank in fixing the valuation of its shares is illegal and beyond the power of the State." § 73. Same Subject. A State statute may tax bank stocks by levying a tax on the shares of the stockholders as distinguished from the capital of the bank invested in Federal securities, even though the tax is collected from the bank instead of the individual stockholders.^' Again, stock of the United States is not subject to taxation under the laws of a State, and such law for that purpose is unconstitutional whether it imposes a tax eo nomine or includes it in the aggregate of the taxpayer's property to be valued like the rest at its worth, and that portion of the capital which a bank has invested in the stocks, bonds or other securities of the United States is not liable to taxation. A State tax on the loans of the Federal Government is a restriction upon the con- stitutional power of the United States to borrow money, and if the States had such a right, being in its nature unlimited, it might be used to defeat the Federal power altogether.^^ So a 51 Home Savings Bank v. Des Moines, 205 U. S. 503, 51 L. ed. 901, 27 Sup. Ct. 571. "This principle was announced in Weston v. Charleston, 2 Pet. (27 U. S.) 449, 7 L. ed. 481, where it was held that taxes upon the stock of the United States levied by one of the municipal corporations of South Carolina were invalid. From that time no one has questioned the immu- nity of national securities from State taxation." Id., 513, per Mr. Justice Moody. 62 National Bank v. Commonwealth, 9 Wall. (76 U. S.) 353, 19 L. ed. 701. 63 Bank of Commerce v. New York, 2 Black (67 U. S.), 620, 17 L. ed. 451. 134 FEDERAL A(iENCIES TAXATION § 74 tax laid by a State on banks on a valuation equal to the amount of their capital stock paid in, or secured to be paid in, is a tax on the property of the institution; and when that property consists of stocks of the Federal Gov(^rnnient, the law laying the tax is void.^'* Nor can any tax be imposed by a State law or under the authority thereof upon stock issued for loans made to the United States, as such a law would be unconstitutional.^'^ So under a decision rendered in 1868 United States notes issued under the Loan and Currency Acts of 1862 and 1863 intended to circulate as money and actually constituting, with the national bank notes, the ordinary circulating medium of the country, are obligations of the National Government and exempt from State taxation.^^ "The principle is, that the States cannot control the National Government within the sphere of its constitutional powers — for there it is supreme — and cannot tax its obligations for payment of money issued for purposes within that range of powers, because such taxation necessarily implies the assertion of the right to exercise such control." " Certificates of indebted- ness issued by the United States to creditors of the Government for supplies furnished to it in carrying on the Civil War and by which the Government promised to pay the sums of money specified in them, with interest, at a time named are beyond the taxing power of the State .^* § 74. Same Subject — When Tax Is on Franchises. A State may, however, impose l)y statute a tax upon the corporate franchise or business of all corporations incorporated under any law of the State, or of any other State or country, and doing business within the State, where such tax is measured by the extent of the dividends of the corporation in the current year, as the tax is one upon the right or privilege to be a corporation and to do business in the State in a corporate 5* Bank Tax Case, 2 Wall. (69 U. S.) 200, 17 L. ed. 793. 65 Weston V. Charleston, 2 Pet. (27 U. S.) 449, 7 L. ed. 481. 56 Bank v. Supervisors, 7 Wall. (74 U. S.) 26, 19 L. ed. 60. 57 Banks, The, v. The Mayor, 7 Wall. (74 U. S.) 16, 25, 19 L. ed. 57. 5s Banks, The, v. The Mayor, 7 Wall. (74 U. S.) 16, 19 L. ed. 57. 135 § 74 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — capacity, and differs from a tax upon the i)rivilege or franchise which when incorporated the company may exercise, nor does the statute being thus construed, by its imposition of a tax upon the dividends of the company, violate the provision of the act of Congress exempting bonds of the United States from taxation, although a portion of the dividends may be derived from interest on capital invested in such bonds. The validity of a State tax upon corporations created under its laws, or doing business within its territory, can in no way be dependent upon the mode which the State may deem fit to adopt in fixing the amount for any year which it will exact for the franchise.^** Again, a statute of a State requiring savings societies authorized to receive deposits, but without authority to issue bills, and having no capital stock, to pay annually into the State treasury a sum equal to three-fourths of one per cent on the total amount of their deposits on a given day, imposes a franchise tax, not a tax on property, and is valid, and the fact that a franchise tax and not a tax on property has been imposed on a savings society which has invested a part of its deposits in securities of the United States, declared by Congress, in the act which authorizes their issue, to be exempt from taxation by State authority, does not exempt the society from taxation to the extent of deposits so invested.^" So a State statute which enacts that every institu- tion for savings, incorporated under the law of the State, shall pay to the commonwealth a tax on account of its depositors of a certain percentage on the amount of its deposits, to be assessed, one-half of said annual tax on the average amount of its deposits for six months preceding certain dates in the year, imposes a franchise tax, not a tax on property, and is valid, A savings institution, therefore, in such State, having a portion of its deposits invested in Federal securities, declared by the act of Congress authorizing their issue to be exempt from State tax- ation, is as liable under the above statute to a tax on account of such deposits as on account of others, and it is held that there 59 Home Insurance Co. v. New York, 134 U. S. 594, 33 L. ed. 1025, 10 Sup. Ct. 593, 119 U. S. 129, 30 L. ed. 350, 8 Sup. Ct. 1385. 60 Society for Savings v. Coite, 6 Wall. (73 U. S.) 594, 18 L. ed. 897. 136 FEDERAL AGENCIES — TAXATION § 75 is nothing inconsistent with the view, as to the validity of the tax, in the decisions of the Federal Supreme Court.^^ § 75. Taxation — Franchises or Privileges Conferred by Congress — Railroads — Telegraph Companies. A State board of ocjualization has no power to include in its assessment franchises conferred by Congress, as such franchises cannot be taxed by the State; and the assessment is repugnant to the Constitution and laws of the United States, and the power given to Congress to regulate commerce among the several States.^- But the fact that a railroad company is a corporation organized under a statute of the United States with power thereunder to charge and collect tolls and rates for transportation does not exempt it from the operation of a statute establishing a railroad commission as to business done wholly within the State; but such business is subject to the control of the State in all matters of taxation, rates and other police regulations.^^ So the property of a railroad corporation of the United States may be taxed by a State but not through its franchises.^ Again, the privilege conferred upon telegraph com- panies by Congress ^^ carries with it no exemption from the ordi- nary burdens of taxation in a State within which they may own and operate lines of telegraph, and the State may tax such com- pany upon the property owned and used by it within its limits by what is essentially an excise tax where such tax is not for- bidden by the commerce clause of the Constitution.^^ While a «i Provident Institution v. Massachusetts, 6 Wall. (73 U. S.) 612, 18 L. ed. 907. « California v. Central Pacific Rd. Co., 127 U. S. 1, .32 L. ed. 150, 8 Sup. Ct. 1053. 83 Reagan v. Mercantile Trust Co., 154 U. S. 413, 14 Sup. Ct. 1060, 38 L. ed. 1028, affirming, following and applying in this case the facts in Reagan v. Farmers' Loan & Trust Co., 154 U. S. .362, 38 L. ed. 1014, 14 Sup. Ct. 1047. w Central Pacific Rd. Co. v. California, 162 U. S. 91, 40 L. ed. 903, 16 Sup. Ct. 766; California v. Central Pacific Rd. Co., 127 U. S. 1, 32 L. ed. 150, 8 Sup. Ct. 1053. 85 Under Rev. Stat., § 5263; see Joyce on Electric Law (2d ed.), §§ 51- 52a. 88 Western Union Teleg. Co. v. Massachusetts, 125 U. S. 530, 8 Sup. Ct. 137 § 76 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — State cannot exclude from its liiniis a corporation engaged in in- terstate or foreign commerce, or a corporation in the employ- ment of the General Government, by the imposition of un- reasonable conditions, it may subject it to a property taxation incidentally affecting its occupation in the same way that busi- ness of individuals or other corporations is affected by connnon governmental burdens.**^ § 76. Taxation — Railroads. The power of a State to construct railroads and other high- ways, and to impose tolls, fare, or freight for transportation thereon, is unlimited and uncontrolled. The disposition of the revenues thus derived is subject to its own discretion. But a State cannot impose a tax on the movement of persons or property from one State to another.^* A legislative and con- stitutional provision of a State that taxation of property shall be equal and uniform and in proportion to its value, is not violated by exacting a contribution according to their gross income of the several railroads, in proportion to the number of miles of railroad operated within the State, in order to meet the special service required of the State Railroad Commissi on .^^ So a State statute distributing for taxation purposes the rolling stock and other unlocated personal property of a railway com- pany, to and for the benefit of the counties traversed by the railroad, does not violate the provision in the Fourteenth 961, 31 L. ed. 790. See Joyce on Electric Law (2d ed.), §§ 83a-96, 911- 940b. 87 Postal Tel. Cable Co. v. Adams, 155 U. S. 688, 39 L. ed. 311, 15 Sup. Ct. 360. Consistently with the due process clause of the Fourteenth Amendment a State cannot tax property located or existing permanently beyond its limits. Western Union Teleg. Co. v. Kansas, 216 U. S. 1, 54 L. ed. — , 30 Sup. Ct. — . See this case also as to requirement which was held to im- pose an unconstitutional condition on Telegraph Company. 68 Railroad Co. v. Maryland, 21 Wall. (88 U. S.) 450, 22 L. ed. 678. When State statute taxing interstate railroads is constitutional. Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Backus, l.')4 U. S. 421, 14 Sup. Ct. 1114, .38 L. ed. 1031. «» Charlotte, Columbia & Augusta R. R. Co. v. Gibbes, 142 U. S. 386, 35 L. ed. 1051, 12 Sup. Ct. 255, 48 Am. & Eng. R. Cas. 595. 138 FEDERAL AGENCIES — TAXATION § 76 Amendment to the Constitution, that no State shall deny to any person within its jurisdiction the equal protection of its laws/" nor is a stipulation in the charter of a railroad company, that the company shall pay to the State a bonus, or a portion of its earnings, repugnant to the Constitution of the United States. Such a stipulation is different, in principle, from the imposition of a tax on the movement or transportation of goods or persons from one State to another. The latter is an interference with and a regulation of commerce between the States, and beyond the power of the State to impose; the former is not.''^ The charter of the Baltimore & Ohio Railroad Company foi- con- structing and working a branch railroad between Baltimore and Washington contained a stipulation that the company at the end of every six months should pay to the State one-fifth of the whole amount received for the transportation of passen- gers. This charter was accepted and complied with for many years. It was held (1) that this stipulation was not repugnant to the Constitution of the United States; (2) that it was a contract to pay, and not a receipt of money belonging to the State; and, if unconstitutional, the objection could be set up as a defense to an action brought by the State to recover the money.'' The State of origin remains the permanent situs of personal property notwithstanding its occasional excursions to foreign parts, and a State may tax its own corporations for all their property in the State during the year, even if every item should be taken into another State and then brought back. The taxation, therefore, of cars under the New York franchise tax law, belonging to a corporation of that State is not uncon- stitutional as depriving the owner of its property without due process of law because the cars are at times temporarily absent from the State, it appearing that no cars permanently without the State are taxed .'^^ 70 Columbus Southern Ry. Co. v. Wright, 151 U. S. 470, 38 L. ed. 23S, 14 Sup. Ct. 296; Ga. Stat., Oct. 16, 1889, Laws of Ga., 1889, p. 29. " Railroad Co. v. Maryland, 21 Wall. (88 U. S.) 456, 22 L. ed. 678. 72 Railroad Co. v. Maryland, 21 Wall. (88 U. S.) 456, 22 L. ed. 678. 73 New York Central Rd. Co. v. Miller, 202 U. S. 584, 50 L. ed. 1155, 26 Sup. Ct. 1. 139 §§77,78 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES — § 77. Taxation —Franchises— Capital Stock.^^ A State may tax corporations upon their franchise or business based upon the amount of capital stock employed within the State; ^^ and when not otherwise exempted the capital stock of a corporation and its shares in stockholders' hands may both be taxed, and it is not double taxationJ"^ So a State law requiring national banks to pay a tax which is rightfully laid on the shares of its stock is valid under the limitation of the doctrim> governing the taxation of national banks by a State7^ A State statute may also lawfully impose a franchise tax as where corporations having capital stock divided into shares are required to pay a tax of a certain percentage upon the excess of the market value of all such stock over the value of its real estate and machinery 7« So a State statute taxing stocks of railroads incorporated in other States held by citizens of the taxing State is not unconstitutional under the Fourteenth Amendment because no similar tax is imposed on the stock of domestic railroads or of foreign railroads doing business in such taxing State; the property of the former class of railroads being untaxed, and that of the latter two classes being taxed, by the State 7^ An assessment of a tax upon the shares of stockholders in a corporation appearing upon the books of the company, which the company is required to pay irrespective of any dividends or profits payable to the shareholder, out of which it might repay itself, is substantially a tax upon the corporation itself.«" § 78. Taxation—" Franchise "— " Corporate Franchise " 74 See § 72, herein. 75 New York v. Roberts, 171 U. S. 658, 43 L. ed. 345, 19 Sup. Ct. 225. 78 Bank of Commerce v. Tennessee, 161 U. S. 134, 16 Sup. Ct. 456, 40 L. ed. 645. Compare opinion of court in Home Savings Bk. v. Des Moines, 205 U. S. 503, 510, 51 L. ed. 901, 27 Sup. Ct. 571. 77 National Bank v. Commonwealth, 9 Wall. (76 U. S.) 353, 19 L. ed. 701, aff'd in McClellan v. Chipman, 164 U. S. 347, 41 L. ed. 461, 17 Sup. Ct. 85. 78 Hamilton Company v. Massachusetts, 6 Wall. (73 U. S.) 632, 639, 18 L. ed. 904. 79 Kidd V. Alabama, 188 U. S. 730, 23 Sup. Ct. 401, 47 L. ed. 669. 80 New Orleans v. Houston, 119 U. S. 265, 30 L. ed. 411, 7 Sup. Ct. 198. 140 FEDEllAL A(;KN(,UE8 — TAXATION § 78 — Express Companies— Ferry Franchise -Bridge Companies — Insurance Companies — Uniformity of Taxation. Although a statute may provide for a tax on the ''franchise" of corporations, including certain enumerated public service corporations and those whose lines extend beyond the limits of the State, and may also use the words "corporate franchise," nevertheless the legislative intention may, as deduced from the entire statute, be such that the scheme of taxation is not in contravention of the commerce clause and the Fourteenth Amendment, and also be in harmony, as a property tax, with the Constitution of the State enacting the statute .^^ A State statute defining express companies, and prescribing the mode of taxing the same, and fixing the rate of taxation thereon, imposes a tax only on business done within the State, and does not violate the requirements of uniformity and equality of taxation prescribed by a State Constitution.*^ Diversity of taxation both with respect to the amount imposed and the various species of property selected, either for bearing its burdens or for being exempt from them, is not inconsistent with a perfect uniformity and equality in taxation, and of a just adaption of property to its burdens. A system of taxation which imposes the same tax upon every species of property, irrespective of its nature, or condition or class, will be destruc- tive of its principle of uniformity and equality of taxation, and of a just adaption of property to its burdens.*^ A State cannot tax a ferry franchise over a navigable river granted by another State, even though granted to a corporation of the taxing State, where the jurisdiction of the latter only extends to low water mark; such taxation would amount to a deprivation of property without due process of law.*^ But a State may tax 81 Adams Express Co. v. Kentucky, 166 U. S. 171, 41 L. ed. 960, 17 Sup. Ct. 527; as to taxation of franchises, see Joyce on I'ranchises, §§ 417-461. 82 Pacific Express Co. v. Seibcrt, 142 U. S. 339, 35 L. ed. 1035, 12 Sup. Ct. 250; Mo. Stat., May 16, 1S.S9. 83 Pacific Express Co. v. Seibert, 142 U. S. 339, 35 L. ed. 1035, 12 Sup. Ct. 250. 8< Louisville & Jeffersonville Ferry Co. v. Kentucky, 188 U. S. 385, 23 Sup. Ct. 463, 47 L. ed. 513. In this case the franchise was granted by In- 141 § 70 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES-^ the intangible property within its limits of a bridge company- created and organized in the State for the purpose of erecting and operating a railroad bridge over a navigable river between it and another State; and it may include the franchises it has granted in the valuation of the company's property; such a statute does not violate the Federal Constitution.*^ So a State statute, requiring insurance companies to make full and specified returns to the proper state officers of their business condition, liabilities, losses, premiums, taxes, dividends, ex- penses, etc., is an exercise of the police power of the State and may be enforced against a company organized under a special charter from the legislature of the State, which does not in terms require it to make such return, without thereby depriving it of any rights under the Constitution of the United States.*^ § 79. Exemption from Taxation — Power of State as to — Effect of Consolidation, etc.*^ It has been repeatedly held by the Federal Supreme Court that the legislature of a State may exempt particular parcels of property or the property of particular persons or corporations from taxation, either for a specified period or perpetually, or may limit the amount or rate of taxation to which such prop- erty shall be subjected, and that when such immunity is con- ferred or such limitation is prescrilied by the charter of a cor- poration it becomes a part of the contract, and is equally inviolate with its other stipulations; nevertheless, before any diana to maintain a ferry across the Ohio River from the Indiana shore to the Kentucky shore. The franchise was granted to a Kentucky corporation with a franchise from that State to ferry from the Kentucky to the Indiana shore. The jurisdiction of Kentucky extended only to low water mark on the northern and western side of the Ohio River. It was held, in addition to the above, that the Indiana franchise had its situs for taxation in that State; also, quaere, whether such taxation would burden interstate commerce, not decided. 85 Henderson Bridge Co. v. Kentucky, 166 U. S. 150, 41 L. ed. 953, 17 Sup. Ct. 532. 88 Eagle Ins. Co. v. Ohio, 153 U. S. 446, 38 L. ed. 778, 14 Sup Ct. 868. 87 See § 23, herein. 142 FEDERAL AGKNCIP:S — TAXATION § 79 such exoniptioM or limitation can be admitted, the intent of the legislature to confer the innnunity or prescribe the limitation must be clear beyond a reasonable doubt. All public grants are strictly construed, and nothing can be taken against the State by presumption or inference. The established rule of construction in such cases is that rights, privileges and im- munities not expressly granted are reserved.*^ A provision in a charter that certain payments shall be made out of income and that, after dividends up to a specified percentage have been paid, the balance shall be divided between the Govern- ment and the stockholders, does not, in the absence of any exemption in express terms, exempt the corporation from taxation on its franchise.*" A provision in an act of a State legislature under which two railroads were consolidated, re- quiring the new company to pay annually into the State treas- ury a tax of a certain per cent upon its capital stock of a certain amount, was hold not to prevent a subsequent legislature from imposing a further or different tax upon the compan3^ The amount designated in such case being held to be only a declara- tion of the tax payable annually until a different rate should be established."'^ A consolidation of railroads operating to extinguish the old company and to form a new one as of the date of consolidation precludes an exemption from taxation in the old charter from passing to the new company."^ Immunit}^ from taxation does not pass to purchaser of the «8 Delaware Railroad Tax, 18 Wall. (85 U. S.) 206, 21 L. ed. 888. See also Metropolitan St. Ry. Co. v. New York State Board Tax Comm'rs, 199 U. S. 1, 50 L. ed. 65, 25 Sup. Ct. 23 (case followed in Twenty-third St. Ry. Co. v. New York State Board Tax Comm'rs, 199 U. S. 53, 50 L. ed. 85, which also follows Brooklyn City Rd. Co. v. New York, 199 U. S. 48, 50 L. ed. 79, 25 Sup. Ct. 713); Tomlinson v. Branch, 15 Wall. (82 U. S.) 460, 21 L. ed. 189. That exemptions from taxation are to be strictly construed, etc., see also Ford V. Delta & Pine Land Co., 164 U. S. 662, 17 Sup. Ct. 230, 41 L. ed. .590; Covington & Lexington Turnpike Rd. Co. v. Sandford, 164 U. S. 578, 41 L. ed. .560, 17 Sup. Ct. 198. »9 Honolulu Rapid Transit & Land Co. v. Wilder, 211 U. S. 137, 53 L. ed. 121, 29 L. ed. 44, aff'g 18 Hawaii, 668. w> Delaware Railroad Tax, 18 Wall. (85 U. S.) 206, 21 L. ed. 888. " Keokuk & Western Rd. Co. v. Missouri, 152 U. S. 301. 38 L. ed. 450, 14 Sup. Ct. 392. 143 § 79 CONSTITUTIONAL BASIS OF ACTIONS AND DEFENSES^ property and franchises of a railroad under a decree to enforce a statutory lien and such property is subject to taxation there- after by the State. '^^ »2 Railroad Company v. County of Hamblen, 102 U. S. 273, 26 L. ed. 152. Exemption from taxation and effect of consolidation, etc.; assignability; see the following cases: Yazoo & Mississippi Valley Rd. Co. v. Vicksburg, 209 U. S. 358, 28 Sup. Ct. 510, 52 L. ed. 833 (exemption; consolidation; ap- plication of laws affecting constituent companies and obligation of contract) ; Jetton V. University of The South, 208 U. S. 489, 52 L. ed. 584, 28 Sup. Ct. 375 (contract impairment clause; charter exemption not extended to lessees of corporation exempted); Rochester Railway Co. v. Rochester, 205 U. S. 236, 51 L. ed. 784, 27 Sup. Ct. 469, aff'g 182 N. Y. 116 (transference of legislative contract of immunity from taxation; impairment of contract; effect of merger of corporations on contract of immunity; when nontrans- ferable); Powers V. Detroit, Grand Haven & M. Ry. Co., 201 U. S. 543, 26 Sup. Ct. 556, 50 L. ed. 860, aff'g 138 Fed. 264 (reorganization of railroad company; no new corporation; statutory exemption from taxation not de- stroyed); New Mexico v. United States Trust Co., 174 U. S. 545, 43 L. ed. 1079, 19 Sup. Ct. 784; s. c, 172 U. S. 171, 43 L. ed. 407, 19 Sup. Ct. 128, 172 U. S. 186, 43 L. ed. 413, 19 Sup. Ct. 146, 881 (taxation; railroads; exemp- tion of right of way acquired from United States; assessment of superstruc- tures and improvements); Ford v. Delta & Pine Land Co., 164 U. S. 662, 41 L. ed. 590, 17 Sup. Ct. 230 (taxation; extent of exemption; railroads; assess- ments; local improvements); Covington & Lexington Turnpike Rd. Co. v. Sandford, 164 U. S. 578, 41 L. ed. 560, 17 Sup. Ct. 198 (new corporation created out of old one; exemption from legislative control, held not to pass to certain extent; tolls; taxation); Phoenix Fire & Marine Ins. Co. v. Ten- nessee, 161 U. S. 174, 16 Sup. Ct. 471, 40 L. ed. 660 (exemption from taxa- tion not conferred on new company beyond a defined limit which was conferred on the other company by act incorporating it) ; Tennessee v. Whit- worth, 117 U. S. 139, 6 Sup. Ct. 649, 29 L. ed. 833, 117 U. S. 129, 6 Sup. Ct. 645, 29 L. ed. 830 (consoHdation of railroads of different States; shares of new company issued for shares of old one; exemption from taxation passes into new shares in absence of statute of first State to contrary); St. Louis, Iron Mountain & Southern Ry. Co. v. Berry, 113 U. S. 465, 5 Sup. Ct. 529, 28 L. ed. 1055 (consolidation of railroads; exemption from taxation; new company took franchises, etc., subject to organic law as to taxation at time of consolidation); Louisville & Nashville Rd. Co. v. Palmes, 109 U. S. 244, 27 L. ed. 922, 3 Sup. Ct. 193 (right of railroad to exemption from taxation does not pass by sale under mortgage; right personal and not assignable); Railroad Company v. Comm'rs, 103 U. S. 1, 26 L. ed. 359 (when exemption trom taxation does not pass by grant to railroad, reaffirming Railroad Com- pany V. Gaines, 97 U. S. 697, 24 L. ed. 1091; Morgan v. Louisiana, 93 U. S. 217, 23 L. ed. 860) ; Railroad Company v. Maine, 96 U. S. 499, 24 L. ed. 836 (consolidation; tax exemption not continued); Chesapeake & Ohio Rd. Co. V. Virginia, 94 U. S. 718, 24 L. ed. 310 (consolidation; railroads; no greater immunity from taxation acquired than severally enjoyed as to portions of 144 TEDKRAL AGENCIES — TAXATION § 79 road belonging to constituent companies under their respective charters; whatever property was subject to taxation remained so after consolidation) ; Central Railroad & Bkg. Co. v. Georgia, 92 U. S. 665, 23 L. ed. 757 (con- solidation; railroads; effect on charter exemption from taxation on each corporation); Tomlinson v. Branch, 15 Wall. (82 U. S.) 460, 21 L. ed. 189 (consolidation; railroads: tax exemption and extension to successor cor- poration; necessity of express words); Philadelphia, W. & B. Rd. Co. v. Maryland, 10 How. (51 U. S.) 376, 13 L. ed. 461 (consolidation; railroads; assessment of; exemption from taxation taxing power never presumed re- linquished unless intention clearly expressed). 10 145 §§ 80, 81 JURISDICTION AxND VENUE — DEFINITIONS CHAPTER VII JURISDICTION AND VENUE — DEFINITIONS § 80. Definition of Jurisdiction. § 87. Jurisdiction in " Special Casey " 81. Definition of Jurisdiction Con- Defined and Construed. tinned — Nature of Corpora- 88. Subject-Matter and Jurisdic- tion Cases in Which Given or tion Over It Defined. Applied — Instances. 89. Definitions — "Civil" and 82. Same Subject. "Criminal" Jurisdiction — . 83. Same Subject. " Furtlier Civil and Crimina' 84. "General Jurisdiction in Law Jurisdiction." and Equity" Defined. 90. Jurisdiction as Applied to a 85. " Full Jurisdiction in All Mat- State or to City Coimcil. ters of Equity" Defined. 91. Venue Defined. 86. Concurrent Jurisdiction De- fined. , § 80. Definition of Jurisdiction. Jurisdiction is the power to hear and determine a cause or matters in controversy between parties to a suit; to adjudicate or exercise any judicial power over them.^ §81. Definition of Jurisdiction Continued— Nature of Corporation Cases in Which Given or AppUed — Instances. There are various other definitions of jurisdiction. Many of them have evidently been formulated with a view to the nature of the cause, the character of the judicial power to be exercised, or the particular point involved, while others have only a gen- eral application. We shall confine ourselves in the following illustrations to a statement of the nature of those corporation cases in which the word jurisdiction has been defined. The substance of the above definition has been given and applied in a suit by attachment and a claim for damages against a foreign corporation, for the negligent loss of baggage and a 1 See notes under the two next following sections. 146 JURISDICTION AND VKNUE — DEFINITIONS § SI valise by a guest in one of its sleeping cars;- in a case of con- d(Mn nation i)rocee(Jings by a railway company and the juris- diction of a justice of the peace; "'' in the matter of a petition by a railroad company foi- af)pointment of commissioners of ap- praisal and of the insufficiency of the petition to give the court jurisdiction of the subject-matter;^ in an action against a State board of equalization to enjoin a certification to the State Comptroller on the assessed valuation of railroad prop- erty;^ in a case of certiorari to a county board of supervisors sitting as a board of equalization of taxes, under a claim that the board exceeded its jurisdiction, in that it did not regularly l)ursue its authority in determining the assessable value of railway property, and in that it received illegal evidence con- cerning profits earned by the corporation ; ^ in a cause of action 2 Pullman Palace Car Co. v. Harrison, 122 Ala. 149, 157, 82 Am. St. Rep. 68. Defined, per Tyson, J., as follows: Jurisdiction is " the power of a court or judge to hear and determine a cause. * * * It is coram judice when a cause is presented which brings this power into action. * * * The power to decide upon the cause of action, as presented by the pleadings, is jurisdiction, like the power to decide any other legal proposition that the case may involve." Id., per Tyson, J. 3 Musick V. Kansas City, Springfield & Memphis Ry. Co., 114 Mo. 309, 21 S. W. 491. Jurisdiction of the siibject- matter of a proceeding is "the power to hear and determine cases of the general class to which the proceeding in question belongs." Id. * Winnebago Furniture Mfg. Co. v. Wisconsin Midland R. Co., 81 Wis. 389, 393, 51 N. W. 576, quoting from the definitions of jurisdiction given in United States v. Arredondo, 6 Pet. (31 U. S.) 691, 709, 8 L. ed. 547: Grig- non's Lessee v. Astor, 2 How. (43 U. S.) 319, 338, 11 L. ed. 283. See these last citations in note 12 below. 5 Nashville, C. & St. L. Ry. v. Taylor, 86 Fed. 168, 171, quoting from Rhode Island v. Massachusetts, 12 Pet. (37 U. S.) 657, 9 L. ed. 1233, wherein jurisdiction is defined as the power to hear and determine the subject- matter in controversy between parties to a suit; to adjudicate or exercise any judicial power over them; quoted also in Dahlgreen v. Superior Court, 8 Cal. App. 622, 626, 97 Pac. 681, which also cites People v. Sturdevant, 9 N. Y. 263, 59 Am. Dec. 536. In the Rhode Island v. Massachusetts case it is also declared that: "The question is whether, in the case before a court, their action is judicial or extrajudicial or without authority of law to render a judgment or decree upon the rights of the Htigant parties. If the law con- fers the power to render a judgment or decree the court has jurisdiction." " C entral Pacific Rd. Co. v. Placer County, 43 Cal. 365. Jurisdiction, gen- erally defined, is the power to hear and determine. When the word is ap- 147 § 82 JURISDICTION AND VENUE — DEFINITIONS to enforce a mechanic's lien against mining property wherein several intervenors claimed liens upon the entire property, and one only upon a portion thereof, and an order of sale of the entire property directing a pro rata distribution of the proceeds among all the hcnholders was held unauthorized and void;' in a case of a writ of prohibition to enjoin a judge from pro- ceeding in a cause where he had an interest therein and was disquahfied, in that his property would be equally subject to injury as that of the plaintiff in an action for an injunction to restrain depositing tailings and debris from mining claims in the channel of a river;* in a matter of dissolution of an in- solvent bank and exclusive jurisdiction over funds of such corporation, and pendency of proceedings to dissolve as not a bar to an action by the attorney general.'* § 82. Same Subject. The substance of the above definition is also given or applied in a case of a judgment or decree as a bar, and ejectment and estoppel to set up an older grant; ^" in a suit covering the plied to a particular claim or controversy it is the power to hear and deter- mine that controversy. Id. 7 Bassick Mining Co. v. Schoolfield, 10 Colo. 46, 14 Pac. 65, "Jurisdiction in the court " was defined as the " power to hear and determine the partic- ular case involved. If this power to hear and determine the particular case does not exist in the court in point of law, then there can be no jurisdiction in the case. If it does exist, then, to confer actual jurisdiction of the partic- ular case, or the subject-matter thereof, the jurisdictional power of the court must be invoked or brought into action by such measures and in such manner as is required by the local law of the tribunal. When this is done it is then coram judice. If this be not done, there is at least error, if not want of vaHdity in the proceedings." Id. 8 North Bloomfield Gravel Mining Co. v. Keyser, 58 Cal. 315, defining (at p. 326) jurisdiction as the authority by which judicial officers take cog- nizance of and decide causes, and the power to hear and determine causes. 8 People V. Murray Hill Bank, 41 N. Y. Supp. 804, 805, 806, 10 App. Div. 328. (See Murray Hill Bank, In re, 43 N. Y. Supp. 836, 14 App. Div. 320, afT'd in 153 N. Y. 199, 47 N. E. 298.) " 'Jurisdiction,' in the strict mean- ing of the term as applied to judicial officers and tribunals, means no more than the power lawfully existing to hear and determine a cause. It is the power to adjudge concerning the general questions involved." Id., per Brown, P. J. lost. Lawrence Co. v. Holt & Matthews, 51 W. Va. 352, 364, 41 S. E. — , 148 JURISDICTION AND VENUE — DEFINITIONS § 82 points of concurrent jurisdiction nonabatenient of an action by a pending action, suit against and interference with a re- ceiver and proj)erty in his i)ossession, authority of courts to punish summarily, and contempt; ^^ in an action to recover damages for death caused by the negligence of a railroad com- pany during transportation on a steam ferry ;^- and in a Georgia decision where there was also an action for the re- covery of damages for homicide of the plaintiff's intestate defining jurisdiction as the "right to adjudicate concerning the subject- matter in the given case." " Spinning & Brown v. Ohio Life Ins. & Trust Co., 2 Disney (Ohio), 3.36, 374, 375, where the court gives the definition in the Arredondo case (see note next following, down to and including the words "containing all the requisites, and in the manner prescribed by law"). It further defines ju- risdiction as "the power to hear and determine the subject-matter in con- troversy. If the law confers the power to render a judgment or decree then the court has jurisdiction. What shall be adjudged or decreed between the parties is judicial action." [Quoting from Rhode Island v. Massachu- setts, 12 Pet. (37 U. S.) 657, 718, 9 L. ed. 123.3] and then concludes: "Such we understand to be the law of jurisdiction. It exists by the creation of the court, and the powers conferred upon it to hear and determine causes; but when and how the power is to be exercised depends upon the process by which parties invoke its aid." 12 Holmes v. Oregon & California Rd. Co., 9 Fed. 229, 232. In this case the court declares that: " 'The power to hear and determine a cause is ju- risdiction; it is coram judice whenever a case is presented which brings this power into action. If the petitioner presents such a case in his petition that, on demurrer, the court would render a judgment in his favor, it is an un- doubted case of jurisdiction, whether, on an answer denying and putting in issue the allegations of the petition, the petitioner makes out his case is liie exercise of jurisdiction conferred by the filing of a petition containing all the requisites, and in the manner prescribed by law [United States v. Arredondo, 6 Pet. (31 U. S.) 691, 709, 8 L. ed. 547]. Any movement by a court is necessarily the exercise of jurisdiction; so, to exercise any judicial power over the subject-matter and the parties, the question is whether, on the case before a court, their action is judicial or extrajudicial, with or with- out the authority of law, to render a judgment or decree upon the rights of the litigant parties. If the law confers the power to render a judgment or decree, then the court has jurisdiction what shall be adjudged or decreed between the parties and with which is the right of the case, is judicial ac- tion by hearing and determining it. [Rhode Island v. Massachusetts, 12 Pet. (37 U. S.) 654, 718, 9 L. ed. 1232; Watkins, Ex parte, 3 Pet. (2S U. S.) 193, 205.] It is a case of judicial cognizance, and the proceeding is judicial [Kendall v. United States, 12 Pet. (37 U. S.) 524, 623, 9 L. ed. 1181],' " citing Grignon's Lessee v. Astor, 2 How. (43 U. S.) 319, 338, 11 L. ed. 283. 149 § 82 JURISDICTION AND VENUE — DEFINITIONS brought against a railroad. A plea in abatement, on the ground of a prior action pending, was filed, and it was held that such plea, in alleging that the court in which the action was brought had "jurisdiction of the case" "under the allega- tions of the declaration," sufficiently averred that the court referred to had jurisdiction to entertain the action. It was further decided that whether or not the court in which such a declaration had been duly filed and served, had jurisdiction to dispose of the case upon its merits, was a question for its own determination and not for that of another court in which a second suit by the same plaintiff, against the same defendant, upon the same cause of action, was brought.^'' So in a Federal case there was a petition by creditors to revise, in matter of law, the proceedings of the District Court, which resulted in a denial of their motion to vacate an order of adjudication of the bankruptcy of a corporation, and to permit them to file an answer and to litigate the issue whether or not the corporation was principally engaged in any pursuit which subjected it to adjudication as a bankrupt. One of the points decided was that the issue whether or not a corporation was subject to adjudication as a bankrupt was not jurisdictional. Another point determined was that while the jurisdiction of the national courts is limited, they are not inferior courts, and their judg- ments possess every attribute of finality and estoppel apper- taining to those of courts of general jurisdiction, and the absence from their records of all appearance of jurisdictional facts is immaterial.^^ 13 Wilson V. Atlanta, Knoxville & Northern Ry. Co., 115 Ga. 171, 181, 182, 41 S. E. 699. The court, per Lumpkin, J., declared that "the power to hear and determine a cause is jurisdiction" and that "any movement by a court is necessarily the exercise of its jurisdiction." "Our Civil Code, § 5094 * * * declares that to be 'a good cause of abatement' the former suit must be pending in the same or some ' other court that has juris- diction' we may and do concede that this means jurisdiction to entertain the case; but the jurisdiction depends upon the plaintiff's allegations of facts and not upon the truth of those allegations." 14 First National Bk. of Belle Fourche, In re (U. S. C. C. A.), 152 Fed. 64, 68, 39, where the court, per Sanborn, Cir. J., defines "jurisdiction of the subject-matter and of the parties" as "the right to determine the suit or b'O JURISDICTION AND VENUE — DEFINITIONS § 83 § 83. Same Subject. In an Illinois case there was an action of assumpsit to re- cover on an insurance policy for a loss by fire and the question was in issue as to when a suit was connncnced and when juris- diction was acquired. It was declared that jurisdiction over the person was not essential to the connnencement of a suit at law, but that the court must in some manner acquire jurisdic- tion over the person or subject-matter or both, and that suit was commenced when the prcpcipe was filed and the first sum- mons issued by the clerk and that the policy limitation as to the time of bringing suit was not a bar, although a subsequent process was issued after the expiration of the time so limited by the policy .^^ In Arkansas where an action was brought for a penalty for failure of a railroad company to signal at highway crossings there was also a question as to jurisdiction of the subject-matter and when it was acquired; it was held that when a case is colorably within the court's general ju- risdiction it has jurisdiction even though the pleadings are defective, and that its judgment cannot be collaterally im- peached on certiorari ; also that if defendant is actually served with summons the court has jurisdiction even though the writ is defective or the service irregular.^^ Other definitions have also been given and applied in corporation cases. Thus in a case in the United States Supreme Court a bill in equity was filed by a railroad company, a corporation of one State, against proceeding in favor of or against the respective parties to it. The facts essential to invoke this jurisdiction differ materially from those essential to constitute a good cause of action for the relief sought." This case is cited in Tully, In re (U. S. D. C), 156 Fed. 634, 637, to the point that jurisdiction having been acquired, the court had a right to adjudicate upon the facts appearing, and that parties are thereby estopped from attacking the cor- rectness of that adjutlication collaterally. 15 Schroeder v. Merchants' & Mechanics' Ins. Co., 104 111. 71, 76, defining jurisdiction as "the i>ower to hear and determine a cause; it is coram judice whenever a case is presented which brings this power into action," and also that: "The praecipe when filed brought the power of the court into ac- tion." 18 Railway Co. v. State, 55 Ark. 200, 205, 17 N. W. 806, defining juris- diction as "the right to adjudicate concerning the subject-matter in a given case." 151 § 83 JURISDICTION AND VENUE — DEFINITIONS a revenue agent, a railroad coniiiiiHsion, and a railroad corpora- tion, all citizens of another State, to enjoin the railroad com- mission from approving and certifying an assessment for taxes on the defendant railroad for certain years, and to enjoin the revenue agent from beginning any suit or advising any of the counties or towns along the line of such road to bring suit for the recovery of such taxes, and for a decree adjudging such railroad to be exempt from State and county taxation for such specified years. The plaintiff claimed the right to bring the bill upon the ground that it was a lessee of the property and a creditor and mortgage bondholder of the defendant railroad company whose property was sought to be taxed. A tem- porary injunction issued upon filing of the bill and was subse- quently discharged. An appeal was taken to the Court of Appeals and it was dismissed for want of jurisdiction and a final judgment was thereafter entered in the Circuit Court- dismissing the bill. The inquiry of the Supreme Court, after deciding that a defense of res adjudicata could not be made available upon motion to dismiss on appeal, turned to the questions certified upon the subject of jurisdiction by the Circuit Court which were: (1) of diversity of citizenship; (2) of a question arising under the Constitution and laws of the United States; and (3) whether jurisdiction was vested by the fact that the suit was against the State although nominally against an individual by name, in violation of the Eleventh Amendment to the Constitution. It was held that jurisdiction is the right to put the wheels of justice in motion, and to proceed to the final determination of the cause upon the plead- ings and evidence, and that it exists in the Circuit Courts where the plaintiff is a citizen of one State, the defendant a citizen of another, if the requisite jurisdictional amount exists and the defendant is properly served with process within the district; that the averments of the bill presented a case under the Constitution of the United States and jurisdiction might be sustained upon that ground alone, and that as to the third point the question raised was a defense to the merits rather than to the jurisdiction of the court. It was further decided 152 JURISDICTION AND VENUE — DEFINITIONS § 84 that a failure to allege a compliance with the ninety-fourth rule in ecjuity, concerning hills brought by stockholdei's of corpora- tions against the cf)rporation and other parties, did not raise a question of jurisdiction, but of the authority of plaintiff to maintain his bill.^^ In a Louisiana case of mandamus by a stockholder to enforce the right to inspect the books of a cor- poration, the court defines jurisdiction in connection with the exercise of judicial functions, the extent of the powers con- ferred and requisite thereto as well as the limitations thereon,^* § 84. " General Jurisdiction in Law and Equity " De- fined. Where a State Supreme Court is vested by the Constitution with "general jurisdiction in law and equity" the term "jiiris- 17 Illinois Central Rd. Co. v. Adams, 180 U. S. 28, 45 L. ed. 210, 21 Sup. Ct. 251. 18 State ex rel. Watkins v. North American Land & Timber Co., Ltd., 106 La. 621, 631, 31 So. 172, 87 Am. St. Rep. 309, per Monroe, J., who gives the following definition: "Jurisdiction, however, when considered in con- nection with the exercise of judicial functions, 'includes the power to com- pel a person to appear and answer a complaint or to punish him for not doing so; the power to take property in dispute into the custody of the law; the power to compel the production of evidence and hear the contention of parties; the power to determine the question of right between parties and to enforce the determination' (Cent. Diet., Verbo 'Jurisdiction'). And, where there is a lack of power in either of the directions mentioned, whether because intentionally withheld or because of the incapacity of the grantor to confer it, the jurisdiction may be said to be limited in the one case, and incomplete or inadequate, in the other. Thus, the power to hear may be granted and the power to determine withheld, or the power to hear and determine may be granted and the power to enforce the determination withheld, or the power to hear, determine and enforce may be conferred, but restricted to particular litigants or subjects, and tiie jurisdiction may be properly exercised to the hmit prescribed with the effect of fully accom- plishing the purpose for wliich it is conferred. But where, from the terms of the grant, it is evidently the intention to confer jurisdiction without limit as to persons or subject-matter, or to confer complete jurisdiction, within certain hmits, and the exercise of all the power intended to be conferred is necessary in order that the purposes of the grant may be accomplished, but it happens that the grant falls short, in an essential particular, by reason of want of power in the grantor, it follows that the jurisdiction, as conferred, is incomplete or inadequate, and the question arises whether if, in a particular case, the purposes of the grant cannot thereby be accom- plished, such jurisdiction should be exez-cised at all." 153 §§ 85, 86 JURISDICTION AND VENUE — DEFINITIONS diction" means every kind that a court can possess, of the person, subject-matter, territory, and generally the power of the court in the discharge of its judicial duties. Its jurisdiction is coextensive with the State boundaries over every person, natural and artificial, within the same, and although the State is divided into districts the court in each district is the Supreme Court of the State and each has the same power, no more no less than the other. This power cannot be taken away in one district by the State legislature, and any such attempt so to do is unconstitutional and void.^** Where a District Court of a State is invested by its Constitution with general equity juris- diction such jurisdiction can neither be taken away or im- paired by the legislature .^^ § 85. " Full Jurisdiction in all Matters of Equity " De- fined. Where a Chancery Court is given "full jurisdiction in all matters of equity," the words imply that nothing is reserved; whatever is a matter of equity, as to that, the power to ad- judge is full; the court is granted capacity to fully administer it; where the court takes hold of a subject-matter it ought to dispose of it fully and finally."^ § 86. Concurrent Jurisdiction Defined. In a case of proceedings under the law of eminent domain for the condemnation of land for a railroad right of way, where there was a question of the concurrent jurisdiction of Cir- cuit and City Courts, concurrent jurisdiction was defined as that 19 Mussen v. Au Sable Granite Works, 18 N. Y. Supp. 267, 268, 63 Hun, 367. In this case an action was brought to enforce a lien given by statute against certain funds in the treasury of the city of New York, alleged to be due and belonging to defendant; demurrer to jurisdiction. 20 Chicago, Burlington & Quincy Rd. Co. v. Cass County, 51 Neb. 369, 70 N. VV. 955. 21 Bank of Mississippi v. Duncan, 52 Miss. 740, a suit in chancery by creditors of a bank claiming waste and misapplication of assets; the power of equity to appoint receivers and to compel them to pay fimds into court; also the power of the court to retain bill to repair wrong after it decides that it cannot grant relief and dismisses bill. 154 JURISDICTION AND VKNUE — DEFINITIONS § 87 exfTciscd by different courts at the same tinu^ over the same subject-matter, within the same territory, and whc^rein litigants may, in the first instance, resort to either court indifferently. And also, that it means equal power and authority with another court to hear and determine all cases of a class specified within the scope of the statute, granting such jurisdiction, which arise within the territorial limits prescribed/^ § 87. Jurisdiction in " Special Cases " Defined and Con- strued. Where the Constitution of a State permits the legislature to confer on a County Court jurisdiction in ''special cases" it is not intended thereby to include any class of cases of which the courts of general jurisdiction have always supplied a remedy, and the words must be confined to such new cases as are the creation of statutes, and the proceedings under which are un- known to the general framework of courts of common law and equity. The action to prevent or abate nuisances is not one of these where it is amply provided for in the courts of general jurisdiction. This is so held in an action to recover damages to plaintiff's land by reason of the overflow of defendant's canal, and a motion was made to dismiss the case for want of jurisdiction which was sustained .^^ In another case a corpora- tion filed with a county judge a petition for the condemnation of water, and for the right of way over defendant's land for con- ducting the same, and it was declared that the power to hear and determine a special case was judicial power and its nature or character was not changed in any respect by the fact that the Constitution did not assign it to some specified court, as it did the jurisdiction of most of the cases at law and in equity, and it was held that county courts were vested with jurisdiction in "special cases" in the absence of a statute conferring it upon other courts and that the legislature could confer such juris- diction upon District and County Courts, but not upon a county a Hercules Iron Works v. Elgin, Joliet & Eastern Ry. Co., 141 111. 491, 498, 30 N. E. lO.'jO. ^ Parsons v. Tuolumne County Water Co., 5 Cal. 43, 6 Am. Dec. 76. 155 § 88 JURISDICTION AND VENUE — DEFINITIONS judge or upon any tribunal or officer other than one of the courts specified in the Constitution.^^ § 88. Subject-Matter and Jurisdiction Over It Defined. In a cause of action to enforce mechanics' liens upon all the property of a mining company where an intervenor claimed a lien upon a part of the property only, and an order of sale was made of the entire property, directing a pro rata distribution, it was contended by counsel that, considered as one suit, there was jurisdiction of the subject-matter and that the order of sale was therefore not void though irregular. The court de- fined subject-matter as that which is offered for judicial de- cision, and declared that the subject-matter of the intervenor's petition was not the particular mining lode but his claim of lien upon that lode; that the subject-matter of the petitions of the other lien claimants was not the property mentioned in their petitions, but their claims of lien upon such property; ''counsel, therefore, assume that which is contested when they say the court had jurisdiction of the subject-matter. The question is whether, on the case before the court, the action of the court was judicial or extrajudicial — with or without authority of law. * * * A claim of lien by" the intervenor "upon all the property of the defendant company was not a matter presented by any petition before the court. It was not, there- fore, and could not be, the subject of an order or decree. Had such a lien been decreed, it would have been void. A fortiori the order of sale is void." ^^ In a West Virginia case, jurisdic- i!* Spencer Creek Water Co. v. Vallejo, 48 Cal. 70, cited in Chollar Mining Co. V. Wilson, 66 Cal. 374, 377, an application for a writ of prohibition against proceedings for removal of corporate officers. 25 Bassick Mining Co. v. Schoolfield, 10 C^olo. 46, 51, 14 Pac. 65. The court, per Elbert, J., also said: "Had Armstrong" (the intervenor) "been the only lien claimant, and his petition the only petition before the court for consideration, it is entirely plain that, while the court Iiad jurisdiction of the subject-matter of the petition, it had no power or authority to order a sale of property other than that mentioned in the petition, and upon which a lien had been decreed. Its jurisdiction was not invoked with respect to a claim of lien upon any other property, nor could it attach to any property other than that mentioned in tlie petition. * * * We think it equally plain that the defect of jurisdiction which we have pointed out was not 156 JURISDICTION AND VKNUE — DEFINITIONS § 89 tion ov(>r the subject-matter is defined as meaning the nature of the cause of action and of the relief sought ; that this is con- ferred by th(> sov(>reign authority which organizes the court, and is to be sought for in the general character of its powers, or in authority specially conferred. The cause of action was against an insurance company to recover the entire amount of money found due on the adjustment of a fire loss, to which action the insurer set up the defense of payment of a portion of the money under a foreign judgment and order made in garnishment proceedings. It appeared, however, that such judgment was based upon a contract void as to the insured. It was held that the court of another State had not the jwwer, without service of process or voluntary appearance, to render a judgment on a contract absolutely void in the State where made, and that if such a void contract is sued on by a foreign attachment in a foreign jurisdiction, the garnishee must make defense to the action or notify, if practicable, his absent creditor of the pendency of the attachment proceedings, that such creditor may make a defense, otherwise a judgment rendered by default will not protect the garnishee when sued by his creditor.^^ § 89. Definitions — " Civil " and " Criminal " Jurisdiction — " Further Civil and Criminal Jurisdiction." The terms "civil" and "criminal" when used either in reference to jurisdiction or judicial proceedings generally, cured by the fact that jurisdiction of the court had attached to all the prop- erty under and by virtue of the petitions of the other lien claimants. Their petitions did not invoke the jurisdiction of the court in respect to the Arm- strong claim. We do not see that the court had any greater or different jurisdiction than if the subject-matter of each petition had been tried and adjudicated separately. The same fundamental principles fix the limits of tl'e power and authority of the court in the one case as in the other." The effect of Gen. Stat., § 2155, providing that "judgment is to be rendered accorrhng to the rights of the parties" and each party is to have a lien es- tablished and determined in said decree "upon the property to which his lien shall have attached " was also considered as another reason for the de- cision as rendered. 2« Stewart v. Northern Assurance Co., 45 W. Va. 734, 740, 44 L. R. A. 104, .'>2 S. E. 218; McWhorter, J., in giving the above definition quotes from Cooper V. Reynolds, 10 Wall. (77 U. S.) 308, 316, 19 L. ed. 931. 157 § 89 JURISDICTION AND VENUE — DEFINITIONS have respect to the nature and form of the remedy and the cause of action or occasion for instituting legal proceedings. A competent court for the prosecution of either class of actions is one having lawful jurisdiction; and civil jurisdiction simply means jurisdiction to hear and determine civil actions. To enlarge the civil jurisdiction of that class of actions is merely to give jurisdiction over other actions for the recovery of a right or the redress of a wrong and has no respect whatever to the territorial limit of the jurisdiction over persons. When a Constitution speaks of ''further civil and criminal jurisdic- tion" it has respect to the object of the jurisdiction and not to the territory or persons of suitors. When, therefore, a State Constitution continues certain local courts, then in existence in cities, with the powers and jurisdiction then possessed by them, "and such further civil and criminal jurisdiction as may be conferred by law" the words have respect to the object of the jurisdiction and not to the territory or the persons of the suitors, and the power conferred upon the legislature is to enlarge the then jurisdiction over subjects and matters civil and criminal in their nature and the proper subjects of civil and criminal prosecutions. The authority given is to enlarge their jurisdiction as local courts, not to create new courts with gen- eral jurisdiction throughout the State. When a jurisdiction is spoken of, it has not respect to the residence of the plaintiff, but the subject-matter and cause of action and the person of de- fendant; and the jurisdiction of these local courts is limited to causes of action arising within the territorial limits of the tribunal or to cases in which the party proceeded against resides in or is served with process within the jurisdiction. Jurisdiction cannot be conferred upon them based simply upon the fact that the plaintiff is domiciled in or casually chances to be within the locality. It was, therefore, decided that a City Court, under such provision of the Constitution, had no jurisdiction of an action against a corporation for negligence as a common carrier, where the cause of action arose and the business of the corporation was transacted, and its ofl^cers located outside of the city constituting the jurisdictional 158 JURISDICTION AND VENUE — DEFINITIONS § 89 limits, and that statutes attempting to give such jurisdiction were unconstitutional and void.^^ 27 Landers v. Staten Island R. Co., 53 N. Y. 450, cited in Worthington v. London Guarantee & Accident Co., 1G4 N. Y. 81, 89, 31 Civ. Pro. 282, 58 N. E. 102; Matter of City of Buffalo, 139 N. Y. 422, 427, 34 N. E. 1103, 54 N. Y. St. R. 1103; McCann v. Gerding, 60 N. Y. Supp. 467, 470, 29 Misc. 288; Irwin v. Metropolitan St. Ry. Co., 57 N. Y. Supp. 19, 22, 38 App. Div. 255, 6 Ann. Cas. 376; Tobias v. Perry, 54 N. Y. Supp. 716, 719, 25 Misc. 78; Weidman v. Sibley, 44 N. Y. Supp. 1057, 1059, 16 App. Div. 619; Ziegler v. Corwin, 42 N. Y. Supp. 855, 862, 12 App. Div. 71; Pierson v. Fries, 38 N. Y. Supp. 765, 766, 3 App. Div. 420. Jurisdiction of New York municipal court, see the following cases: Erkins v. Tucker, 115 N. Y. Supp. 256 (no equity jurisdiction); American Mfg. Co. v. Weintraub, 115 N. Y. Supp. 88 (allegation not demurrable for want of jurisdiction in averring that plaintiff is a foreign corporation and not showing defendants are residents of city); Rothstein v. Brooklyn Heights R. Co., 114 N. Y. Supp. 344 (in case of action for personal injuries caused by being struck by a street car conductor, when plaintiff not a passenger, no jurisdiction under Municipal Court Act, Laws 1902, p. 1499, c. 580, § 1, subdv. 14); Woodward Lumber Co. v. General Supply & Construction Co., 113 N. Y. Supp. 628, 60 Misc. 367 (in action by foreign corporation to re- cover money judgment only City Court of New York has jurisdiction under Code Civ. Proc, § 315, subdv. 1); Telzer v. Brooklyn Elevated Rd. Co., 113 N. Y. Supp. 18, 61 Misc. 59 (no jurisdiction of action for malicious pros- ecution, even though joined with another action over which jurisdiction exists; under Municipal Court Act, § 1, subdv. 14, Laws 1902, p. 1489, chap. 580) ; Miller v. Brooklyn Heights Rd. Co., Ill N. Y. Supp. 47, 127 App. Div. 197 (case of refusal of passenger to pay fare and attempt to eject her; action held to be for battery and court without jurisdiction); Edwards v. Greenwich Savings Bk., 110 N. Y. Supp. 920, 59 Misc. 451 (when City Court without jurisdiction in action on savings bank account by the transferee of book and bank sets up judgment setting aside transfer, even though equitable defenses available) ; Ebhng Brewing Co. v. Nimphins, 109 N. Y. Supp. 808, 58 Misc. 545 (case of nonequitable jurisdiction of proceedings to redeem leased premises); Baumstein v. New York City Ry. Co., 107 N. Y. Supp. 23, 56 Misc. 498 (aggravated assault by street car conductor upon passenger and latter's arrest; court has jurisdiction); Leyden v. Brooklyn Heights Rd. Co., 106 N. Y. Supp. 769, 122 App. Div. 383 (has jurisdiction of case for damages sustained through negligence of company in causing injuries to wife and consequent loss of personal services); Jacobs v. Colum- bia Storage Warehouse, 105 N. Y. Supp. 276, 55 Misc. 268 (action to recover personal property, under conditional sale, brought by assignee claiming lien for storage against buyer; no jurisdiction); Schwartz v. Interborough Rapid Transit Co., 103 N. Y. Supp. 80, 53 Misc. 289 (action for assault and battery by company's servant; no jurisdiction; otherwise, where cause of action and assault arose from violation of defendants' contract to carry safely); Gormley v. Brooklyn Heights Rd. Co., 102 N. Y. Supp. 692, 52 159 §§ 90, 91 JURISDICTION AND VENUE — DEFINITIONS § 90. Jurisdiction as Applied to a State, or to City Council. Jurisdiction as applied to a State, signifies the authority to declare, and the power to enforce the law, as well as the terri- tory within which such authority and power may be exercised. The jurisdiction of a State is coextensive with its sovereignty .^^ Where a statute provides that "the city council shall be deemed to have acquired jurisdiction to order " certain work in streets and alleys to be done, the term "jurisdiction," implies that the person or tribunal which has "acquired" it, is thereby empow- ered to declare or establish an enforceable charge or liability against the person or subject over wliich it has been acquired.^^ § 91. Venue Defined. Venue is defined as locality, neighborhood; place of trial; county. The county where a cause is to be tried. The clause in a declaration or indictment which states the place where the transaction was had, the injury inflicted or the crime com- mitted. Originally a venue w^as employed to indicate the county from which the jury was to come.^" Misc. 495 (case of refusal of street railroad company to give transfer, action for penalty and where action to be brought; no conflict between Code Civ. Proc, §§ 983, 991, and Municipal Court Act, Laws 1902, p. 1496, chap. 580, § 20, Id., p. 1498, § 1, subdv. 7 (p. 1488). 28 Sanders v. St. Louis & New Orleans Anchor Line, 97 Mo. 26, 10 S. W. 595, 3 L. R. A. 390. A case of action for death caused by negligence of a corporation of Missouri instituted by a resident of that State ; the deceased was drowned on the Mississippi River between Illinois and Missouri while the boat was at the Illinois shore. It was held that the Missouri courts had jurisdiction. But examine Chicago, Burlington & Quincy Rd. Co. v. Cass County, 51 Neb. 369, 70 N. W. 955. 29 Santa Cruz Rock Pavement Co. v. Broderick, 113 Cal. 628, 634, 45 Pac. 863 (a case of street paving contract, and authority of a board of super- visors and limitations thereon). 30 Anderson's Diet, of Law. For other definitions of venue see the following cases: Massachusetts: Briggs v. Nantucket Bank, 5 Mass. 94, 96. Michiyan: SuWivan v. Hull, 86 Mich. 7, 13, 48 N. W. 646, 647, 13 L. R. A. 556. Nevada: State v. McKinney, 5 Nev. 194, 198, 199. New York: Bangs v. Selden, 13 How. Pr. (N. Y.) 374, 377; Moore v. Gardner, 5 How. Pr. (N. Y.) 243. Texas: Armstrong v. Emmet, 16 Tex. Civ. App. 242, 244. 41 S. W. 87. Utah: Konold v. Rio Grande Western Ry. Co., 16 Utah, 151, 156, 51 Pac. 256, 257. 100 SUPERVISORY BODIES — GENERALLY §92 CHAPTER VIII JURISDICTION OR POWER OF CORPORATION SUPERVISORY BODIES — GENERALLY 92. Jurisdiction or Power of Su- pervisory Bodies or Agen- cies — Delegation of Power — Generally. 93. Jurisdiction of Power of Su- pervisory Bodies or Agen- cies — Delegation of Power — General Instances. 94. Jurisdiction or Powers of As- sessment Board — Railroads — Due Process of Law — In- terstate Commerce. 95. Jurisdiction or Power of Su- pervisors, Aldermen or Other Legislative Bodies of Cities, Towns, etc., as to Water Rates — Mandamus. 96. Powers of Municipality — Rail- road Commission and Bor- ough President — L a y i n g Electric Lines — Repaving by Street Railroad. 99. 99. § 97. Powers of Commission as to Standard Fire Policy. Jurisdiction or Powers of Court of Visitation — Tele- graph and Railroad Lines. Powers of Secretary of Agri- cultiu-e — Regulation of Commerce — Quarantine Regulations. 100. Secretary of Commerce and Labor — Enforcement by, Without Judicial Trial, of Penalty of Transportation Company — Notice and Hearing — Civil and Crimi- nal Action. 101. Power of Secretary of State — Reinsurance Contract. 102. Special Tribunal — "Special Commission" to Hear and Adjudicate, Not a "Court" — Gas and Electric Plant. § 92. Jurisdiction or Power of Supervisory Bodies or Agencies — Delegation of Power — Generally. Ill the execution of the power to regulate commerce Congress may employ, as instrumentalities, corporations created by it or by the States.^ The legislature may also properly designate any agency it deems proper within the State, reasonably calculated to act justly in the matter, to nominate persons for appointment to administer police regulations.^ So the State may transfer its reserved police power from one set of func- 1 Cherokee Nation v. Southern Kansas Ry. Co., 135 U. S. 641, 34 L. ed. 295, 10 Sup. Ct. 965. 2 State ex rel. Milwaukee Medical College v. Cliittenden, 127 Wis. 468, 10 X. W. 500. 11 161 § 93 JURISDICTION OR POWER OF CORPORATION tionaries to another by requiring electrical companies to submit plans, etc., to the latter for constructing electrical conduits or subways.^ Where a statute acts on a subject as far as practica- ble and only leaves to executive officials the duty of bringing about the result pointed out and provided for, it is not uncon- stitutional as vesting executive officers with legislative powers.^ So a distinction exists between the power to make a law, which involves a discretion as to what that law shall be, and employ- ing an agency which is empowered to exercise a discretion in determining when the law as enacted shall be enforced, or to determine questions of fact essential to the application of the law; the power to legislate which is vested in the State cannot be delegated; the administrative duties in carrying out legis- lative powers may be delegated.^ § 93. Jurisdiction of Power of Supervisory Bodies or Agencies— Delegation of Power— General Instances. Judicial power is not unconstitutionally conferred on a State board of control to adjudicate priority of water rights with the right of appeal, as such board is an administrative one.^ A State statute may also require each surveyor general to survey all logs and timbers running out of any boom, chartered or to be chartered by law in his district, and such enactment refers to corporations organized under general law or by special act.' So power may be delegated to a municipal corporation 3 New York v. Squire, 145 U. S. 175, 12 Sup. Ct. 880, 36 L. ed. 666. 4 Buttfield V. Stranahan, 192 U. S. 470, 24 Sup. Ct. 349, 48 L. ed. 252; Field V. Clark, 143 U. S. 649, 12 Sup. Ct. 495, 36 L. ed. 294. . 5 United States v. Union Bridge Co., 143 Fed. 377; People v. Grand Trunk Ry. Co., 232 111. 292, 297, 83 N. E. 839, per Carter, J., quoting Sutherland on Statutory Construction, p. 611. 6 Farm Investment Co. v. Carpenter, 9 Wyo. 110, 61 Pac. 258, 87 Am. St. Rep. 918, 50 L. R. A. 747. As to delegation to, extent of jurisdiction or power of, and enumeration of subordinate bodies or agencies to whom delegated, see Joyce on Fran- chises, §§ 147-170; as to delegation of power to and by courts, see Id., §§ 171-184; as to delegation of power — quasi-municipal and subordinate agencies, see Id., §§ 185-205. 7 Lindsay & Phelps Co. v. Mullen, 176 U. S. 126, 20 Sup. Ct. 325, 44 L. ed. 400. 1G2 SUFERVISOUV BODIES — GENERALLY § 94 to regulate charges of coinnion carriers to the city/ A State may also, through the instrumentality of a city council, ap- portion the burden of repairs for a viaduct crossing several railroads." The authority of a borough council to consent to the location of electric street railway tracks upon notice as required by statute is not a judicial but a legislative act.^" And a delegation to a supervisor of building and loan associa- tions confers neither legislative nor judicial power.^^ An agreement of the commissioners of the sinking fund of a city and the city attorney with certain banks, trust companies, etc., including the bank of the city, that the rights of those institutions should abide the results of test suits to be brought is dehors the power of said commissioners and said attorney, and a decree in such test suit does not constitute res judicata as to those not actually parties to the record.^^ § 94. Jurisdiction or Powers of Assessment Board — Railroads — Due Process of Law — Interstate Commerce. A State statute giving a State assessment board power to correct valuations, naming a time and place at which any per- son interested may be heard, does not deprive the persons assessed of their property without due process of law because those parties do not have further opportunities to be heard by a court or the legislature.^^ If an assessing board, seeking to assess for purposes of taxa- s Chicago Union Traction Co. v. City of Cliicago, 199 III. 484, 50 L. R. A. 6:il, G5 N. E. 451. B Chicago, Buriington & Quincy Rd. Co. v. Nebraska, 170 U. S. 57. 10 State V. West Jersey Traction Co., 62 N. J. L. 386, 41 Atl. 946, aff'g 61 N. J. L. 470, 39 Atl. 681, 10 Am. & Eng. R. Cas. (N. S.) 323. " Preferred Tontine Mercantile Co. v. Nevada, 199 U. S. 613, 50 L. ed. 334, 26 Sup. Ct. 748, dismissing 184 Mo. 160, 82 S. W. 1075. 12 Louisville v. Bank of Louisville, 174 U. S. 439, 43 L. ed. 1039, 19 Sup. Ct. 753, affirming and applying Stone v. Bank of Commerce, 174 U. S. 412, 19 Sup. Ct. 747, 43 L. ed. 1028; Citizens' Savings Bank of Owensboro v. Owensboro, 173 U. S. 636, 19 Sup. Ct. 530, 571, 43 L. ed. 840. 13 Michigan Central R. Co. v. Powers, 201 U. S. 245, 50 L. ed. 744, 26 Sup. Ct. 459, aff'g 138 Fed. 223. When duties imposed on tax collector are unconstitutional delegation of power, see Cleveland, Cincinnati & St. Louis Ry. Co. v. The People, 212 111. 638, 72 N. E. 725. 163 § 95 JURISDICTION OR POWER OF CORPORATION tion a part of a railroad within a State, the other part of which is in an adjoining State, ascertains the value of the whole hne as a single property and then determines the value of that within the State, upon the mileage basis, that is not a valuation of property outside of the State; and the assessing board, in order to keep within the limits of State jurisdiction, need not treat the part of the road within the State as an independent line, disconnected with the part without, and place upon that property only the value which can be given to it if operated separately from the balance of the road. And where an assess- ing board is charged with the duty of valuing a certain number of miles of railroad within a State forming part of a line of road running into another State, and assesses those miles of road at their actual cash value determined on a mileage basis, this does not place a burden upon interstate commerce, beyond the power of the State, simply because the value of that rail- road as a whole is created partly — and perhaps largely — by the interstate commerce which it is doing.^^ § 95. Jurisdiction of Power of Supervisors, Aldermen or Other Legislative Bodies of Cities, Towns, etc., as to Water Rates — Mandamus. A State may make it the official duty of a board of supervisors, town council, board of aldermen, or other legislative body of any city and county, city or town, in the State to annually fix the rates that shall be charged and collected for water furnished. It is also competent for a State to declare that the use of all water appropriated for sale, rental, or distribution, shall be a public use, subject to public regulation and control; but this power cannot be exercised arbitrarily and without reference to what is just and reasonable between the public and those who appropriate water, and supply it for general use.^^ 14 Cleveland, C, C. & St. L. Ry. Co. v. Backus, 154 U. S. 439, 14 Sup. Ct. 1122, 38 L. ed. 1041. 15 San Diego Land & Town Co. v. National City, 174 U. S. 739, 43 L. ed. 1154, 19 Sup. Ct. 804. See also Stanislaus County v. San Joaquin & Kings River Canal & Irrig. Co., 192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. 241, rev'g 113 Fed. 930. 164 SUPERVISORY BODIES — GENERALLY § 90 To regulate or establish rates for which water will be supplied is, in its nature, the execution of one of the powers of the State, and the right of the State to do so should not be regarded as parted with any sooner than the right of taxation should be so regarded, and the language of such an alleged contract should in both cases be equally plain. ^^ So a provision in a State water act that county boards of supervisors should regulate water rates but could not reduce them below a certain point, does not amount to a contract with water companies which would be impaired within the meaning of the Federal Constitution by a subsequent act either reducing the rates below such point or authorizing boards of supervisors to do so.^' A State statute may also confer upon a board of public officers, such as the commissioner of waterworks, a discretion to make a contract with the "lowest and best" bidder, and this dis- cretion cannot be controlled by mandamus.^* § 96. Powers of Municipality — Railroad Commission and Borough President — Laying Electric Lines — Repaving by Street Railroad. As chap. 483 of the laws of 1881, now part of § 102 of the Transportation Corporations Law o' New York, provides that companies organized for the purpose of maintaining lines of elec- tric telegraphs within the State can operate provided they obtain the consent of the municipal authorities before laying lines in 1* Stanislaus County v. San Joaquin & Kings River Canal & Irrig. Co., 192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. 241, rev'g 113 Fed. 930. See Os- born V. San Diego Land & Town Co., 178 U. S. 22, 20 Sup. Ct. 860, 44 L. ed. 961. " Stanislaus County v. San Joaquin & Kings River Canal & Irrig. Co., 192 U. S. 201, 48 L. ed. 406, 24 Sup. Ct. 241, rev'g 113 Fed. 930. As to ordinances of municipal corporations; contract rights; obligation of contract and regulation of water rates, see Newburyport Water Co. v. Newburyport, 193 U. S. 561, 48 L. ed. 795, 24 Sup. Ct. 763; Freeport Water Co. V. Freeport City, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. 493 (followed in Rogers Park Water Co. v. Fergus, 180 U. S. 624, 45 L. ed. 702, 21 Sup. Ct. 490; Danville Water Co. v. Danville City, 180 U. S. 619, 21 Sup. Ct. 505, 45 L. ed. 696); Los Angeles v. Los Angeles City Water Co., 177 U. S. 558, 20 Sup. Ct. 736, 44 L. ed. 886. See also § 37, herein. 18 State of Ohio ex rel. Walton v. Herman, 63 Ohio St. 440. 165 § 96 JURISDICTION OR POWER OF CORPORATION the streets of any city, village or town, a corporation organized after the passage of said act, or its successor, cannot extend its lines within the city of New York or lay additional wires with- out the consent of the municipal authorities.^** Under the charter of the city of New York a borough president, subject to the control of the board of estimate and apportionment, is the proper person to determine when, how and under what circumstances a street shall be repaved.^" In Connecticut, municipal authorities jointly with the railroad commissioners are agents of the State in the control of the use of highways for street railways, and the commissioners, in some particulars, exercise the control through original and exclusive action, and may exercise it in all particulars either through original and appellate or final action. But in the absence of action by the railroad commissioners the municipal authorities in that State may exercise the full direction and control given by statute in respect to placing electric wires and conductors in the highways by a street railway company for the purpose of transmitting and applying electricity as the motive power for operating its railway, subject, however, to final action of the railroad com- missioners; and any authorized action relating to street rail- ways, taken by local municipal authorities, may be retried and determined by the railroad commissioners.^^ 19 New York Independent Telephone Co., Matter of, 133 App. Div. 635. The syllabus to this case as reported in the New York Supplement reads as follows: Where a State law in force until repealed, Laws 1881, p. 656, chap. 483, in force until repealed by Laws 1909, chap. 219; Consol. Laws, p. 1613, chap. 63, provided that any company incorporated under the laws of the State for the purpose of owning and maintaining a telegraph line or lines wholly or partly within the State may lay Hues underground in any city, etc., within the State, provided that it shall before doing so first ob- tain from the common council, etc., permission to use the streets for the purpose. It was held that a burglar alarm corporation incorporated by the State in 1890 with power to use telegraph wires had no authority to use the streets of New York City, where it had not obtained the consent of the board of aldermen. In re New York Independent Tel. Co., 118 N. Y. Supp. 290, 133 App. Div. 635. 20 New York City v. New York City Ry. Co., 132 App. Div. 156, a case as to the obligation of street railroads to relay pavements between tracks. 21 New York, New Haven & Hartford Co.'s Appeal, 80 Conn. 623, 70 Atl. 26. 166 SUPERVISORY BODIIOS— GENERALLY §§ 97-99 § 97. Power of Commission as to Standard Fire Policy. A delegation of power to a commission to draft, etc., a stand- ard form of fire insurance policy is unconstitutional as confer- ring legislative power .^^ § 98. Jurisdiction or Powers of Court of Visitation — Telegraph and Railroad Lines. A Court of Visitation created with power to regulate tele- graphic and railroad lines within a State is a legislative and administrative body, and the fact that the legislature denomi- nates such tribunal a court is not conclusive as to its true charac- ter nor as to the nature of the jurisdiction and powers conferred upon it; but a statute is unconstitutional which combines in such body legislative functions to make laws and regulations with the power to exercise judicial powers by passing upon the validity of such laws and regulations and enforcing its own judgments and orders.^^ A chapter of a certain enactment extending the power, jurisdiction and control of a Court of Visitation over telegraph companies and telegraphic service within a State will be held in pari materia with another chapter of the statutes passed the same year creating a court of visit- ation and attempting to extend its power, jurisdiction and con- trol over the railways of the State, and it must be construed in connection with that statute the same as though both chapters constituted one enactment .^^ § 99. Power of Secretary of Agriculture — Regulation of Commerce — Quarantine Regulations. Whether or not the Cattle Contagious Disease Act ^^ is con- stitutional as delegating power solely vested in Congress to the Secretary of Agriculture, that act confers no power on such secretary to make any regulations concerning intrastate com- 22 King V. Concordia Fire Ins. Co., 140 Mich. 258, 103 N. W. 616, 12 Det. L. N. 160. See also O'Neil v. American Fire Ins. Co., 166 Pa. St. 72, 30 Atl. 943, 45 Am. St. Rep. 650, 26 L. R. A. 715. 23 Western Union Teleg. Co. v. Myatt (U. S. C. C), 9S Fed. 335. 24 Western Union Teleg. Co. v. Austin, 67 Kan. 208, 72 Pac. 850. 25 Of Feb. 2, 1903, 33 Stat. 1264. 167 § 100 JURISDICTION OR POWER OF CORPORATION merce over which Congress has no control. An order, therefore, of that officer, purporting to fix a quarantine line under the above enactment, and which applies in terms to all shipments whether interstate or intrastate, is void as an attempt to regu- late intrastate commerce, notwithstanding it is the same line as that fixed for a similar purpose as to intrastate shipments by the State through which it passes. While in a proper case Federal authorities may adopt a quarantine line adopted by a State, still where the secretary makes regulations adopting it as applying to all commerce whether interstate or intrastate, and nothing on the face of the order indicates whether he could have made such an order if limited to interstate commerce, the order is not divisible and the Federal Supreme Court cannot declare that it relates solely to interstate commerce but must hold it void as an entirety .^^ § 100. Secretary of Commerce and Labor — ^Enforcement by, Without Judicial Trial, of Penalty on Transportation Company — Notice and Hearing — Civil and Criminal Action. 26 Illinois Central Railroad v. McKendree, 203 U. S. 514, 27 Sup. Ct. 153, 51 L. ed. 298. The record here showed that the case as made by the plain- tiff below was to recover damages for the infection of cattle, because of com- ing in contact with cattle transported by the railroad company from a point south to a point north of the quarantine line estabhshed by the Secretary of Agriculture, in a manner violative of regulations for the transportation and keeping of cattle established by the Secretary's order. The Government objected to the jurisdiction of the Supreme Court to entertain the writ of error, upon the ground that no Federal question was raised within the in- tent and meaning of § 709, Revised Statutes, but that court was of opinion that such questions were raised, and that it was required upon the record to review the judgment of the State Court. "The railroad company, by the proceedings and judgment in this case, was denied the alleged Federal rights and immvmities specially set up in the proceedings, in the enforce- ment of a statute and departmental orders averred to be beyond the con- stitutional power of Congress and the authority of the Secretary of Agri- culture, and in the rendition of a judgment for damages in an action under the statute and order, in opposition to the insistence of the defendant that, even if constitutional, the statute did not confer such power or authorize a judgment for damages." Id., 526, per Mr. Justice Day. What is not a delegation of legislative power to Commissioner of Agri- culture, see State v. Southern Ry. Co., 141 N. C. 846, 54 S. E. 29. 168 SUPERVISORY BODIES — GENERALLY § 100 It is within the competency of Congress, when legislating as to matters exclusively within its control, to impose appropriate obligations and sanction their enforcement by reasonable money penalties giving to executive officers the power to enforce such penalties without the necessity of invoking the judicial powers. The prohibition, therefore, of the Alien Immigration Act 2^ against bringing into the United States alien immigrants afflicted with loathsome and contagious diseases is within the absolute power of Congress, and such provision is not uncon- stitutional because it provides that the Secretary of Commerce and Labor may, without judicial trial, impose upon and exact penalties from a transportation company for violation of its provisions; nor is the imposition of such penalty in such case by an executive officer where so authorized by Congress, in a matter of this kind and wholly within its competency, uncon- stitutional under the Fifth Amendment as taking property without due process of law. The greater includes the less, and where Congress has power to sanction a prohibition by penalties enforceable by executive officers without judicial trial on the ascertainment in a prescribed manner of certain facts, the person upon whom the penalty is imposed is not entitled to any hearing in the sense of raising an issue and tendering evidence as to the facts so ascertained, and is not, therefore, denied due process because the time which the executive officer allows him after notice of the ascertainment and imposition to produce evidence as to certain facts on which the fine might be remitted is too short. Again, the authority given by Congress in the above-stated act to the Secretary of Commerce and Labor to impose an exaction on a transportation company bringing to the United States an alien immigrant afflicted with a loathsome contagious disease when the medical examination establishes that the disease existed, and could have been detected by medical examination at the time of embarkation, does not purport to define and punish any criminal offense, but merely entails the infliction of a penalty enforceable by civil suit; nor 27 Act of March 3, 1903, § 9, chap. 1012, 32 Stat. 1213. 169 § 100 JURISDICTION OR TOWER OF CORPORATION is the enforcement necessarily governed by the rules controlling the prosecution of criminal offenses.^* The court, per Mr, Justice White,^^ said: "The exaction which the section authorizes the Secretary of Commerce and Labor to impose, when considered in the light afforded by the context of the statute, is clearly but a power given as a sanction to the duty, which the statute places on the owners of all vessels, to subject alien emigrants, prior to bringing them to the United States, to medical examination at the point of embarkation, so as to exclude those afflicted with the prohibited diseases. In other words, the power to impose the exaction which the statute confers on the secretary is lodged in that officer only when it results from the official medical examina- tion at the point of arrival not only that an alien is afflicted with one of the prohibited diseases, but that the stage of the malady as disclosed by the examination establishes that the 28 Oceanic Steam Navigation Co. v. Stranahan, 214 U. S. 320,53 L.ed. 1013, 29 Sup. Ct. 671, aff'g 155 Fed. 428, distinguishing Wong Wing v. United States, 163 U. S. 228, 41 L. ed. 140, 16 Sup. Ct. 977, following Hepner v. United States, 213 U. S. 103, 53 L. ed. 720, 29 Sup. Ct. 474. In the principal case a steamship company sought the recovery of money paid to the collec- tor of customs of the port of New York which was exacted by that official under an order of the Secretary of Commerce and Labor. Under the findings of the court, the case having, by stipulation, been tried without a jury, there was no doubt that the money was paid to the collector under protest, and involuntarily, the company being coerced by the certainty that if it did not pay the collector would refuse a clearance to its steamships plying between New York City and foreign ports at periodical and definite sailings, whose failure to depart on time would have caused not only grave pubhc incon- venience from the nonfulfillment of mail contracts, but would also have entailed upon the company the most serious pecuniary loss consequent on its failure to carry out many other contracts, both the secretary and the collector were expressly authorized by law, the one to impose and the other to collect the exactions which were made, and the only question, therefore, was whether the power conferred upon the named officials was consistent with the Constitution. The act, the constitutionality of which was called in question and under which the officials acted was § 9 of the act of March 3, 1903, chap. 1012, 32 Stat. 1213. This provision extended to "any person, in- cluding any transportation company other than railway lines entering the United States from foreign contiguous territory, or the owner, master, agent, or consignee of any vessel." 29 /t/., 332, 342. 170 SUPERVISORY BODIES — GENERALLY §§ 101, 102 alien was suffering with the disease; at the time of embarkation, and that such fact would have been then discovered had the medical examination been then made by the vessel or its owners, as the statute requires. We think it is also certain that the j)ower thus lodged in the Secretary of Commerce and Labor was intended to be exclusive, and that its exertion was au- thorized as the result of the probative force attributed to the official medical examination for which the statute provides, and that the power to refuse clearance to vessels was lodged for the express purpose of causing both the imposition of the exaction and its collection to be acts of administrative compe- tency not reciuiring a resort to judicial power for their enforce- ment. * * * It is not denied that there was full power in Congress to provide for the examination of the alien by medical officers and to attach conclusive effect to the result of that examination for the purposes of exclusion or deportation. But it is said the power to do so docs not include the right to make the medical examination conclusive for the purpose of imposing a penalty upon the vessel for the negligent bringing in of an alien. We think the argument rests upon a distinction without a difference. It disregards the purpose which, as we have already pointed out. Congress had in view in the enact- ment of the provision, that is, the guarding against the danger to arise from the wrongful taking on board of an alien afflicted with a contagious malady." § 101. Power of Secretary of State — Reinsurance Con- tracts. A statute is not unconstitutional as attempting to delegate legislative or judicial |iowers upon a Secretary of State when it requires such officer's approval to reinsurance contracts of life risks.3" § 102. Special Tribunal — " Special Commission " to Hear and Adjudicate Not a " Court "—Gas and Electric Light Plant. A statute may create a special tribunal for hearing and decid- 30 Iowa Life Ins. Co., G4 N. J. L. 340, 45 AtL 762. 171 § 102 JURISDICTION OR POWER OF CORPORATION ing upon claims against a municipal corporation which have no legal obligation, but which the legislature thinks have sufficient equity to make it proper to provide for their investi- gation and payment when found proper, and it does not in any way regulate the practice in courts of justice.^^ In a case of importance decided in Connecticut a statute of that State ^^ allows cities and towns to establish gas or electric plants for furnishing light for municipal use and the use of citizens paying therefor, but requires the municipality, before setting up its own plant, to purchase the local plant of a specially chartered corporation engaged in like business, if there be one, provided such corporation shall elect to sell and comply with the terms of the act. In case of a disagreement as to what shall be sold, or as to the terms of sale, the act provides that either party may apply to the Superior Court for the appointment of a "special commission," who shall hear the parties and "adjudi- cate" those matters, and that its doings shall be reported to said court for confirmation. If a remonstrance to the report is sustained, the court is to set aside the report in whole, or in part, as justice may require, and appoint another "special commission " ; and this procedure is to be repeated, if necessary, until the report," covering all questions involved" has been confirmed by the Superior Court, which may compel compliance with its final decree and issue and enforce such interlocutory orders as justice may require; upon appeal by the defendant from a judgment of the Superior Court accepting and confirm- ing the action of such a commission it was held: — (1) That the question of constitutionality of the act ^^ was one beyond the province of the special commission, its duty being simply to execute the powers confided to it by the Superior Court. (2) That the special commission was not a "court," nor its members "judges," within the meaning of the Constitution of the State ^* 31 Guthrie National Bank v. Guthrie, 173 U. S. 528, 19 Sup. Ct. 513, 43 L. ed. 796. 32 Chapter 231 of the Public Acts of 1893, now §§ 1978-1997 of the Gen- eral Statutes. 33 Of 1893. 34 Article 5, §§ 1, 3. 172 SUPERVISORY BODIES — GENERALLY § 102 which requires courts to bo established and judges appointed by the General Assembly. (3) That the compulsory purchase feature of the act did not confer '^ exclusive public emoluments or privileges" upon the plaintiff in violation of the State Con- stitution^^ since the duty of purchasing such plants rested equally on all municipalities seeking to take advantage of the statute, and was owed equally to all corporations in the situation of the plaintiffs. While no man or set of men are entitled to demand exclusive privileges from the State, it may grant them, for proper cause and on equal terms, to certain sets of men or classes of corporations. (4) That the legislature had the right to create a i)articular kind of administrative tribunal to decide questions regarding the value of property to be appropriated to a public use, whether by a public or a private corporation, and the method and terms of such appropriation. (5) That in estimating the sum to be paid by the city for the plaintiff's property, the commission was not confined to a valuation of the bare physical plant, and committed no error in taking into account its earning capacity as a going concern, based upon its actual earnings, the expense of operation and the changes, if any, needed for the reasonable improvement of the plant, and the probable results thereof as bearing upon the output; also the fact that the plaintiff had an established business, built up at the risk of private capital after experiments and changes during a long period, as well as the policy of the State in dealing with public service corporations like the plaintiff, in so far as that policy or purpose was manifested by the terms of the statute. (6) That it was unnecessary and could serve no useful purpose, for the commission to specify separately each item of value which it included in the purchase price fixed by it. (7) That it was within the jurisdiction of the Superior Court, in framing the final judgment, to provide for the due fulfillment of the terms and conditions of sale laid down in the report, although it could not impose other or additional obli- gations upon the parties. (8) That the judgment in fixing the date of the sale and transfer; settling the particular form of the 36 Article 1, § 1. 173 § 102 JURISDICTION OR POWER OF CORPORATION warranty deed and bill of sale and the date and manner of their delivery; in computing interest and liquidating the precise amount of the purchase price; and in ordering the issue of an execution for the amount due at the date fixed for payment, did not depart from, but merely gave effect to the terms of the report. (9) That the sale of the plant, subject to the mortgage, as directed by the commission, imposed no direct obligation upon the city to pay the mortgage bonds or interest thereon, and therefore a clause of the judgment which required the city to reimburse the plaintiff for such installments of interest as it should thereafter pay, was erroneous, and unauthorized either by the statute or the commission's report. Under such circum- stances the plaintiff must look solely to its equitable charge upon the mortgaged property for indemnity .^^ 38 Norwich Gas & Electric Co. v. Norwicli, 76 Conn. 565. 174 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 103 CHAPTER IX JURISDICTION OR POWERS OF SUPERVISORY CORPORATION COM- MISSIONS CONTINUED 103. Jurisdiction of Interstate Com- merce Commission — Nature of Powers of. 104. Jurisdiction of Interstate Com- merce Commission — Rates — R e b a t e s — Discrimina- tion. 105. Same Subject — Instances. 106. Jurisdiction of Interstate Com- merce Commission — Rates — Promulgation of General Orders. 100a. Jurisdiction of Interstate Commerce Commission — Carriers Discriminatory Regulations — Railroad Equipment — Coal Car Dis- tribution. 107. Power of State as to Railroad and Like Commissions. 108. Same Subject. 109. Same Subject — Power to Re- move or Suspend Commis- sions. 110. .Jurisdiction and Power of Railroad and Like Commis- sions — Generally. 111. Same Subject. 112. Nature of Jurisdiction and Power of Railroad Commis- sions. 113. Jurisdiction of Railroad Com- missions — Rates. § 114. Same Subject. 115. When Railroad Commission Is Without Jurisdiction — Rates. 116. Jurisdiction of Railroad Com- mission — Increase of Capi- tal Stock of Corporations. 117. Jurisdiction of Public Service C o m m i s s i o n — Issue of Stocks and Bonds by Cor- poration, lis. Jurisdiction of Railroad Com- mission — Stopping Inter- state Trains. 119. Jurisdiction of Railroad Com- mission — Interstate Com- merce — Delivery of Cars — Train Connections. 120. Jurisdiction of Railroad Com- missions — Railroad Station — Other Facilities — Obliga- tion of Contract — Due Process of Law. 121. Jurisdiction of Railroad Com- missions — Railroad or Grade Crossings — Appor- tionment or Expense of. 122. Jurisdiction of Railroad Com- missions — Telegraph Corn- pan i e s — Installing Tele- phone. § 10.3. Jurisdiction of Interstate Commerce Commission -Nature of Powers of. The Interstate Coinmcrcc Commission is a body corporate I/O § 103 JURISDICTION OR TOWERS OF with legal capacity to be a party plaintiff or defendant in the Federal Courts.^ It was decided in 1889 that the Interstate Commerce Commission is invested only with administrative powers of suspension and investigation which fall far short of making the board a court, or its action judicial in the proper sense of the term. The commission hears, investigates, and reports upon complaints made before it, undoing alleged viola- tions or omissions of duty under the act; but subsequent judicial proceedings are contemplated and provided for as the remedy for the enforcement, either by itself or the party inter- ested, of its order or report in all cases where the party com- plained of or against whom its decision is rendered does not yield voluntary obedience thereto. The commission is charged with the duty of investigating and reporting upon complaints, and the facts found or reported by it are only given the force and weight of prima facie evidence in all such judicial proceed- ings as may thereafter be required or had for the enforcement of its recommendation or order. The functions of the com- mission are those of referees or special commissioners, appointed to make preliminary investigation of and report upon matters for subsequent judicial examination and determination. In respect to interstate commerce matters covered by the law, the commission may be regarded as the general referee of each and every Federal Circuit Court upon which the jurisdiction is conferred enforcing the rights, duties and obligations recognized and imposed by the act. It is neither a Federal Court under the Constitution, nor does it exercise judicial powers, nor do its conclusions possess the efficacy of judicial proceedings.^ 1 Texas & Pacific Ry. Co. v. Interstate Commerce Commission, 162 U. S. 197, 16 Sup. Ct. 666, 40 L. ed. 940. 2 Kentucky & Indiana Bridge Co. v. Louisville & Nashville Rd. Co. (U. S. C. C), 37 Fed. 567. See also the following cases: Interstate Commerce Commission v. Cincin- nati, New Orleans & T. P. Ry. Co. (U. S. C. C, 1896), 76 Fed. 183 (I. C. C. is not invested with either legislative or purely judicial power; is adminis- trative body with certain incidental and quasi-judicial powers); Interstate Commerce Commission v. Louisville & Nashville Rd. Co. (U. S. C. C, 1896), 73 Fed. 409 (function of I. C. C. is both quasi-judicial and administrative in nature) ; Interstate Commerce Commission v. Cincinnati, New Orleans & T. 176 SUPERVISORY CORPORATION' COMMISSIONS CONTINUED § 104 § 104. Jurisdiction of Interstate Commerce Commission — Rates — Rebates — Discrimination. A private car company which delivers its cars to railroad companies to be furnished indiscriminately for the use of shippers, receiving pay for such use from the railroad com- panies on a mileage basis, is within the provision of the act of Congress^ making it unlawful for any person "or corpora- tion to offer, grant, give, or solicit, accept, or receive any re- bate, concession, or discrimination in respect of the transporta- tion of any property in interstate or foreign commerce by any common carrier, * * * whereby any such property shall, by any devise whatever be transported at a less rate than that named in the tariffs published and filed by such carrier, or whereby any other advantage is given or discrimination is practiced," and the giving by such car company of any rebate or allowance to a shijoper using its cars, whereby he secures the transportation of his property at a less rate than that named in the published tariff of the carrier for transportation of such property, in its own cars, although from its own funds and without the connivance or knowledge of the carrier, is a violation of the statute. Such a car company is therefore sub- ject to the jurisdiction of the Interstate Commerce Commis- sion, charged with the duty of enforcing the statute and having power to inquire into the operations of any agency of trans- portation which may so conduct its business as to destroy uniformity of rates .^ The Southern Pacific and other railroads published a guar- anteed through rate on citrous fruits from California to the Atlantic seaboard. The shippers availing themselves of this rate routed the goods from the terminals of the initial carriers and illegally obtained rebates for the routing from the con- necting carriers. To prevent this — and the action was suc- P. R. Co. (U. S. C. C, 1894), 64 Fed. 981 (I. C. C. not a court but adminis- trative body exercising quasi-judicial powers). 3 Act of Feb., 1903, chap. 708, 32 Stat. 847, U. S. Comp. St. Supp., 1905, p. 599. < Syllabus in Interstate Commerce Commission v. Reichmann, 145 Fed. 237. 12 177 § 104 JURISDICTION OR POWERS OF cossful— the initial carriers republished the rate/ reserving the right to route the goods beyond their own terminals. On com- plaint of shippers the Interstate Commerce Commission ordered the initial carriers to desist from enforcing the new rule, hold- ing it violated § 3 of the Interstate Commerce Act by subject- ing the shippers to undue disadvantage. The Circuit Court sustained the commission, but on the ground that the routing by the carrier amounted, although no other agreement was proved in regard thereto, to a pooling of freights and violated § 5 of the act. It was held error, and that, as the general pur- pose of the act was to facilitate commerce and prevent dis- crimination it would not be construed so as to make illegal a salutary rule to prevent the violation of the act in regard to obtaining rebates; that the question of joint through rates was, under the act, one of agreement between the companies and under their control, and nothing in the act prevented an initial carrier guaranteeing a through rate from reserving in its pub- lished notice thereof the right to route the goods beyond its own terminal; that a carrier need not contract to carry goods beyond its own line, or make a through rate; if it had agreed so to do, it might do so by such lines as it chose, and upon such reasonable terms, not violative of the law, as it could agree upon; and this right did not depend upon whether it agreed to be liable for default of the connecting carrier; that the fact that the initial carrier, in order to break up the practice of rebating by the connecting carriers, promised them fair treat- ment and carried out the promise by giving them certain percentages of a guaranteed through rate business, did not amount to a pooling of freights within the meaning of § 5 of the Interstate Commerce Act; and also that a reservation applicable to a single business by the initial carrier, guarantee- ing a through rate, of the right to route goods beyond its own terminal, did not amount to an unlawful discrimination within the prohibition of the act if the business was of a special nature, like the fruit business, having nothing in common with other freight .'^ 5 Southern Pacific Co. v. Interstate Commerce Commission, 200 U. S. 178 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 105 § 105. Same Subject ^Instances. An order of the Interstate Commerce Commission, that car- riers not charging for tanks on tank-oil shipments desist from charging for the barrel on barrel shipments, or else furnish tank cars to all shippers applying therefor is held to be equiva- lent to a holding that the charge for the barrel is not in itself excessive, and, therefore, that barrel-oil shippers who had not demanded tank cars had not been discriminated against, and were not entitled to reparation for the amounts paid by them on the barrel.^ Certain interstate carriers having established and for some time maintained a rate on steel rails and fastenings and other iron products from Chicago, Illinois, to San Francisco, Cali- fornia, and other Pacific coast points, the Interstate Commerce Commission ordered that the rates on such products from Pueblo, Colorado, an intermediate point, to such Pacific coast points, should not exceed seventy-five per cent of the rates contemporaneously in force from Chicago to the same points on the Pacific coast, and that the rate on steel rails and fasten- ings from Pueblo to San Francisco should not exceed forty- five cents per hundred, and that the rate on other iron products should not exceed thirty-seven and one-half cents per hundred. It was held that the commission had no more power to fix a rate from Pueblo to Pacific coast points by relation to the Chicago rate that had been or that might be established by the carriers themselves than it had to prescribe a maximum rate from Pueblo to Pacific coast points upon an independent con- sideration of what would be a reasonable charge for the service, and that its order was therefore void.''' A railroad engaged in interstate commerce does not violate the provisions of §§ 4 and 6 of the Interstate Commerce Act, by furnishing cartage for delivery free of charge to the mer- 536, 50 L. ed. 585, 26 Sup. Ct. 330, rev'g Interstate Commerce Commission V. Southern Pac. Ry. Co., 132 Fed. 829. See § 35, herein. 8 Penn. Refining Co. v. Western New York & Penn. Rd. Co., 208 U. S. 208, 28 Sup. Ct. 268, 52 L. ed. 456, aff'g 137 Fed. 343, 70 C. C. A. 23. ' Syllabus in Southern Pacific Co. v. Colorado Fuel & Iron Co., 101 Fed. 779, 42 C. C. A. 12; Colorado Fuel & Iron Co. v. Southern Pacific Co., Id. 179 § 105 JURISDICTION OR POWERS OF chants of one town on its line, and not furnishing similar service to the merchants of another town on its line thirty- three miles distant, nor by failing to publish such free cartage in the schedule published in the first town, when such privilege has been openly and notoriously enjoyed for twenty-five years. The fourth section of such act has in view only the transporta- tion of passengers and property by rail, and when property transported as interstate commerce reaches its destination by rail at lawful rates, having regard to rates charged upon similar transportation to other points on the line, it docs not concern the Interstate Commerce Commission whether the goods after arrival are carried to their place of deposit in vehicles furnished by the railroad company free of charge, or in vehicles furnished by the owners of goods; and the same rule applies to the transportation of passengers. In matters of this kind much should be left to the judgment of the commission, and, should it direct, by a general order, that railway companies should thereafter regard cartage, when furnished free, as one of the terminal charges, and include it as such in their schedules, such an order might be regarded as a reasonable exercise of the commission's power.* The Interstate Commerce Commission, in making an investigation on the complaint of a shipper has, in the public interest, the power disembarrassed by any sup- posed admissions contained in the statement of the complaint to consider the whole subject and the operation of the new classification complained of in the entire territory; also how far its going into effect would be just and reasonable and would create preferences or engender discriminations and whether it is in conformity with the requirements of the act to regulate commerce. And if it finds that the new classification disturbs the rate relations thereupon existing in the official classification territory and creates preferences and engenders discrimina- tions it may, in order to prevent such result, prohibit the further enforcement of the changed classification, and an order to that effect is within the power conferred by Congress on the 8 Interstate Commerce Commission v. Detroit, G. H. & M. R. Co., 167 U. S. 633, 42 L. ed. 310, 17 Sup. Ct. 957. 180 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 106 commission; and so held as to an order of the commission di- recting carriers from further enforcing throughout official classification in regard to common soap in less than carload lots.» § 106. Jurisdiction of Interstate Commerce Commission — Rates — Promulgation of General Orders. Congress has not conferred upon the Interstate Commerce Commission the legislative power of prescribing rates, either maximum or minimum or absolute; and as it did not give the express power to the commission, it did not intend to secure the same result indirectly by empowering that tribunal, after having determined what, in reference to the past, were reason- able and just rates, to obtain from the courts a peremptory order that in the future railroad companies should follow the rates thus determined to have been in the past reasonable and just.^" It is also held that the commission has original and » Cincinnati, Hamilton & Dayton Ry. Co. v. Interstate Commerce Com- mission, 206 U. S. 142, 51 L. ed. 995, 27 Sup. Ct. 648, aff'g 146 Fed. 559. 10 Interstate Commerce Commission v. Alabama Midland Ry. Co., 168 U. S. 144, 42 L. ed. 414, 18 Sup. Ct. 45, aff'g 74 Fed. 715, 21 C. C. A. 51, adhering to the decisions in Interstate Commerce Commission v. Cincinnati, New Orleans & Texas Pac. Ry. Co., 167 U. S. 479, 44 L. ed. 243, 17 Sup. Ct. 896 (s. c, 76 Fed. 183); Cincinnati, New Orleans & Texas Pac. Ry. Co. V. Interstate Commerce Commission, 162 U. S. 184, 16 Sup. Ct. 700, 40 L. ed. 935. See also Interstate Commerce Commission v. Cincinnati, New Orleans & Texas Pacific Ry. Co., 167 U. S. 479, 42 L. ed. 243, 17 Sup. Ct. 896, cited in Siler v. Louisville & Nashville Rd. Co., 213 U. S. 175, 194, 29 Sup. Ct. 451, 53 L. ed. 753 [to point that commission is not clothed with jurisdiction, either upon complaint or upon its own information, to enter upon a general investigation of every rate upon every class of commodities carried by all the roads of the State from or to all points therein, and make a general tariff of rates throughout the State (such as was made in the citing case) ; and that no such power was given to the Interstate Commerce Commission]; Honolulu Rapid Transit & Land Co. v. Hawaii, 211 U. S. 282, 291, 29 Sup. Ct. 55, 53 L. ed. 186 (to point that legislature may delegate to an administrative body the execution in detail of the legislative power of regulation); Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 226, 29 Sup. Ct. 67, 53 L. ed. 150 (to point that the estabhshment of a rate is the making of a rule for the future, and therefore is an act legislative, not judicial in kind); Arkansas Railroad Rates, In re (U. S. C. C), 168 Fed. 720, 724 (to point that the making of carriers' rates is a legislative and not a judicial act and courts are powerless to make them; and also as to duty of courts to 181 § 106 JURISDICTION OR POWERS OF exclusive jurisdiction to determine the question of the reason- ableness of an established rate for the interstate transportation of freight, and when a schedule of rates has been duly filed and has gone into effect the rates thereby prescribed are the only lawful rates until changed by the commission.^^ Reason- ably interpreted, the statute, by which alone the Interstate Commerce Commission derives its power, unmistakably re- quires that all rates prescribed thereunder shall be just and reasonable, within the constitutional guaranty, and also that they shall not be unjustly discriminatory or unduly preferential ; and these requirements plainly operate as limitations upon the power of the commission. Neither Congress nor any legislative or administrative board acting by its authorization can com- petently establish rates for the transportation of property in interstate commerce that will not admit of the carrier earning such compensation for the service rendered as under all the circumstances is just and reasonable to it and to the public, dissolve preliminary injunction or make it perpetual where commission rates on final hearing are shown to be compensatory or noncompensatory and confiscatory; the case also decided as to the power of the court to fix max- imum rates and to what extent it may do so) ; Macon Grocery Co. v. Atlan- tic Coast Line Rd. Co. (U. S. C. C), 1G3 Fed. 738, 749 (" 'It is insisted, however, that this power of the court cannot be exercised until the interstate commission has acted, but that commission is expressly denied the power of injunction or any judicial power. This, it has been conclusively held, remains with the courts'"); Chicago, Burhngton & Quincy Rd. Co. v. Winnett (U. S. C. C. A.), 162 Fed. 242, 247 [to point that legislature may delegate power to fix rates upon a commission and that courts of equity will not interfere by injunction to control the exercise of this power in ad- vance (citing also numerous other cases)]. When order of Interstate Commerce Commission fixing rates is invalid, see Interstate Commerce Commission v. Lake Shore & Michigan S. Ry. Co., 134 Fed. 942, aff'd (mem.) 202 U. S. 613, 26 Sup. Ct. 766, 50 L. ed. 1171. Neither court or commission has power to fix maximum rates. See In- terstate Commerce Commission v. East Tennessee V. & G. Ry. Co., 85 Fed. 107; Interstate Commerce Commission v. Northeastern R. Co. of S. C, 83 Fed. 611, 27 C. C. A. 631. " Syllabus in Great Northern Ry. Co. v. Kalispell Lmnber Co., 165 Fed. 25. Commission may determine reasonableness or unreasonableness of rates. Tift V. Southern Ry. Co., 138 Fed. 753, aff'd Southern Ry. Co. v. Tift, 148 Fed. 1021, 79 C. C. A. 536, 206 U. S. 428, 27 Sup. Ct. 709, 51 L. ed. 1124. 182 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 106 for that would be depriving the carrier of its property without due process of law, and would also be taking its property for public use without just compensation in violation of the Fifth Amendment to the Constitution .^^ Again, Congress has con- ferred upon the Interstate Commerce Commission the power of determining whether, in given cases, the services rendered were like and contemporaneous, whether the respective traffic was of a like kind and whether the transportation was under substantially similar circumstances and conditions. If the commission has power of its own motion to promulgate general decrees or orders which thereby become rules of action to common carriers, such exertion of power must be confined to the obvious purposes and directions of the statute since Con- gress has not granted it legislative powers. In passing upon the questions arising under the statute the tribunal appointed to enforce its provisions, whether the commission or the courts, is empowered to consider fully all the circumstances and con- ditions that reasonably apply to the situation, and in the exer- cise of its jurisdiction the tribunal may and should consider the legitimate interests as well of the carrying companies as of the traders and shippers, and in considering whether any particular locality is subjected to an undue preference or dis- advantage the welfare of the communities occupying the lo- calities where the goods are delivered is to be considered as well as that of the communities which are in the locality of the place of shipment. Among the circumstances and conditions to be considered, as well in the case of traffic originating in foreign ports as well as in the case of traffic originating within the United States, competition that affects rates should be considered, and in deciding whether rates and charges made at a low rate to secure foreign freights which would otherwise go by other competitive routes, are or are not undue and unjust the fair interests of the carrier companies and the welfare of 12 Missouri, Kansas & Texas Ry. Co. v. Interstate Commerce Commission (U. S. C. C), 104 Fed. 645. See also Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 819, 30 Chicago L. News, 243, 171 U. S. 361, IS Sup. Ct. 888, 43 L. ed. 197. 183 § lOGa JURISDICTION OR POWERS OF the community which is to receive and consume the com- modities are to be considered. If the commission instead of confining its action to redressing on complaint made by some particular person, corporation, firm, or locality, some specific disregard by common carriers of provisions of the act, proposes to promulgate general orders, which thereby become rules of action to the carrying companies, the spirit and letter of the act require that such orders should have in view the purpose of promoting or facilitating commerce, and the welfare of all to be affected, as well the carriers as the traders and consumers of the country. The mere fact that the disparity between through and local rates is considerable does not warrant the Circuit Court of Appeals in finding that such disparity constitutes an undue discrimination, especially if such disparity is not com- plained of by anyone affected thereby .^^ § 106a. Jurisdiction of Interstate Commerce Commission — Carrier's Discriminatory Regulations — Railroad Equipment — Coal Car Distribution. The equipment of an interstate railroad, including cars for transportation of its own fuel are instruments of interstate commerce and subject to the control of the Interstate Com- merce Commission. So the act to regulate commerce has delegated to said commission authority to consider, where complaint is made on that subject, the question of distribu- tion of coal cars, including the carrier's own fuel cars, in times of car shortage, as a means of prohibiting unjust preference or undue discrimination; and the commission ^"^ has power to deal with preferential and discriminatory regulations of carriers as well as with rates; nor is it beyond the powers of said commission to require a railroad in distributing its coal cars to take into account its own fuel cars in order not to create a preference of the mine to which said cars are assigned "Texas & Pacific Ry. Co. v. Interstate Commerce Commission, 162 U. S. 197, 16 Sup. Ct. 666, 40 L. ed. 940. 1^ Under § 15 of the act to regulate commerce as amended June 29, 1906, c. 3591, 34 Stat. 585. 184 SUPERVISORY CORl'ORATION COMMISSIONS CONTINUED § 107 over other mines. And even if commerce in regard to the purchase of coal at a mine on a raih'oad line by the raih-oad company which supplies its own cars may end there, the power to use the equipment of the railroad to move the coal is subject to the control of said commission in order to prevent dis- crimination against, or undue preference of, other miners and shippers of coal.^^ § 107. Power of State as to Railroad and Like Commis- sions. A State may exercise through a board of commissioners such legislative control as may be necessary to protect the public against danger, injustice and oppression.^^ The legislature may also, without delegating its lawmaking power, establish a commission with authority to fix reasonable rates and tariffs for railroads, prevent unjust discriminations and exercise rea- sonable supervision and control in other matters subject to the right of appeal to the courts, and such a statute is con- stitutional.^'' A State statute may also constitutionally create a railroad commission and charge it with the duty of supervis- ing railroads; and such an enactment is not necessarily void in its entirety because it is to some degree inconsistent and uncertain in its terms.^* So the creation of a board of railroad commissioners and the extent of its powers; what the route of railroad companies created by the State may be; and whether parallel and competing lines may consolidate, are all matters 15 Interstate Commerce Commission v. Illinois Central Rd. Co., 215 U. S. 452, 30 Sup. Ct. — , 54 L. ed. — , followed in Interstate Commerce Commis- sion V. Chicago & Alton Rd. Co., 215 U. S. 479, 30 Sup. Ct. — , 54 L. ed. — , as to power, under the act to regulate commerce, of the commission to make reasonable arrangements for the distribution of coal cars to shippers including cars for the transportation of fuel purchased by the railroad com- pany for its own use. See Baltimore & Ohio Rd. Co. v. Pitcairn Coal Co., 215 U. S. 481, 54 L. ed. — , 30 Sup. Ct. — . See § 49, herein. i« New York & New Eng. Rd. Co. v. Bristol, 151 U. S. 556, 14 Sup. Ct. 437, 38 L. ed. 269. 17 Express Co. (Atlantic Express Co.) v. Wilmington & Weldon Rd. Co., Ill N. C. 463, 16 S. E. 393. 1** Railroad Commission Cases (Stone v. Farmers' Loan & Trust Co.), 116 U. S. 307, 29 L. ed. 636, 6 Sup. Ct. 334. 185 § 108 JURISDICTION OR POWERS OF which a State may regulate by its statutes, and the State Courts are the absolute interpreters of such statutes.^^ § 108. Same Subject. The power to regulate the operation of railroads by a commis- sion rests upon the principle that the State has control over property and pursuits of a public nature. The commission derives all its powers from the statute which creates it. Its functions and duties are administrative or ministerial and neither legislative nor judicial. "Its powers cannot be legis- lative, for legislative powers cannot, strictly speaking, be delega- ted, nor can its powers be judicial in the proper sense of the term, for judicial power can only be exercised by courts and judges." ^" A constitutional inhibition against the delegation of legislative power does not prevent the grant of authority to make rules and regulations for the government of a particular subject. In creating a board of railroad commissioners and investing it with authority to make rules and regulations for the government of railroads, the legislature really enacts the law which governs the subject, but intrusts to the board the execu- tion of the law. For the law the statute must be looked to, as the commissioners cannot enact laws, although they may make reasonable rules and regulations when the authority to make such rules and regulations is expressly or impliedly conferred upon them by statute. ^^ Again, inasmuch as a State has inher- ent power to regulate and control public service corporations, operating within its limits, and to prescribe within reasonable bounds the facilities and conveniences which shall be furnished by them, it may delegate to or confer this power upon a body such as a State corporation commission, although it possesses, to some extent, legislative, executive and judicial powers. And where such commission is, by the Constitution and laws J9 Mobile, Jackson & Kansas City Rd. Co. v. Mississippi, 210 U. S. 187, 52 L. ed. 1016, 28 Sup. Ct. 650, aff'g 89 Miss. 724. 20 Gulf, Colorado & Santa Fe Ry. Co. v. State (Tex. Civ. App., 1909), 120 S. W. 1028, 1034. 21 Gulf, Colorado & Santa Fe Ry. Co. v. State (Tex. Civ. App., 1909), 120 S. W. 1028, 1034. 186 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 109 of a State, given control over common carriers of persons and goods as to matters relating to their public duties and charges, and the latter are given full opportunity, upon notice, to be heard as to their defense and also a right of appeal to the State Court, they are not, by such legislation, deprived of their prop- erty without due process of law. But although this applies to the exercise of its judicial powers, still, in exercising its legis- lative powers the commission is not obligated to give notice to the parties to be affected thereby. Again, the subjection of common carriers to the control of such corporation commission by the State Constitution and laws does not deny to them the equal protection of the laws within the meaning of that provision of the Federal Constitution. The State Constitution and laws apply alike in such case to all persons and companies similarly situated, and the classification is a reasonable one. Nor is the commission an illegal and invalid tribunal, even though invested to a certain extent with legislative, executive and judicial powers; nor does such grant of powers conflict with the Bill of Rights, which expressly provides that, "Except as hereinafter provided, the legislative, executive and judicial departments shall be kept separate and distinct." But where a choice of either of two methods of performing a charter duty is given a corporation, it should not be limited to one of them by the commission, nor should the latter make any order affecting the right of a connecting carrier who has had no notice and was not a party to the proceeding.^^ § 109. Same Subject — Power to Remove or Suspend Commissions. Inasmuch as the railroad commission of North Carolina is not a judicial but an administrative court a statute which provides for the suspension and removal of a commissioner « Winchester & Strasburg Rd. Co. v. Commonwealth, 106 Va. 264, 55 S. E. 692. What is not a delegation of legislative powers to commission, see People v. Delaware & H. Canal Co., 52 N. Y. Supp. 850, 32 App. Div. 120, aff'd 165 N. Y. 362, 59 N. E. 138. 187 §110 JURISDICTION OR POWERS OF will not be sustained as unconstitutional on the ground that thereby the independent tenure of the judiciary is interfered with/^ § 110. Jurisdiction and Power of Railroad and Like Commissions— Generally. As the regulation of the business conducted by common carriers is one over which the legislature has full power to act, ample authority can by law be conferred upon a railroad and warehouse commission to call for information on any carrier, whether a natural or artificial person, resident or nonresident, carrying on business within the State, where such information is absolutely essential for the proper conduct of the carrier and the protection of the public.^'* Under a Georgia case a railroad company cannot be compelled by a railroad commission to contract for shipment of goods beyond its own line.^^ Under a North Carolina decision, a State statute ^^ making it unlawful for a railroad to neglect to transport any goods received by it for a longer period than four days after the receipt thereof gives to the railroad four days' free time at the point of shipment. And a statute making it unlawful for any railroad to allow any goods to remain at any intermediate point for a longer period than forty-eight hours unless otherwise provided by the corpo- ration commission, gives to the commission the right to fix the time allowed as free time for intermediate points and to make reasonable regulations as to the time of transit. But the corpo- ration commission has no power to change the time allowed as 23 Caldwell (State ex rel. Caldwell) v. Wilson, 121 N. C. 425, 61 Am. St. Rep. 672, 28 S. E. 554. 24 State ex rel. Railroad & Warehouse Commission v. Adams Express Co., 66 Minn. 271, 273, 38 L. R. A. 225, 68 N. W. 1085, per Collins, J. 25 State V. Wrightsville & T. Rd. Co., 104 Ga. 437, 30 S. E. 891. As to power of railroad commission to relieve railroad company on ap- plication of operation of statutes relating to transportation of a particular commodity between certain points, see Illinois Central Rd. Co. v. Common- wealth, 23 Ky. L. Rep. 544, 63 S. W. 448. Examine Siler v. Louisville & Nashville Rd. Co., 213 U. S. 175, 53 L. ed. 753, 29 Sup. Ct. 451, considered under § 115, herein. 2« Laws N. C. 1903, chap. 590. 188 SUPERVISORY CORPORATION COMMISSIONS CONTINUEii § lU free time at the point of shipment, nor to alter the penalties fixed for the violation of the statute." § 111. Same Subject. Under an Oregon decision a legislative authority given to a railroad commission to examine into the affairs of railroads and report as to certain specific matters to the legislature, does not raise the presumption of an authority to adjust the same, even though authority is also conferred to hear complaints against such corporations by reason of acts done or omitted to be done by them.28 In Wisconsin while the legislature cannot properly delegate authority to a commission to determine what power a corporation shall possess, still it may clothe a commission with authority to determine whether the facts exist rendering a corporation competent to exercise its corporate powers in a given case. A legislative grant of authority to a commission to determine whether a corporation may do a particular thing proposed by the latter to be done implies authority to determine corporate competency in that regard tested by the charter.^^ Under a Virginia decision where a choice of one of two methods is given to a railroad corporation of performing a charter duty, it is error for a State corporation commission to limit them to one of such methods in directing the performance of that duty.^'' Under a Texas decision the Constitution of that State ^^ em- 27 Summers v. Railroad, 138 N. C. 295, 50 S. E. 714. The syllabus to this case in the Southeastern Reporter reads as follows: "Laws 1903, p. 999, c. 590, § 3, providing that it shall be unlawful for any railroad company to omit to transport any goods received by it for shipment for a longer period than four days after receipt thereof, unless otherwise agreed upon between the parties, or unless the same be destroyed, or to allow any such goods to remain at any intermediate point more than forty-eight hours, unless other- wise provided by the Corporation Commission, confers power on the com- mission to fix the time allowed as free time for intermediate points, and to make regulations as to the time of transit, but not to change the time al- lowed as free time at the point of shipment, nor to alter the penalties. 28 Oregon Railroad Comm'rs v. Oregon Rd. & Nav. Co., 17 Ore. 65, 19 Pac. 702, 2 L. R. A. 195. 29 State ex rel. Minneapolis, St. Paul & Sault Ste. Marie Ry. Co., v. Rail- road Commission, 137 Wis. 80, 117 N. W. 846. 30 Winchester & Strasburg Rd. Co. v. Commonwealth, 106 Va. 264. 31 Article 10, § 2. 180 § 112 JURISDICTION OR POWERS OF powers and directs the legislature to enact laws to "correct abuses" on the different railroads in this State, and this embra- ces the right and duty to pass laws for the correction of all abuses or improper uses of the franchises which had been or might be granted to railroads in this State, as well as all abuses connected with or growing out of the business transacted in the exercise of such franchises. The power was not limited to the correction of abuses in the rates of freight and passenger tariffs. The same construction and effect is to be given to the power to "correct abuses" conferred by the legislature on the railroad commission ^^ and the powers conferred thereby are not limited to regulation of freight and passenger tariffs. It seems that the power of the railroad commission to correct abuses extends only to such as are defined by law, and does not give authority to enact a law defining what is an abuse .^^ Un- der the English Regulation of Railways Act ^^ railway commis- sioners have power to issue a writ of attachment or to impose a penalty not exceeding a certain sum for disobedience to their orders.'^ § 112. Nature of Jurisdiction and Powers of Railroad Commissions. The Railroad Commission of Mississippi is not a court but a mere administrative agency of the State.^^ The North Carolina Railroad Commission established by the act of 1891 of that State is purely of legislative origin, and is an administrative and 32 Rev. Stats., Arts. 4562-4569. 33 Syllabus in Railroad Commission v. Houston & Texas Cent. Ry. Co., 90 Tex. 340, 38 S. W. 750. As to effect of order of railroad commission compelling carriers to receive loaded cars for transportation over its own line, to haul the same over its own line and its junction with the next connecting line and deliver them for transportation to a connecting line, without compensation for loss or de- livery of cars when beyond its own control, see Gulf, Colorado & Santa Fe Ry. Co. V. State (Tex. Civ. App., 1909), 120 S. W. 1028. 34 Of 1873, § 6. 35 So held by Queen's Bench Division of the High Court of Justice, Chat- terly Iron Co. v. North Staffordshire Ry. Co. (1878), 3 Ry. & Can. Cas. 238. 38 Mississippi Railroad Commission v. Illinois Central Rd. Co., 203 U. S. 335, 27 Sup. Ct. 90, 51 L. ed. 209, aff'g 138 Fed. 327. 190 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 113 not a judicial court, and though, by subsequent statute, the commission was made a court of record, the object and effect of such amending statute was simply to give authority to its records and proceedings and added nothing to its powers.'^ Whether or not certain provisions of the Texas statute of 1891, establishing a railroad commission with power to classify and regulate rates, are valid, the remainder of that act is a valid and constitutional exercise of the State sovereignty, and the commis- sion created thereby is an administrative board, created for carrying into effect the will of the State, as expressed by its legislation.^^ It is held that the State Corporation Commission of Virginia acts judicially in determining the liability of a corporation for a fine or forfeiture imposed by a statute which such commission is required to enforce, and it may declare the act imposing such fine or forfeiture unconstitutional.^® § 113. Jurisdiction of Railroad Commissions — Rates. Under a State statute the duty of enforcing such rates as it may fix may be vested in a railroad commissi on. '*° The author- 37 Caldwell v. Wilson, 121 N. C. 425, 28 S. E. 554. See Pate (State ex rel. Board of Rd. Comm'rs) v. Wilmington & Weldon Rd. Co., 122 N. C. 877, 29 S. E. 334, 11 Am. & Eng. R. Cas. (N. S.) 671, considered under § 140, herein. 38 Reagan v. Farmers' Loan & Trust Co., 154 U. S. 352, 38 L. ed. 1014, 14 Sup. Ct. 1047, followed Id., 154 U. S. 420, 38 L. ed. 1031, 14 Sup. Ct. 1062. 39 Commonwealth v. Atlantic Coast Line Ry. Co., 106 Va. 61. Mr. Jus- tice Holmes, in his opinion in Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 224, 53 L. ed. 150, 29 Sup. Ct. 67, remarks that the Virginia State corporation commission exercises among its duties "the authority of the State to supervise, regulate and control public service corporations, and to that end, as is said by the Supreme Court of Virginia * * * jt has been clothed with legislative, judicial and extensive powers. Norfolk & Portsmouth Belt Line Rd. Co. v. Commonwealth, 103 Va. 289, 294." 40 McChord v. Louisville & N. R. Co., 183 U. S. 483, 46 L. ed. 289, 22 Sup. Ct. 165. Duty of railroad commissioners to make rates relates to the subjects of transportation rather than to particular persons or comporations. State v. Atlantic Coast Line Rd. Co. (Fla.), 40 So. 875. As to delegation to railroad commissioners as to mileage tickets on rail- roads, when valid, see Attorney General v. Old Colony Rd. Co., 160 Mass. 62, 35 N. E. 252, 22 L. R. A. 1112. When railroad commission no jurisdiction to compel railroad to reinstate 191 § 113 JURISDICTION OR POWERS OP ity vested in a railroad and warehouse commission to determine, in the exercise of their discretion and judgment what are equal and reasonable rates and fares for the transportation of persons former lower competitive rate, see Edson v. Southern Pacific Co., 133 Cal. 25, 65 Pac. 15. See the following English decisions: Jurisdiction of railway commissioners to require railway company to distinguish in rate books quantum for conveyance, etc., under Regulation of Railways Act, 1873 (36 & 37 Vict., chap. 48), s. 14. See Pickford's, Lim- ited, V. London & Northwestern Ry. Co. (1905), 12 Ry. & Can. Traff. Cas. 154. Jurisdiction of railway commissioners; whether railway company can be called upon to justify increase of rates, lowered but reraised under Rail- way & Can. Traff. Act, 1894 (57 & 38 Vict., chap. 54), s. 1, and Act, 1888 (51 & 52 Vict., chap. 25), s. 29. See Millon & Askam Hematic Iron Co. v. Furness Ry., 12 Ry. & Can. Traff. Cas. 1. Examine Rishworth v. North- eastern Ry., 12 Ry. & Can. Traff. Cas. 34. Jurisdiction of railway commissioners to rescind a through rate; reason- able facility, see Great Northern Ry. Co. (Ireland) v. Donegal Ry. Co. (1901), 11 Ry. & Can. Traff. Cas. 47; Ry. & Canal Traff. Act, 1854 (17 & 18 Vict., chap. 31), s. 2, and Act, 1888 (51 & 52 Vict., chap. 25), ss. 9, 25. Jurisdiction of railway commissioners as to proposed reduction of rate; creation of undue preference, see Taff Vale Ry. Co., In re (1900), 11 Ry. & Can. Traff. Cas. 89 [application to commissioners under Ry. & Can. Traff. Act, 1888 (51 & 52 Vict., chap. 25), s. 29, subs. 3]. Jurisdiction of railway commissioners to grant through booking with- out a through rate, as reasonable facilities, see Didcot, Newbury & South- ampton Ry. Co. V. Great Western Ry. Co., etc. (1896), 10 Ry. & Can. Traff. Cas. 1, 9, under Ry. & Can. Traff. Act, 1854 (17 & 18 Vict., chap. 31), s. 2, and Act, 1888 (51 & 52 Vict., chap. 25), s. 25. As to jurisdiction of railway commissioners to hear and determine complaint as to unreasonableness of increased rate or charge for cartage, see Mansion House Association on Ry. & Canal Traffic, etc., v. London & Northwestern Ry. Co., 9 Ry. & Can. Traff. Cas. (1896), 174, appUcation under Ry. & Can. Traff. Act, 1894 (57 & 58 Vict., chap. 54), s. 1. Jurisdiction of railway commissioners; application for order enjoining railway company to desist charging passengers fares in excess of the sums stated in the Company's Act, 1847 (10 & 11 Vict., chap. 226, s. 49). Com- plaint was founded on obligation imposed on railway companies by the English Ry. & Can. Traff. Act, 1854, s. 2, to grant "all reasonable facili- ties." See Brown v. Great Western Ry. Co. (1881), 3 Ry. & Can. Cas. 523. See also Chatterly Iron Co. v. North Staffordshire Ry. Co. (1878), 3 Ry. & Can. Cas. 238 (illegal and excessive charges for conveyance of traffic does not afford all reasonable facilities within English Ry. & Can. Traff. Act, 1854, s. 2); Aberdeen Commercial Co., etc., v Great North of Scotland Ry. Co. (1878), 3 Ry. & Can. Traff. Cas. 205. 192 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 114 and property by a railway company is not a delegation of legislative power."** The act of the legislature of Minnesota, creating a railroad commission, is not unconstitutional in assuming to establish joint through rates or traffic over the lines of independent con- necting railroads, and apportionating and dividing the joint earnings. Such a commission has a clear right to pass upon the reasonableness of contracts in which the public is interested, whether such contracts be made directly with the patrons of the road or for a joint action between railroads in the trans- portation of persons and property in which the public is indi- rectly concerned. And whether or not connecting roads may be compelled to enter into contracts as between themselves, and establish joint rates, it is none the less true that where a joint tariff between two or more roads has been agreed upon such tariff is as much within the control of the legislature as if it related to transportation over a single line. The presumption is that the rates fixed by the commission are reasonable, and the burden of proof is upon the railroad company to show the contrary. A tariff fixed by the commission for coal in carload lots is not proved to be unreasonable, by showing that if such tariff were applied to all freight the road would not pay its op- erating expenses, since it might well be that the existing rates upon other merchandise, which were not disturbed by the com- mission, might be sufficient to earn a large profit to the com- pany, though it might earn little or nothing upon coal in car- load lots.''^ § 114. Same Subject. An act of incorporation, which confers upon the directors of a railroad company the power to make by-laws, rules and regulations touching the disposition and management of the company's property and all matters appertaining to its con- « State V. Chicago, Milwaukee & St. Paul Ry. Co., 38 Minn. 281, 37 N. W. 72. »2 Minneapolis & St. Louis Ry. Co. v. Minnesota, 186 U. S. 257, 22 Sup. Ct. 900, 46 L. ed. 1151. 13 193 § 115 JURISDICTION OR POWERS OF cerns, confers no right which is violated by the creation of a State railroad conimission, charged with the general duty of preventing the exaction of unreasonable or discriminating the rates upon transportation done within the limits of the State, and with the enforcement of reasonable police regulations for the comfort, convenience and safety of travelers and persons doing business with the company within the State .^^ Under a Massachusetts decision the authority of the board of railroad commissioners ^ is not to consider the general subject of rates, but "to ascertain at what rates facilities for the carriage of milk under contract or in large quantities are furnished by the railroad corporation," and to compare them with the tariff for the carriage of milk by the can, to fix rates by the can "fairly proportionate with such contract or large quantity rates." The order when made is to have the force and effect of a criminal statute which calls for strictness and regularity of proceedings under it.^ The creation of a railroad or corporation commis- sion by statute of a State may operate as a repeal of a statute empowering railroads to fix passenger rates, or a statute giving such authority to railroads may repeal an enactment creating such commission or extending its powers."^ § 115. When Railroad Commission Is Without Jurisdic- tion — Rates. Jurisdiction so extensive as to place in the hands of a rail- road commission power to make general maximum rates for all commodities between all points in a State is not to be implied, but must be given in language admitting no other reasonable construction ; and the fact that the legislature of a State gives to such a commission no power to raise rates, but only power to reduce rates found to be exorbitant after hearing on specific complaint is an argument against construing the statute so as 43 Railroad Commission Cases (Stone v. Farmers' Loan & Trust Co.), 116 U. S. 307, 29 L. ed. 636, 6 Sup. Ct. 334. ** Under Pub. Stat., chap. 112, §§ 192-194. « Syllabus in Littlefield v. Fitchburg Rd. Co., 158 Mass. 1, 32 N. E. 859, "Southern Ry. Co. v. McNeill, 155 Fed. 756. See Matthews v. Board of Corporation Comm'rs of N. C, 97 Fed. 400. 194 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 115 to give the commission power to fix maximum rates on all commodities. Again, vvliere such commission after liearing on specific complaint as to a rate on a particular conmiodity makes a general rate tariff for maximum rates on all commodities which is beyond its statutory power, the whole tariff falls, and the rate on the tariff on the particular commodity will not be separately sustained. Therefore, where a State railroad com- mission having, after a hearing on complaints that the rates on lumber were too high, attempted to impose a general maxi- mum intrastate tariff schedule, and the statute creating the commission not giving it authority to make such a schedule, it was held by the Federal Supreme Court, without deciding whether either the statute or the order deprived the railroad companies of their property without due process of law, that the entire schedule of rates must fall as being beyond the juris- diction of the commission to establish in that manner.^^ So a State constitutional provision regulating rates or compensation for long and short hauls with a proviso authorizing the railroad commission upon application to prescribe the extent of relief which might be granted or carried from the operation of the provision is invalid where it affects or is made applicable to interstate commerce.''* A statute creating a railroad and <7 Siler V. Louisville & Nashville Rd. Co., 213 U. S. 175, 53 L. ed. 753, 29 Sup. Ct. 451. The jurisdiction of the United States Circuit Court, also the rule of the Federal Supreme Court as to constitutional questions not de- cided were involved as noted elsewhere herein. The Kentucky railroad commission law was the one under discussion. The bill was by a railroad company in the Federal Circuit Court for the Eastern District of Kentucky to enjoin enforcement of order of the commission providing maximum rates on transportation of all commodities upon railroads to and from all points within the State. Examine Illinois Central Rd. Co. v. Commonwealth, 23 Ky. L. Rep. 544, 63 S. W. 448. « Louisville & Nashville Rd. Co. v. Eubank, 184 U. S. 27, 22 Sup. Ct. 277, 46 L. ed. 416. The section (Const. Ky., § 218) reads as follows: "It shall be unlawful for any person or corporation, owning or operating a railroad in this State, or any common carrier, to charge or receive any greater com- pensation in the aggregate for the transportation of passengers, or of prop- erty of like kind, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance; but this shall not be construed as authorizing any common carrier, or person or 195 § 116 JURISDICTION OR POWERS OF warehouse commission is unconstitutional where it makes the rates fixed by such commission final and conclusive and de- prives a railroad company of its right to judicial investigation by due process of law.^^ Again, a legislative authority given to a board of railroad commissioners, under the act creating it, to examine into the affairs of railroad companies doing business in the State and make reports to the legislature with certain suggestions as to classification and rate changes in freights or fares without any express delegation of authority to regulate or determine the unreasonableness of such freight rates, does not vest jurisdiction in the commission to require excessive freight charges to be refunded .^° § 116. Jurisdiction of Railroad Commissions — ^Increase of Capital Stock of Corporations. Under a Minnesota decision the legislature may pass a statute providing generally for what purposes and upon what terms, conditions and limitations an increase of capital stock may be made, and it may confer upon a commission (a railroad and warehouse commission) the administrative duty of supervis- ing any proposed increase of stock. It may also delegate to the commission the duty of finding the facts in each particu- lar case, and empower and require rt to allow the proposed increase where the facts exist which bring the case within the statute. But the legislature cannot, by any statute, authorize such commission in its judgment to allow an increase of a cor- poration's capital stock for such purposes and on such condi- corporation, owning or operating a railroad in this State, to receive as great compensation for a shorter as for a longer distance: Provided, that upon application to the Railroad Commission, such common carrier, or person or corporation, owning a railroad in this State, may in special cases, after investigation by the Commission, be authorized to charge less for longer than for shorter distances for the transportation of passengers or property, and the commission may, from time to time, prescribe the extent to which such common carrier, or person or corporation, owning or operating a railroad in this State, may be relieved from the operation of this section." « Chicago, Milwaukee & St. Paul Ry. Co. v. Minnesota, 134 U. S. 418, 33 L. ed. 970, 10 Sup. Ct. 462, 702. 50 Oregon Railroad Comm'rs v. Oregon Rd. & Nav. Co., 17 Ore. 65, 19 Pac. 702, 2 L. R. A. 195. 196 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 116 tions or terms as it shall or may deem advisable, or in its discretion to refuse it, as such an attempt to confer authority would be a delegation of legislative power. And where the statute does delegate to a commission such legislative power, it is unconstitutional and void; a distinction exists between the delegation of legislative powers and administrative duties; that between the delegation of power to make a law, which involves a discretion as to which it shall be, and the conferring an authority or discretion to be exercised under and in pur- suance of the law.^^ The Railroad Commission of Wisconsin also has authority to pass upon the competency of a railroad corporation to increase its capital stock and to refuse permis- sion in that regard in case the articles of incorporation shall not have been so broadened as to cover the subject by a valid amendment which requires a public record of the change to be made in the office of the Secretary of State and compliance with the conditions precedent thereto in respect to the pay- ment of fees.^- 51 State V. Great Northern Ry. Co., 100 Minn. 445, 10 L. R. A. (N. S.) 250, 111 N. W. 289. 52 State ex rel. Minneapolis, St. Paul & Sault Ste. Marie Ry. Co. v. Rail- road Commission, 137 Wis. 80, 117 N. W. 846. A case of mandamus pro- ceedings to require the State railroad commission to furnish relator with a certificate of authority to issue stock in addition to that originally author- ized by the articles of association. There was involved the question of the scope of the commissioners' power relative to the issue of stock, stock certifi- cates, bonds, or other evidences of indebtedness by railroad corporations. " The key to the law " (statute) " is contained in the declaration, in effect, that no corporate stock, stock certificates, bonds, or other evidences of indebted- ness shall be issued by any public service corporation except upon the au- tliority of the commission first obtained. That, of course, does not imply authority for the commission to interfere with the mere business policy of a corporation within its corporate powers, which * * * would be an illegitimate delegation of authority. State v. Great Northern Ry. Co., 100 Minn. 445, 111 N. W. 289. It does unmistakably show a purpose to lodge in the railroad commission power to pass upon questions of fact involved in whether a public service corporation, desiring to do any of the things mentioned is competent in that regard, having reference to the written law on the subject. The seat of original power is in the legislature; it cannot legitimately delegate it. It can properly clothe a commission with capacity to determine whether corporate rights created by the legislature are exer- cisable, that depending upon the existence of facts satisfying legal con- 197 § 117 JURISDICTION OR POWERS OF § 117. Jurisdiction of Public Service Commission— Issue of Stocks and Bonds by Corporations. The paramount purpose of the enactment of the Public Service Commissions Law of New York was the protection and enforcement of the rights of the public. One of the legislative {purposes in the enactment of the statute was to prevent the issue of stocks and bonds by public service corporations, if, upon an investigation of the facts, it was found that they were not for the purposes of the corporation enumerated by the statute and reasonably required therefor. It was not, however, designed to make the commissioners the financial managers of the corporation or to empower them to substitute their judg- ment for that of the board of directors or stockholders as to the wisdom of a transaction. While the ownership of property or- dinarily carries with it the right of management, the duty devolves upon the owner to so manage as not to have it become a nuisance or unnecessarily infringe upon the rights of others. It was, therefore, evidently the legislative intent in the enact- ment of this provision that the commissioners should have supervision over the issuing of long-time bonds by the public service corporations enumerated in § 55 of the Public Service Commission Law to the extent of determining whether they were issued under and in conformity with the provisions of the statute for the purposes mentioned therein, or whether they were issued for the discharge of the actual and not the fictitious debts of the company, or whether they were issued for the refunding of its actual obligations and not for the inflation of its stocks or bonds. Beyond this the power of the commis- sioners does not extend, unless it may pertain to the power to determine whether an obligation should be classified as operat- ing expenses and as to whether such expenses should be paid ditions precedent in that regard, and give to the corporation invoking its jurisdiction evidences of its determination. It would be highly unreason- able to conclude that the legislature purposed empowering the commission to authorize the doing of the things mentioned in the act in any other sense. The grant of power to authorize suggests by necessary implication the grant of power to pass upon the underlying questions. The former includes the latter." Id., 86, 87, per Marshall, J, 198 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 117 by obligations running beyond a year. The Public Service Commission Law^^ authorizes a eommon carrier, upon secur- ing from the proper public service commission an order so to do, to issue stocks, bonds, notes or other evidence of indebted- ness, among other things, for the discharge or lawful refunding of its obligations, and authorizes such commission to investi- gate for the purpose of enabling it to determine whether it should grant such an order. The relator made an application for an order to issue bonds secured by a mortgage already given for the purpose of paying outstanding indebtedness, the amount and validity of which indebtedness was not questioned. The indebtedness had accrued by the purchase of securities, which transaction the public service commission regarded as an unfortunate one for the company; that it had paid more than the securities were worth and that the property so acquired had not been included in the mortgage. Although it conceded that the purchase was lawful and that the notes were valid obligations of the company, the commission withheld consent to the issuing of the bonds. Relator also applied for leave to issue bonds to pay indebtedness incurred for the acquisition of other property, which was refused, apparently upon the ground that the lands so acquired should have been mortgaged for the purpose of paying such obligations. It was held that the application of the relator to issue the bonds should have been granted .^^ The decision of the court below in this case was as follows : § 55 of the Public Service Commission Law, requiring public service corporations to obtain an order from the Public Service Commissioners authorizing an issue of bonds and determining the amount thereof, was designed to pro- tect the public and the public interests. The commission is not justified in withholding its consent unless the proposed bond issue is in conflict with public interest. Otherwise the right of such corporation to manage its own affairs is protected by the Constitution. The Public Service Commission, there- fore, should not refuse to grant an order authorizing a corpora- M Laws 1907, chap. 429, § 55. S4 People ex rel. Delaware & Hudson Co. v. Stevens, 197 N. Y. 1. 199 § 118 JURISDICTION OR POWERS OF tion owning and operating both railroads and coal mines to issue bonds secured only by a mortgage on its railroad property, but not covering its coal mines, for the purpose of refunding outstanding obligations where it does not appear that the public interests are in any way imperiled .^^ § 118. Jurisdiction of Railroad Commissions — Stopping Interstate Trains.^® While a State railroad commission may, in the absence of congressional legislation, order a railroad company to stop interstate trains at stations where there is only an incidental interference with interstate commerce, based on a legal exer- cise of the police power of the State exerted to secure proper facilities for the citizens of the State, still, where the railroad company has furnished all proper and reasonable facilities, such an order is an improper and illegal interference with inter- state commerce and void as a violation of the commerce clause of the Constitution.^^ ''The matter of the validity of statutes, directing railroad companies to stop certain of their trains at stations named, has been before this court several times, and the result of its holdings is: That a statute of Illinois, which required the Illinois Central Railroad to stop its fast mail train from Chicago to New Orleans at Cairo, in the State of Illinois, 65 People ex rel. Delaware & Hudson Co. v. Stevens, 134 App. Div. 99. As presenting the view taken of this case, as set forth in the syllabus thereto, in 118 N. Y. Supp. 969, we append that syllabus as follows: The PubUc Service Commission Law, Laws 1907, p. 921, chap. 429, § 55, provid- ing for the approval by the commission of the issuance of bonds by public Bsrvice corporations, is valid only as an exercise of the right of the State to protect the public and the public interests, and the commission may not withhold its approval unless it clearly appears that the act of the corpora- tion in the management of its affairs is in conflict with the public interests. And where a corporation organized to own and operate railroads and coal lands proposed to issue bonds secured by a mortgage of railroad property alone and the public interests would not be imperiled thereby, the Public Service Commission must approve the issue as required by Public .Service Commission Law, Laws 1907, p. 921, chap. 429, § 55, and they could not insist that the mortgage should include coal lands as well. *8 See § 50, herein. w Mississippi Railroad Commission v. Illinois Central Rd Co., 203 U. S. 335, 51 L. ed. 209, 27 Sup. Ct. 90, aff'g 138 Fed. 327. 200 SUPERVISORY CORPORATION COMMISSIONS CONTINUED §118 which was a county seat, was unconstitutional if the company had made adequate accommodation by other trains for inter- state passengers to and from Cairo.^* That a statute which re- quired every railroad corporation to stop all regular passenger trains, running wholly within the State, at its stations at all 58 Illinois Central Rd. Co. v. Illinois, 163 U. S. 142, 41 L. ed. 107, 16 Sup. Ct. 1096. In this case the act of Congress of Sept. 20, 1850, c. 61, granted a right of way and sections of the public lands, to the State of Illinois, and to States south of the Ohio River, to and in the construction of a railroad con- necting the waters of the Great Lakes with those of the Gulf of Mexico, and over which the mails of the United States should be carried. The State of Illinois accepted the act, and incorporated the Illinois Central Railroad Company, for the purpose of constructing a railroad with a southern ter- minus described as " a point at the City of Cairo." The company accordingly constructed and maintained its railroad to a station in Cairo, very near the junction of the Ohio and Mississippi Rivers; but afterwards, in accord- ance with statutes of the United States and of the State of Illinois, connected its railroad with a railroad bridge built across the Ohio River opposite a part of Cairo farther from the mouth of that river; and put on a fast mail train carrying interstate passengers and the United States mails from Chicago to New Orleans, which ran through the city of Cairo, but did not go to the station in that city, and could not have done so without leaving the through route at a point three and a half miles from the station and coming back to the same point; but the company made adequate accommo- dation by other trains for interstate passengers to and from Cairo. Cairo was a county seat. It was held that a statute of Illinois, requiring railroad companies to stop their trains at county seats long enough to receive and let off passengers with safety, and construed by the Supreme Court of the State to require the fast mail train of this company to be run to and stopped at the station in Cairo, was, to that extent, an unconstitutional hindrance and obstruction of interstate commerce, and of the passage of the mails of the United States, cited in Houston & Texas Central R. Co. v. Mayes, 201 U. S. 321, 329, 50 L. ed. 772, 26 Sup. Ct. 491 (case of requirement that rail- road furnish certain number of cars on specified day to transport merchan- dise to another State ; held not within police power, and in violation of com- merce clause of Federal Constitution); Cleveland, Cincinnati, Chicago & St. Louis Ry. Co. v. Illinois, 177 U. S. 514, 518, 519, 20 Sup. Ct. 722, 44 L. ed. 868 (considered in note below); Lake Shore & Michigan Southern Ry. Co. V. Smith, 173 U. S. 684, 688, 19 Sup. Ct. 565, 43 L. ed. 858 [reversing Smith V. Lake Shore & Michigan Southern Ry. Co., 114 Mich. 460, 72 N. W. 328, 4 Det. Leg. N. 662, 8 Am. & Eng. R. Cas. (N. S.) 496], a case of mileages ticket; constitutional law and State legislature regulation of railroads; Lake Shore & Michigan Southern Ry. Co. v. Ohio, 173 U. S. 285, 303, 306, and in dissenting opinion, 321, 43 L. ed. 702, 19 Sup. Ct. 465 (considered in note 60, below), distinguished in Gladson v. Minnesota, 166 U. S. 427, 431 (considered in note 59, below). 201 § 118 JURISDICTION OR POWERS OF county seats, was a reasonable exercise of the police power of the State, where the statute did not apply to railroad trains entering the State from any other State, or transcontinental trains of any railroad .^^ A statute relating to railroad com- panies which provided that a company should cause three of its trains each way, if so many were run daily, Sundays ex- cepted, to stop at a station containing over three thousand inhabitants, was vaHd in the absence of legislation by Congress on the subject; ^° and also a State statute which required all regular passenger trains to stop at county seats was invalid, when applied to an interstate train, intended only for through passengers from St. Louis to New York, when it appeared that the railroad company furnished sufficient trains to accommo- date all the local and through business in the State, and where such trains stopped at county seats. "^^ * * * Upon the 58 Gladson v. Minnesota, 166 U. S. 427, 41 L. ed. 1064, 17 Sup. Ct. 627, holding also that such a statute does not take property of the company without due process of law; nor does it, as applied to a train connecting with a train of the same company running into another State, and carrying some interstate passengers and the United States mail, unconstitutionally inter- fere with interstate commerce, or with the transportation of the mails of the United States. flo Lake Shore & Michigan Southern Ry. Co. v. Ohio, 173 U. S. 285, 19 Sup. Ct. 465, 43 L. ed. 702, under an Ohio statvite providing as stated in the text and also that: "If a company, or any agent or employe thereof, vio- late or cause or permit to be violated, this provision, such company, agent or employe shall be liable to a forfeiture of not more than one hundred nor less than twenty-five dollars, to be recovered in an action in the name of the State, upon the complaint of any person, before a justice of the peace of the county in wliich the violation occurs, for the benefit of the general fund of the county; and in all cases in wliich a forfeiture occurs under the provisions of this section, the company whose agent or employe caused or permitted such violation shall be liable for the amount of the forfeiture, and the conductor in charge of such train shall be held, prima facie, to have caused the violation." This statute was held not to be, in the absence of legislation by Congress on the subject, repugnant to the Constitution of the United States, when applied to interstate trains carrying interstate commerce through the State of Ohio on the Lake Shore & Michigan Southern Railway. 81 Cleveland, Cincinnati, Chicago & St. Louis Ry. Co. v. Illinois, 177 U. S. 514, 44 L. ed. 868, 20 Sup. Ct. 772; four regular passenger trains per day, each way, were furnished by the railroad company, which were suffi- cient to accommodate all the local and through business, and all such trains 202 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 118 principles decided in these cases, a State railroad commission has the right, under a State statute, so far as railroads are concerned, to compel a railroad company to stop its trains under the circumstances already referred to, and it may order the stoppage of such trains if the company does not otherwise furnish proper and adequate accommodation to a particular locality, and in such cases the order may embrace a through interstate train actually running and compel it to stop at a locality named. In such case in the absence of congressional legislation covering the subject, there is no illegal or improper interference with the interstate commerce right; but if the com- pany has furnished all such proper and reasonable accommoda- tion to the locality as fairly may be demanded, taking into consideration the fact, if it be one, that the locality is a county seat, and the amount and character of the business done, then any interference with the company (either directly by statute, or by a railroad commission acting under authority of a statute) by causing its interstate trains to stop in a particular locality in the State, is an improper and illegal interference with the rights of the railroad company, and a violation of the com- merce clause of the Constitution. In reviewing statutes of this nature, and also orders made by a State railroad commission, it frequently becomes necessary to examine the facts upon which they rest and to determine from such examination whether there has been an unconstitutional exercise of power and an illegal interference by the State or its commission with the interstate commerce of the railroad. Whether there has or has not been such an interference is a question of law arising from the facts." ^^ stopped at county seats. It was also held that while railways are bound to provide primarily and adequately for the accommodation of those to whom they are directly tributary, they have the legal right, after all these local conditions have been met, to adopt special provisions for through traffic, and legislative interference therewith is an infringement upon the clause of the Constitution which requires that commerce shall be free and unob- structed. 62 Mississippi Railroad Commission v. Illinois Central Rd. Co., 203 U. S. 335, 343, 344, 27 Sup. Ct. 90, per Mr. Justice Peckham; case affirms 138 Fed. 327. 203 § 119 JURISDICTION OR POWERS OF § 119. Jurisdiction of Railroad Commissions— Interstate Commerce — Delivery of Cars — Train Connections. While a State in the exercise of its police power may confer power on an administrative agency to make reasonable regu- lations as to the place, time and manner of delivery of merchan- dise moving in channels of interstate commerce, any regulation which directly burdens interstate commerce is a regulation thereof and repugnant to the Federal Constitution and so held that an order of a North Carolina corporation commission re- quiring a railway company to deliver cars from another State to the consignee on a private siding beyond its own right of way was a burden on interstate commerce and void, but it was a question whether such an order applicable solely to State business would be repugnant to the due process clause of the Constitution.^^ A State railroad commission may require a railroad company to so arrange its schedule as to furnish trans- portation between two points so as to make connection with through trains where such order is not so arbitrary or unreason- able as to transcend the limits of regulation and is not in effect either a denial of due process of law or a deprivation of the 63 McNeill V. Southern Railway Co., 202 U. S. 543, 30 L. ed. 1143, 26 Sup. Ct. 722. Jurisdiction of railway commissioners as to traffic; complaint under Railway and Canal Traffic Act, 1888 (51 & 52 Vict., chap. 25), s. 9, subs, (a) (c); also conditions precedent to jurisdiction; see Great Northern Ry. Co. V. Great Central Ry. Co. (1899), 10 Ry. & Can. Traff. Cas. 266. Jurisdiction of railway commission as to "facilities" for receiving, for- warding and delivering traffic; to erect or alter stations or other structural works; case of demurrer to a prohibition issued at instance of the railway company to restrain the railway commissioners from proceeding to make certain orders which they had announced their intention to make under the English Act of 1873 (36 & 37 Vict., chap. 48), the act by which the commissioners were appointed to carry into effect the Railway and Canal Traffic Act, 1854 (17 & 18 Vict., chap. 31), as amended and enlarged by that act; see (Hastings Case) Southeastern Ry. Co. v. Railway Comm'rs, etc. (1881), 3 Ry. & Can. Cas. 464. Court of Railway and Canal Commission: jurisdiction of to order railway company to deliver traffic at a private siding as part of a "railway"; under Railway and Canal Traffic Act, 1854 (17 & 18 Vict., chap. 31), ss. 1, 2. See Cowan & Sons v. North British Ry. Co. (1901), 11 Ry. & Can. Traff. Cas. 96. Held by a majority of seven judges of Court of Session. 204 SUPERVISORY CORPORATION COMMISSIONS CONTINUED § 120 equal protection of the laws or a taking of i)roperty without compensation. It is also within the power of such commission to compel a railroad company to make reasonable conn(!ctions with other roads so as to promote the convenience of the traveling public, and an order requiring the running of an additional train for that purpose, if otherwise just and reason- able, is not inherently unjust and unreasonable because the running of such train will impose some pecuniary loss on the company.^'* § 120. Jurisdiction of Railroad Commissions— Railroad Stations— Other Facilities— Obligation of Contract— Due Process of Law. While a State statute, providing for the abandonment of railroad stations, may authorize railroad commissioners to consent, or to refuse to consent, to the abandonment of an existing railroad station, still it confers upon them no authority to bind the State by contract not to exercise its legislative power as to the establishment of such stations, so that a sub- sequent enactment of the legislature establishing a depot at a certain place does not impair the obligation of any contract between the State and a railroad corporation.*'^ The general laws of Minnesota of 1901 ^^ requiring the erection and main- tenance of depots by railroad companies on the order of the railroad and warehouse commission under the conditions therein stated in that act, does not deny a railroad company the right to reasonably manage or control property or arbitrarily take its property without its consent, or without compensation or due process of law, and is not repugnant to the Constitution of the United States.^' Under a Texas decision an action was 64 Atlantic Coast Line Rd. Co. v. North Carolina Corporation Commission, 206 U. S. 1, 51 L. ed. 33, 27 Sup. Ct. 585. Examine Honolulu Rapid Transit & Land Co. v. Hawaii, 211 U. S. 282, 29 Sup. Ct. 55, 53 L. ed. 186, rev'g 18 Hawaii, 553. 86 Railroad Company v. Hammersley, 104 U. S. 1, 26 L. ed. 629. 6fi Chapter 270, April 13, 1901. "7 Minneapolis & St. Louis Ry. Co. v. Minnesota, 193 U. S. 53, 48 L. ed. 614, 42 Sup. Ct. 396. Whether railway commission has jurisdiction to order water-closets to 205 § 120 JURISDICTION OR POWERS OF begun by a railway company to enjoin the railroad commission from enforcing an order made by it requiring the company to construct at a certain place a station on its line of railway in said State "and its terminus, an adequate and sufficient pas- senger and freight depot building for the proper accommodation as required by law, of the business of said station." The trial court gave judgment for the plantiff, defendant appealed and said judgment was sustained. The defendant brought error, there was a reversal and the action was dismissed. It was also held that the commission having merely followed the statute in making the order in question, the validity of its action must depend upon the validity of the statute, and not upon the powers of the commission outside of that statute .*^^ Admission of incompetent evidence in a proceeding before the State corporation commission to require a railway company to es- tablish and maintain a depot and agent at one of its stations is not ground for reversal of an order requiring such facilities and service, where the action of the commission is supported by other sufficient competent evidence.®^ be provided at railway stations as a reasonable facility, see West Ham Corp. V. Great Eastern Ry. Co. (1895), 9 Ry. & Can. Traff. Cas. 7. 6s Railroad Commission v. Chicago, Rock Island & Gulf Ry. Co. (Sup. Ct. Tex., 1909), 117 S. W. 794, rev'g 114 S. W. 192. 89 Syllabus in Missouri, Kansas & Texas Ry. Co. v. State (Okla., 1909), 103 Pac. 613. The court, per Hayes, J. (at p. 616), said: " In determining whether an additional facility shall be required at a station, the conven- ience of the public patronizing the station, the inconvenience of the railroad in maintaining it, and the expense thereof, are all to be considered. In the case at bar, there is some evidence tending to show a necessity for the depot and agent prayed for by the petition. On the other hand, there is also evi- dence tending to show that the maintenance of the depot by appellant will be attended with some inconvenience and extra expense to the company. The exact extent of the business which petitioner insists demands these additional facilities, and the extent of the additional expense which will be entailed upon the railway company to furnish them, do not clearly appear from the record upon which the commission has acted and made its order requiring the station to be established and the agent maintained; but the evidence does show that the passenger traffic to and from this point has been sufficient, that the company has voluntarily established a schedule for the stopping of six passenger trains daily to receive passengers and to permit them to depart from its trains at that point. The proximity of the other stations and the access they afford to the public at Phillips upon appellant's 20G SUPERVISORY C trans- mission of messages by any telegraph line or lines within the State, it has the incidental power, subject to the right of ap- peal, to ascertain what particular corporation is in the con- trol of or operates any of such lines in the State, in order that it may exercise its authority to fix rates, as well as to ascertain against whom to proceed for a violation 7^ Again, the railroad commission in that State has no power to prescribe rules or regulations for telegraph companies other than those directed by statute to make rates of charges for the transportation of messages by telegraph lines for doing business in the State of the statutory enactment, and for a violation of the rules pre- scribed by the commission fixing rates for messages the latter may on service of notice of the violation and on hearing direct full compensation to the injured party, enforceable by a civil action 7* With only one railroad station in a town having one telephone exchange, and an inland town about six miles distant with about three hundred population having a telephone ex- change, said town receiving all of its freight by the way of said station and a telephone installed and maintained in said station, connected with both exchanges, it appearing that the installing and maintaining of such telephone would be to the convenience of the patrons of said railroad station, the order of the corporation commission requiring a telephone to be installed and maintained in said station will not be disturbed by the court. Prima facie just, reasonable, and correct,^'' is a presumption arising upon the finding of the corporation com- mission that the order based upon such facts is presumed on appeal by the court to be just, reasonable, and correct, subject to be overcome or rebutted by the facts in the record, as weighed and found by the court in reviewing the same.*" ern Union Teleg. Co., 113 N. C. 213, 18 S. E. 389; compare Leavell v. West- ern Union Teleg. Co., 116 N. C. 211, 21 S. E. 391. 77 Railroad Commissioners (State ex rel. Railroad Commissioners) v. Western Union Teleg. Co., 113 N. C. 213, 18 S. E. 389. 7» Mayo V. Western Union Teleg. Co., 112 N. C. 343, 16 S. E. 1006. 79 Section 22, Art. 9, § 235, Burns's ed.; Snyder's ed., p. 259, of the Consti- tution. 80 Atchison, Topeka & Santa Fe Ry. Co. y. State (Okla., 1909), 100 Pac. 11. 210 CORPORATION 8UPEKVI.SOKY COMMISSIONS, ETC. CHAPTER X JURISDICTION OF COURTS OVIOR COUI'ORATION SUPERVISORY COMMISSIONS, ETC. 130. 131. 133. 134. 135. 135a 123. Jurisdicf ion of Boards of § 132. Ecivialization — Conclusive- ness of Decisions of — Re- view by Courts. 124. Jurisdiction of Courts — Cer- tiorari to Review Assess- ment — Special Franchise Tax — Requirements as to Return by Tax Commis- sioners. 125. Board of Harbor Commis- sioners — J urisdiction of Courts. 126. Resolution of City Council and Direction to City So- licitor to Enforce Same Against Street Railway — — Obligation of Contract — Jurisdiction of Federal Cir- cuit Court — Injunction. 127. Condemnation Proceedings — Commissioners — State Crossing Board — Jurisdic- tion of Courts — Waiver. 128. Jurisdiction of Courts — In- surance — State Auditor — Superintendent of Insur- ance. 129. Jurisdiction of Officers of Land Department — Con- trol and Supervision of by Courts — Mandamus — In- junction. Same Subject — Railroads- Right of Way. Jurisdiction of Courts in Re- spect to Interstate Com- merce Commission — Gener- ally. 136. 137. 138. Jurisdiction of Federal Courts in Respect to Interstate Commerce Commission — Rates. Same Subject. Same Subject — Injunction — Where Redress Must First Be Sought. Same Subject — Compensation of Carrier — Services Ren- dered at Shipper's Request — Practice and Procedure — Remanding Case. • Jurisdiction of Federal Courts in Respect to Inter- state Commerce Commis- sion — Regulation of Car- riers as to Cars — Where Redress Must First be Sought. Jurisdiction of Federal Courts in Respect to Interstate Commerce Commission — Shipper's Indebtedness for Demurrage — Refusal of Carriers to Receive Goods. Use of Process of Federal Circuit Court in Aid of In- quiries Before Interstate Commerce Commission — Testimony — Production of Books, etc. — Fine and Im- prisonment — Contempt — Power of Commission. Judicial Functions of Non- judicial Bodies — Power to Compel Corporations to Produce Books, etc. — No- tice — Courts — Due Process 211 §123 JURISDICTION OF COURTS OVER and Equal Protection — Contempt — Compensation to Witness. Jurisdiction of Courts in Re- spect to Railroad Commis- sions — Generally. Same Subject. Same Subject. Jurisdiction of Courts — Rail- road Commissioners — Pub- lic Service Commission — Certificate of Public Con- venience and Necessity. Jurisdiction of Courts Over Rate Regulations — Gener- ally. 144. Same Subject. 145. Legislative and Judicial Func- tions as to Rate Regulation — Distinctions. 146. Equity Jurisdiction — Rail- road, etc., Rates — Obliga- tion of Contracts — Injunc- tion — Discrimination . 147. Extent of Judicial Interfer- ence as to Rate Regulations. § 139 140. 141. 142. 143. 148. Jurisdiction of Courts Before Rate Legislation Goes Into Effect. 149. Jurisdiction of Courts in Re- spect to Railroad Commis- sions — Rates. Same Subject. Same Subject — Where Re- sort Must First Be Had. Same Subject — Appeal to State Supreme Court Be- fore Suing in Federal Cir- cuit Court. Jurisdiction of Courts in Re- spect to Railroad Commis- sions — Rates — When Con- stitutional Question Not Decided. Public Service Commission — Right to Appeal — Certio- rari — Nature of Powers. 155. Jurisdiction of Courts — Suit Against Railroad Commis- sioners — Whether Suit Against State. 150. 151. 152. 153. 154. § 123. Jurisdiction of Boards of Equalization— Conclu- siveness of Decisions Of — Review by Courts. A State board of equalization is one of the instrumentalities provided by the State for the purpose of raising the public revenue by way of taxation. In regard to corporations of a certain class it is the duty of that board to make an original assessment upon them. Where no appeal is provided for from the decision of the board, such decision is conclusive, except as proceedings for relief may thereafter be taken in the courts. But the action of the board is reviewable in the Federal Courts at the instance of one claiming to be thereby deprived of his property without due process of law and denied the equal protection of the law ; the provisions of the Fourteenth Amend- ment are not confined to the action of the State through its legislative, executive or judicial authority, but relate to all the instrumentalities through which the State acts. And action of 212 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 123 such a board which results in illegal discrimination is held not to be action forbidden by the State legislature and therefore beyond review of the Federal Courts under the Fourteenth Amendment.^ Again, proceedings before a board of equaliza- tion are ^-wasi-judicial, and if an order made by it is within its jurisdiction it is not void and cannot be resisted in an action at law; nor can overvaluation be made a ground of defense at law. The action of the tax officers being in the nature of a judgment must be yielded to until set aside. And this can only be done in a direct proceeding. So where the highest court of a State has decided that the board of equalization has acted according to the methods prescribed and authorized by the laws of the State, and that an order made by it is legal under the State Constitution and statutes, the decision constitutes an interpre- tation of the law of the State and is not open to dispute in the Federal Supreme Court .^ 1 Raymond v. Chicago Traction Co., 207 U. S. 20, 52 L. ed. 7, 28 Sup. Ct. 7, aff'g 114 Fed. 557, distinguishing on the last point, Barney v. City of New York, 19.3 N. Y. 430; see Powers v. Detroit, Grand Haven & M. Ry. Co., 201 U. S. 543, 26 Sup. Ct. 556, 50 L. ed. 860, aff'g 138 Fed. 264; Savannah, T. & I. of H. Ry. Co. V. Savannah, 198 U. S. 392, 49 L. ed. 1097, 25 Sup. Ct. 690. As to equity jurisdiction and power of courts; injunction against collection of taxes; and railroad taxation, see State Railroad Tax Cases, 92 U. S. 575, 23 L. ed. 663, cited as to remedy in Norwood v. Baker, 172 U. S. 269, 291, 300, 19 Sup. Ct. 187, 43 L. ed. 443; Pittsburg, C, C. & St. Louis Ry. Co. v. Board of Public Works, 172 U. S. ,32, 37, 19 Sup. Ct. 90, 43 L. ed. 354; Northern Pacific Rd. Co. v. Clark, 153 U. S. 252, 272, 38 L. ed. 706, 14 Sup. Ct. 809; Albuquerque Bank v. Perea, 147 U. S. 87, 90, 37 L. ed. 91, 13 Sup. Ct. 000; Milwaukee v. Koeffler, 116 U. S. 219, 224, 29 L. ed. 612, 6 Sup. Ct. 372; Thompson v. Allen County, 115 U. S. 550, 557, 564, 29 L. ed. 472, 6 Sup. Ct. 140; Virginia Coupon Cases, 114 U. S. 270, 315 (there were eight of these cases, 114 U. S. at pp. 270, 307, 309, 311, 317, 323, 325, 338, 29 L. ed. 185, 199, 198, 200, 202, 205, 5 Sup. Ct. 903, 923, 924, 925, 928, 932, 962) ; Union Pacific Ry. Co. v. Cheyenne, 113 U. S. 516, 526, 29 L. ed. 517, 6 Sup. Ct. 475; Snyder v. Marks, 109 U. S. 189, 193, 3 Sup. Ct. 157, 27 L. ed. 901; National Bank v. Kimball, 103 U. S. 732, 733, 26 L. ed. 469; Whitehead v. Farmers' Loan & Trust Co., 98 Fed. 12; Linehan Ry. Transfer Co. v. Pendergrass, 70 Fed. 2; Chicago, Buriington & Quincy Rd. Co. v. Board of Comm'rs, 67 Fed. 413; Robinson v. City of Wilmington, 65 Fed. 858. 2 Western Union Tel. Co. v. Missouri ex rel. Gottlieb, 190 U. S. 412, 23 Sup. Ct. 730, 47 L. ed. 1116. 213 §§ 124, 125 JURISDICTION OF COURTS OVER § 124. Jurisdiction of Courts — Certiorari to Review As- sessment — Special Franchise Tax — Requirements as to Return by Tax Commissioners. It is held in a late case in New York that on certiorari to review the assessment of a special franchise tax, the tax com- missioners should be required to specify in their return the records and papers upon which the determination was made, the evidence presented before the board in open session, and to state the separate valuations placed upon real property in the street and upon the use of the street, if separate valuations were made, together with the material facts which enter into their determination. Although the board of tax commissioners in making such assessment may obtain information apart from the record and may have its own experts make an examination of facts bearing upon the value of the franchise, it should not be required to make a return of specific information acquired apart from the open session or through agents and experts. On certiorari under the tax law the court has power to take further evidence, or direct such evidence to be taken before a referee, and hence there is not the same necessity for a full and complete return that exists in the case of the ordinary writ.^ § 125. Board of Harbor Commissioners — ^Jurisdiction of Courts. Under a California decision the courts will refuse to interfere with the discretion of harbor commissioners, vested in them under the political code of that State in the matter of regulating the position of vessels, even if such discretion is erroneously exercised and may operate as a hardship on individuals, pro- vided, however, there is an honest exercise of judgment; and if a fraudulent exercise of discretion is claimed in changing the wharf of a vessel the court w^ill not interfere unless the fraud is clearly established; the proof must be of something greater than suspicion alone.'* 3 People ex rel. New York, Ontario & Western Ry. Co. v. Tax Commis- sioners, 132 App. Div. 604. 4 Union Transportation Co. v. Bassett, 118 Cal. 604, 50 Pac. 754, rev'g in Banc, 46 Pac. 907. 214 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 126 § 126. Resolution of City Council and Direction to City Solicitor to Enforce Same Against Street Railway — Obliga- tion of Contract — Jurisdiction of Federal Circuit Court — Injunction. A resolution of a municipal council directing a street railway company to remove and replace tracks and wires, and, in case of failure to comply, instructing the city solicitor to take such action as he deems advisable to enforce the resolution, amounts only to direction to bring a suit; and, even if contract rights should be violated if the resolution were, enforced, the resolution does not of itself amount to an ordinance or law impairing the obligation of contracts, and the Federal Circuit Court has no jurisdiction of a suit to enjoin its enforcement. Mr. Jus- tice Holmes said: "We are of opinion that this is not a law impairing the rights alleged by the appellee, and, therefore, that the jurisdiction of the Circuit Court cannot be maintained. Leaving on one side all questions as to what can be done by resolution as distinguished from ordinance under Iowa laws, we read this resolution as simply a denial of the appellee's claim and a direction to the city solicitor to resort to the courts if the appellee shall not accept the city's views. The resolution begins with a recital that questions as to the railway company's rights have been raised, and ends with a direction to the city solicitor to take action to enforce the city's position. The only action to be expected from the city solicitor is a suit in court. We cannot take it to have been within the meaning of the di- rection to him that he should take a posse and begin to pull up the tracks. The order addressed to the company to remove their tracks was simply to put them in the position of dis- obedience, as ground for a suit, if the city was right." ^ 5 Des Moines, City of, v. Des Moines City Ry. Co., 214 U. S. 179, 53 L. ed. 958, 29 Sup. Ct. 553. This was a bill brought in the Circuit Court by an Iowa corporation against a city in Iowa. The ground of jurisdiction was that a resolution of the city council impaired the obligation of contract and also if carried out would take the property of the corporation without due process of law contrary to the Fourteenth Amendment. The Circuit Court granted an injunction against the enforcement of the resolution, and the de- fendant appealed to the Federal Supreme Court. The plaintiff, the appellee, 215 §127 JURISDICTION OF COURTS OVER § 127. Condemnation Proceedings — Commissioners — State Crossing Board— Jurisdiction of Courts— Waiver. The United States cannot interfere with the exercise by the State of her right of eminent domain in taking for public use land, within her limits, which is private property. But when the inquiry whether the conditions prescribed by her statutes for its exercise have been observed takes the form of a judicial proceeding between the owner of lands and a corporation seeking to condemn and appropriate them, the controversy is subject to the ordinary incidents of a civil suit, and its determination does not derogate from the sovereignty of the State. So a controversy of this kind in a State, when carried, under a law thereof, from the commissioners of appraisement to the State Court, taking there the form of a suit at law, may, if it is between citizens of different States, be removed to a Federal Court.^ In condemnation proceedings to acquire an existing system of water supply in a city, which system is the property of private individuals operated under a contract with the city the assessment of damages may be made by com- missioners where the statutes so provide, and there is no denial of due process of law in making their findings final as to the facts, leaving open to the courts the inquiry whether there was any erroneous basis adopted by the commissioners in their appraisal, or other errors in their proceedings, and this applies where there is nothing in the statute under which a water supply company was organized, nor in any contract with the town in question for a water supply, nor in the annexation to a municipality which gave to such company rights exclusive beyond such legislative action ."^ Under a Michigan decision the State crossing board is given the requisite jurisdiction as to set up, under a certain ordinance, a right unlimited as to time to construct, maintain and operate an electric street railway in and over the streets, alleys and bridges of Des Moines. 8 Boom Co. V. Patterson, 98 U. S. 403, 25 L. ed. 206. See as to last point Madisonville Traction Co. v. Saint Bernard Min. Co., 196 U. S. 239, 25 Sup. Ct. 251, 49 L. ed. 262. ^ Long Island Water Sppply Co. v. Brooklyn, 166 U. S. 685, 41 L. ed. 1154, 17 Sup. Ct. 677. 216 CORPORATION SUPERVISORY COMMISSIONS, ETC. §§ 128, 129 making orders in condemnation proceedings to condemn land for terminal branches of a railroad at the time of its being organized, where a map of the road was then filed including the terminal branches, and the certified approval of the board of directors was given thereto.^ An objection, taken by a property owner in a condemnation proceeding for a part of his properl y, that, under the statute, his entire property must be condemned, is waived and cannot be maintained on appeal, if he accepts the award made by the commissioners in the condemnation pro- ceeding and paid in by the condemnors for the parcel actually condemned. After an award has been made and accepted the proceeding is functus ojfficio? § 128. Jurisdiction of Courts — Insurance — State Auditor — Superintendent of Insurance. Where trust funds for the benefit of policy holders are in the possession of the State auditor, through securities, which have been deposited with the insurance commissioner by an insurance company as required by law, being illegally surrendered and transferred, the court will take jurisdiction of such auditor as to the control and disposition of said trust fund.^" A super- intendent of insurance, who is without authority to revoke a license to do business in the State of an insurance company organized in another State, may be enjoined from so revoking by the Federal Court .^^ § 129. Jurisdiction of Officers of Land Department — Con- trol and Supervision of by Courts— Mandamus — Injunction. Congress has constituted the Land Department, under the 8 Toledo, S. & M. R. Co. v. East Saginaw & St. C. R. Co., 72 Mich. 206, 40 N. W. 436. 9 Winslow V. Baltimore & Ohio Rd. Co., 208 U. S. 59, 52 L. ed. 388, 28 Sup. Ct. 190, aff'g 28 App. D. C. 126. 1" Hayne v. Metropolitan Trust Co., 67 Minn. 245, 69 N. W. 916. When state auditor cannot be compelled by the Federal Court to issue to a foreign insurance company a certificate authorizing it to do business in the State, see Manchester Fire Ins. Co. v. Herriott (U. S. C. C), 91 Fed. 711. 11 Metropolitan Life Ins. Co. v. McNall (U. S. C. C), 81 Fed. 888, 26 Ins. L. J. 641, 14 Nat. Corp. Rep. 675. 217 1 § 129 JURISDICTION OF COURTS OVER supervision and control of the Secretary of the Interior, a special tribunal with judicial functions to which is confided the execution of the laws which regulate the purchase, selling and care and disposition of the public lands. The Secretary having jurisdiction to decide at all, has necessarily jurisdiction to decide as he thinks the law is, and it is his duty so to do, and the courts have no jurisdiction under those circumstances to review his determination by mandamus or injunction; neither of these writs will lie against an officer of the Land Department to control him in discharging an official duty which requires the exercise of his judgment and discretion. The courts have no general supervisory power over these officers by which they can control their decisions upon questions within their juris- diction.^^ So where the decision of questions of fact is commit- ted by Congress to the judgment and discretion of the head of a department, his decision thereon is conclusive; and even upon mixed questions of law and fact, or of law alone, his action will carry with it a strong presumption of its correctne.ss, and the courts will not ordinarily review it, although they have the power, and will occasionally exercise the right of so doing.^^ The rule is that in the administration of the public lands of the United States the decisions of the Land Department upon questions of fact are conclusive and only questions of law are 12 Riverside Oil Co. v. Hitchcock, 190 U. S. 316, 47 L. ed. 1074, 23 Sup. Ct. 698. See also Love v. Flahive, 205 U. S. 195, 51 L. ed. 768, 27 Sup. Ct. 488, aff'g 83 Pac. 882; Estes v. Timmons, 199 U. S. 391, 50 L. ed. 241, 26 Sup. Ct. 85; McMichael v. Murphy, 197 U. S. 304, 25 Sup. Ct. 460, 49 L. ed. 766; Small V. Rakestraw, 196 U. S. 403, 25 Sup. Ct. 285; 49 L. ed. 527; Gertgens V. O'Connor, 191 U. S. 237, 24 Sup. Ct. 94; 48 L. ed. 163; Cosmos Exploration Co. V. Gray Eagle Oil Co., 190 U. S. 301, 47 L. ed. 1064, 23 Sup. Ct. 692; Potter V. Hall, 189 U. S. 292, 23 Sup. Ct. 545, 47 L. ed. 417; De Cambra v. Rogers, 189 U. S. 119, 23 Sup. Ct. 519, 47 L. ed. 734; New Orleans v. Paine, 147 U. S. 261, 37 L. ed. 162, 13 Sup. Ct. 303 (cited in Michigan Land & Lum- ber Co. V. Rust, 168 IT. S. 589, 594, 42 L. ed. 591, 18 Sup. Ct. 208; Astiazarin V. Santa Rita Min. Co., 148 U. S. 80, 83, 27 L. ed. 376, 13 Sup. Ct. 457). 13 Bates & Guild Co. v. Payne, 194 U. S. 106, 24 Sup. Ct. 559, 48 L. ed. 894, citing (at p. 109) Riverside Oil Co. v. Hitchcock, cited in last preceding note. See Whitcomb v. White, 214 U. S. 15, 53 L. ed. 889; 29 Sup. Ct. 599, aff'g 13 Idaho, 490; Enterprise Sav. Assoc, v. Zumstein (U. S. C. C. A.), 67 Fed. 1000, afif'g 64 Fed. 837, as to same principle. 218 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 129 reviewable in the courts. In the absence of some specific provision to the contrary in respect to any particular grant of public land, its administration falls wholly and absolutely within the jurisdiction of the Commissioner of the General Land Office, under the supervision and direction of the Secre- tary of the Interior.^'* But it is held that judicial power is not unconstitutionally conferred on a State board of land com- 1* Catholic Bishop of Nesqually v. Gibbon, 158 U. S. 155, 15 Sup. Ct. 779, 39 L. ed. 931, citing Harden v. Northern Pacific Rd., 154 U. S. 288, 327, 38 L. ed. 992, 14 Sup. Ct. 1030; United States v. California & Oregon Land Co., 148 U. S. 31, 37 L. ed. 354, 13 Sup. Ct. 458; Knight v. United States Land Assoc, 142 U. S. 161, 177, 12 Sup. Ct. 258, 35 L. ed. 974; Cragin v. Powell, 128 U. S. 691, 32 L. ed. 566, 9 Sup. Ct. 203; Wright v. Roseberry, 121 U. S. 488, 7 Sup. Ct. 985, 30 L. ed. 1039; Lee v. Johnson, 116 U. S. 48, 29 L. ed. 570, 6 Sup. Ct. 249; United States v. Minor, 114 U. S. 233, 5 Sup. Ct. 836, 29 L. ed. 110; Rector v. Gibbon, 111 U. S. 276, 28 L. ed. 427, 4 Sup. Ct. 605; Baldwin v. Stark, 107 U. S. 463, 27 L. ed. 526, 2 Sup. Ct. 473; Missionary Society v. Dallas, 107 U. S. 336, 2 Sup. Ct. 672, 27 L. ed. 545; Steel v. Smelt- ing Co., 106 U. S. 447, 1 Sup. Ct. 389, 27 L. ed. 226; Smelting Co. v. Kemp, 104 U. S. 636, 26 L. ed. 875; Quimby v. Conlan, 104 U. S. 420, 26 L. ed. 800; Vance v. Burbank, 101 U. S. 514, 25 L. ed. 929; Marquez v. Frisbie, 101 U. S. 473, 25 L. ed. 800; Moore v. Robbing, 96 U. S. 530, 24 L. ed. 848; Shepley v. Cowan, 91 U. S. 330, 23 L. ed. 424; Warren v. Van Brunt, 19 Wall. (86 U. S.) 646, 22 L. ed. 219; Lamb v. Davenport, 18 Wall. (85 U. S.) 307, 314, 21 L. ed. 759; Johnson v. Towsley, 13 Wall. (80 U, S.) 72, 20 L. ed. 485. The prin- cipal case is cited in Cosmos Exploration Co. v. Gray Eagle Oil Co., 190 U. S. 301, 309, 47 L. ed. 1064, 23 Sup. Ct. 692 (to the point of jurisdiction of the Land Department unless taken away by some affirmative provision of law. The case also decides that the court will not determine title while the ques- tions are still before the Land Department and there undecided. See also to this last point Kirwan v. Murphy, 189 U. S. 35, 47 L. ed. 698, 23 Sup. Ct. 599) Johanson v. Washington, 190 U. S. 179, 185 (to the point that the general supervision of the affairs of the Land Department is now vested in the Secre- tary of the Interior, and that unless Congress selects some other officer to act in respect to such matters it will be assumed that he is the officer to represent the Government); United States v. Beebe, 117 Fed. 670, 679; Northern Pacific Rd. Co. v. M'Cormick, 94 Fed. 932, 941; Diller v. Hawley, 81 Fed. 651, 657; Johnston v. Morris, 72 Fed. 890, 897; American Bell Telephone Co. V. United States, 68 Fed. 542, 569. Jurisdiction in its common law and technical meaning is declared not to be a term applicable to the Commissioner of the Land Office to issue grants or patents to land. The case, however, holds that the authority of the Commis- sioner of Patents to grant a patent is not of the nature of jurisdiction in the common-law acceptance. Wilder v. McCormick, 2 Blatch. (U. S. C. C.) 31, 34 Fed. Cas., No. 1760, p. 1221. 219 § 130 JURISDICTION OF COURTS OVER missioners.^^ Still the decisions of State land officers are also decided not to be conclusive, but may be inquired into and declared void by the courts.^* § 130. Same Subject— Railroads— Right of Way. A decision of the Secretary of the Interior in the exercise of the powers conferred upon him by the act of 1875 ^' that a designated railroad company is entitled to a right of way over public land, cannot be revoked by his successor in office, and whether a railroad company, applying for such a grant, is a company which the statute authorizes to receive a grant of a right of way is a quasi-judicisd question, which, when once determined by the Secretary, is finally determined so far as the executive is concerned.^* It is further decided that it is not within the province of the courts to interfere with the adminis- tration of the Land Department, and until the land is patented inquiry as to equitable rights comes within the cognizance of the Department and the courts will not anticipate its action .^^ 15 American Sulphur & Mining Co. v. Brennan, 20 Colo. App. 439, 79 Pac. 750. When jurisdiction and control of land may be delegated to county through board of supervisors under general supervision of land commissioners, see Jefferson Davis County v. James-Sumrall Lumber Co. (Miss., 1909), 49 So. 611. 16 Minnesota v. Bachelder, 1 Wall. (68 U. S.) 109, 17 L. ed. 551. 17 Act of March 3, 1875, chap. 152, 18 Stat. 482. 18 Noble v. Union River Logging Rd. Co., 147 U. S. 165, 37 L. ed. 123, 13 Sup. Ct. 271. See Curtner v. United States, 149 U. S. 662, 676, 13 Sup. Ct. 985, 1041, 37 L. ed. 890. 19 Oregon v. Hitchcock, 202 U. S. 60, 50 L. ed. 935, 26 Sup. Ct. 568. See further as to jurisdiction of courts in such matters the following cases: Hum- bird V. Avery, 195 U. S. 480, 49 L. ed. 286, 25 Sup. Ct. 123 (Northern Pacific Railroad grant) ; Clark v. Herington, 186 U. S. 206, 22 Sup. Ct. 872, 46 L. ed. 1128 (Union Pacific Railroad grants); Hawley v. Diller, 178 U. S. 476, 44 L. ed. 1157, 20 Sup. Ct. 986; Brown v. Hitchcock, 173 U. S. 473, 43 L. ed. 772, 19 Sup. Ct. 485; Parsons v. Venzke, 164 U. S. 89, 17 Sup. Ct. 27, 41 L. ed. 360; Monroe Cattle Co. v. Becker, 147 U. S. 47, 37 L. ed. 72, 13 Sup. Ct. 217; United States v. Missouri, Kansas & Texas Ry. Co., 141 U. S. 358, 12 Sup. Ct. 13, 35 L. ed. 766 (railroad and telegraph grant); Sanford v. Sanford, 139 U. S. 642, 35 L. ed. 290, 11 Sup. Ct. 266; United States v. Marshall Silver Min. Co., 129 U. S. 579, 32 L. ed. 734, 9 Sup. Ct. 343; Craig v. Leitensdorfer, 123 U. S. 189, 8 Sup. Ct. 85, 31 L. ed. 114; Litchfield v. Register & Receiver. 220 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 131 § 131. Jurisdiction of Courts in Respect to Interstate Commerce Commission — Generally. In a ijrocecding in the Circuit Court ^" under the Interstate Commerce Law to enforce an order made by the commission, the court has no general power to adjust differences between the litigants, or to correct abuses in the conduct by a raih'oad company of its business; and, unless a vaUd order has been made by the commission and violated by the company no relief can be granted to the petitioners.^^ In a suit by the Interstate Commerce Commission to enforce an order made by it, the court is not confined in passing on the validity of the order to the reasons stated by the commission. ^^ In determin- ing whether an order of the Interstate Commerce Commission shall be suspended or set aside, power to make, and not the wisdom of, the order is the test, and the Federal Supreme Court must consider all relevant questions of constitutional power or right, all pertinent questions as to whether the administra- tive order is within the scope of the delegated authority under which it purports to be made, and also whether even if in form it is within such delegated authority it is not so in substance because so arbitrary and unreasonable as to render it invalid. If an order of the Interstate Commerce Commission is sus- 9 Wall. (76 U. S.) 575, 19 L. ed. 681; Secretary v. McGarrahan, 9 Wall. (76 U. S.) 298, 19 L. ed. 579; Gaines v. Thompson, 7 Wall. (74 U. S.) 347, 19 L. ed. 62; Lindsey v. Hawes, 2 Black (67 U. .S.), 554, 17 L. ed. 265; Lytle V. Kansas, 22 How. (63 U. S.) 193, 16 L. ed. 306; Irvine v. Marshall, 20 How. (61 U. S.) 558, 15 L. ed. 994; Garland v. Wynn, 20 How. (61 U. S.) 6, 15 L. ed. 801. When jurisdiction of Land Department ceases, see United States v. Schurz, 102 U. S. 378, 26 L. ed. 167, cited in Michigan Land & Lmnber Co. v. Rust, 168 U. S. 589, 593, 18 Sup. Ct. 208, 42 L. ed. 591; Iron Silver Min. Co. V. Campbell, 135 U. S. 286, 302, 10 Sup. Ct. 765, 34 L. ed. 155; United States V. American Bell Telephone Co., 128 U. S. 315, 363, 32 L. ed. 450, 9 Sup. Ct. 90; Mullan v. United States, 118 U. S. 271, 279, 6 Sup. Ct. 1041, 30 L. ed. 170; Bicknell v. Comstock, 113 U. S. 149, 151, 5 Sup. Ct. 399, 28 L. ed. 962; City of New Orleans v. Paine, 51 Fed. 838. 20 Under § 16 of Interstate Commerce Law. 21 Syllabus in Farmers' Loan & Trust Co. v. Northern Pac. Ry. Co. (U. S. C. C), 83 Fed. 249. 22 Southern Pacific Co. v. Interstate Commerce Comtaission, 200 U. S. 536, 26 Sup. Ct. 330, 50 L. ed. 585. 221 § 132 JURISDICTION OF COURTS OVER tainod by the court below in jjart and only the commission appeals, the conclusions of the court below as to those portions of the order sustained are not open to inquiry in the Federal Supreme Court; and in determining whether the action of the court below was or was not correct said Supreme Court does so irrespective of the reasoning by which such action was induced. ^^ The findings of the Interstate Commerce Com- mission are made by the law yrima facie true, and the Federal Supreme Court has ascribed to them the strength due to the judgments of a tribunal appointed by law and informed by experienced^ § 132. Jurisdiction of Federal Courts in Respect to Inter- state Commerce Commission — Rates. The P'cderal Circuit Court has jurisdiction to review the findings of the Interstate Commerce Commission as to rates, affecting interstate commerce, long and short hauls, and undue and unreasonable preferences; or whether the circumstances and conditions of the carriage have been substantially similar or otherwise, giving effect to the findings as 'prima facie evidence of the matters stated therein. ^^ So power to determine and prescribe what are just and reasonable maximum rates to be charged in interstate commerce is, in a limited way, conferred upon the Interstate Commerce Commission by existing statute law; but as the commission acts only as a legislative or admin- istrative board, and not judicially, its determination or action does not, and cannot, preclude judicial inquiry into the justness and reasonableness of the rates, within the meaning of the 23 Interstate Commerce Commission v. Illinois Central Rd. Co., 215 U. S. 452, 54 L. ed. — , 30 Sup. Ct. — , cited in Baltimore & Ohio Rd. Co. V. Pitcairn Coal Co., 215 U. S. 481, 30 Sup. Ct. — , 54 L. ed. — , to the point that under the court review provisions of § 15 of the act to regulate com- merce as amended in 1906, the courts are limited to the question of power of the commission to make the order and cannot consider the wisdom or expediency of the order itself. 24 Ilhnois Central Rd. Co. v. Interstate Commierce Commission, 206 U. S. 441, 27 Sup. Ct. 700, 51 L. ed. 128. 25 Interstate Commerce Commission v. Alabama Midland Ry. Co., 168 U. S. 144, 42 L. ed. 414, 18 Sup. Ct. 45. 222 COKPOllATlUN ttUrEKVl.SOKY COMMISSIONS, ETC. § l'A'2 constitutional guaranty, for that is a judicial question. The F'ederal Circuit Court may, therefore, inquire whether rates fixed by the Interstate Commerce Commission are just and reasonable within the meaning of the constitutional guaranty, and whether they are unjustly discriminatory, or unduly perferential, within the meaning of the statute. The statute under which the Interstate Commerce Commission derives its power to prescribe rates at all also unequivocally recognizes, and, if there be need therefor, it plainly declares, that the Federal Circuit Courts, sitting in equity, are vested with juris- diction to entertain, hear, and determine suits to compel obedience to orders of the commission prescribing rates, and also suits to annul or enjoin the enforcement of such orders. It is not conceived that the scope of the inquiry which the court is authorized to make, or the effect to be given to the com- mission's finding or determination upon which its order is based, is intended to be in anywise different when the suit is one to annul or enjoin the enforcement of the order than when it is one to enforce obedience thereto. It is not intended that the hearing in sucti a suit, whether it be of the one kind or the other, shall be confined to an ascertainment of what was determined by the commission and to a consideration of the sufficiency of the facts as determined by it to sustain the order; but on the contrary, the hearing may be de novo, and may include the taking and consideration of evidence other than that before the commission. Again, evidence submitted by raihvay companies in such case may be considered which was not before the com- mission. The court should, however, start with the presumption that the order of the commission is valid, and was made after a careful consideration and correct determination of every question of fact underlying it. The burden of showing that the facts are such as to render the order invalid rests upon the carrier assailing it, and unless the case made on behalf of the carrier is a clear one the order ought to be upheld. ^*^ Again, 28 Missouri, Kansas & Texas Ry. Co. v. Interstate Commerce Commission (U. S. C. C), 164 Fed. 645, 650. A suit in equity against the Interstate Commerce Commission by certain railway companies and the receivers of 223 § 132 JURISDICTION OF COURTS OVER it is decided, however, that under the Interstate Commerce Act^'' the Interstate Commerce Commission has original and exclusive jurisdiction to determine the question of the reason- ableness of an established rate for the interstate transportation of freight, and when a schedule of rates has been duly filed and has gone into effect the rates thereby prescribed are the only lawful rates until changed by the commission, and a court has no power to enjoin their enforcement.^^ It is declared in a other railway companies to annul and enjoin the enforcement of an order of the commission requiring such companies to desist from exacting certain terminal charges as to shipments originating outside the State, and prescrib- ing a maximum charge per car for such terminal service, and also requiring the railway companies to desist from exacting existing through rates for transportation of cattle in car loads from and to outside points and for pre- scribing for such through service maximum rates to be charged. The court also says, as to express declaration of the statute stated in the text, that: "This is shown (a) by the provision in Section 15 [Act Feb. 4, 1887, c. 104, 24 Stat. 384 (U. S. Comp. Stat. 1901, p. .3165), as amended by act June 29, 1906, c. 3591, § 4, 34 Stat. 589 (U. S. Comp. Stat. Supp. 1907 p. 900)], that ' all orders of the commission, except orders for the payment of money, shall take effect * * * and shall continue in force * * * not exceeding two years, * * * unless the same shall be * * * suspended or set aside bj^ a court of competent jurisdiction;' (b) by the provision in Section 16 that when any carrier fails or neglects to obey 'any order of the commission, other than for the payment of money, ' while the same is in effect, any party injured thereby, or the commission in its own name, may apply to the Circuit Court for an enforcement of such order, and ' the court shall prosecute such inquiries and make such investigations, through such means as it shall deem needful in the ascertainment of the facts at issue, or which may arise upon the hearing of such petition;' (c) by the further provision in § 16 that ' the venue of suits brought in any of the Circuit Courts of the United States against the commission to enjoin, set aside, annul or suspend any order or requirement of the commission shall be in ' designated districts, 'and jurisdiction to hear and determine such suits is hereby vested in such courts; ' and (d) by the still further provision in § 16 that the provi- sions of the expedition act [act, Feb. 11, 1903, c. 544, 32 Stat. 823 (U. S. Comp. Stat. Supp. 1907, p. 951)] ' are hereby made applicable to all such suits, including the hearing on an application for a preUminary injunction, and are also made applicable to any proceeding in equity to enforce any order or roriuirement of the commission.' " 27 Act of Feb. 4, 1SS7, chap. 104, 24 Stat. 379, U. S. Comp. Stat. 1901, p. 3154, as amended, including the amendatory act of June 29, 1906, chap. 3591, 34 Stat. 584, U. S. Comp. Supp. 1907, p. 892. 28 Syllabus in Great Northern Railway Co. v. Kalispell Lumber Co., 165 Fed. 25. 224 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 133 comparatively recent case that the statute gives prima facie effect to the findings of the commission, and when those find- ings are concurred in by the Federal Circuit Court, they should not be interfered with, unless the record establishes that clear and unmistakable error has been committed.^** § 133. Same Subject. The reasonableness of a rate is a question of fact, and while the conclusions of the Interstate Commerce Commission are subject to review, if that body excludes facts and circumstances that ought to have been considered they will not after having been affirmed by the Circuit Court and Circuit Court of Ajjpcals, be reversed because the commission did not adopt the pre- sumptions of mixed law and fact put forward as elements for determining the reasonableness of a rate; and where the inquiry before the commission is essentially one of fact, the existence of competition cannot in the Federal Supreme Court be made an inference of law dominating against the actual findings of the commission and their affirmance by the Circuit Court.^" The Interstate Commerce Act was intended to afford an effective and comprehensive means of redressing wrongs resulting from unjust discriminations and undue preference, and to that end placed upon carriers the duty of publishing schedules of reason- able and uniform rates; and consistently with the provisions of that law, a shipper cannot maintain an action at common law in a State Court for excessive and unreasonable freight rates exacted on interstate shipments where the rates charged were those duly fixed by the carrier according to the act and had not been found to be unreasonable by the Interstate Com- merce Commission. And where defendant in the State Court contends that, consistently with the Interstate Commerce Act, the State Court has no power to grant the relief, and such contention is essentially involved and expressly, and in order 28 Cincinnati, Hamilton & Dayton Ry. Co. v. Interstate Commerce Com- mission, 206 U. S. 142, 154, 51 L. ed. 995, 27 Sup. Ct. G4S, per Mr. Justice White, case affirms 146 Fed. 559. 30 Illinois Central Rd. Co. v. Interstate Commerce Commission, 206 U. 8. 441, 27 Sup. Ct. 700, 51 L. ed. 128. 15 225 § 134 JURISDICTION OF COURTS OVER to support the judgiiieiit, necessarily, decided adversely to the defendant, a Federal question exists and the Federal Supreme Court can review the judgment on a writ of error.^^ § 134. Same Subject— Injunction— Where Redress Must First Be Sought. A Federal Court of the district of which the complainants are inhabitants has jurisdiction of a suit to enjoin several rail- road companies, who are members of an association, from putting into effect an alleged unlawful rate on all food com- modities shipped in interstate commerce within the territory in which such district is situated, although none of the defend- ants are citizens of the State, where they operate roads in the State and district and are found and served therein.^^ It was subsequently held, however, that a Federal Court of Equity might enjoin the putting into effect an arbitrary and unrea- sonable and unjust interstate freight rate which a combina- tion had adopted until the Interstate Commerce Commission should pass upon such rate in order thereby to prevent re- sulting irreparable injury .^^ It is held, however, that a shipper seeking reparation predicated upon the unreasonableness of an established rate under the act to regulate commerce must primarily seek redress through the Interstate Connnerce Com- mission, as that body has plenary power to determine in the first instance what rates are legal or illegal, reasonable or excessive for the transportation of interstate commerce; and in maintaining action it must be alleged that resort has been had to that commission and the rate charged and paid declared excessive and unreasonable.^^ 31 Texas & Pacific Ry. Co. v. Abilene Cotton Oil Co., 204 U. S. 426, 51 L. ed. 523, 27 Sup. Ct. 350. 32 Syllabus in Macon Grocery Co. v. Atlantic Coast Line Rd. Co. (U. S. C. C), 163 Fed. 736. Bill for injunction was retained until application to and determination by the Interstate Commerce Commission. 33 Macon Grocery Co. v. Atlantic Coast Line Rd. Co. (U. S. C. C. ), 163 Fed. 738. Compare Chicago, Burlington & Quincy Rd. Co. v. Winnett (U. S. C. C. A.), 162 Fed. 242. 34 Meeker v. Lehigh Valley Rd. Co. (U. S. C. C), 162 Fed. 354, citing Texas 226 CORPORATION SUPERVISORY COMMISSIONS, ETC. §§ 135, 135a § 135. Same Subject — Compensation of Carrier —Services Rendered at Shipper's Request — Practice and Procedure — Remanding Case. A carrier which is at service and expense in stopping goods in transit for inspection and reloading for the benefit of the shipper is entitled to compensation in addition to the actual expense incurred. But where the Interstate Connnerce Com- mission has held, and its order has been affirmed by the Federal Circuit Court and Circuit Court of Appeals, that a carrier can- not charge for a service rendered at the request and for the benefit of the shipper any amount in excess of the actual expense incurred, and fixed a rate less than the Federal Supreme Court considers reasonable, said court cannot, where the testimony has not been preserved in the record, fix a fair and reasonable charge, but will reverse the judgments of both courts and remand the case to the former court with instructions to send the matter back to the commission for further investigation and report .^^ § 135a. Jurisdiction of Federal Courts in Respect to Inter- state Commerce Commission — Regulation of Carriers as to Cars — Where Redress Must First be Sought. Regulations which are primarily within the competency of tlie Interstate Commerce Commission are not subject to judicial supervision or enforcement until that body has been })roperly afforded an opportunity to exert its administrative functions. So the distribution to shippers of coal cars includ- ing those owned by the shippers and those used by the carrier for its own fuel is a matter involving preference and discrimina- tion and within the competency of the Interstate Commerce Commission, and the courts cannot interfere with regulations in regard to such distribution until after action thereon by the commission. And even if not assigned as error, the United & Pacific Ry. Co. v. Abilene Cotton Oil Co., 204 U. S. 426, 439-441, 448, 27 Slip. Ct. 350, 355, 51 L. ed. 553. 35 Southern Ry. Co. v. St. Louis Hay & Grain Co., 214 TJ. S. 297, 53 L. ed. 1004, 29 Sup. Ct. 678, rev'g 153 Fed. 728. 227 § 136 JURISDICTION OF COURTS OVER States Supreme Court will consider the jurisdictional question of whether there is power in the court, in view of the act to regulate commerce, to grant relief prayed for in regard to matters within the competency of said commission.^^ § 136. Jurisdiction of Federal Courts in Respect to Inter- state Commerce Commission — Shipper's Indebtedness for Demurrage — Refusal of Carrier to Receive Goods. It is held in a recent case that the United States Circuit Court has jurisdiction to determine in the first instance the indebted- ness of a shipper to a railroad company for demurrage, under the rules adopted by the company and filed with the Interstate Commerce Commission, where it depends upon the construction and not upon the reasonableness or unreasonableness of such rules although the latter question is one primarily for the com- mission.^^ Where an interstate carrier refuses to receive and forward goods tendered for shipment and the goods consist of a class for which a classification and rate had been generally made, and there is no complaint that the rates are unreasonable, or that the shipper was subjected to any undue disadvantage in competition with other shippers of his class or that the place from which the goods were to be shipped is discriminated against, a suit based on such refusal to carry is one under the common law, is in personam, and is not dependent upon the Interstate Commerce Act, or limited to proceedings before the Interstate Commerce Commission, but the State Courts where tender of the shipment was made or the Federal Courts on removal have jurisdiction, without regard to the fact that the refusal was based upon a statute of another State to which they were consigned making it unlawful for carriers to bring into certain countries, etc., in such State goods of the class tendered for shipment, as such statute was a police regulation and would be void as a regulation of interstate commerce.^* 38 Baltimore & Ohio Rd. Co. v. Pitcairn Coal Co., 215 U. S. 481, 54 L. ed. — , 30 Sup. Ct. — . See § 106a, herein. 37 Syllabus in Hite v. Central Ry. Co. of N. J. (U. S. C. C. A.), 171 Fed. 370. 38 Louisville & Nashville R. Co. v. F. W. Cook Brewing Co. (U. S. C. C. A.), 172 Fed. 117. 228 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 137 § 137. Use of Process of Federal Circuit Court in Aid of Inquiries Before Interstate Commerce Commission— Testi- mony— Production of Books, etc.— Fine and Imprisonment — Contempt — Power of Commission. The twelfth section of the Interstate Commerce Act authoriz- ing the Federal Circuit Courts to use their process in aid of inquiries before the commission established by that act, is not in conflict with the Constitution of the United States as impos- ing on judicial tribunals duties not judicial in their nature: and a petition filed under that section in the Circuit Court against a witness, duly summoned to testify before the commission, to compel him to testify or produce books, documents and papers relating to the matter under investigation before that body, makes a case of controversy to which the judicial power of the United States extends. The power conferred upon the com- mission to require the attendance and testimony of witnesses and the production of books, papers and documents relating to the matter under investigation by it imposes upon anyone summoned by that body to appear and testify, or to produce books, etc., the duty so to do, if the testimony or evidence sought relate to the matter under investigation, provided such matter is one which the commission is legally entitled to investi- gate, and the witness is not excused by law or on some personal ground from doing what the commission so requires him to do. But the authority to destroy or impair fundamental guarantees of personal rights which are recognized by the Constitution as inhering in the freedom of the citizen, is not embodied in the power given to Congress to regulate ir.U^rstate commerce. And a defendant in a proceeding of such a character before the Circuit Court may contend that he was protected by the Con- stitution from answering the questions propounded to him and that he was not bound to produce the books, etc., ordered to be produced, and that neither the questions nor the books, etc., related to the particular matter under investigation, nor to any matter which the commission was entitled under the consti- tution or laws to investigate, and the court upon determining such issue in favor of the defendant could dismiss the petition 229 § 137 JURISDICTION OF COURTS OVER upon its merits. The inquiry whether a witness before the com- mission is bound to answer a particular question propounded to him, or to produce books, etc., in his possession and called for by that body, is one that cannot be committed to a sub- ordinate administrative or executive tribunal for final determi- nation. Such a body could not, under our system or government, and consistently with due process of law, be invested with authority to compel obedience to its orders by a judgment of fine or imprisonment. Except in the particular instances enumerated in the Constitution ^^ of the exercise by either house of Congress of the right to punish disorderly behavior upon the part of its members, and to compel the attendance of witnesses, and the production of papers in election and impeachment cases, and in cases that may involve the existence of those bodies, the power to impose fine or imprisonment in order to compel the performance of a legal duty imposed by the United States can only be exerted, under the law of the land, by a competent judicial tribunal having jurisdiction in the premises. Such a proceeding under the twelfth section of the Interstate Commerce Act is not merely ancillary and advisory, nor is its object merely to obtain an opinion of the Circuit Court that would be without operation upon the rights of the parties. Any judgment rendered will be a final and indisputable basis of action as between the commission and the defendant and furnish a precedent for similar cases. The judgment is none the less one of a judicial tribunal dealing with questions judicial in their nature and presented in the customary forms of judicial proceedings, because the effect may be to aid an administrative or executive body in the performance of duties legally imposed upon it by Congress in execution of a power granted by the Constitution. The issue in such a case is not one for the deter- mination of a jury, nor can any question of contempt arise until the issue of law in the Circuit Court is determined adversely to the defendant, and he refuses to obey, not the order of the 39 Which are considered in Kilboum v. Thompson, 103 U. S. 168, 190, 26 L. ed. 377, and in Anderson v. Dunn, 6 Wheat. (19 U. S.) 204, 5 L. ed. 242. 230 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 137 commission, but the final order of the court. In matters of contempt a jury is not required by due process of law.^" <« Interstate Commerce Commission v. Brimson, 154 U. S. 447, 14 Sup. Ct. 1125, 38 L. ed. 1047, dissenting opinion in 155 U. S. 3, 39 L. ed. 49, 15 Sup. Ct. 19. [Case of appeal bringing up for review a judgment dismissing a petition filed in the Federal Circuit Court by the Interstate Commerce Com- mission under the act of Congress to "regulate commerce" approved Feb. 4 1887, and amended by acts of March 2, 1889, and Feb. 10, 1891, 24 Stat. 379, chap. 104; 25 Stat. 855, chap. 382; 26 Stat. 743, chap. 128; 1 Supp. Rev. Stat. 529, 684, 891. (See as to act of 1903. 194 U. S. 25, cited below in this note.) The petition was based on the twelfth section of the act authorizing the commission to invoke the aid of any court of the United States in requir- ing the attendance and testimony of witnesses, and the production of docu- ments, books, and papers. The Circuit Court held that section to be unconsti- tutional and void, as imposing on the judicial tribunals of the United States duties that were not judicial in their nature. In the judgment of that court, the proceeding was not a case to which the judicial power of the United States extended. Interstate Commerce Conamission, In re, 53 Fed. 476, 480], dis- tinguishing (on the fourth point) Sanborn, In re, 148 U. S. 222, 37 L. ed. 429, 13 Sup. Ct. 577; Gordon v. United States, 117 U. S. 697, 29 L. ed. 921; Barrow v. Hill (Todd's Case), 13 How. (54 U. S.) 52, 14 L. ed. 47; United States V. Ferreira, 13 How. (54 U. S.) 40, 14 L. ed. 42; Hayburn's Case, 2 Dall. (2 U. S.) 409, 1 L. ed. 436. Principal case is cited in Harriman v. Inter- state Commerce Commission, 211 U. S. 407, 418 (to the point that " it was in- timated that there was a limit " to the power of Congress to legislate upon the subject-matter of the questions put to the witnesses; but the question was passed by) ; cited and quoted Id., 427 (in dissenting opinion, as to author- ity of Interstate Commerce Commission to conduct an investigation upon its own motion); cited in Alexander v. United States, 201 U. S. 117, 121, 50 L. ed. 686, 26 Sup. Ct. 356 (as to contention that to justify appeal the order of the Circuit Court constitutes practically an independent proceeding and amounting to final judgments) ; cited and quoted from in Hale v. Henkel, 201 U. S. 43, 72, 26 Sup. Ct. 370, 50 L. ed. 652 (as sustaining the constitutional- ity of the Interstate Commerce Act so far as it authorized the Circuit Courts to use their processes in aid of inquiries before the commission) ; Interstate Commerce Commission v. Baird, 194 U. S. 25, 42, 48 L. ed. 860, 24 Sup. Ct. 563 (to point that commission has no power to fix rates). Id., 38 (to point that before passage of act of 1903, a petition filed under § 12 of the prior act, made a case of controversy to which the judicial power of the United States extended; also as to proceeding not being merely advisory to com- mission, and judgment being final and indisputable basis of action as be- tween commission and defendant, and as furnishing a precedent in similar cases; and while the object is obtaining testimony, important questions may be involved touching power of commission ; also adding that intent of Congress rendered it imperative that such cases should be promptly determined in a court of last resort. This case holds that under the proviso in § 3 of the act of Feb. 19, 1903, u direct appeal may be taken to the Federal Supreme Court 231 § 138 JURISDICTION OF COURTS OVER § 138. Judicial Functions of Nonjudicial Bodies — Power to Compel Corporations to Produce Books, etc. — Notice — Courts — Due Process and Equal Protection — Contempt — Compensation to Witness. In connection with the point first stated under the last from a judgment of the Circuit Court in a proceeding brought by the Inter- state Commerce Commission, under the direction of the attorney general, to obtain orders requiring the testimony of witnesses and the production of books and documents); cited in Northern Securities Co. v. United States, 193 U. S. 197, 353, 48 L. ed. 679, 24 Sup. Ct. 436 (to point that railroad companies are instruments of commerce and as operating pubhc highways are subject to governmental control and regulation) ; Atlantic- & Pacific Teleg. Co. v. Philadelphia, 190 U. S. 160, 162, 47 L. ed. 995, 23 Sup. Ct. 671 (to point of exclusive power of Congress to regulate interstate commerce) ; District of Columbia v. Eslin, 183 U. S. 62, 66, 22 Sup. Ct. 17, 46 L. ed. 85 (as to extent of exercise of judicial power by Supreme Court in matter of jurisdiction of Court of Claims; a final judgment and appeal, dismissed foi* want of jurisdiction) ; Downes v. Bidwell, 182 U. S. 244, 289, 45 L. ed. 1088, 21 Sup. Ct. 770 (to point that wherever a power is given by Congress and a limitation is imposed on the authority, such restriction operates upon and confines every action on the subject within its constitutional limits) ; La Abra Silver Mining Co. v. United States, 175 U. S. 423, 457, 44 L. ed. 276, 20 Sup. Ct. 168 (to point that Court of Claims function is ancillary and advisory, and findings or conclusions not enforceable by any process of execution issuing from the court, nor is it by statute the final and indisputable basis of action) ; cited and quoted from in United States v. Duell, 172 U. S. 576, 588, 19 Sup. Ct. 286, 43 L. ed. 559 (and upon point of finality of judgment and being none the less one because effect may be to aid an administrative or executive body in performance of duties legally imposed by Congress under the Constitution; a case as to judicial function of Commissioner of Patents) ; cited in United States v. Joint Traffic Assoc, 171 U. S. 505, 571, 43 L. ed. 259, 19 Sup. Ct. 25 (to point that power to regulate commerce has no limitations other than prescribed by the Constitution and such power does not carry right to destroy or impair limitations and guarantees in Constitution and its amend- ments; constitutional right of citizen to make contracts, and power of Congress to prohibit contracts of nature involved in this case) ; cited and quoted from in Debs, In re, 158 U. S. 564, 597, 15 Sup. Ct. 900, 39 L. ed. 1092 (as to contempt not being a question triable of right by a jury); cited in Fulgham v. Midland Valley R. Co., 167 Fed. 660, 662, (as to exclusive power of Congress to regulate commerce; a case of action for injury to employe and scope of Railroad Employers' Liability Act of Congress) ; O'Shea, In re, 166 Fed. 180, 182 (to point that argument not sound, that witness obligated to answer, in a special examination, questions as to merits of pension claims even though tending to incriminate) ; Interstate Commerce Commission v. Harri- man, 157 Fed. 436; Riggsbee, In re, 151 Fed. 701, 703 (to point that party is not entitled to jury trial) ; Western New York & Pennsylvania Rd. Co. v. 232 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 138 preceding section it is held by the Federal Supreme Court in a comparatively recent case that nothing in the Federal Con- stitution prohibits a State from conferring judicial functions on nonjudicial bodies. The case was one of notice to a corporation, given pursuant to a statute, to produce certain described books and papers before the grand jury. The notice; was required to be issued from the court or tribunal before whom the jjapers were required to be produced, and for neglect or refusal with- out reasonable cause to comply the corporation could be Penn. Refining Co., 137 Fed. 343, 349 (to point that Interstate Commerce Commission though clothed with quasi-judicial functions, is an administrative botly in contradistinction to a judicial tribimal); Interstate Commerce Com- mission V. Philadelphia & R. Ry. Co., 123 Fed. 969, 970 (to point that upon application for an order by Interstate Commerce Commission requiring wit- nesses to appear before it, etc., the Circuit Court does not sit as an appellate tribunal, but should decide all questions raised as to relevancy of such testimony if such questions were raised before it in the first instance) ; United States V. Lehigh Valley R. Co., 115 Fed. 373, 375 (to point as to what is not an interstate shipment; case of mandamus; authority of Federal Court to compel shipment where terminal points within same State); cited and quoted from in Kinney, In re, 102 Fed. 468, 473 (as to there being no such thing as contempt of a subordinate administrative body and that determi- nation by Circuit Court and refusal to obey are prerequisites; a case of power of collector of internal revenue) ; cited in Ripon Knitting Works v. Schreiber, 101 P'ed. 810, 813 [(in quotation from Debs case cited above in this note) upon point of contempt; in question as to power of court of bankruptcy to punish for]; Wyckoff, Seamans & Benedict v. Wagner Typewriter Co., 99 Fed. 158, 159 (case of refusal of stockholder as witness, to answer question tending to criminate, and declared not a case under Interstate Commerce Act) ; United States V. Sweeney, 95 Fed. 434, 450 [(in quotation from Debs case cited above in this note) as to denial of trial by jury to persons guilty of contempt]; United States v. Bell, 81 Fed. 830, 843 (generally as to protection of witnesses against inquisitorial system; case of examination before special pension examiner and incriminating testimony); Gross, In re, 78 Fed. 107, 109 (as to application to commissioners to Circuit Court to enforce obedience to subpoenas being a "case" to which the judicial power of the United States extends; a case as to constitutionality of act authorizing judges and clerks of United States Courts to issue subpoenas, when Commissioner of Pensions applies therefor); Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co., 64 Fed. 981, 982 (to point that Interstate Commerce Commission is not a court but an administrative body lawfully created, exercising quasi- judicial powers and that its rulings entitled to highest respect); King v. M'Lean Asylum of Mass. Gon'I. Hosp., (U Fed. 325, .".39 (generally as to "cases," "controversies" and "questions" included within the Federal jurisdiction. 233 § 138 JURISDICTION OF COURTS OVER punished by the court having jurisdiction of the person to punish for contempt. It was further held in connection with the point above mentioned that it was within the power of the State, and due process of law was not denied thereby, to require a corporation, doing business in the State, to produce before tribunals of the State books and papers kept by it in the State, although at the time the books might be outside the State; that so long as an opportunity to be heard is given to the party objecting to the notice to produce books and papers, before the proceeding to enforce such production is closed, due process of law is afforded, and if the State Court has construed the statute providing for such production to the effect that objec- tions raised before a grand jury must be reported to the court for action, there is opportunity to be heard; that whether a notice to produce books and papers is broader than the State statute provides for is not a Federal question ; that a corpora- tion required to produce books and papers cannot refuse to produce them on the ground that it might incriminate them, it being for the court, after inspection, to determine the suffi- ciency of the objection and what portion, if any, of the books and papers produced should be excluded; that an objection that a notice to produce books and papers is too broad cannot be urged against the validity of an order adjudging the party refusing to comply guilty of contempt ; that a notice to produce is not too broad where it is limited to books and papers relating to dealings with certain specified parties between certain speci- fied dates; that a State statute providing for the production of books and papers by corporations does not deny to corporations the equal protection of the laws and that such a classification is a proper one; and, briefly stated, that a State statute providing for the production of their books and papers by corporations be- fore courts, grand juries and other tribunals, and punishing cor- porations for failure to comply therewith for contempt is not unconstitutional as depriving corporations of their property without due process of law, or as denying them the equal pro- tection of the laws, or as conferring judicial functions on non- judicial bodies, or as taking private property for public use 234 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 131) without compensation, or us constituting unreasonable searches and seizures or requiring corporations to incriminate themselves. An objection was also raised in this case that the statute pro- vided no compensation for the time, trouble and expense imposed upon a corporation in a foreign State or country in col- lecting and sending the documents demanded to the State of enactment of said statute, and that it would thereby take, if en- forced, private property for public use without compensation, and it was held that if the person producing the books and papers is entitled, under the general law of the State, to com- pensation as a witness, the failure of the statute requiring the production of books and papers of corporations to provide com- pensation to the corporation itself for the time, trouble and ex- pense of such production does not amount to taking private property without compensation.'*^ § 139. Jurisdiction of Courts in Respect to Railroad Commissions — Generally. In Connecticut one injured in his legal rights by unlawful action, either of a municipal board, or of the board of railroad « Consolidated Rendering Co. v. Vermont, 207 U. S. 541, 52 L. ed. 327, 28 Sup. Ct. 425, aff'g 66 Atl. 790. The court, per Mr. Justice Peckham said as to this last point: "The prohibition to that effect is found in the Fifth Amend- ment to the Federal Constitution. Here again we meet the question whether that amendment, because of the subsequent adoption of the Fourteenth Amendment, applies to a State proceeding, but for the reasons already stated we do not find it expedient to discuss it here. We do not say that in any event a witness is entitled to compensation in order to avoid the above constitutional provision, but the Supreme Court in this case has held that the general law of the State in reference to the compensation of witnesses applied to this statute. The answer which the counsel for the company makes is that neither the statute nor the notice required the attendance of anyone as a witness, but was merely an order for production for which no compensation was provided, either by the statute or under the general law. But the papers cannot walk into court of themselves, and when they are brought there by virtue of the notice to produce served on the company, and they are given to some person by the company for the purpose of such production, he has a right to be sworn as to the papers which he produces for the purpose of identification, if nothing else, and the State Court has hekl that he is entitled as a witness to compensation." 235 § 139 JURISDICTION OF COURTS OVER commissioners, in the exercise of the specified administrative powers of such board, may apply to the Superior Court, or a judge thereof in chambers, by ''appeal," for such relief as comes within the judicial power of the court, and this process runs against the municipal board when the injury results from the unlawful action of that board. In this case it appeared that the New York, New Haven & Hartford Railroad Company being a street-railway company, and desiring to transmit electricity from its power station north of New London to a substation in Now London, where the electricity was to be used for its street-railway lines, applied to the common council of New London for their approval of the erection of a line of poles and overhead wires along and across certain streets of New London for such transmission of electricity. The common council denied the application, on the ground that they "did not consider it safe to grant the petition unless the wires are placed under ground." The street-railway company appealed to a judge of the Superior Court, asking that the order of the common council be revoked, and said judge, upon hearing, revoked said order. The city of New London appealed to the Supreme Court of Errors, claiming, first, that the common council had power to make the order complained of, and second, that the Superior Court, or a judge thereof in chambers, could not entertain an application for determining such question of power before the subject-matter of the order had been passed upon by the railroad commissioners. It was held that the trial judge had power to entertain the company's application in order to determine the judicial question as to the nature and extent of the power of the common council, but that he erred in holding that the common council had no power to make the order complained of.'*' Under an Indiana decision where it is evident from a State statute that it was not the legislative purpose to make an order of a railroad commission conclusive in any given case when seasonably attacked, yet where the commission proceeds upon complaint and notice with an 42 New York, New Haven & Hartford Co.'s Appeal, 80 Conn. 623, 70 Atl. 26. Compare Spencer's Appeal, 78 Conn. 301. 236 CORPORATION SUPEKVIWOKY (JOMMISSIONS, ETC. § 139 opportunity to a railroad company to be heard, the presumption in favor of the validity of an order made by the commission for a track connection is strong and a clear case must be made out to justify the overthrow of its action. And while, whatever the commission does in the way of ordering the construction of an interchange track, must, from the relation of the carrier^ to interstate commerce, be held to inure to the benefit of such commerce, yet such an order so made, must be considered in the light of a railroad commission statute providing that "it shall apply only to the transportation of passengers and prop- erty within this State and to the receiving, switching, dehver- ing, storing and handling such property." The proper con- struction of such order is a State and not a Federal question .^^ In Louisiana the Supreme Court does not act as a supervisoiy or administrative board, but only as a judicial body in taking cognizance of and adjudicating disputed matters between the railroad commission and State railroads.''^ Under a Minnesota case, if it is charged that a common carrier has refused or neglected to comply with a lawful order of the railroad or warehouse commission the manner in which notice of a hearing thereof shall be given may be directed by the courts; and a statute so providing is not contrary to the State Constitution prohibiting the delegation of legislative powers to the judiciary .^^ Again, where an act of the Minnesota legislature establishing a railroad and warehouse commission as interpreted by the Supreme Court of the State provides that the rates of charges for the transportation of property, recommended and published by the commission, shall be final and conclusive as to what arc reasonable and equal charges, and that there can be no judicial inquiry as to the reasonableness of such rates, and a railroad company, in answer to an application for a mandamus, contends that such rates are unreasonable, but is not allowed by the <3 Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Hunt (Ind., 1908), 86 N. E. 328. ** Morgan's Louisiana & Texas Rd. & Steamship Co. v. Railroad Com- mission, 109 La. 247, 33 So. 214. ■^^ State, Railroad & Warehouse Commission v. Adams Express Co., 66 Minn. 271, 68 N. W. 1085, 38 L. R. A. 225. 237 § 140 JLIRISDICTION OF COURTS OVER State Court to i)iiL in testimony on that question, such act is in conilict with the Constitution of the United States, in that it deprives the company of its property without due process of law, and depriv(\s it of the equal protection of the laws.'"^ A statutory provision of the same State empowering the courts to direct the manner of service of notice upon a common carrier, when proceeded against by a railroad and warehouse commission authorized to call upon such carrier for information absolutely essential for the proper conduct of the carrier and the protection of the public, does not constitute a delegation of legislative power to the judiciary.'*^ § 140. Same Subject. In Mississippi the State Courts are the absolute interpreters of State statutes creating a board of railroad commissioners and specifying the extent of their powers, and also regulating and controlling railroad routes and matters of consolidation of connecting lines.'** The railroad commission of that State is not a court, but a mere administrative agency of the State; and the prohibitions of § 720, Revised Statutes, against injunctions from United States Courts to stay proceedings in State Courts are not applicable thereto; and even though the commission might, under the State law, resort to the State Courts to aid it in enforcing its orders the proceedings cannot be regarded as one in the State Courts within the meaning of § 720, Revised Statutes.^^ Again, a decree of a court of that State, requiring a railroad company which does an interstate business to construct its lines within the State in accordance with the provisions of its charter and the directions of the State railroad commission is 46 Chicago, M. & St. Paul Ry. Co. v. Minnesota, 134 U. S. 418, 33 L. ed. 970, 10 Sup. Ct. 462. ■*7 State ex rel. Railroad & Warehouse Commission v. Adams Express Co., 66 Minn. 271, 273, 38 L. R. A. 225, 68 N. W. 1085, per Collins, J. 48 Mobile, Jackson & Kansas City Rd. Co. v. Mississippi, 210 U. S. 187, 52 L. ed. 1016, 28 Sup. Ct. 650, aff'g 89 Miss. 724. 49 Mississippi Railroad Commission v. Illinois Central Rd. Co., 203 U. S. 335, 51 L. ed. 209, 27 Sup. Ct. 90, aff'g 138 Fed. 327, and citing Western Union Telg. Co. v. Mississippi Railroad Commission, 74 Miss. 80, 21 So. 15. 238 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 140 not an interference with interstate commerce because com- pliance therewith entails expense or requires the exercise of emi- nent domain.^" The North Carolina Corporation Conmiission has no power to enforce its orders and decrees by final process issuing directly therefrom, and for such purposes resort must be had to ordinary courts, either by independent proceedings or in proper instances by process issued in cases carried before such courts on appeal. Therefore, when on complaint made by a consignee of goods investigation was had and award made that a rule of the commission had been violated by the railway and that a penalty provided by such rule should be paid, and further that the rules of the corporation commission made for protection of shippers in such cases should be observed and obeyed, no appeal lies from such ruling, as the statute and rules themselves already require obedience, and consequently no right or interest of the parties was in any way affected. Unless given in express terms an appeal will only lie from orders and rulings of the corporation commission of North Carolina when such orders affect some right or interest of the parties to the controversy.^^ Under a decision in that State, even though the railroad commission is a court of record, inferior to the Supreme Court, in the purview of the Constitution, with powers inherent in all courts, as to punish for contempt, etc., it is properly an administrative body. It can issue no execution upon the fines and penalties laid by it, but these must be collected by action in the Superior Court. All its orders and regulations are merely the basis of judicial action in the Superior Court to enforce them and punish their violation, and until there has been an official adjudication of the validity of its action in any particular case, there can be no appeal to the Supreme Court, whose jurisdiction, except in the case of claims against the State, is appellate and the State statute authoriz- ing an appeal from the commission direct to the Supreme Court, 50 Mobile, Jackson & Kansas City R. Co. v. Mississippi, 210 U. S. 187, 28 Sup. Ct. 650, 52 L. ed. 1016, aff'g 89 Miss. 724. 81 Hardware Co. v. Railroad (State ex rel. North Carolina Corp. Comm. & Hart- Ward Hardware Co. v. Southern Ry. Co.), 147 N. C. 483. 239 § 141 JURISDICTION OF COURTS OVER where no exception is made to the facts as found by the com- mission, is in conflict with the State Constitution which gives the Supreme Court appellate jurisdiction only except of claims against the State .^^ It is also held in the same State that the act creating the railroad commission is unconstitutional in providing for direct appeal to the Supreme Court from the commission as the appeal must in conformity with such con- stitutional provision be first taken to the Superior Court.^^ Again, in that State a statute which gives authority to a rail- road commission to prescribe rules and regulations for the government of railroads, and provides that upon failure of any railroad company to make full and ample recompense for the violation of such rules and regulations, the commission should be entitled to proceed in the courts, after notice, to enforce the penalties to be prescribed therein for such violation, is valid without providing in detail the methods of procedure .^^ § 141. Same Subject. Under an Oklahoma decision on appeal from an order of the State Corporation Commission, the presumption obtains, by reason of the Constitution,^^ that the order is reasonable, just, and correct, and he who complains on appeal of such order has upon him the burden of establishing the unreasonableness, 52 Pate (State ex rel. Board of Rd. Comm'rs) v. Wilmington & Weldon Rd. Co., 122 N. C. 877, 29 S. E. 334, 11 Am. & Eng. R. Cas. (N. S.) 671 (a case of a petition filed by certain citizens with the raiboad commission for an order that defendant be required to establish a railroad station, with freight, express and telegraph offices at a specified place, which petition was dismissed on the ground of want of authority) citing Caldwell (State ex rel. Caldwell) v. Wilson, 121 N. C. 425, 28 S. E. 554, 61 Am. St. Rep. G72; Lea veil v. Western Union Teleg. Co., 116 N. C. 211, 21 S. E. 391; Railroad Commissioners (State ex rel. Rd. Comm'rs.) v. Western Union Teleg. Co., 113 N. C. 213, 18 S. E. 389; Mayo V. Western Union Teleg. Co., 112 N. C. 343, 16 S. E. 1006; Express Co. (Atlantic Express Co.) v. Wihnington & Weldon Rd. Co., Ill N. C. 463, 16 S. E. 393. 53 State Railroad Commission v. Wihnington, 122 N. C. 877, 29 S. E. 334, II Am. & Eng. R. Cas. (N. S.) 671, N. C. Const., Art. 4, § 12. 54 Express Co. (Atlantic Express Co.) v. Wilmington & Weldon Rd. Co., III N. C. 463. 55 Section 22, Art. 9. 240 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 141 I in justness, or incorrectness of such order, which he may do by- showing that the unreasonableness of the order appears affirm- atively from the facts as certified by the commission, or that it is shown by evidence in the record, upon which the commission failed to make findings of fact, or upon which the commission erroneously found the facts.^^ Under a Texas decision where the railroad commission has adopted rules or regulations and a suit is instituted to test such decision of the commission, the ordinary rules of procedure prevail upon the question whether or not they are just and reasonable, and the complain- ant is not obligated to show that property is taken without due process of law and without proper compensation." Under a Vir- ginia decision, proceedings before the railroad commissioner'^^ and his inability to have the cause of complaint corrected are conditions precedent to the exercise by the Circuit Courts of the jurisdiction conferred on; them by said act. But when the 56 Syllabus in Missouri, Kansas & Texas Ry. Co. v. State (Okla., 1909), 103 Pac. 613. The court per Hays, J. (at p. 615), said : " The Constitution requires the commission to certify, on appeal from any of its orders, the facts and reasons upon which the commission bases its order. Such requirement is made for the purpose of furnishing this court an aid in determining whether the order made is reasonable and just; and, while all acts of the commission are to be regarded as 'prima facie just, reasonable, and correct, its findings of fact and reason assigned for the making of an order, or refusal to make any order, are not conclusive upon this court, and, where there are no findings of fact by the commission affirmatively showing that an order made is unreasonable and unjust, in the absence of any statute or rule of this court prescribing the procedure before the commission and on appeal here, we think the court should consider, not only the facts found by the commission, but also all the evidence in the record which fairly tends to support the action of the commission. The Constitution clothes the order of the com- mission with the presumption that it is prima facie, reasonable, just, and correct, § 22, art. 9, of the Constitution (§ 235, Bunn's ed.). On appeal the burden is upon appellant to overcome this presumption. This it may do by showing that the facts found affirmatively show the order to be unreason- able and unjust, or that there is evidence in the record upon which the com- mission has made no finding, or upon which it has incorrectly made findings of fact which show that such order is unreasonable and unjust." " Raikoad Commission v. Houston & Texas C. R. Co., 90 Tex. 340, 33 S. W. 750. See Railroad Commission v. Weld (Tex. Civ. App.), 66 S. W. 122, 1095. 68 Under act of March 3, 1892 (acts 1891-92, p. 965). 16 241 § 141 JURISDICTION OF COURTS OVER jurisdiction of such courts is properly invoked, they hear the cause de novo, and when the complaint is that two railroads companies fail to make proper connections, both companies must be made parties defendant by the commonwealth in order that the court may adjust all matters or cause of com}jlaint. The fact that one of the companies is willing to adopt the suggestion of the commissioner, and to obey his directions, does not dispense with the necessity of making such company a party to the proceedings in the Circuit Court .^^ And in the same State an order of a Circuit Court,^° requiring common carriers to make specified changes in their schedules so as to effect a given connection, should provide that they may there- after agree upon a new schedule not in violation of law, and that, in the absence of such new schedule, either party may, after reasonable notice to the other and to the attorney for the commonwealth of the county in which the suit is pending, apply to the court, or to the judge in vacation, for any modi- fication in its order that may be shown to be proper.^^ In Wisconsin unless an order of the railroad commission is unlaw- ful or unreasonable it will not be disturbed .^^ Under a Federal decision the power to regulate the operation of railroads includes regulation of the schedule for running trains; such power is legislative in character, and the legislature itself may exercise it or may delegate its execution in detail to an administrative body, and where the legislature has so delegated such regulation the power of regulation cannot be exercised by the courts. So where the legislature of Hawaii has vested by statute the regulation of a railway company thereby incorporated in certain administrative officers, it is beyond the power of the courts to independently regulate the schedule of running cars by decree in a suit; and this is so held without deciding as to 69 Southern Ry. Co. v. Commonwealth, 98 Va. 758, 2 Va. Sup. Ct. 620, 37 S. E. 294. 60 Proceeding under the act of March 3, 1892, acts 1891-92. 61 Southern Ry. Co. v. Commonwealth, 98 Va. 758, 2 Va. Sup. Ct. 620, 37 S. E. 294. 62 State ex rel. Northern Pac. Ry. Co. v. Railroad Commission (Wis., 1909), 121 N. W. 919. 242 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 142 the power of the courts to review the action of the administra- tive officers charged by the legislature with establishing regulations. In this case the question was whether the courts of the Territory of Hawaii had jurisdiction to issue an injunction to prevent the running of street railway cars at intervals of time less than that of an existing schedule, on the ground that public convenience required the continuance of the existing schedule, in other words, whether the court had power to control and regulate the operations of the company,^^ The English High Court of Justice has no original jurisdiction over matter within the railway commissioners' jurisdiction, but can only enforce orders made by the latter under the Regulation of Railways Act.*^"* And where railway commissioners sit in lieu of arbitrators under the provisions of said Regulation of Rail- ways Act,*'^ they exercise a jurisdiction not depending on the parties' consent, and an appeal lies to the Superior Court on questions of law.^^ § 142. Jurisdiction of Courts — Railroad Commissioners — Public Service Commission — Certificate of Public Conven- ience and Necessity. In New York the determination of the board of railroad com- missioners of that State whether or not a certificate should be issued that public convenience and necessity require the con- struction of a proposed railroad, does not constitute a subject 63 Honolulu Rapid Transit & Land Co., 211 U. S. 282, 53 L. ed. 186, 29 Sup. Ct. 55, rev'g 18 Hawaii, 553; §§ 833-871, chap. 66 of Rev. Laws of Hawaii. Examine Atlantic Coast Line Rd. Co. v. North Carolina Corporation Commission, 206 U. S. 1, 51 L. ed. 33, 27 Sup. Ct. 585. 64 Chatterly Iron Co. v. North Staffordshire Ry. Co. (1878), 3 Ry. & Can. Cas. 238; act of 1873, § 26. 65 Act of 1873, § 8. 66 Northeastern Ry. Co. v. North British Ry. Co. (1897), 10 Ry. & Can. Traffic Cas. 82. Appeal under Railway and Traffic Act, 1888, § 17. So held by the Court of Session. As to appeal from commissioners to Superior Court of Appeal under Rail- way and Traffic Act of 1888, § 17, being applicable under English Telegraph Acts, quccre. Postmaster Gen'l v. Corporation of Glasgow, 10 Ry. & Can. Cas. 238. 243 § 142 JURISDICTION OF COURTS OVER for judicial revision.^^ The determination of a board of rail- road commissioners under the railroad law of New York '^^ that ]Hiblic convenience and necessity require the construction of a railroad, is not effective to confer any corporate rights upon the applicant until the certificate embodying the decision is filed in the office of the Secretary of State, and it is only then that the statute of limitations begins to run as to the right to review the determination of the board. Said commissioners in acting under the above statute®^ proceed judicially and are required to determine, at the outset, whether a corporation applying for a certificate is one de jure, by reason of a com- pliance with what the statute commands as essential to due incorporation. If the ten per cent of the minimum amount of capital stock has not been subscribed, nor paid in good faith and in cash, there has been no legal incorporation, and that question the board must determine. When no cash appears to have been paid in or received by the railroad company or by anyone for it, in compliance with the railroad law,^° which requires an affidavit that ten per cent of the capital stock has been paid in good faith and in cash, the Appellate Division of the Supreme Court of New York may review the determination of the railroad commission upon that question and find that the affidavit was false, and, for that purpose, where the return includes the proceedings and testimony, that court may look into the evidence, and if it finds that it fails to support the determination of the board, may annul such determination. Such decision cannot be reviewed by the Court of Appeals.^^ In another case in the same State it is held that where, after the former board of railroad commissioners issued to a -railroad a certificate of public convenience and necessity and denied a 67 People V. Board of Railroad Comm'rs, 175 N. Y. 516, 67 N. E. 1088, aff'g 81 N. Y. Supp. 20, 81 A. D. 242. 68 Railroad Law, § 59 (Laws 1890, chap. 565, as am'd). 69 Under § 59 thereof. 70 Sfction 2 of Railroad Law. 71 People ex rel. New York Central & Hudson River Rd. Co. v. Public Service Commission, 195 N. Y. 157, 88 N. E. 261, aff'g 106 N. Y. Supp. 968, 122 App. Div. 283. 244 CORPORATIOX SUPERVISORY COMMISSIONS, ETC. § 142 subsequent application by another railroad for a similar certifi- cate, the second petitioner contends that its application should have been granted owing to the fact that since the prior de- termination conditions have materially changed in the locality, the Ajopellate Division in its discretion may remit the matter to the Public Service Commission for investigation and deter- mination. It is a question as to whether the Supreme Court has power to order the Public Service Commission to issue a certificate of public convenience and necessity. But assuming that the court possesses that power, it has also power to remit the matter for a rehearing to the body possessing original juris- diction; and the power of the Supreme Court to review a determination of the former board of railroad commissioners or its successor, the present Public Service Commission, has been exercised for so long a time that it is not an open ques- tion .'^^ On review of the determination of the State railroad commission not to issue a certificate of convenience and neces- sity for the construction of a belt line for freight around a city connecting different railroads, affidavits were presented show- ing that since the hearing before the commission one railroad is constructing a switching yard of great capacity and laying an additional track along its passenger belt line which would soon be available for interchanging freight among the various "Buffalo Frontier Terminal Ry. Co., Matter of, 131 App. Div. 503, 115 N. Y. Supp. 483. The Supreme Court of New York on review of proceedings on an appli- cation for the issuance of a certificate of public convenience and necessity for a railroad, having power to direct the Public Service Commission to issue the certificate, may also remit the matter for a rehearing to that body; and the power to remit a case for any purpose must carry with it the authority to determine in what manner and for what purpose the submission is made. Syllabus in Buffalo Frontier Terminal Rd. Co., In re, 115 N. Y. Supp. 483. " It is urged with much earnestness that the determination of the Board of Railroad Commissioners is an administrative and not a judicial act, and this court has no power to review its decision. The power has been exercised for so long a time that it is not an open question, and we deem it unnecessary to enter into any discussion on the subject." Buffalo Frontier Terminal Co., In re, 1 15 N. Y. Supp. 483, 489, per Spring, J. In this case the determination of the Board of Railroad Commissioners was set aside and a rehearing ordered before the Public Service Commission; McLennan, P. J., dissented. 245 § 142 JURISDICTION OF COURTS OVER railroad lines, and that other improvements by new lines are under way tending to obviate the necessity for new proposed lines. It also appeared that a rival company was granted a certificate which, except for objection which induced a reversal as to its certificate on certiorari, might be equally well equipped and located to satisfy the necessity, if it has since eliminated the objections, and might be entitled to the certificate. It was held that, notwithstanding the evidence before the railroad commission entitled petitioner to a certificate, the case would be remanded to the Public Service Commission, its successor,'^ for a rehearing on present conditions.^^ 73 Under Laws 1907, p. 937, chap. 429. 74 Syllabus in Buffalo Frontier Terminal Rd. Co., In re, 115 N. Y. Supp. 483, 131 App. Div. 503. " We do not deem it necessary to determine the question of the power of this court to order the Public Service Commission to issue a certificate of necessity to the petitioner. As bearing upon this subject, see, however, Village of Ft. Edward v. Hudson Valley Rd. Co., 192 N. Y. 139, 84 N. E. 962; Matter of Wood, 181 N. Y. 93, 73 N. E. 561; Matter of Rochester, Corning & Elmira Traction Co., 102 N. Y. Supp. 1112, 118 App. Div. 521; § 85, Public Service Commissions Law (Laws 1907, p. 937, c. 429), § 59 of Railroad Laws (Laws 1895, p. 317, c. 545). Passing the question of power, we think such an order would be an unwise exercise of discretion in view of the conditions existing. One rival company has already applied to that body for such certificate, and, if granted, it might render permission to the peti- tioner improper or unnecessary. The Board of Railroad Commissioners, believing a certificate should be granted, issued it to another competing company. The affidavits tend to show that conditions affecting the operation of railroads and the transportation of freight have materially changed since the determination made more than two years ago. It is a matter of current knowledge that the Public Service Commission of the second district has been devoting much time to the consideration of the many problems con- nected with the operation of the railroads in and about the city of Buffalo. It has the opportunity of frequent inspection of conditions prevailing, and is especially equipped for the solution of questions involving railroad con- struction and operation. We have no doubt as to the power of this court to relegate this matter to that body for investigation and determination. The petitioner asks that this court direct the commission to issue the certificate. Assuming that can be done, the power must also be lodged in this court to remit the matter for a rehearing to the body possessing original jurisdiction. The mode in which this court transfers the proceeding to the commission, and what directions it may make, relate wholly to the procedure. The power to remit for any purpose must carry witli it the authority to determine in what manner and for what purpose the submission is made. In People 24G CORPORATION SUPERVISORY COMMISSIONS, ETC. § 143 § 143. Jurisdiction of Courts Over Rate Regulations — Generally. While rates for the transportation of persons and property within the limits of a State are primarily for its determination/^ and while it is not for the courts to go into the reasonableness of established water rates but resort must first be had to the body designated by law to fix proper rates/^ nevertheless, the question whether they are so unreasonably low as to deprive the carrier of its property without such compensation as the Constitution secures, and, therefore, without due process of law, cannot be so conclusively determined by the legislature of a State, or by regulations adopted under its authority that the matter may not become the subject of judicial inquiry," And in order to determine whether the rates as fixed furnish at least some compensation as a return for the services rendered or property used the courts may review the question of rates where they are not fixed by appropriate judicial proceedings wherein an opportunity to appear and defend has been afforded by proper notice, and this applies irrespective of whether the rates are fixed by legislative power or otherwise than as above stated .^^ Again, courts have the power to inquire whether a body of rates prescribed by a legislature is unjust and unrea- sonable and such as to work a practical destruction of rights of ex rel. Bath & Hammondsport Railroad Company v. Public Service Com- mission et al., the appellate division annulled the determination of the Board of Railroad Commissioners (127 App. Div. 4S0, 112 N. Y. Supp. 133), and this decision was affirmed in the Court of Appeals, not yet reported. Upon application that court modified its order, ' so as to award a rehearing before the Public Service Commission, ' although the determination reversed the ruling which was made by its predecessor, the Railroad Commission." Buffalo Frontier Terminal R. Co., In re, 115 N. Y. Supp. 483, 489, 131 App. Div. 503, 510, per Spring, J. 75 Smyth V. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 819, 30 Chicago L. News, 243, 171 U. S. 361, 43 L. ed. 197, 18 Sup. Ct. 888. 78 Osborne v. San Diego Land & Town Co., 178 U. S. 22, 20 Sup. Ct. 860, 44 L. ed. 961. " Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 819, 30 Chicago L. News, 243, 171 U. S. 361, 43 L. ed. 197, 18 Sup. Ct. 888. 78 San Diego Water Co. v. San Diego, 118 Cal. 556, 50 Pac. 633, 38 L. R. A. 460. 247 § 144 JURISDICTION OF COURTS OVER property, and if found to be so to restrain its operation, because such legislation is not due process of law. This applies to a statute regulating the rates to be charged by a corporation controlling a public highway; and where a j)rima facie case exists invalidating such enactment, and if a defense arises under an act of Congress or under the Constitution, the ques- tion whether the plea or answer sufficiently sets forth such a defense is a question of Federal law, the determination of which cannot be controlled by the judgment of the State Court 7^ § 144. Same Subject. When a State legislature establishes a tariff of railroad rates so unreasonable as to practically destroy the value of the property of companies engaged in the carrying business, the Federal Courts may treat it as a judicial question and hold such legislation to be in conflict with the Constitution of the United States, as depriving the company of its property without due process of law, and as depriving it of the equal protection of the laws.*" And although the determination of whether a rail- way rate prescribed by a State statute is so low as to be con- fiscatory involves a question of fact, its solution raises a Federal question, and the sufficiency of rates is a judicial question over which the proper Circuit Court has jurisdiction, as one arising under the Constitution of the United States. And whether a State railroad rate statute, although on its face relating only to intrastate rates, is an interference with interstate commerce also raises a Federal question which cannot be considered frivolous.^^ It is held, however, that no general supervisory 79 Covington & Lexington Turnpike R. Co. v. Sandford, 164 U. S. 578, 41 L. ed. 560, 17 Sup. Ct. 198. 80 St. Louis & San Francisco Ry. Co. v. Gill, 156 U. S. 649, 15 Sup. Ct. 484, 39 L. ed. 567. «i Young, ex Parte, 209 U. S. 123, 52 L. ed. 714, 28 Sup. Ct. 441, citing Chicago, Milwaukee & St. Paul Ry. Co. v. Tompkins, 176 U. S. 167, 172, 44 L. ed. 417, 20 Sup. Ct. 336; Smyth v. Ames, 169 U. S. 466, 522, 18 Sup. Ct. 418, 42 L. ed. 818; Covington & Lexington Turnpike R. Co. v. Sandford, 16411. S. 578, 17 Sup. Ct. 198, 41 L. ed. 560; St. Louis & S. F. Ry. Co. v. Gill, 156 U. S. 649, 15 Sup. Ct. 484, 39 L. ed. 569; Reagan v. Farmers' Loan & T. Co., 154 U. S. 362, 38 L. ed. 1014, 14 Sup.Ct. 1047 ; Chicago, M. & St. P. R. 248 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 145 jurisdiction is vested in the courts in respect to freight and passenger rates.*- But the power is vested in the courts to ultimately determine in respect to discriminating rates the questions of right and justice as between the parties.*^ § 145. Legislative and Judicial Functions as to Rate Regulation — Distinctions. There is a distinction between the power to prescribe a tariff for rates and charges and the power to determine whether existing and prescribed rates and charges are unjust or unreasonable; the former is a legislative the latter a judicial function. The courts cannot prescribe or fix a schedule of rates and charges for public or quasi-public service, or deter- mine whether one rate is preferable to another; their jurisdic- tion is to construe or apply the law or regulation after it is made, or to determine its constitutionality or prevent its en- forcement, nor can the legislature place its own enactments beyond the constitutional jurisdiction of the courts, nor fore- stall their judgments by prescribing such a tariff or schedule as to preclude an inquiry into their reasonableness, or as to the constitutionality of the legislative enactment.*^ So a duty which is not a judicial but a legislative or administrative one, such as fixing railroad transportation rates, cannot be forced upon the judiciary contrary to the State Constitution.*^ A court may conduct a judicial investigation in aid of a legis- lative regulation as to rates to be paid for water and determine the reasonableness thereof and what rates are reasonable with regard at least to existing rights and grievances; and a statute providing for a petition by selectmen of a town or any persons feeling themselves aggrieved, to the supreme judicial court, to Co. V. Minnesota, 134 U. S. 418, 33 L. ed. 970, 10 Sup.Ct. 462, 702; Hastings V. Eames (U. S. C. C. A.), 68 Fed. 726. s2 Raritan River R. Co. v. Middlesex & S. Traction Co., 70 N. J. L. 732, 58 Atl. 332. '^ Interstate Commerce Commission v. East Tennessee V. & G. Ry. Co., 85 Fed. 107. 8* Western Union Teleg. Co. v. Myatt (U. S. C. C), 98 Fed. 335. »5 Steenerson v. Great Northern R. Co., 69 Minn. 353, 72 N. \V. 713, 8 Am. & Eng. R. Cas. (N. S.) 559, 249 § 146 JURISDICTION OF COURTS OVER fix the rates and authorizing two or more judges of said court to establish maximum rates was held constitutional.*^ § 146. Equity Jurisdiction — Railroad, etc., Rates — Obli- gation of Contracts — Injunction — Discrimination. A court of equity has no power to establish railroad rates." But in view of the continuous confusion, risks and multiplicity of suits, which would result from, and the public interests and vast number of people which would be affected by, the en- forcement of an ordinance reducing the rates of fare of street railways, which ordinance the companies claim is unconstitu- tional as impairing the obligation of the contracts resulting from the ordinances granting the franchises, a court of equity has jurisdiction of an action to enjoin the enforcement of the ordinance, especially when the ordinance affects only a part of the system and would engender the enforcement of two rates of fare over the same line leading to dangerous consequences. The passage by the municipality of an ordinance affecting franchises already granted under prior ordinances amounts to an assertion that the legislative authority vested in it to pass the original ordinance gave it the continued power to pass subsequent ordinances, and it cannot assail the jurisdiction of the Circuit Court on the ground that its action in impairing the contracts which resulted from prior ordinances was not an action by authority of the State. In this case it was held that the consolidated ordinance of February, 1885, of the city of Cleveland, and ordinances thereafter passed by the munici- pality and accepted by the companies, constituted such bind- ing contracts in respect to the rate of fare to be exacted upon the consolidated and extended lines of the railroad companies as to deprive the city of its right to exercise the reservations in the original ordinances as to changing the rates of fare; and the ordinance of October 17, 1898, reducing the rate of fare to be charged, was void and unconstitutional within the impair- 86 Janvrin, Petitioner, 174 Mass. 514, 55 N. E. 381, 47 L. R. A. 319. 87 Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, 413, 420, 38 L. ed. 1014, 14 Sup. Ct. 1047, followed in s. c, 154 U. S. 420, 38 L. ed. 1031, 14 Sup. Ct. 1002. 250 CORPORATION SUPERVISORY COMMISSIONS, p:TC. § 147 ment clause of the Constitution of the United States.** If citizens of different States are affected by a claimed illegal reduction of freight rates the jurisdiction of a Federal court of equity over the question is not taken away by the act of the legislature of one of the States in fixing such rates instead of authorizing a commission so to do.**^ A public service corpora- tion may be prevented from discrimination in the matter of rates, and equity has jurisdiction of such corporation to require it to furnish its services at reasonable and uniform rates to all citizens alike.^" § 147. Extent of Judicial Interference as to Rate Regula- tions. It is asserted that the extent of judicial interference is pro- tection against unreasonable rates.''^ And the rule declared by the Federal Supreme Court is that although rates when fixed by legislative authority for public service corporations should allow a fair return upon the reasonable value of the property at the time it is being used, still the statute will not be declared invalid by the courts unless the rates are so unreasonably low that their enforcement would amount to the taking of property for public use without compensation.*^^ So while courts may refuse to enforce legislation on constitutional grounds the power or jurisdiction invoked should be exercised only in the clearest cases, and where a public service corporation refuses to observe an ordinance fixing in detail the maximum water rates to be charged by the company, and prefers to go into 88 Cleveland v. Cleveland City Ry. Co., 194 U. S. 517, 48 L. ed. 102, 24 Sup. Ct. 756, followed in Cleveland v. Cleveland Electric Ry. Co., 194 U. S. 538, 48 L. ed. 1109, 24 Sup. Ct. 764. 89 Ames V. Union Pac. R. Co. (U. S. C. C), 64 Fed. 165, 4 Inters. Comm. Rep. 835. 90 Wright V. Glen Telephone Co., 95 N. Y. Supp. 101, 48 Misc. 192, aff'g 99 N. Y. Supp. 85. 91 Chicago & Grand Trunk Ry. Co. v. Wellman, 143 U. S. 339, 35 L. ed. 1035, 12 Sup. Ct. 250. 92 Willcox V. Consolidated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. Ct. 392, citing San Diego Land & Town Co. Cases, 174 U. S. 839, 43 L. ed. 1154, 19 Sup. Ct. 257, 8. c, 189 U. S. 439, 47 L. ed. 892, 23 Sup. Ct. 571. 251 §§ 148, 149 JURISDICTION OF COURTS OVER court with a claim that the ordinance is unconstitutional, it must, where such enactment has been held otherwise valid, be prepared to show to the court's satisfaction that the ordi- nance would necessarily be so confiscatory in its effect as to violate the Federal Constitution. ^'^ Again, the judiciary ought not to interfere with the collection of rates, for the use of water, established under legislative sanction, unless they are so plainly and palpably unreasonable as to make their enforcement equivalent to the taking of property for public use without such compensation as under the circumstances is just both to the owner and the public.^^ § 148. Jurisdiction of Courts Before Rate Legislation Goes Into Effect. Except in very clear cases courts should not interfere with State rate legislation before the legislation goes into effect.®^ So the making of a rate by a legislative body, after hearing the interested parties, is not res judicata upon the validity of the rate when questioned by those parties in a suit in a court. Litigation does not arise until after legislation ; nor can a State make such legislative action res judicata in subsequent litiga- tion .»^ § 149. Jurisdiction of Courts in Respect to Railroad Commissions — Rates. If a State railroad commission attempts to enforce unrea- sonable rates its power is not so purely legislative in its nature as to preclude its being amenable to the court. '^^ So a citizen 93 Knoxville, City of, v. Knoxville Water Co., 212 U. S. 1, 29 Sup. Ct. 148, 53 L. ed. 371, cited in Willcox v. Consolidated Gas Co., 212 U. S. 19, 41. 8* San Diego Land & Town Co. v. National City, 174 U. S. 739, 43 L. ed. 154, 191 Sup. Ct. 804, aff'g 74 Fed. 79. 85 Willcox V. Consolidated Gas Co., 212 U. S. 19, 53 L. ed. 382, 29 Sup. Ct. 392. 98 Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 Sup. Ct. 67, 53 L. ed. 150. 87 Southern Pac. Co. v. Board of Railroad Commissioners (U. S. C. C), 78 Fed. 236. " Jurisdiction is given to the Circuit Court in suits involving the requisite amount, arising under the Constitution or laws of the United States (1 U. S. 252 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 149 of another State who feels himself aggrieved and injured by the rates prescriljed by a raih'oad commission may seek his remedy in ccjuity against the connnissioncrs in the Circuit Court of the United States in the State, and the Circuit Court has jurisdiction over such a suit under the statutes regulating its general jurisdiction, with the assent of the State, expressed in the act, creating the commission; and it is within the power of a court of equity in such case to decree that the rates so established by the commission are unreasonable and unjust, and to restrain their enforcement; but it is not within its j)ow(!r to establish rates itself, or to restrain the commission from again establishing rates.^® To the same effect is another decision wherein it is held in almost the same language that it is not only within the power but it is also the duty of the courts to inquire whether rates prescribed by a State railroad commis- sion are unjust and unreasonable, such as to constitute an unconstitutional invasion of property rights, and, if so, to enjoin their enforcement; but they are not authorized to revise or change a body of rates, which is a legislative or adminis- trative, rather than a judicial function.^'' Though the making of carriers' rates is a legislative and not a judicial act, within the jurisdiction of the courts, and courts cannot make rates on Comp. St., p. 508) and the question really to be determined under this objection is whether the acts of the legislature and the orders of the railroad commission, if enforced, would take property without due process of law, and although that question might incidentally involve a question of facts its solution nevertheless is one which raises a Federal question. See Hasting, V. Ames (C. C. A., 8th Circuit), 68 Fed. Rep. 726. The sufficiency of rates with reference to the Federal Constitution is a judicial question, and one over which Federal Courts have jurisdiction by reason of its Federal nature. Chicago, etc., R. R. Co. v. Minnesota, 134 U. S. 418, 33 L. ed. 970, 10 Sup. Ct. 462, 702; Regan v. Farmers', etc., Co., 154 U. S. 369, 399, 38 L. ed. 1014, 14 Sup. Ct. 1047; St. Louis, etc., Co. v. Gill, 156 U. S. 649, 39 L. ed. 567; Coving- ton, etc.. Turnpike Road Company v. Sandford, 164 U. S. 578, 41 L. ed. 560, 17 Sup. Ct. 198; Smyth v. Ames, 169 U. S. 466, 522; Chicago, etc., Co. v. Tompkins, 176 U. S. 167, 44 L. ed. 417, 20 Sup. Ct. 336. »s Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, 38 L. ed. 1014, 14 Sup. Ct. 1047, followed /(/., 154 U. S. 420, 38 L. ed. 1031, 14 Sup. Ct. 1062. *»« Syllabus in Trammell v. Dinsmore, 102 Fed. 794, 42 C. C. A. 623; Dinsmore v. Soutliern Exp. Co. & Georgia Rd. Commission, Id., aff'd 183 U. S. 115, 46 L. ed. Ill, 22 Sup. Ct. 45. 253 § 150 JURISDICTION OF COURTS OVER a final hearing, a court, for the purpose of requiring C(jni{)lain- ant, who has obtained a preliminary injunction against alleged confiscatory rates, to do equity, and prevent the imposition of extortionate rates for carriage, may fix, maximum rates beyond which complainant shall not go during the pendency of the litigation, and make the compliance with such maximum rates a condition on which the temporary injunction will be con- tinued.^ § 150. Same Subject. Equity has jurisdiction, however, on the ground of prevent- ing a multiplicity of suits, to restrain a State board of railroad commissioners from enforcing a schedule of rates advertised to be put in force on a certain day; and a preliminary injunction should be granted where the probable effect of such threatened enforcement of the schedule of rates would be that dividends from the operation of the roads affected would be destroyed, especially where a person injured by overcharges would, under the statute, be entitled to recover treble damages.' Under a decision rendered in 1899 in the Federal Supreme Court it appeared that: The State of South Dakota having passed an act providing for the appointment of a board of railroad com- missioners, and authorizing that board to make a schedule of reasonable maximum fares and charges for the transportation of passengers, freight and cars on the railroads within the State, provided that the maximum charge for the carriage of passengers on roads of the standard guage should not be greater than three cents per mile; and that board having acted in accordance with the statute, and having published its schedule of maximum charges, the Chicago, Milwaukee & St. Paul Railway Company filed the bill in this case in the Circuit Court of the United States for the District of South Dakota, seeking to restrain the enforcement of the schedule. The railroad commissioners answered fully, and testimony was 1 Syllabus in Arkansas Railroad Rates, In re (U. S. C. C), 168 Fed. 720. 2 Chicago & Northwestern R. Co. v. Dey (U. S. C. C), 35 Fed. 866, 2 Inters. Com. Rep. 325, 4 Rd. & Corp. L. J. 465, 1 L. R. A. 744. 254 COKPCmATION SUJ'EKVLSOKY COMMISSIONS, ETC. § 150 taken before an examiner upon the issues made by the plead- ings. This testini; ny was reported without findings of fact or conclusions of law. The case went to hearing. The judge without the aid of a master, examined the pleadings and the mass of iH'oof. He made findings of fact and conclusions of law; delivered an ojiinion; and rendered a decree dismissing the bill. It was held by the Federal Supreme Court: That neither the findings made by the court, nor such facts as were stated in its opinion, were sufficient to warrant a conclusion upon the question whether the rates prescribed by the defend- ants were unreasonable or not, and that the process by which the court came to its conclusion was not one which could be relied upon. That there was error in the failure to find the cost of doing the local business, and that only by a comparison between the gross receipts and the cost of doing the business, ascertaining thus the net earnings, could the true effect of the reduction of rates be determined.^ It is held in Kentucky that although a railroad commission may be empowered under a State Constitution to grant relief in "special cases" from the operation of such provision which prohibits a greater charge by common carriers for a short than for a long haul, still the refusal of such commission to grant the relief is held not re- viewable by the courts."^ A claim for repayment of excessive freight charges must be enforced in a common-law action; and where a railroad commission, acting without jurisdiction or power in the premises, orders such excessive charges to be refunded the remedy is not that provided by the statute creat- ing the commission whereby such board is empowered, in case of a violation of its lawful orders or upon refusal or neglect of a 3 Chicago, Milwaukee & St. Paul Ry. Co. v. Tompkins, 176 U. S. 167, 20 Sup. Ct. 336, 44 L. ed. 417. Cited in Minneapolis & St. Louis R. Co. v. Minnesota, 186 U. S. 257, 262, 22 Sup. Ct. 900, 46 L. ed. 1151; Chesapeake & Potomac Teleg. Co. v. Manning, 186 U. S. 238, 250, 46 L. ed. 1144, 22 Sup. Ct. 881 ; Cotting v. Kansas City Stock Yards Co., 183 U. S. 79, 85, 22 Sup. Ct. 30, 46 L. ed. 92. * Louisville & N. R. Co. v. Commonwealth, 104 Ky. L. Rep. 1380, 43 L. R. A. 541, denying rehearing, 104 Ky. 226, 46 S. W. 707, 20 Ky. L. Rep. 1380, 43 L. R. A. 541, Ky. Const., § 218. 255 § 151 JURISDICTION OF COURTS OVER railroad company to obey the same to complain to the State Circuit Court in ecjuity and saitl court being thereupon au- thorized to hear and determine the matter upon notice given the company.^ § 151. Same Subject — Where Resort Must First Be Had. A court of e(|uity is without power to interfere by injunction to control in advance the exercise of the legislative power, conferred on a State railway commission by the Constitution and statutes of a State, to fix reasonable and just rates for the transportation of property within the State, by restraining such commission from considering or acting upon the question of establishing new rates on any given commodities or from giving notice to a railroad company of any order which may be adopted establishing such rates.® Under the Texas statute a shipper is not obligated in case of excessive freight charges collected by a carrier to apply for relief to the railroad com- mission but may sue therefor and for penalties provided.'^ Where a State railroad commission, which is granted power by the State Constitution to make and enforce rates, enacts and attempts to enforce rates which are so low as to be confiscatory, the proper remedy is by a bill in equity to enjoin such enforce- ment, but such a suit should not be commenced until the rate has been fixed by the body having the last word.^ It is likewise determined that a State railroad commissioner may be en- joined from proceeding to fix rates under a State statute. But although under a State statute the duty of enforcing the rates it may fix is vested in a railroad commission yet the rates 5 Oregon Rd. Comm'rs v. Oregon Rd. & Nav. Co., 17 Oreg. 65, 19 Pac. 702, 2 L. R. A. 195. 6 Syllabus in Chicago, Burlington & Quincy Rd. Co. v. Winnett (U. S. C. C. A.), 162 Fed. 242. Compare Macon Grocery Co. v. Atlantic Coast Line Rd. Co. (U. S. C. C), 163 Fed. 738. ^ Texas & New Orleans Rd. Co. v. Sabine Tram Co. (Tex. Civ. App., 1909), 121 S. W. 256, Rev. Stat., 1895, Art. 568, provides that persons "may" ap- ply to commission, and Art. 4575 authorizes suit for damages and penalties in such cases. « Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 Sup. Ct. 67, 53 L. ed. 150. 256 CORPORATION SUPERVISORY COMMISSIONS, ETC. §§ 152, 153 must be fixed before alleged consequences, such as threatened multi[)licity of suits, and irreparable injury as grounds for equity jurisdiction and an injunction, can be availed of." § 152. Same Subject — Appeal to State Supreme Court Before Suing in Federal Circuit Court. While a jjarty does not lose his right to complain of action under an unconstitutional law by not using diligence to prevent its enactment, on a qu(\stion of railroad rat(^s, wh(m an appeal to the Supreme Court of the State from an order of the State Corporation Commission fixing such rates is given by the State Constitution, it is proper that dissatisfied railroads should take the matter to the Supreme Court of their State, before bringing a bill in the Circuit Court of the United States, and where the circumstances of the case justify it action on such a bill will be suspended to await the result of such an appeal.^" § 153. Jurisdiction of Courts in Respect to Railroad Commissions — Rates — When Constitutional Question Not Decided. Where a bill, brought by a railroad company in the Federal Circuit Court to enjoin the enforcement of an order by a State railroad commission providing maximum rates on transporta- tion of all commodities upon a railroad to and from all points within a State, not only alleges that the statute creating the commission, but also the order of the commission sought to be enjoined, dei)rives complainant of its property without due process of law, and also violates other provisions of the Con- stitution, the Circuit Court obtains jurisdiction without refer- ence to the particular violation of the Fourteenth Amendment. The rule of the Federal Supreme Court is, not to decide con- stitutional questions if the case can be decided without doing so; and when it can dispose of the case by construction of the » McChord v. Louisville & N. R. Co., 18^! U. S. 483, 22 Sup. Ct. 165, 46 L. ed. 289, rev'g 103 Fed. 216. 10 Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 Sup. Ct. 67, 53 L. ed. 150. 17 257 § 154 JURISDICTION UF COURTS OWAl statute and on the lack of authority given by such statute to make the order complained of, it will do so rather than on the constitutional questions involved, and even though the highest court of the State has not construed the statute involved the Federal Supreme Court must, in a case of which it has juris- diction, construe it." § 154. Public Service Commission — Right to Appeal — Certiorari — Nature of Powers. The Public Service Conunission of New York is entitled to prosecute an ai)ijeal from an order of the Appellate Division of the Supreme Court which annulled its determination denying an application of a railroad company for permission to con- struct and operate an extension of its road. The commission having determined that the i)ublic interest required the con- struction and operation of a laihoad upon the route over^which the relator had acquired a franchise, recommended, however, that the permission and approval of the commission be with- held because of the limitations imposed by the municipal authorities of the city of New York upon the franchise con- tract. It was held, that so far as the consent of the municipal authorities to the construction of the proposed line may be limited by conditions which are in conflict with the provisions of the Public Service Commissions Law, the statute must pre- vail and the Public Service Commission was without authority to refuse to the relator the certificate provided for in § 53 of said Public Service Commissions Law.'^ It is held in New York 11 Siler V. Louisville & Nashville Rd. Co., 213 U. S. 175, 53 L. ed. 753, 29 Sup. Ct. 451. A case of construction of Kentucky Railroad Commission Law, distinguishing Barney v. City of New York, 193 U. S. 430, 48 L. ed. 737, 24 Sup. Ct. 502. 12 People ex rel. South Shore Traction Co. v. Willcox, 196 N. Y. 212, aff'g 133 App. Div. 556. The syllabus to the report of this case in the New York Supplement reads as follows: The Public Service Commission is bound to approve the building of a street railroad as provided by Public Service Commission Law, Laws 1907, p. 920, chap. 429, § 53, in all cases where the local authorities have granted the consent provided for by the Constitution, Art. 3, § 18, as supplemented by the Railroad Law (Laws 1890, p. 1108, chap. 565), as amended by the Laws of 1997, p. 203, chap. 156, §§ 1, 91, and 258 COltrOKATlON .SUPEltVlHOKY COMMISSIONS, ETC. § 154 that ci d(>i('nnination of tho Public tScrvi(;e Coniniissioii csiab- lishiiig a joint fare for passengers on two connecting inde- pendent street railroad corporations and apportioning such fare between them is quasi-judicial in its nature, and reviewable by the conniion-law writ of certiorari; and a motion to quash or modify a writ of certiorari to review the determination of an inferior tribunal may be made in the Appellate Division of the New York Supreme Court. ^^ the commission has determined, as the statute provides, that the proposed construction is '"necessary and convenient for the public service," though it does not approve the terms imposed by the local authorities. People v. Willcox, 118 N. Y. Supp. 248, 133 App. Div. 556. 13 People ex rel. Joline v. Willcox, 113 N. Y. Supp. 861, 129 App. Div. 267. The court, per Patterson, P. J., at pp. 862 etseq. of Supp. and pp. 268 et seq. of App. Div., said: "It is not claimed by the moving party that the action by the Public Service Commission in making orders now brought to our attention is beyond some power of review by the courts, but it is insisted that such review may only be had in independent proceedings, either by way of injunction to restrain the commission from enforcing the order or by defense to an application made by the commissioners to compel compliance with it by mandamus or by defense to an action of law to enforce a penalty for a violation of it and thus to bring before the court upon new evidence all questions that might arise and could be litigated respecting the validity and enforceability of the order objected to. The question, therefore, now before the court, is whether a writ of certiorari may be issued to review the action of the commission in making the order complained of, or must the relators be remitted to some other remedy. In the act of the legislature constituting the Pviblic Service Commission (Laws 1907, p. 889, chap. 429) there is no specific method pointed out by which the action of that commission can be lirought within the judicial cognizance of the courts of the State. There is no express provision made either for a review of the proceedings or for an appeal from its orders. The writ of certiorari is regulated as to its allowance and proceedings thereunder, by the Code of Civil Procedure, which provides for what may be called certain statutory writs, but which also preserves the common-law writ. Unquestionably the common-law writ can only be issued for the purpose of reviewing acts either judicial or quasi-judicial in their nature, and official acts that are purely executive, legislative, administrative or ministerial in their character are not subject to review by such writ; it is scarcely worth while to cite authorities to so elementary a proposition. The inquiry, therefore, now is whether the acts of the Public Service Com- mission in the proceedings which led up to and eventuated in making the orders now sought to be reviewed are purely and exclusively executive, legislative, administrative or ministerial, or are judicial or quasi-judicial. In making the order now sought to he reviewed the Public Service Commission acted under t!ie authority of a provision of § 49 of the act instituting the 259 § 155 JURISDICTION OF COURTS OVER § 155. Jurisdiction of Courts — Suit Against Railroad Commissioners, etc. — Whether Suit Against State. Where a State railroad commission, which is granted power commission (chap. 429, p. 917, Laws 1907;) which in part reads as follows ' The commission shall have power by. order to require any two or more common carriers or railroad corporations whose lines, owned, operated, controlled or leased, from a continuous line of transportation or could be made to do so by the construction and maintenance of switch connection, to establish through rates and joint rates, fares and charges for the transporta- tion of passengers, freight and property within the State as the commission may, by its order, designate; and in case through routes and joint rates be not established by the common carriers or railroad corporations named in any such order within the time therein specified, the commission shall establish just and reasonable rates, fares and charges to be charged for such through transportation, and declare the portion thereof to which each com- mon carrier or railroad corporation affected thereby shall be entitled and the manner in which the same shall be paid and secured. ' The proceeding was within the terms of the statute. The commission acted upon its own initia- tive, as it was also authorized to do. The procedure was apparently in conformity with provisions of the act relating to that subject and rules and regulations which the commission was authorized to adopt. * * * Jf we were to have regard only, on the present motion, to what appears in the petition and in the orders of the commission, it would be evident that their inquiry and action in the premises was judicial in its nature and that it was substantially acting as a court. It is true that it has been decided by courts of high authority that the mere fixing of rates by a commission in- trusted with such power by law is legislative in its character, as in the very recent case of Prentis v. Atlantic Coast Line Co. (and companion cases decided November 30, 1908), 211 U. S. 210, 29 Sup. Ct. 67, 53 L. ed. 150. In passing upon the nature of the powers devolved upon the State Corpora- tion Commission of Virginia, Mr. Justice Holmes, writing the opinion of the court in those cases, remarks that whether the proceedings are to regarded as legislative in their character or otherwise does not depend upon the domi- nant character of the body in which they may take place, but upon the character of the proceedings themselves. But looking beyond what is disclosed by the papers now before the court, and examining the act itself by which the Public Service Commission is established and its powers con- ferred, and having regard to the decisions of the courts in this State appli- cable to the subject, the conclusion seems to be necessary that the proceed- ings and order, the subject of the present inquiry, are judicial in their nature. * * * n appears to us that the power granted to and exer- cised by the Public Service Commission in the matter now under consider- ation mcludes very much more than what may be called a mere legislative act of fixing rates. There is involved the compulsion of two lines of railway to operate their roads jointly, and there is the judicial or quasi-judicial act of ascertaining and determining a proportionate share of a joint rate to be allowed to each operating company. In such a proceeding there seems to us 260 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 155 by the State Constitution to make and enforce rates, enacts and attempts to enforce rates which are so low as to be con- fiscatory, the proper remedy is by bill in equity to enjoin such that there necessarily arises a controversy — one to be determined by judicial methods, dependent upon evidence and the establishment of facts. The commission is clothed with the power which formerly resided in the rail- road commission of tiie State and the gas committee, and acts of a character kindred to tliose now the subject of consideration have been regarded as judicial in their nature, as for instance in the case of People ex rel. Loughran V. Railroad Commissioners, 158 N. Y. 421, 53 N. E. 163, where it was held that the State Board of Railroad Commissioners, in consenting, under the power conferred upon them by the railroad law, to the discontinuance of a station on a line of railway, was not an act merely of administration, but it was judicial in its character and might be reviewed by the common-law writ of certiorari. In that case no right of review was given expressly by the statute; but the court remarked that a common-law writ of certiorari, might be issued to review the determination of inferior tribunals and officers acting under the authority of a statute to correct errors of law affecting the property or rights of the parties, and that in consenting to a discontinuance of the station the Board of Railroad Commissioners acted judicially, citing as authority People v. New York, Lake Erie & Western Rd. Co., 104 N. Y. 58, 9 N. E. 85G, 58 Am. Rep. 484. The acts of the commission were judicial because the law impliedly required it to decide a question of fact, and also required their judgment upon evidence determining whether the consent should be given or not. The question was between the public patronizing the station and the inconvenience to the railroad company in maintaining it and stopping its trains thereat. In People ex rel. Einton v. Brooklyn Heiglits Rd. Co., 172 N. Y. 90, 64 N. E. 788, which was a case relating to the discontinuance of continuous train service, the Board of Railroad Commission- ers was authorized to determine whether the mode of operating the road and conducting its business was reasonable and expedient; and the court of appeals held that the action of the commission was reviewable by certiorari, and that the duty of examining the facts rested upon the appellate division. In the case of Stewart v. Railroad Commissioners, 160 N. Y. 202, 54 N. E. 697, the question was whether certain duties devolving upon the railroad commission were administrative and not judicial. That was a case which involved the issuance of a certificate of public necessity for the construction of a railroad, a matter which is very closely akin to that of a joint rate. In that case it was argued with great persistence that the statute conferred upon the railroad commissioners a duty which was administrative anti which the courts had no power to review. In its opinion the court says: " The issuance of a common-law writ of certiorari to review the judicial determinations of in- ferior judicial tribunals and officers acting judicially under authority of stat- ute, to correct errors of law affecting property rights of the parties, has for a long time formed a part of our judicial procedure. Starr v. Trustees of Roch- ester, 6 Wend. (N. Y.) 564; People ex rel. Coughran v. Railroad Commission- ers, 158 N. Y. 421, 53 N. E. 163, and cases cited. Counsel has, therefore, 261 § 155 JURISDICTION OF COURTS OVER enforcement, and such a suit against the members of the com- mission will not be bad as one against the State, but it should not be commenced until the rate has been fixed by the body found it necessary to call the duty enjoined upon the railroad commissioners by § 59 of the railroad law something else than a judicial duty, in order to obtain even the suggestion of a foundation upon which to construct an argument introduced to convince the mind that such a determination as this is not reviewable by certiorari. But it is clear that if the duty enjoined upon the Board of Railroad Commissioners by tliis section calls upon them to decide some question of fact every time there is an application made to them for the issuing of the certificate authorized by it, then in the making of that decision it acts judicially, notwithstanding there may be closely interwoven with it certain administrative or ministerial functions that must be also exercised. ' In the recent and very instructive case of Village of Saratoga Springs v. Saratoga Gas, etc., Co., 191 N. Y. 123, S3 N. E. G93, it was held in substance, that while the fixing of maximum rates for gas and electric light corporations by a commission, created by Laws 1905, p. 2092, chap. 737, and to whose powers the present Pubhc Service Commission succeeded is fixed in the State legislature, nevertheless the power is not inherently and exclusively legislative; that what is intrusted to the com- mission is the duty of ascertaining facts and, after a public hearing, deter- mining what is a reasonable maximum rate. As we understand the opinion of the court in that case, a commission authorized by the legislature to fix rates is in a sense acting legislatively, yet the procedure by or through which they reach a result is in its nature judicial or quasi-judicial. Indeed, it would seem, from the provision of § 59 of the Public Service Law, that it was within the contemplation of the legislature, in passing the act, that the action of the commission in many cases might come before the courts by independent proceedings instituted for a review. Section 59 provides very drastic penal- ties for violation of orders of the commission ; but it proceeds to say that in an action to recover a penalty and forfeiture brought by the commissioners imder the act, if the defendant in such an action shall prove that during any portion of the time for which it is sought to recover penalties or forfeitures for a violation of an order of the commission the defendant was actually and in good faith prosecuting a suit, action, or proceeding in the courts to set aside such order, the court shall remit the penalties or forfeitures incurred during the pendency of such suit, action, or proceeding. The only proceed- ing available to this petitioner would be that of certiorari, but that is not conclusive of the subject. We think that, in view of the whole trend of the decisions of the highest court of this State with reference to the nature of proceedings of public service commission in such matters as those acted upon in the case now before us, we must hold that the commission has acted judicially or quasi-judicially, and that the appropriate method of review is by certiorari, and that hence the motion to vacate the writ must be denied. Our decision goes no further than to determine that the particular order to which the petitioner now objects and the proceedings leading to its issuance may be reviewed by certiorari. All concur." 202 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 155 having the last word.^^ A suit brought by a railway company against the members of a State railway commission to restrain them from interfering with complainant's property and inter- state business under a State statute alleged in the bill to be unconstitutional as imposing burdens on interstate commerce is not a suit against the State within the meaning of the Eleventh Amendment to the Federal Constitution .^^ A question whether a suit nominally against an individual or commission by name, is in reality a suit against the State within the Eleventh Amendment to the Constitution, is a defense to the merits rather than to the jurisdiction of the court. Such defense should be raised either by demurrer or other appropriate pleadings and cannot be made available upon motion to dis- miss .^"^ A suit by a telegraph company against the court of visitation and the State solicitor to restrain the enforcement of rates is not a suit against the State .^^ Purchases made by State officers of supplies for business carried on by the State are made by the State, and suits by the vendors against the State officers carrying on or winding up the business are suits against the State and, under the Eleventh Amendment, beyond the jurisdiction of the Federal Courts; and this applies to suits against commissioners to wind up the State Liquor Dispensary of South Carolina.^* In the very important Young case ^'^ it was held : that the Attorney General of the State of Minnesota, under his common-law power and the State statutes, has the general authority imposed upon him of enforcing constitutional i*Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 Sup. Ct. 67, 53 L. ed. 150. 15 McNeill V. Southern Ry. Co., 202 U. S. 543, 26 Sup. Ct. 722, 50 L. ed. 1142, citing Fitts v. McGhee, 172 U. S. 516, 529, 530, 43 L. ed. 535, 19 Sup. Ct. 209; Scott v. Donald, 165 U. S. 107, 112, 41 L. ed. 648, 17 Sup. Ct. 262. 16 Illinois Central R. Co. v. Adams, 180 U. S. 28, 45 L. ed. 210, 21 Sup. Ct. 251. " Western Union Telegraph Co. v. Myatt, 98 Fed. 335. i» Murray v. Wilson Distilling Co., 213 U. S. 151, 53 L. ed. 742, 29 Sup. Ct. 687, rev'g 161 Fed. 152, a case of action against commissioner under winding-up law; action against State of South Carolina dispensary law; Eleventh Amendment; commissioner imder State dispensary law to wind up its affairs. 18 Young, Ex parte, 209 U. S. 123, 52 L. ed. 714, 28 Sup. Ct. 441, 263 § 155 JURISDICTION OF COURTS OVER statutes of the State and is a proper party defendant to a suit brought to prevent the enforcement of a State statute on the ground of its unconstitutionality; that the attempt of a State officer to enforce an unconstitutional statute is a proceeding without authority of and docs not affect the State in its sov- ereign or governmental capacity, and is an illegal act and the officer is stripped of his official character and is subjected in his person to the consequences of his individual conduct. The State has no power to impart to its officer immunity from responsibility to the supreme authority of the United States.^'^ 20 In this case the court, per Mr. Justice Peckham, said: "The question of jurisdiction, whether of the Circuit Court or of this court, is frequently a deHcate matter to deal with, and it is especially so in this case, where the material and most important objection to the jurisdiction of the Circuit Court is the assertion that the suit is in effect against one of the States of the Union. It is a question, however, which we are called upon, and which it is our duty, to decide. * * * This inquiry necessitates an examina- tion of the most material and important objection made to the jurisdiction of the Circuit Court, the objection being that the suit is, in effect, one against the State of Minnesota, and that the injunction issued against the Attorney General illegally prohibits State action, either criminal or civil, to enforce obedience to the statutes of the State. This objection is to be considered with reference to the Eleventh and Fourteenth Amendments to the Federal Constitution. The Eleventh Amendment prohibits the commencement or prosecution of any suit against any one of the United States by citizens of another State or citizens or subjects of any foreign State. The Fourteenth Amendment provides that no State shall deprive any person of life, liberty, or property -n-ithout due process of law, nor shall it deny to any person within its jurisdiction the equal protection of the laws. "The case before the Circuit Court proceeded upon the theory that the orders and acts heretofore mentioned would, if enforced, violate rights of complainants protected by the latter amendment. We think that whatever the rights of complainants may be, they are largely founded upon that amendment, but a decision of this case does not require an examination or decision of the question whether its adoption in any way altered or limited the effect of the earlier amendment. We may assume that each exists in full force, and that we must give to the Eleventh Amendment all the effect it naturally would have, without cutting it down or rendering its meaning any more narrow than the language, fairly interpreted, would warrant. It ap- plies to a suit brought against a State by one of its own citizens as well as to a suit brought by a citizen of another State. Hans v. Louisiana, 134 U. S. 1, 33 L. ed. 842, 10 Sup. Ct. 504. It was adopted after the decision of this court in Chisholm v. Georgia (1793), 2 Dall. 419, where it was held that a State might be sued by a citizen of another State. Since that time there have been many cases decided in this court involving the Eleventh Amendment, among 264 CORPORATION SUPERVISORY COMMISSIONS, ETC. § loS tliem being Osborn v. United States Bank (1S24), 9 Wheat. (22 U. S.) 738, 846, 857, 6 L. ed. 204, which held that the Amendment applied only to those suits in which the State was a party on the record. In the subsequent case of Governor of Georgia v. Madrazo (1828), 1 Pet. (20 U. S.) 110, 122, 123, 7 L. ed. 73, that holding was somewhat enlarged, and Chief Justice Marshall delivering the opinion of the court, while citing Osborn v. United States Bank, supra, said that where the claim was made, as in the case then before the court, against the (Jovernor of (ieorgia as governor, and the demand was made upon him, not personally, but officially (for moneys in the treasury of the State and for slaves in the possession of the State government), the State might be considered as the party on the record (page 123), and there- fore the suit could not be maintained. "Davis v. Gray, 16 Wall. (S3 U. S.) 203, 220, 21 L. ed. 447, reiterates the rule of Osborn v. United States Bank, so far as concerns the right to enjoin a State officer from executing a State law in conflict with the Con- stitution or a statute of the United States, when such execution will violate the rights of the complainant. "In Virginia Coupon Cases, 114 U. S. 270, 296, 29 L. ed. 185, 5 Sup. Ct. 903, 962 (Poindexter v. Greenhow), it was adjudged that a suit against a tax collector who had refused coupons in payment of taxes, and, under color of a void law, was about to seize and sell the property of a taxpayer for non-payment of his taxes, was a suit against him personally as a wrongdoer and not against the State. "Hagood V. Southern, 117 U. S. 52, 67, decided that the bill was in sub- stance a bill for the specific performance of a contract between the com- plainants and the State of South Carolina, and, although the State was not in name made a party defendant, yet being the actual party to the alleged contract the performance of which was sought and the only party by whom it could be performed, the State was, in effect, a party to the suit, and it could not be maintained for that reason. The things required to be done by the actual defendants were the very things which when done would con- stitute a performance of the alleged contract by the State. "The cases upon the subject were reviewed, and it was held, in In re Ayers, 123 U. S. 443, 31 L. ed. 216, 8 Sup. Ct. 164, that a bill in equity brought against officers of a State, who, as individuals, have no personal interest in the subject-matter of the suit, and defend only as representing the State, where the relief prayed for, if done, would constitute a perform- ance by the State of the alleged contract of the State, was a suit against the State (page 504), following in this respect Hagood v. Southern, supra. " A suit of such a nature was simply an attempt to make the State itself, through its officers, perform its alleged contract, by directing those officers to do acts which constituted such performance. The State alone had any interest in the question, and a decree in favor of plaintiff would affect the treasury of the State. "On the other hand, United States v. Lee, 106 U. S. 196, 1 Sup. Ct. 240, 27 L. ed. 171, determined that an individual in possession of real estate under the Government of the United States, which claimed to be its owner, was, nevertheless, properly sued by the plaintiff, as owner, to recover posses- 265 § 155 JURTSDir TION OF COURTS OVER sion, and such suit was not one against the United States, although the individual in possession justified such possession under its authority. See also Tindal v. Wesley, 167 U. S. 204, 42 L. ed. 137, 17 Sup. Ct. 770, to the same effect. "In Pennoyer v. McConnaughy, 140 U. S. 1, 9, 11 Sup. Ct. 840, 35 L. ed 631, a suit against land commissioners of the State, was said not to be against the State although the complainants sought to restrain the defend- ants, officials of the State, from violating, under an unconstitutional act, the complainant's contract with the State, and thereby working irreparable dam- age to the property rights of the complainants. Osborn v. United States Bank, supra, was cited, and it was stated : ' But the general doctrine of Os- born V. Bank of the United States, that the Circuit Courts of the United States will restrain a State officer from executing an unconstitutional statute of the State, when to execute it would violate rights and privileges of the complainant which had been guaranteed bj"^ the Constitution, and would work irreparable damage and injury to him, has never been departed from.' The same principle is decided in Scott v. Donald, 165 U. S. 58, 67, 41 L. ed. 632, 17 Sup. Ct. 265. And see Missouri, etc., v. Missouri Railroad Commissioners, 183 U. S. 53 46 L. ed. 78. "The cases above cited do not include one exactly like this imder dis- cussion. They serve to illustrate the principles upon which many cases have been decided. We have not cited all the cases, as we have not thought it necessary. But the injunction asked for in the Ayres Case, 123 U. S. (supra), was to restrain the State officers from commencing suits imder the act of May 12, 1887 (alleged to be unconstitutional), in the name of the State and brought to recover taxes for its use, on the ground that if such suits were commenced they would be a breach of a contract with the State. The injunction was declared illegal because the suit itself could not be entertained as it was one against the State to enforce its alleged contract. It was said, however, that if the court had power to entertain such a suit, it would have power to grant the restraining order preventing the com- mencement of suits. (Page 487.) It was not stated that the suit of the injunction was necessarily confined to a case of a threatened direct trespass upon or injury to property. " Whether the commencement of a suit could ever be regarded as an ac- tionable injury to another, equivalent in some cases to a trespass such as is set forth in some of the foregoing cases, has received attention In the rate cases, so called. Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, 14 Sup. Ct. 1047, 38 L. ed. 1014 (a rate case), was a suit against a railroad commission (created under an act of the State of Texas) and the Attorney General, all of whom were held suable, and that such suit was not one against the State. The commission was enjoined from enforcing the rates it had established under the act, and the Attorney tleneral was enjoined from instituting suits to recover penalties for failing to conform to the rates fixed by the commission under such act. It is true the statute in that case creating the board provided that suit might be maintained by any dissatisfied railroad company, or other party in interest, in a court of competent jurisdiction in Travis County, Texas, against the commis- 266 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 155 sion as defendant. This court held that such language permitted a suit in the United States Circuit (-ourt for the Western District of Texas, which embraced Travis County, but it also held that, irrespective of that con- sent, the suit was not in effect a suit against the State (although the At- torney General was enjoined), and therefore not prohibited under the amend- ment. It was said in the opinion, which was delivered by Mr. Justice Brewer, that the suit could not in any fair sense be considered a suit against the State (page 392), and the conclusion of the court was that the objection to the jurisdiction of the Circuit Court, was not tenable whether that jurisdiction was rested (page 393), 'upon the provisions of the statute or upon the general jurisdiction of the court existing by virtue of the statutes of Congress and the sanction of the Constitution of the United States.' Each of these grounds is effective and both are of equal force. Union Pacific, etc., v. Mason City Company, 199 U. S. 160, 166, 26 Sup. Ct. 19, 50 L. ed. 134. "In Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. 418, 42 L. ed. 819 (another rate case), it was again held that a suit against individuals, for the purpose of preventing them, as officers of the State, from enforcing, by the com- mencement of suits or by indictment, an unconstitutional enactment to the injury of the rights of the plaintiff, was not a suit against a State within the meaning of the amendment. At page 518, in answer to the objection that the suit was really against the State, it was said : ' It is the settled doctrine of this court that a suit against individuals for the purpose of preventing them as officers of a State from enforcing an unconstitutional enactment to the injury of the rights of the plaintiff, is not a suit against the State within the meaning of that amendment.' The suit was to enjoin the enforcement of a statute of Nebraska because it was alleged to be unconstitutional, on account of the rates being too low to afford some compensation to the com- pany, and contrary, therefore, to the Fourteenth Amendment. "There was no special provision in the statute as to rates, making it the duty of the Attorney General to enforce it, but under his general powers he had authority to ask for mandamus to enforce such or any other law. State of Nebraska ex rel., etc., v. The Fremont, etc.. Railroad Co., 22 Nebraska, 313. "The final decree enjoined the Attorney General from bringing any suit (page 477) by way of injunction, mandamus, civil action or indictment, for the purpose of enforcing the provisions of the act. The fifth section of the act provided that an action might be brought by a railroad company in the Supreme Court of the State of Nebraska; but this court did not base its decision on that section when it held that a suit of the nature of that before it was not a suit against a State, although brought against individual State officers for the purpose of enjoining them from enforcing, either by civil proceeding or indictment, an unconstitutional enactment to the injury of the plaintiff's right. (Page 518.) "This decision was reaffirmed in Prout v. Starr, 188 U. S. 537, 542, 47 L. ed. 584, 23 Sup. Ct. 398. " Attention is also directed to the case of Missouri, etc., Ry. Co. v. Missouri R. R., etc., Commissioners, 183 U. S. 53, 46 L. ed. 78. That was a suit 207 § 155 JURISDICTION OF COURTS OVER brought in a State court of Missouri by the railroad commissioners of the State, who had the powers granted them by the statutes set forth in the report. Their suit was against the railroad company to compel it to dis- continue certain charges it was making for crossing the Boonville bridge over the Missouri River. The defendant sought to remove the case to the Federal court, which the plaintiffs resisted, and the State court refused to remove on the ground that the real plaintiff was the State of Missouri, and it was proper to go behind the face of the record to determine that fact. In regular manner the case came here, and this court held that the State was not the real party plaintiff, and the case had therefore been properly removed from the State court, whose judgment was thereupon reversed. " Applying the same principles of construction to the removal act which had been applied to the Eleventh Amendment, it was said by this court that the State might be the real party plaintiff when the relief sought enures to it alone, and in whose favor the judgment or decree, if for the plaintiff, will effectively operate. " Although the case is one arising under the removal act, and does not involve the Eleventh Amendment, it nevertheless illustrates the question now before us, and reiterates the doctrine that the State is not a party to a suit simply because the State railroad commission is such a party. "The doctrine of Smyth v. Ames is also referred to and reiterated in Gunter, Attorney General, v. Atlantic, etc.. Railroad Co., 200 U. S. 273, 283, 26 Sup. Ct. 252, 50 L. ed. 477. See also McNeill v. Southern Railway, 202 U. S. 543-559, 50 L. ed. 1142, 26 Sup. Ct. 722; Mississippi Raih-oad Commission v. Illinois, etc., Railroad Co., 203 U. S. 335, 340, 27 Sup. Ct. 90, 51 L. ed. 209. "The various authorities we have referred to furnish ample justification for the assertion that individuals, who, as officers of the State, are clothed with some duty in regard to the enforcement of the laws of the State, and who threaten and are about to commence proceedings, either of a civil or criminal nature, to enforce against parties affected an unconstitutional act, violating the Federal Constitution, may be enjoined by a Federal court of equity from such action. "It is objected, however, that Fitts v. McGhee, 172 U. S. 516, 19 Sup. Ct. 269, 43 L. ed. 535, has somewhat limited this principle, and, that upon the authority of that case, it must be held that the State was a party to the suit in the United States Circuit Court, and the bill should have been dismissed as to the Attorney General on that ground. "We do not think such contention is well founded. The doctrine of Smyth V. Ames was neither overruled nor doubted in the Fitts case. In that case the Alabama legislature, by the act of 1895, fixed the tolls to be charged for crossing the bridge. The penalties for disobeying that act, by demanding and receiving higher tolls, were to be collected by the persons paying them. No officer of the State had any official connection with the recovery of such penalties. The indictments mentioned, were found under another statute, set forth at page 520 of the report, of the case, which pro- vided a fine against an officer of a company for taking any greater rate of toll than was authorized by its charter, or, if the charter did not specify the 2()8 CORPORATION SUPERVISORY COMMISSIONS, ETC. § 155 amount, then the fine was imposed for charging any unreasonable toll, to be determined by a jury. This act was not claimed to be unconstitutional, and the indictments found under it were not necessarily connected with the alleged unconstitutional act fixing the tolls. As no State officer who was made a party bore any close official connection with the act fixing the tolls, the making of such officer a party defendant was a simple effort to test the constitutionality of such act in that way, and there is no principle upon which it could be done. A State superintendent of schools might as well have been made a party. In the light of this fact it was said in the opinion (page 530) : " ' In the present case, as we have said, neither of the State officers named held any special relation to the particular statute alleged to be unconstitu- tional. They were not expressly directed to see to its enforcement. If, because they were law officers of the State a case could be made for the pur- pose of testing the constitutionality of the statute, by an injunction such as it brought against them, then the constitutionality of every act passed by the legislature could be tested by a suit against the governor and the at- torney general, based upon the theory that the former, as the executive of the State, was, in a general sense, charged with the execution of all its laws, and the latter, as attorney general, might represent the State in htigation involving the enforcement of its statutes. That would be a very con- venient way for obtaining a speedy judicial determination of questions of constitutional law which may be raised by individuals, but it is a mode which cannot be applied to the States of the Union consistently with the fundamental principle that they cannot, without their assent, be brought into any court at the suit of private persons.' " In making an officer of the State a party defendant in a suit to enjoin the enforcement of an act alleged to be unconstitutional it is plain that such officer must have some connection with the enforcement of the act, or else it is merely making him a party as a representative of the State, and thereby attempting to make the State a party. "It has not, however, been held that it was necessary that such duty should be declared in the same act which is to be enforced. In some cases, it is true, the duty of enforcement has been so imposed (154 U. S. 362, 366, 38 L. ed. 1014, 14 Sup. Ct. 1047, § 19 of the act), but that may possibly make the duty more clear; if it otherwise exist it is equally efficacious. The fact that the State officer by virtue of his office has some connection with the enforcement of the act is the important and material fact, and whether it arises out of the general law, or is specially created by the act itself, is not material so long as it exists. "In the course of the opinion of the Fitts case the Reagan and Smyth cases were referred to (with others) as instances of State officers specially charged with the execution of a State enactment alleged to be unconstitu- tional, and who commit under its authority some specific wrong or trespass to the injury of plaintiff's rights. In those cases the only wrong or injury or trespass involved was the threatened commencement of suits to enforce the statutes as to rates, and the threat of such commencement was in each case regarded as suflncient to authorize the issuing of an injunction to pre- vent the same. The threat to commence those suits imder such circum- 209 § 155 JURISDICTION OF COURTS OVER stances was therefore necessarily held to be equivalent to any other threat- ened wrong or injury to the property of a plaintiff which had theretofore been held sufhcient to autliorize the suit against the officer. The being specially charged with the duty to enforce the statute is sufficiently apparent when such duty exists under the general authority of some law, even though such authority is not to be found in the particular act. It might exist by reason of the general duties of the officer to enforce it as a law of the State. "The officers in the Fitts case occupied the position of having no duty at all with regard to the act, and could not properly be made parties to the suit for the reason stated. "It is also objected that as the statute does not specifically make it the duty of the Attorney General (assuming he has that general right) to en- force it, he has under such circumstances a full general discretion whether to attempt its enforcement or not, and the court cannot interfere to control him as Attorney General in the exercise of his discretion. " In our view there is no interference with his discretion under the facts herein. There is no doubt that the court cannot control the exercise of the discretion of an officer. It can only direct affirmative action where the officer having some duty to perform not involving discretion, but merely ministerial in its nature, refuses or neglects to take such action. In that case the court can direct the defendant to perform this merely ministerial duty. Board of Liquidation v. McComb, 92 U. S. 531, 541, 23 L. ed. 623. "The general discretion regarding the enforcement of the laws when and as he deems appropriate is not interfered with by an injunction which restrains the State officer from taking any steps towards the enforcement of an unconstitutional enactment to the injury of complainant. In such case no affirmative action of any nature is directed, and the officer is simply prohibited from doing an act which he had no legal right to do. An injunc- tion to prevent him from doing that which he has no legal right to do is not an interference with the discretion of an officer. "It is also argued that the only proceeding which the Attorney General could take to enforce the statute so far as his office is concerned, was one by mandamus, which would be commenced by the State in its sovereign and governmental character, and that the right to bring such action is a neces- sary attribute of a sovereign government. It is contended that the com- plainants do not complain and they care nothing about any action which Mr. Young might take or bring as an ordinary individual, but that he was complained of as an officer, to whose discretion is confided the use of the name of the State of Minnesota so far as litigation is concerned, and that when or how he shall use it is a matter resting in his discretion and cannot be controlled by any court. " The answer to all this is the same as made in every case where an officer claims to be acting under the authority of the State. The act to be enforced is alleged to be unconstitutional, and if it be so, the use of the name of the State to enforce an unconstitutional act to the injury of complainants is a proceeding without the authority of and one which does not affect the State in its sovereign or governmental capacity. It is simply an illegal act upon the part of a State official in attempting by the use of the name of the State 270 roRPOiiATioN sipp:uvisoi{Y commissions, etc. § 155 to enforce a legislative enactment which is void because unconstitutional. If the act which the State Attorney (Jeneral seeks to enforce be a violation of the Federal Constitution, the officer in proceeding under such enactment comes into conflict with the superior authority of that Constitution, and he is in that case stripped of his official or representative cliaracter and is subjected in his person to the consequences of his individual conduct. The State has no power to impart to him any immunity from responsibility to the supreme authority of llie United States. See In re Ayres, supra, 507. It would 1)0 an injury to complainant to harass it with a multiplicity of suits or litigation generally in an endeavor to enforce penalties under an uncon- stitutional enactment, and to prevent it ought to be within the jurisdiction of a court of equity. If the question of unconstitutionality with reference, at least, to the Federal Constitution be first raised in a Federal court that court, as we think is shown by the authorities cited hereafter, has the right to decide it to the exclusion of all other courts. "The question remains whether the Attorney General had, by the law of the State, so far as concerns these rate acts, any duty with regard to the enforcement of the same. By his official conduct it seems that he regarded it as a duty connected with his office to compel the company to obey the commodity act, for he commenced proceedings to enforce such obedience immediately after the injunction issued, at the risk of being found guilty of contempt by so doing. "The duties of the Attorney General as decided by the Supreme Court of Minnesota, are created partly by statute and exist partly as at common law. State ex rel. Young, Attorney General, v. Robinson (decided June 7, l'JU7), 112 N. W. Rep. 269. In the above cited case it was held that the Attorney General might institute, conduct and maintain all suits and pro- ceedings he might deem necessary for the enforcement of the laws of the State, the preservation of order and the protection of pubhc rights, and that there were no statutory restrictions in that State limiting the duties of the Attorney General in such case. "Section 3 of chap. 227 of the General Laws of Minnesota, 1905 (same laws, § 58, Revised Laws of Minnesota, 1905), imposes the duty upon the Attorney (Jeneral to cause proceedings to be instituted against any corpora- tion whenever it shall have offended against the laws of the State. By § 1960 of tic Revised Laws of 1905 it is also provided that the Attorney General shall be ex officio attorney for the railroad commission and it is made his duty to institute and prosecute all actions which the commission shall order brought, and shall render the commissioners all counsel and advice necessary for the proper performance of their duties. "It is said that the Attorney General is only bound to act when the commission orders action to be brought, and that § 5 of the commodity act (April IS, 1907) expressly provides that no duty shall rest upon the com- mission to enforce the act, and hence no duty other than that which is discretionary rests upon the .\ttorney General in that matter. The pro- vision is somewhat unusual, but the reasons for its insertion in that act are not material, and neither require nor justify comment by this court. "It would seem to be clear that the Attorney General, under his power 271 ^ 155 JURISDICTION OF COURTS OVER existing at common law and by virtue of these various statutes, had a general duty imposed upon him, which includes the right and the power to enforce the "statutes of the State, including, of course, the act m question, if it were constitutional. His power by virtue of his office sufficiently con- nected him with the duty of enforcement to make him a proper party to a suit of the nature of the one now before the United States Circuit Court." 272 JUKISDICTIUN UF COURTS UVEK C01U'01{AT10N8 § 150 CHAPTER XI JURISDICTION OF COURTS OVER CORPORATIONS 158. 159. 156. Essentials or Prerequisites of Jurisdiction. 157. Federal Supreme Court — Ap- peal and Error — Funda- mental Question Is Juris- diction. Jurisdiction of Federal Su- preme Court — Federal Question — Presentment by Record — Special Allegation. Jurisdiction — Appeals Taken After 1891 to Federal Su- preme Court. 160. Jurisdiction of Federal Circuit Court of Appeals^ — When Invoked — Diverse Citizen- ship. 161. Original Jurisdiction of Fed- eral Circuit Courts Under Judiciary Act of 1888. 162. Equity Jurisdiction — Gener- ally. 163. Equity Jurisdiction — Ade- quate Remedy at Law. 164. Equity Jurisdiction — Ade- quate Remedy at Law — Collection of Taxes — In- junction. § 165. Equity Jurisdiction — Waiver of Defense of Remedy at Law. 166. Equity Jurisdiction of Fed- eral Courts — Parties. 167. Equity Jurisdiction to Re- move Cloud Upon or to Quiet Title. 168. Jurisdiction of Federal Circuit Court to Remove Incum- brance or Lien or Cloud Upon Title to Property Within District — Absent Defendants — Process — Service — Publication. 169. Equity Jurisdiction of Fed- eral Circuit Courts — Pro- bate Matters — Diverse Citi- zenship. 170. When Equity Has no Juris- diction of Bill to Recover Lands of Railroad Com- pany. 171. Jurisdiction of Court of Claims of New York — Negligence Causing Death — Nonresi- dents as Parties — State as Common Carrier. § 156. Essentials or Prerequisites of Jurisdiction. We will state here as preliminary to the discussion of the ju- risdiction of courts over corporations that certain general rules as to the essentials of jurisdiction are: (1) The court must have cognizance of the class of cases to which the one to be adjudged belongs; (2) the proper parties must be present; and (3) the point decided must be, in substance and effect, within the 18 273 § 157 JURISDICTION OF COURTS OVER CORPORATIONS judgment.^ So before that power to hear and deterniiiie or adjudge a matter in controversy which constitutes jurisdic- tion 2 can be affirmed to exist it must be made to appear tliat the law has given the tribunal capacity to ascertain the com- plaint against the person or thing sought to be charged or affected; that such complaint has actually been preferred; and that such person or thing has been properly brought before the tribunal to answer the charge therein contained.^ § 157. Federal Supreme Court— Appeal and Error- Fundamental Question Is Jurisdiction. In the Supreme Court of the United States on every writ of error or appeal the first and fundamental question is that of jurisdiction, first of said court, and then of the court from which the record comes. Such a question arising on the face of the record cannot be ignored. The court is bound to ask and answer this question for itself, without respect to the relation of the parties to it, and whether propounded by counsel or not.^ The jurisdiction referred to in the first subdivision of the fifth section of the Judiciary Act of March 3, 1891, is the juris- diction of the Circuit and District Courts of the United States as such; and when a case comes directly to the Federal Supreme Court under that subdivision, the question of jurisdiction alone is open to examination. The general rule is that the jurisdic- tion of the Federal Courts depends not on the relative situation 1 Railway Co. v. State, 55 Ark. 200, 205, 17 N. W. 806, per Hemingway, J. (an action to recover penalty from railway company for failure to signal at crossing; jurisdiction of subject and when acquired), citing Windsor v. Mc- Veigh, 93 U. S. 274; Munday v. Vail, 34 N. J. L. 418; 1 Black on Judg., § 242. See also Sloan v. Byers, 37 Mont. 503, 511, 97 Pac. 855, 857, per Smith, J. 2 See §§ 80 e< seq., herein. 3 Pullman Palace Car Co. v. Harrison, 122 Ala. 149, 157, 82 Am. St. Rep. 68, per Tyson, J., a case relating to jurisdiction over foreign corporations and the nonsufficiency of a levy of attachment to give jurisdiction. i Defiance Water Co. v. Defiance, 191 U. S. 184, 48 L. ed. 140, 24 Sup. Ct. 63; Continental Nat. Bk. of Memphis v. Buford, 191 U. S. 119, 48 L. ed. 119, 24 Sup. Ct. 54; Great Southern Fire Proof Hotel Co. v. Jones, 177 U. S. 449, 20 Sup. Ct. 690, 44 L. ed. 842. 274 JURISDICTION OF COURTS OVER CORPORATIONS § 158 of the parties concerned in interest, but on the relative situa- tion of the parties named in the record.^ § 158. Jurisdiction of Federal Supreme Court— Federal Question —Presentment by Record— Special Allegation. The jurisdiction of the Federal Supreme Court, under § 709 of the Revised Statutes, to review proceedings of State Courts is limited to specific instances of denials of Federal rights specially set up in and denied by the State Court .*^ The review of a judgment of a State Court by said Supreme Court of the United States is confined to assignments of error made and passed upon in the judgment brought in said court for review; and assignments of error therein cannot bring new matter into the record/ Under the Revised Statutes, § 709, there are three classes of cases in which the final decree of a State Court may be examined in the Supreme Court of the United States: (1) Where there is drawn in question the validity of a treaty, or statute of, or authority exercised under, the United States, and the decision is against their vaHdity; (2) where is drawn in question the validity of a statute of, or an authority exercised under, any State, on the ground of their being repugnant to the Constitution, treaties or laws of the United States, and the decision is in favor of their validity; (3) where any title, right, privilege or immunity is claimed under the Constitution, or any treaty or statute of, or commission held or authority exercised under, the United States, and the decision is against the title, right, privilege or immunity specially set up and claimed by either party under such Constitution, statute, commission or authority, and in this class the Federal right, title, privilege or immunity must, with possibly some rare exceptions, be specially set up to give said Supreme Court jurisdiction. But where the validity of a treaty or statute of 5 Mexican Central Ry. Co. v. Eckman, 187 U. S. 429, 47 L. ed. 245, 23 Sup. Ct. 211. 6 Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 53 L. ed. 417, 29 Sup. Ct. 220, aff'g 106 S. W. 918. ' Waters-Pierce Oil Co. v. Texas, 212 U. S. 112, 53 L. ed. 431, 29 Sup. Ct. 227; writ of error to review 105 S. W. 851, dismissed. 275 § 159 JUllItiDICTlON OF COURTS OVER CORPORATIONS the United States is raised, and the decision is against it, or the vahdity of a State statute is drawn in question, and the decision is in favor of its validity, if the Federal question ap- pears in the record and was decided, or if such decision was necessarily involved in the case, and the case could not have been determined without deciding such question, the fact that it was not specially set up and claimed is not conclusive against a review of such question in said Supreme Court.® Said court does not review, but accepts as conclusive the findings of facts made by the State Court. ^ So on a writ of error that court cannot deal with facts, and whether the land involved is within or without certain boundaries is for the State Court to deter- mine.^" And relief cannot be afTorded by the United States Supreme Court to one who violates the provisions of a State statute from an erroneous conception of what the statute requires.^^ § 159. Jurisdiction— Appeals Taken After 1891 to Fed- eral Supreme Court. The Judiciary Act of 1891 ^' having provided that no appeals shall be taken from Circuit Courts to the Federal Supreme Court, except as provided in that act, and having repealed all acts and parts of acts relating to appeals or writs of error con- tained in that act, and the joint resolution of 1891 ^^ having provided that nothing contained in that act shall be held to 8 Columbia Water Power Co. v. Columbia Electric St. Ry. L. & P. Co., 172 U. S. 475, 43 L. ed. 521, 19 Sup. Ct. 247, aff'g 43 S. C. 154, 20 S. E. 1002, cited upon the last point in Bollin v. Nebraska, 176 U. S. 83, 92, 20 Sup. Ct. 287, 44 L. ed. 382; Telluride Power Transmission Co. v. Rio Grande Western Ry. Co., 175 U. S. 639, 647, 44 L. ed. 305, 20 Sup. Ct. 245; Scudder v. Comp- troller of New York, 175 U. S. 32, 36, 44 L. ed. 62, 20 Sup. Ct. 26. See also 204 U. S. 568, 196 U. S. 86, 132, 186 U. S. 307, 308, 185 U. S. 46. 8 Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 53 L. ed. 417, 29 Sup. Ct. 220, aff'g 106 S. W. 918. 10 King V. West Virginia & Spruce Coal & Lumber Co., 216 U. S. 92, 54 L. ed. , 30 Sup. Ct. , writ of error to review 64 W. Va. 545, 546, 584, 610, dismissed. 11 Hammond Packing Co. v. Arkansas, 212 U. S. 322, 53 L. ed. 530, 29 Sup. Ct. 370, aff'g 81 Ark. 519. 12 Act of March 3, 1891, 26 Stat., pp. 826, 827, chap. 517. 13 Of March 3, 1891, 26 Stat. 1115. 276 JURISDICTION OF COURTS OVER CORPORATIONS §§ 100, 161 impair the jurisdiction of said Supreme Court in respect of any case wherein the writ of error or the appeal shall have been sued out or taken to that court before July 1, 1891, an appeal to said court from a judgment entered in a Circuit Court November 18, 1890, appealable before July 1, 1891, could not be taken after such last-mentioned date.^"* § 160. Jurisdiction of Federal Circuit Court of Appeals — When Invoked — Diverse Citizenship. The right to invoke the jurisdiction of the Federal Circuit Court of Appeals existed immediately after the act '^ creat- ing said courts, notwithstanding the provision as to appeals taken or pending, before July 1, 1891.^* The Circuit Courts of Appeals have power to review the judgments of the Circuit Courts in cases where the jurisdiction of the Circuit Court attaches solely by reason of diverse citizen- ship, notwithstanding constitutional questions may have arisen after the jurisdiction of the Circuit Court attached." § 161. Original Jurisdiction of Federal Circuit Courts Under Judiciary Act of 1888. The Judiciary Act as amended in 1888 provides: § 1. "That 1* National Exchange Bk. of Baltimore v. Peters, 144 U. S. 570, 36 L. ed. 545, 12 Sup. Ct. 767, cited in Little Rock & M. Rd. Co. v. East Tenn. Va. & Ga. Rd. Co., 159 U. S. 698, 699, 40 L. ed. 311, 16 Sup. Ct. 189; Mason v. Pewabic Mining Co., 153 U. S. 361, 366, 14 Sup. Ct. 847, 38 L. ed. 745; American Construction Co. v. Jacksonville, T. & K. W. Ry. Co., 148 U. S. 372, 378, 13 Sup. Ct. 758, 37 L. ed. 486; United States v. Ady, 76 Fed. 360; Nashua & L. R. Corp. v. Boston & L. R. Corp., 51 Fed. 931. 15 Of March 31, 1891. 16 So held in Baltimore & Ohio R. Co. v. Andrews (U. S. C. C. C. A.), 50 Fed. 728, 6 U. S. App. 75, 1 C. C. A. 636, 17 L. R. A. 190. See Northern Pac. R. Co. V. Amato (U. S. C. C. A.), 49 Fed. 881, aff'd in 144 U. S. 465, 36 L. ed. 506, 12 Sup. Ct. 740; Louisville Public Warehouse Co. v. Collector of Customs (U. S. C. C. A.), 49 Fed. 561, aff'g 48 Fed. 372. 17 American Sugar Ref. Co. v. New Orleans, 181 U. S. 277, 45 L. ed. 859, 21 Sup. Ct. 646. Jurisdiction of United States Circuit Court of Appeals limited to appeals from final decree and does not embrace those which involve constitutionality of State law and Federal Constitution. Westerly v. Westerly Waterworks (U. S. C. C. A.), 76 Fed. 467, 22 C. C. C. A. 278, 33 U. S. App. 723, appeal in 75 Fed. 181, dismissed. 277 § 161 JURISDICTION OF COURTS OVER CORPORATIONS the Circuit Courts of the United States shall have original cognizance, concurrent with the courts of the several States, of all suits of a civil nature, at common law or in equity, where the matter in dispute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars, and arising under the Constitution or laws of the United States, or treaties made, or which shall be made, under their authority, or in which controversy the United States are plaintiffs or peti- tioners, or in which there shall be a controversy between citi- zens of different States, in which the matter in dispute exceeds, exclusive of interest and costs, the sum or value aforesaid, or a controversy between citizens of the same State, claiming lands under grants of different States, or a controversy between citizens of a State and foreign States, citizens, or subjects, in which the matter in dispute exceeds, exclusive of interest and costs, the sum or value aforesaid, and shall have exclusive cognizance of all crimes and offenses cognizable under the authority of the United States, except as otherwise provided by law, and concurrent jurisdiction with the District Courts of the crimes and offenses cognizable by them. But no person shall be arrested in one district for trial in another in any civil action before a Circuit or District Court; and no civil suit shall be brought before either of said courts against any person by any original process or proceeding in any other district than that whereof he is an inhabitant, but where the jurisdiction is founded only on the fact that the action is between citizens of different States, suit shall be brought only in the district of the residence of either the plaintiff or the defendant; nor shall any Circuit or District Court have cognizance of any suit, except upon foreign bills of exchange, to recover the contents of any promissory note or other chose in action in favor of any assignee, or of any subsequent holder of [if] such instrument be payable to bearer and be not made by any corporation, unless such suit might have been prosecuted in such court to recover the said contents if no assignment or transfer had been made." ** 18 Act of August 13, 1888, chap. 866, § 1, 25 Stat, at L. 433, U. S. Comp. 278 JURISDICTION OF COURTS OVER CORPORATIONS § 162 § 162. Equity Jurisdiction — Generally. The equity jurisdiction of the Federal Courts is derived from the Federal Constitution and is like unto that of the High Court of Chancery in England at the time of the adoption of the Judiciary Act of 1789.^^ A court of equity has jurisdiction of a bill by a corporation praying that its guaranty on a great 'lumber of negotiable bonds may be canceled, and suits upon it restrained, because of facts not appearing on its face.^" But equity courts do not restore money or property to corpora- tions that have obtained them by contracts or conveyances made in excess of their powers, until those corporations first restore the money or property they have secured thereby or its value, since he who seeks equity must first do equity .^^ Stat. 1901, p. 508, amending act of March 3, 1887, chap. 373, § 1, 24 Stat, at L. 552, amending the first section of "an act to determine the jurisdiction of Circuit Courts of the United States, and to regulate the removal of causes from state courts and for other purposes." Approved March 3, 1875, chap. 137, § 1, 18 Stat, at L. 470. See Act of March 3, chap. 517, §§ 4-G, U. S. Comp. Stat., 1901, pp. 548-550, as to appellate jurisdiction superseding such jurisdiction of Circuit Courts. See § 629, Rev. Stat., pars. 1-20, super- seded by act of 1875. When a State contains more than one district, every suit not of a local nature in the Circuit or District Court thereof, against a single defendant, inhabitant of such State, must be brought in the district where he resides; but if there are two or more defendants, residing in different districts of the State, it may be brought in either district, and a duplicate writ may be is- sued against the defendants, directed to the marshal of any other district in which any defendant resides. The clerk issuing the duplicate writ shall indorse thereon that it is a true copy of a writ sued out of the court of the proper district, and such original and duplicate writs, when executed and returned into the office from which they issue, shall constitute and be pro- ceeded on as one suit; and upon any judgment or decree rendered therein, execution may be issued, directed to the marshal of any district in the same State. Act of May 4, 1858, chap. 27, 11 Stat. L. 272, Rev. Stat., § 740; act of February 24, 1863, chap. 54, § 9, 12 Stat. L. 662, U. S. Comp. Stat., 1901, p. 588. In what district suits for infringement of patents to be brought. Act of March 3, 1897, chap. 395, 29 Stat. 695, U. S. Comp. Stat., 1901, p. 589. 19 Waterman v. Canal-Louisiana Bank & Trust Co., 215 U. S. 33, 54 L. ed. , 30 Sup. Ct. . 20 Louisville, New Albany & Chicago Ry. Co. v. Louisville Trust Co., 174 U. S. 552, 43 L. ed. 1081, 19 Sup. Ct. 821. 21 Jenson v, Toltec Ranch Co. (U. S. C. C. A.), 174 Fed. 86, citing Logan County Bank v. Townsend, 139 U. S. 67, 72, 77, 78, 11 Sup. Ct. 496, 35 L. 279 i^ 163 JURISDICTION OF COURTS OVER CORPORATIONS § 163. Equity Jurisdiction — Adequate Remedy at Law. The Natioiijil courts liave juri.stliction in equity in the ab- sence of an adequate remedy at law in those ^'ourts. The test of their equitable jurisdiction is the absence of such remedy in the Federal Courts. The presence or absence of a remedy at law in the State Courts is not the test of the jurisdiction in equity of the Federal Courts. The equitable jurisdiction of the Federal Courts vested in them under the Judiciary Act of 1789, and, where it has not been subsequently changed by act of Congress, the test of that jurisdiction is the adequacy of the remedy at law for wrongs of the character under consideration in the year 1789, when the Judiciary Act was adopted.^^ So ed. 107; Central Transportation Co. v. Pullman's Car Co., 139 U. S. 24, 60, 11 Sup. Ct. 478, 35 L. ed. 55; Pullman's Car Co. v. Transportation Co., 171 U. S. 138, 150, 151, 18 Sup. Ct. 808, 43 L. ed. 108; Planters' Bank v. Union Bank, 16 Wall. (83 U. S.) 483, 21 L. ed. 473: Hovey's Estate, In re, 198 Pa. St. 385, 48 Atl. 311, 315; Dunlop v. Mercer, 156 Fed. 545, 553, 86 C. C. A. 435, 443. 22 Syllabus in National Surety Co. v. State Bank, 120 Fed. 593. When equity has jurisdiction — remedy at law inadequate, see the following cases : United States: Union Stock Yards Nat. Bank v. Gillespie, 137 U. S. 411, 34 L. ed. 724, 11 Sup. Ct. 118, 4 Bkg. L. J. 175; Kilbourne v. Sunderland, 130 U. S. 505, 32 L. ed. 1005, 17 Wash. L. Rep. 278, 9 Sup. Ct. 594; Poke- gama Sugar Pine Lumber Co. v. Klamath River Lumber & I. Co. (U. S. C. C), 96 Fed. 34; National Bank of Commerce v. Allen (U. S. C. C), 90 Fed. 545, 2 Denver Leg. Adv. 240, 33 C. C. A. 169, 61 U. S. App. 102, 9 Am. & Eng. Corp. Cas. (N. S.) 429; Southern R. Co. v. North Carohna R. Co. (U. S. C. C), 81 Fed. 595; Pittsburg, C. & St. L. R. Co. v. Keokuk & H. Bridge Co. (U. S. C. C), 68 Fed. 19; Gunn v. Brinkley Car Works & Mfg. Co. (U. S. C. C), 13 C. C. A. 529, 66 Fed. 382; North British & M. Ins. Co. v. Lathrop (C. C. E. D. Va.),63Fed. 508. Alabama: Merritt v. Ehrman, 116 Ala. 278, 22 So. 514. Illinois: Higgins v. Lansingh, 154 111. 301, 40 N. E. 362. Maine: Porter v. Frenchman's Bay & Mt. D. & Land & W. Co., 84 Me. 195, 54 Atl. 814. New York: American Sugar Refining Co. v. Fancher, 145 N. Y. 552, 65 N. Y. St. R. 506, 40 N. E. 206, 27 L. R. A. 757, rev'g 81 Hun, 56, 62 N. Y. St. R. 249, 9 Nat. Corp. Rep. 383, 30 N. Y. Supp. 482. Pennsylvania: Conemaugh Gas Co. v. Jackson Farm Gas Co., 186 Pa. 443, 29 Pitts. L. J. (N. S.) 136, 40 Atl. 1000; Boyd v. American Carbon Black Co., 182 Pa. 206, 37 Atl. 9.37, 40 W. N. C. 459. When equity will not take jurisdiction — remedy at law adequate, see the following cases: 280 JURISDICTION OF COURTS OVER CORPORATIONS § 163 it is held in another case that the adequacy or inadequacy of a remedy at law for the protection of the rights of one entitled upon any ground to invoke the powers of a Federal Court, is not to be conclusively determined by the statutes of the particular State in which suit may be brought. One who is entitled to sue in the Federal Circuit Court may invoke its jurisdiction in equity whenever the established principles and rules of equity permit such a suit in that court; and he cannot be deprived of that right by reason of his being allowed to sue in a State Court on the same cause of action.^^ Equity does not now take jurisdiction in cases of fraud where the relief properly obtainable on that ground can be obtained in a court of law, and where, so far as necessary, discovery may be obtained as well as in equity/^ United States: Washington Market Co. v. District of Columbia, 172 U. S. 361, 43 L. ed. 478, 19 Sup. Ct. 218, aff'g 6 App. D. C. 34, 23 Wash. L. Rep. 213; Smyth v. New Orleans Canal & Bkg. Co., 141 U. S. 656, 35 L. ed. 891, 12 Sup. Ct. 113; Safe Deposit & Trust Co. of Baltimore v. City of Anniston (U. S. C. C), 96 Fed. 661; Sigua Iron Co. v. Clark (U. S. C. C), 77 Fed. 496; National Park Bank v. Peavey (U. S. C. C), 64 Fed. 912; International Trust Co. V Cartersville Improvement G. «fe W Co. (U. S. C. C), 63 Fed. 341 ; United States Bank v. Lyon County (U. S. C. C), 46 Fed. 514; American Cable R. Co. v. Citizens' R. Co. (U. S. C. C. ), 44 Fed. 484; Manchester F. Assur. Co. V. Stockton Combined Harvester & Agri. Works (U. S. C. C), 38 Fed. 378. Alabama: Farmers' & M. Bank v. Hall, 120 Ala. 14, 24 So. 347. Arkansas: Davis v. Arkansas F. Ins. Co., 63 Ark. 412, 39 S. W. 258. California: Myers v. Sierra Valley S. & A. Assoc, 122 Cal. 669, 55 Pac. 689. New Hampshire: Boston, C. & M. R. Co. v. Boston & L. R. Co., 65 N. H. 393, 23 Atl. 529. Pennsylvania: Salisbury Gas Co. v. Salisbury, 138 Pa. 250, 21 Pitts. L. J. (N. S.) 148, 48 Phila. Leg. Int. 149, 27 W. N. C. 120, 20 Atl. 844, 10 L. R. A. 193; Sanderson v. Whitmeyer (C. P.), 2 Dauph. Co. Rep. 174, 8 Pa. Dist. Rep. 312. West Virginia: Thompson v. Whittaker Iron Co., 41 W. Va. 574, 23 S. E. 795. 23 Smyth v. Ames, 169 U. S. 466, 42 L. ed. 819, 18 Sup. Ct. 418, 30 Chicago Leg. News, 243, 171 U. S. 361, 18 Sup. Ct. 888, 43 L. ed. 497. 2^ Equitable Life Assur. Soc. v. Brown, 213 U. S. 25, 53 L. ed. 682, 29 Sup. Ct. 404; rev'g 151 Fed. 1; United States v. Bitter Root Co., 200 U. S. 451, 50 L. ed. 550, 26 Sup. Ct. 318, Rev. Stat., § 724. See the following cases: Smyth v. New Orleans Canal & Bkg. Co., 141 281 § 164 .JURISDICTION OF COURTS OVER CORPORATIONS § 164. Equity Jurisdiction— Adequate Remedy at Law- Collection of Taxes— Injunction. Where a corporation has paid the full amount of its tax as based upon the same rate as that levied upon other property of the same class, equity will restrain the collection of the excess illegally assessed, there being no adequate remedy at law, when it appears that it would require a multiplicity of suits against the various taxing authorities to recover the tax and that a portion of it would go to the State against which no action would lie, and where the amount is so great that its payment would cause insolvency, and a levy upon the property of a street car system, and embarrass and injure the public/^ But the collection of taxes under authority of a State will not be enjoined by a court of the United States on the sole ground that the tax is illegal, but it must appear that the party taxed has no adequate remedy by the ordinary processes of the law, and that there are special circumstances bringing the case within some recognized head of equity jurisdiction.^^ In a comparatively recent case in the United States Supreme Court it appeared that a bill in equity had been brought by a West Virginia corporation against a city in Idaho, in the Fed- eral Circuit Court for the District of Idaho, to obtain an in- junction against the enforcement of an ordinance, and the following points were decided: (1) Equity will not interpose where there is a remedy at law which is as complete, practicable and adequate as equity could afford. (2) As the defense of the unconstitutionality and illegality of a tax is open in a court of law, injunction should not issue against the enforcement of the tax merely because it is unconstitutional or illegal unless U. S. 656, 35 L. ed. 891, 12 Sup. Ct. 113; Smith v. American Nat. Baak, 89 Fed. 832, 60 U. S. App. 431, 32 C. C. A. 368; Western Assiir. Co. v. Ward, 75 Fed. 338, 41 U. S. App. 443; Moffett H. & C. Co. v. Rochester (U. S. C. C), 4 Det. L. News, 22, 30 Chicago Leg. News, 11, 82 Fed. 255; Darrah v. Boyce, 62 Mich. 480, 29 N. W. 102. 25 Raymond v. Chicago Union Traction Co., 207 U. S. 20, 28 Sup. Ct. 7, 52 L. ed. 7. 26 Arkansas Building & Loan Ass'n v. Madden, 175 U. S. 269, 44 L. ed. 159, 20 Sup. Ct. 119. 282 JURISDICTION OF COURTS OVER CORPORATIOXS §§ 165, 160 other circumstances bring the case within some clear ground of equity jurisdiction. (3) Even though some States may for convenience of remedy permit equity to enjoin the collection of a tax for mere illegality, courts of a different and paramount sovereignty should not do so, and Federal Courts should not interfere by injunction with the fiscal arrangements of a State if the rights involved can be preserved in any other manner. (4) A municipality speaks through its council, and where the bill does not allege any facts showing threats to remove prop- erty of a complainant public service corporation such action will not be presumed so as to give equity jurisdiction. (5) A suit at law by a municipality to collect a license fee imposed by ordinance on a public service corporation contemplates continuance and not restraint, of the business of such corpora- tion, and, as the defense of unconstitutionahty of the ordinance is open in that suit, equity should not interfere. (6) Equity should not enjoin the collection of a tax on the ground of cloud on title when the tax can only be collected by a suit at law in which the defense of its illegality is open, and it does not appear that the tax is a Hen on any of complainant's property .^^ § 165. Equity Jurisdiction — Waiver of Defense of Rem- edy at Law. The defense in an equity suit that the complainant has not exhausted his remedy at law may be waived by defendant, and when waived, as it may be by consenting to the appoint- ment of receivers, the case stands as though the objection never existed.^* § 166. Equity Jurisdiction of Federal Courts— Parties. While a Federal court of equity cannot, either under the forty-seventh rule in equity or general principles of equity, proceed to adjudication in the absence of indispensable parties, 27 Boise Artesian Water Co. v. Boise City, 213 U. S. 276, 53 L. ed. 796, 29 Sup. Ct. 426. 28 Metropolitan Railway Receivership, In re, 208 U. S. 90, 52 L. ed. 403, 28Sup. Ct. 219. 283 § 166 JURISDICTION OF COURTS OVER CORPORATIONS if it can do justice to the parties before it without injury to absent persons it will do so and shape the decree so as to preserve the rights of those actually before the court, without l)rejudice to the rights of the absentees.^^ The general rule in 2B Waterman v. Canal-Louisiana Bank & Trust Co., 215 U. S. 33, 54 L. ed. — , 30 Sup. Ct. — . In this case the absent party was not of the same State as complainant and had no interest in common with complainant and while a proper, was not an indispensable party, as his interests were separate and could be protected by retention of his legacy by the executors subject to adjudication in another suit. The court, per Mr. Justice Day, said: "Sec- tion 737 of the Revised Statutes of the United States provides: ' When there are several defendants in any suit at law or in equity, and one or more of them are neither inhabitants of nor found within the district in which the suit is brought, and do not voluntarily appear, the court may entertain jurisdiction, and proceed to the trial and adjudication of the suit between the parties who are properly before it; but the judgment or decree rendered therein shall not conclude or prejudice other parties not regularly served with process nor voluntarily appearing to answer.' "To the same effect is the forty-seventh equity rule. This statute and rule permit the court to proceed with the trial and adjudication of the suit, as between parties who are properly before it, and preserves the rights of parties not voluntarily appearing, providing their rights are not prejudiced by the decree to be rendered in the case. This rule has been said to be declaratory of the already-established equity practice. Shields v. Barrow, 17 How. (58 U. S.) 130, 15 L. ed. 158; 1 Street's Federal Equity Practice, § 533, and cases there cited. This rule does not permit a Federal Court to proceed to a decree in that class of cases in which there is an absence of indispensable, as distinguished from proper, or even necessary parties, for neither the absence of formal, or such as are commonly termed necessary parties, will defeat the jurisdiction of the court; provided, in the case of necessary parties, their interests are such and so far separable from those of parties before the court, that the decree can be so shaped that the rights of those actually before the court may be determined without necessarily affecting other persons not within the jurisdiction. After pointing out that there may be formal parties, of whose omission the court takes no account, Mr. Justice Miller, in delivering the opinion in Barney v. Baltimore, 6 Wall. (73 U. S.) 280, went on to say: " 'There is another class of persons whose relations to the suit are such that if their interests and their absence are formally brought to the attention of the court, it will require them to be made parties, if within its jurisdiction, before deciding the case. But if this cannot be done, it will proceed to administer such relief as may be in its power between the parties before it. And there is a third class whose interests in the subject-matter of the suit and in the relief sought are so bound up with that of the other parties that their legal presence as parties to the proceeding is an absolute necessity, without which the court cannot proceed. In such cases the court refuses 284 JURISDICTION OF COURTS OVER CORPORATIONS § 1(J6 equity is that all persons materially interested, either legally or beneficially, in the subject-matter of a suit are to be made parties to it; and the established practice of courts of equity is to dismiss the plaintiff's bill if it appears that the rehef prayed for would injuriously affect persons materially inter- ested in the subject-matter who are not made parties to the suit, is founded upon clear reasons, and may be enforced by the court sua sponte, though not raised by the pleadings or suggested by counsel. So when it appears to a court of equity that a case, otherwise presenting ground for its action, cannot be dealt with because of the absence of essential parties; and it further appears that necessary and indispensable parties are beyond the reach of the jurisdiction of the court, or that when made parties, the jurisdiction of the court will thereby be defeated, it would be useless for the court to grant leave to amend. ^° to entertain the suit when these parties cannot be subjected to its juris- diction.' "The relation of an indispensable party to the suit must be such that no decree can be entered in the case which will do justice between the parties actually before the court without injuriously affecting the rights of such absent party. 1 Street's Fed. Equity Practice, § 519. "If the court can do justice to the parties before it without injuring absent persons it will do so, and shape its relief in such a manner as to preserve the rights of the persons not before the court. If necessary, the court may require that the bill be dismissed as to such absent parties, and may generally shape its decrees so as to do justice to those made parties without prejudice to such absent persons. Payne v. Hook, 7 Wall. (74 U. S.) 425, 19 L. ed. 260." The principal case was a question of jurisdiction concerning the right of the Federal Circuit Court to entertain a bill in equity brought by residents and citizens of Illinois against a bank and trust com- pany, a citizen and inhabitant of Louisiana, and also certain institutions, inhabitants of said State and established under its laws also against other citizens and inhabitants, natural persons, of said State; also against a natural person residing in a State outside the court's jurisdiction. 30 Minnesota v. Northern Securities Co., 184 U. S. 199, 22 Sup. Ct. 308, 46 L. ed. 299. The bill disclosed in this case that the parties to be affected by the decision of the controversy were, directly, the State of Minnesota, the Great Northern Railway Company, and the Northern Pacific Railway Company, corporations of that State, and the Northern Securities Company, a corporation of the State of New Jersey; and, indirectly, the stockholders and bondholders of those corporations, and of the numerous railway com- panies whose lines were alleged to be owned, managed or controlled by the 285 § 1()7 JURISDK'TJON OF COURTS OVER TORPORATIONS § 167. Equity Jurisdiction to Remove Cloud Upon, or to Quiet Title. Equity has jurisdiction to remove a cloud from and quiet title to real estate, and any deed, devise, or other instrument, judgment or decree, not void on its face, which purports to convey any interest in or makes any charge upon land of the true owner, the invalidity of which requires proof by extrinsic evidence, is a cloud upon the legal title of the owner in posses- sion; so, any pretended conveyance which, if left undisturbed may ripen into a perfect title, must necessarily create a cloud upon the true title, under the laws of West Virginia, and a suit may be maintained in a Federal Court there for the can- cellation of such instrument and this applies to deeds executed to each other and caused to be recorded by members of an organization in furtherance of an alleged fraudulent conspiracy, and defendants only possession is alleged to be that of tenants of the complainant who is absolute owner of the land.^^ A bill in equity in Indiana which avers that a deed is void on its face, and an answer which does not deny the averment, will support the jurisdiction of the Federal Circuit Court in that district to quiet the title of complainant as against the deed.^' So a bill which charges that the collection of an illegal tax would involve the plaintiff in a multiplicity of suits as to the title of lots being laid out and sold, which would prevent their Great Northern and Northern Pacific Railway Companies; and it was obvious that the rights of the minority stockholders of the two railroad companies were not represented by the Northern Securities Company. 31 Acord V. Western Pocahontas Corporation (U. S. C. C), 156 Fed. 989, citing Smith v. O'Keefe, 43 W. Va. 172, 27 S. E. 383; Waldron v. Harvey, 54 W. Va. 608, 46 S. E. 603 (syl. 21); 102 Am. St. R. 959; Robinson v. Lowe, 50 W. Va. 75, 40 S. E. 454; Bennett v. Pierce. 50 W. Va. 604, 40 S. E. 395; Ambler v. Leach, 15 W. Va. 677; Garrett v. Ramsay, 26 W. Va. 345; Moore v. McNutt, 41 W, Va. 695, 24 S. E. 682. Where land or other subject-matter of a fixed character lies in different districts of same State. Act May 4, 1858, chap. 27, § 2, 11 Stat, at L. 27, § 742, Rev. Stat, U. S. Comp. Stat. 1901, p. 588. See act March 3, 1875, chap. 137, § 8. 32 Reynolds v. Crawfordsville First Nat. Bank, 112 U. S. 405, 5 Sup. Ct. 213, 28 L. ed. 733, aff'g Holland v. Challen, 110 U. S. 15, 28 L. ed. 52, 3 Sup. Ct. 495. 286 JURISDICTION OF COURTS OVER COHI'OKATIONS § lOS sale, and which would cloud ilic title to all its real estate, states a case for relief in equity .^^ Where the attitude and claims of a municipality cast a cloud upon the title to property con- sisting largely of franchises in the hands of receivers and to be administered under orders of the court, the receivers may, with the authority of the court, proceed by ancillary bill to protect the jurisdiction and right to administer the property, and to determine the validity of claims of parties which cast a cloud upon such franchises, and in such case it is proper to grant an injunction until the rights of parties can be deter- mined.^"* Although a State statute may have enlarged the or- dinary equitable action to quiet title and remove a cloud, the Federal Circuit Court sitting in that district may take juris- diction of a bill properly brought under its provisions.^ § 168. Jurisdiction of Federal Circuit Court to Remove Incumbrance or Lien or Cloud Upon Title to Property Within District— Absent Defendants— Process— Service — Publication. The repealing section of the Judiciary Act of 1887-1888, did not reach § 8 of the act of 1875,^^ and that section is srill in 33 Union Pacific Ry. Co. v. Cheyenne, 113 U. S. 516, 28 L. ed. 1098, 5 Sup. Ct. 601. 34 Blair v. Chicago, 201 U. S. 400, 26 Sup. Ct. 427, 50 L. ed. 801, rev'g 132 Fed. 848. 36 Bardon v. Land & River Imp. Co., 157 U. S. 327, 39 L. ed. 719, 15 Sup. Ct. 650. 36 Act of March 3, 1875, § 8, chap. 137, 18 Stat. 470, 472, U. S. Comp. Stat., p. 513. By this section determining the jurisdiction of the Circuit Courts of the United States, it was provided: "That when in any suit, commenced in any Circuit Court of the United States, to enforce any legal or equitable lien upon, or claim to, or to remove any incumbrance or lien or cloud upon the title to real or personal property within the district where such suit is brought, one or more of the defendants therein shall not be an inhabitant of, or found within, the said district, or shall not voluntarily appear thereto, it shall be lawful for the court to make an order directing such absent de- fendant or defendants to appear, plead, answer, or demur, by a day certain to be designated, which order shall be served on such absent defendant or defendants, if practicable, wherever found, and also upon the person or persons in possession or charge of said property, if any there be; or where such personal service upon such absent defendant or defendants is not 287 § 108 JURISDICTION OF COURTS OVER CORPORATIONS force. And a suit brought by owners of stock of a railroad company for the cancellation of deeds and leases under and by authority of which the properties of the company are held and managed is a suit within the meaning of said § 8, as one to remove incumbrances or clouds upon rent or personal prop- erty and local to the district and within the jurisdiction of the Circuit Court for the district in which the property is situated without regard to the citizenship of defendants so long as di- verse to that of the plaintiff, and foreign defendants not found can be brought in by order of the court subject to the condition prescribed by that section, that any adjudication affecting absent, nonappearing defendants shall affect only property within the districts as may be the subjects of the suit and un- der the jurisdiction of the court .''^ In another case a suit was practicable, such order shall be published in such manner as the court may direct, not less than once a week for six consecutive weeks; and in case such absent defendant shall not appear, plead, answer, or demur within the time so limited, or within some further time to be allowed by the court, in its discretion, and upon proof of the service or publication of said order, and of the performance of the directions contained in the same, it shall be lawful for the court to entertain jurisdiction, and proceed to the hearing and adj udication of such suit in the same manner as if such absent defendant had been served with process within the said district; but said adjudication shall, as regards said absent defendant or defendants without appearance, affect only the property which shall have been the subject of the suit and under the jurisdiction of the court therein, within such district," etc., with certain rights reserved to the defendant saved from repeal by act of March 3, 1887, 24 Stat. 552, 555, chap. 373, as corrected by § 5 of act of August 13, 1888, 25 Stat. 433, 436, chap. 866. " These provisions " of the above section " were substantially those embodied in § 738 of the Revised Statutes, except that the act of 1875 embraced (as § 738 did not) suits in equity 'to remove any encumbrance or lien or cloud upon the title to real or personal property.' Both § 738 and the act of 1875 related to legal and equitable hens or claims on real and personal property within the district where the suit was brought," per Mr. Justice Harlan in the Citizens' Trust Company case cited below. 37 Citizens' Saving & Trust Co. v. Illinois Central Rd. Co., 205 U. S. 46, 51 L. ed. 703, 27 Sup. Ct. 425. The court, per Mr. Justice Harlan (at pp. 54- 57), considers Jellenik v. Huron Copper Mining Co., 177 U. S. 1, 44 L. ed. 647, 20 Sup. Ct. 559; Mellen v. Moline Malleable Iron Works, 131 U. S. 352, 9 Sup. Ct. 781, 33 L. ed. 178, and also cites Dick v. Foraker, 155 U. S. 404, 15 Sup. Ct. 124, 39 L. ed. 201, and says: "These decisions, we think, make it clear that this suit comes within the act of 1S75, as one to remove an incumbrance or cloud upon the title to real property within the Eastern 288 JURISDICTION OF COURTS 0\j;U COKI'ORATIONS § 1()8 brought in the Circuit Court of the United States for the West- ern District of Michigan by i)arties, citizens of other States than Micliigan, against a Michigan mining corporation and certain individual defendants holding shares of stock in that corporation and being citizens residing in Massachusetts. The plaintiffs claimed that they were the real owners of certain shares of stock of the corporation the certificates of which were held by the Massachusetts defendants, and sought a decree removing the cloud upon their title to such shares. It was held that the defendants, citizens of Massachusetts, were nec- essary parties to the suit; that they could be proceeded against in respect of the stock in question in the mode and for the limited purposes indicated in the eighth section of the act of District of Illinois. The railroad in question is wJwlly within that district, although the defendant corporations, including the Belleville Company, may hold their annual or other meetings in Chicago. The bill seeks the cancellation of the deeds and leases under and by authority of which the Belleville Company are held and managed in the interest, as is alleged, of the Illinois Central Railroad Company, and to the destruction of the rights of the stockholders of the Belleville Company. * * * jf ^j^g deeds and leases in question are adjudged to be void, the entire situation, as to the possession and control of the Belleville railroad properties, will be changed, and the alleged incumbrances upon the properties of the Belleville Com- pany will be removed. * * * The only inquiry now is whether, looking at the allegations of the bill, the suit is of such a nature as to bring it within the act of 1875, as one to remove incumhrances or clouds upon real or personal property within the district where the suit was brought, and, therefore, one local to sitch district. The court below held that the suit was not one which could Ije Ijrought and maintained against the defendant corporations found to be inhabitants of another district and not voluntarily appearing in the suit; and this, notwithstanding the railroad in question is wholly within the district where the suit was brought. 18 Stat. 472, 25 Stat. 436. If the suit was within the terms of the act of 1875, then the Circuit Court of the Eastern District of Illinois, although the defendant corporations may be inhabitants of another district in Illinois, could proceed to such an adjudication as the facts would justify, subject, of coiu'se, to the condition prcscril)ed l)y the eighth section of that act, that any adjudication, affecting absent defend- ants without appearance, should affect only such property within the district as may be the subject of the suit and under the jurisdiction of the court. * * * Wg adjudge that the suit is of such a nature as to bring it within the jurisdiction of the Circuit Court for the Eastern District, under the act of 1875. The judgment must, therefore, be reversed and the cause remanded that the plaintiff' may proceed, as it may be advised, with the preparation of its case under the act of 1875." 19 289 § 168 JURISDICTION OF COURTS OVER CORPORATIONS Congress of 1875^* which authorized j)roceedings by pubUca- tion against absent defendants in any suit commenced in any Circuit Court of the United States to enforce any legal or equitable lien upon, or claim to, or to remove any incumbrance or lien or cloud upon the title to real or personal property within the district where such suit is brought; and that for the purposes of said act the stock held by the citizens of Massa- chusetts was to be deemed personal property "within the district" where the suit was brought. The certificates of stock were only evidence of the ownership of the shares, and the interest represented by the shares was held by the company for the benefit of the true owner. And as the habitation or domicile of the company is and must be in the State that created it, the property represented by its certificates of stock may be deemed to be held by the company within the State whose creature it is, whenever it is sought by suit to determine who is its real owner.^^ Again, a suit instituted by a creditor of a corporation, on his own behalf and on behalf of other unse- cured creditors, to set aside a conveyance of its real estate and a mortgage of its personal property, both made by the corpo- ration in trust to secure certain preferred creditors, including among them a director of the corporation, and also to procure a dissolution of the corporation, and the closing up of its busi- ness, is a suit brought to remove an incumbrance or lien or cloud upon the title to such property within the meaning of the act of Congress of 1875, authorizing a Circuit Court of the United States to summon in an absent defendant and to ex- ercise jurisdiction over his rights in the property in suit within the jurisdiction of the court ; nor is it necessary that the creditor of an insolvent corporation should obtain judgment on his claim, and take out execution and exhaust his remedies at law, in order to invoke the jurisdiction of a court of equity in his favor to remove an incumbrance or cloud or lien upon the title of the corporation's property under said statute.''" 38 Act of March 3, 1875, 18 Stat. 470, chap. 137, § 8, given in note above. 3« Jellenik v. Huron Copper Mining Co., 177 U. S. 1, 20 Sup. Ct. 559, 44 L. ed. 647. 40 Mellen v. Moline Malleable Iron Works, 131 U. S. 352, 33 L. ed. 178, 29J JURISDICTION OF COURTS OVER CORPORATIONS §§ 169, 170 § 169. Equity Jurisdiction of Federal Circuit Courts- Probate Matters— Diverse Citizenship. While Federal Courts cannot seize and control proi)erty which is in the possession of the State Courts and have no ju- risdiction of a purely probate character, they can, as Courts of Chancery, exercise jurisdiction where proper diversity of citizenship exists, in favor of creditors, legatees and heirs, to estabhsh their claims and have a proper execution of the trust as to them. And although a complainant asks in some of the prayers for relief which is beyond the jurisdiction of the court as being of a purely probate character, if the allegations of the bill support them the court may grant other prayers for relief which are within its jurisdiction, and, as a court of equity, shape its decree according to the equity of the case. Again, where the bill does not seek to set aside the probate of a will or interfere with the possession of the Probate Court, the Federal Court of Equity, in a case where diverse citizenship exists, may determine as between the parties before the court their interest in the estate, and such decree will be binding upon, and may be enforced against, the executor. It will be assumed that the State Probate Court will respect the decree of the Federal Court having jurisdiction settling the rights of parties in an estate, and the denial of effect of such decree presents a claim of Federal right which can be protected by the Federal Supreme Court .^^ § 170. When Equity Has no Jurisdiction of Bill to Recover Lands of Railroad Company. A court of equity has no jurisdiction of a bill to recover lands held as property of a railroad company under a foreclosure 9 Sup. Ct. 781; act of March 3, 1875, § 8, 18 Stat. 470, 472, chap. 137, U. S. Comp. Stat. 513. " Waterman v. Canal-Louisiana Bank & Trust Co., 215 U. S. 33, 54 L. ed. — , 30 Sup. Ct. — . This case was one of a bill in equity brought in the United States Circuit Court by residents and citizens of Illinois against the Canal-Louisiana Bank & Trust Company, executor, and certain corpora- tions and institutions established under the laws of another State and citizens thereof and inhabitants of the district therein in which the suit was brought; also against certain natural persons. 291 § 171 JURISDICTION OF COURTS OVER CORPORATIONS sale of corporate property, where such suit is in effect one to determine the legal title to the lands and is brought by one holding the legal title to the stock of the corporation, although based upon the claim that he was acting as trustee of pledgees, from whom he held by assignment, with but an equitable title in part of the stock upon which he was suing; that he was at- tempting to recover property of a dissolved corporation; and that the lands did not pass by the sale and were still liable for the debts of the stock. An assignee of the pledgee of stock of a dissolved corporation has no greater rights in bringing suits than could his assignor or the pledgee have had, and the latter can have no greater rights than his assignor. And where the complainant's interest instead of being equitable, as alleged, has become legal by an assignment and conveyance, the equi- table features disappear and, whatever equities might be urged between the complainant and his cestuis qui trustent, there is between him and defendant, in such case, but the en- forcement of a legal title. Again, the principle upon which courts of equity take jurisdiction in cases where it is sought to follow the property of dissolved corporations in behalf of creditors thereof, is that such property, when held by a legal title, is charged with an imphed trust to pay the indebtedness, but this does not apply where it cannot be claimed that prop- erty is so charged.^ § 171. Jurisdiction of Court of Claims of New York- Negligence Causing Death— Nonresidents as Parties — State as Common Carrier. It was the intention of the legislature of the State of New York as expressed in the Code of Civil Procedure'*^ that the Court of Claims should have jurisdiction in those cases where death is caused by a wrongful act, neglect or default on the part of the State; and the right given to prosecute a private claim against the State in the Court of Claims to recover dam- «Knevals v. Florida Central & Peninsula Rd. Co. (U. S. C. C. A.), 66 Fed. 224, 13 C. C. A. 410. Petition for certiorari denied (mem.), 159 U. S. 257. « See § 264. 292 JURISDICTION OF COURTS OVER CORPORATIONS § 171 ages for a wrongful act, neglect or default on the joart of the State, by which the death of any person has been caused is not confined to residents of the State, but sucli a claim may be prosecuted by a resident of another State. The State of New York having acquired, pursuant to law, for a State reservation, lands at Niagara Falls, upon which was an inclined railroad, had the power to continue the operation of such railroad so as to derive a revenue therefrom; but the doctrine of uUra vires as applied to corporations is not applicable to the State itself when it does not exceed the constitutional Hmits of its powers. Such doctrine cannot, however, be invoked to shield a corpo- ration from the consequences of its negligence in conducting a business not within the scope of its lawful activities. Again, when a State engages in the business of a common carrier, it must maintain and operate a suitably and properly equipped road. It must take care to prevent accidents, to see that its machinery and aj^pliances are reasonably safe for the purposes for which they are used and to introduce and use such improve- ments in its machinery and apparatus as have been found naturally to contribute to safety, in the same manner as other common carriers of passengers for hire."" 44 Burke v. State of New York, 04 Misc. .558. 293 JURISDICTION OF COURTS CHAPTER XII JURISDICTION OF COURTS OVER CORPORATIONS CONTINUED § 172. What Constitutes Contro- versy or Dispute Between Parties — Jurisdiction of Federal Circuit Court — Citizenship. 173. When Corporation Is and Is Not a Citizen — Pleadings. 174. Presumption as to Citizenship of Members of Corporation — President and Stock- holders. 175. Citizenship — Joint Stock Company Not a Corpora- tion for Jurisdictional Pur- poses. 176. Citizenship — Limited Part- nership Not a Corporation for Jurisdictional Purposes. 177. Citizenship — Board of Trus- tees Not a Corporation for Jurisdictional Purposes. 178. Citizenship of Corporation of Two or More States — An- cillary or Permissive Char- ters or License. 179. Same Subject — Removal of Causes. 180. Citizenship — Consolidated Corporations. 181. When Federal Court Has Jurisdiction — Corporation — Doing Business — Process — Service. 182. When Federal Court no Juris- diction — Corporation — Do- ing Business. 183. Where Plaintiffs Citizens of Different States. 294 184. Citizenship — Territory Di- vided Into Two States. 185. Jurisdiction of Circuit Court — Citizenship of (iuardian in Suit Against Corpora- tion. 186. Citizenship of State — Diverse Citizenship. 187. Jurisdiction — Where "Found" — Suit to Re- strain Enforcement Unrea- sonable Rates by Railroad Corporation. 188. Jurisdiction — Transitory Ac- tion of Trespass — Parties Residents of Other States Than That of Suit. 189. When Federal Courts no Jurisdiction of Suit by Assignee of Chose in Ac- tion — Assignment of Judg- ment. 190. Jurisdiction of Federal Courts — Suits by Assignee — In- quiry Relates to Time When Suit Is Brought. 191. Jurisdiction of Federal Courts —Suits by Assignee of Promissory Note or Chose in Action — Exception to Statutory Prohibition. 192. When Federal Courts Have Jurisdiction of Suits by Assignee. 193. When Federal Court no Juris- diction of Suit by As- signee — Contract to Convey Land. OVER CORPORATIONS CONTINUED §§ 172, 173 § 194. Motive for Bringing Suit or jn § 195. Same Subject — When Juris- Obtaining Citizenship — diction Defeated. Collusive Assignment or 196. Jurisdiction — Rearrange- Transfer or Fraud to Give ment of Parties — Diverse Jurisdiction. Citizenship. § 172. What Constitutes Controversy or Dispute Be- tween Parties — Jurisdiction of Federal Circuit Court- Citizenship. An unsatisfied, justiciable claim of some right involving the jurisdictional amount made by a citizen of one State against a citizen of another State is a controversy or dispute between the parties within the meaning of the statutes defining the jurisdiction of the Circuit Court.^ And such jurisdiction does not depend upon the denial by the defendant of the existence of the claim or of its amount or validity.^ In the exercise of the jurisdiction conferred upon it of con- troversies between citizens of different States a Circuit Court of the United States is for every practical purpose a court of the State in which it sits and will enforce the rights of parties according to the law of that State, taking care, as a State Court must, not to infringe any right secured by the Constitution and the laws of the United States. And in case of condemnation it would proceed under the sanction of and enforce the State law so far as it was not unconstitutional.* § 173. When Corporation Is and Is Not a Citizen- Pleadings. Although a corporation, being an artificial body created by legislative power, is not a citizen within several provisions of the Constitution, yet where rights of action are to be enforced by or against a corporation, it will be considered as a citizen of the State where it was created, within the clause extending the judicial power of the United States to controversies be- 1 Acts of March 3, 1875, chap. 137, § 1, 18 Stat. 470; March 3, 1887, chap. 373, § 1, 24 Stat. 552; August 13, 1888, chap. 866, § 1, 25 Stat. 433. 2 MetropoUtan Railway Receivership, In re, 208 U. S. 90, 52 L. ed. 403, 28 Sup. Ct. 219. 3 Madisonville Traction Co. v. St, Bernard Mining Co., 196 U. S. 239, 25 Sup. Ct. 251,49L. ed. 262. 295 § 173 JURISDICTION OF COURTS tween citizens of the different States. And where a corpora- tion is created by the laws of a State, it is, in suits brought in a Federal Court in that State, to be considered as a citizen of such State, whatever its status or citizenship may be else- where by the legislation of other States."^ It was held in 1861, by the Federal Supreme Court, that a corporation is not a citizen within the meaning of the Constitution of the United States and cannot maintain a suit in a court of the United States against the citizen of a different State from that by which it was chartered, unless the persons who compose the corporate body are all citizens of that State; that, in such case they may sue by their corporate name, averring the citizenship of all the members, and such a suit would be regarded as the joint suit of indi\idual persons, united together in the corpo- rate body and acting under the name conferred upon them for the more convenient transaction of business, and consequently entitled to maintain a suit in the Federal Courts against a cit- izen of another State. ^ Where there is no plea to the jurisdic- tion in a suit in equity in a Federal Court an allegation that complainant is a corporation and citizen of a certain State, and that defendants are citizens of another State, and residents of the district where the suit was brought, stands admitted as to complainant though denied in the answer and as to the de- fendants by failure to deny.^ 4 Railway Co. v. Whitton, 13 Wall. (80 U. S.) 270, 20 L. ed. 571. 5 Ohio & Mississippi Rd. Co. v. Wheeler, 1 Black. (66 U. S.) 286, 17 L. ed. 130. 6 Crown Cork & Seal Co. v. Standard Brewery (U. S. C. C), 174 Fed. 252, citing Roberts v. Lewis, 144 U. S. 653, 12 Sup. Ct. 781, 36 L. ed. 579; Butchers' & Drovers' Stock Yards Co. v. Louisville & Nashville R. Co., 67 Fed. 35, 14 C. C. A. 290, 31 U. S. App. 252. Pleadings — as to averments of citizenship, see the following cases: Mexi- can Cent. Ry. Co. v. Pinkney, 149 U. S. 194, 37 L. ed. 699, 13 Sup. Ct. 859; Gordon v. Third Nat. Bank of Chattanooga, 144 U. S. 97, 36 L. ed. 360, 12 Sup. Ct. 657; Everhart v. Huntsville College, 120 U. S. 223, 30 L. ed. 623, 7 Sup. Ct. 555; Continental Ins. Co. v. Rhodes, 119 U. S. 237, 30 L. ed..380, 7 Sup. Ct. 193; Grace v. American Central Ins. Co., 109 U. S. 278, 27 L. ed. 932, 3 Sup. Ct. 207; Covington Drawbridge Co. v. Shepherd, 20 How. (61 U. S.) 227, 15 L. ed. 896, aff'd 21 How. (62 U. S.) 112, 16 L. ed. 38; Piquig- not V. Pennsylvania Railroad Co., 16 How. (57 U. S.) 104, 14 L. ed. 863. General issue admits corporate capacity of plaintiffs to sue. Society for 296 OVER CORPORATIONS CONTINUED § 174 § 174. Presumption as to Citizenship of Members of Corporation— President and Stockholders. For the purpose of suing and being sued in the Circuit Court of the United States the members of a local corporation are conclusively presumed to be citizens of the State by whose law it was created and in which alone the corporate body has a legal existence/ There is an indisputable legal presumption that a State corporation, when sued or suing in a Circuit Court of the United States, is composed of citizens of the State which created it, and, therefore, such corporation is itself deemed to come within that provision of the Constitution of the United States which confers jurisdiction upon the Federal Courts in "controversies between citizens of different States." This presumption accompanies a railroad corporation, which has consent to extend its railroad into another State, and does business therein, and it may sue or be sued in the Federal Courts in such other State as a citizen of the State of its original creation. That presumption of citizenship is one of law, not to be defeated by allegation or evidence to the contrary.* No the Propagation of the Gospel, etc., v. Town of Pawlet, 4 Pet. (29 U. S.) 480, 7 L. ed. 927, cited in New York Dry Dock v. Hicks, 5 McLean (U. S. C. C.) Ill, 115. Averment of residence of plaintiff in State, in suit against foreign corpo- ration, as basis of order for service by publication, under New York Code Civ. Proc, § 1780, and § 438. See Auerbach v. Internationale Wolfram Lampen Aktien Gesellschaft (U. S. C. C), 173 Fed. 624. An averment in a bill that the complainants are " all of Cognac in France, and citizens of the Republic of France," is sufficient to give the Circuit Court of the United States for Nebraska jurisdiction in a controversy where the defendants are citizens of Nebraska. No averment of alienage is nec- essary. Hennessy v. Richardson Drug Co., 189 U. S. 25, 47 L. ed. 697, 23 Sup. Ct. 532. 7 Thomas v. Board of Trustees of the Ohio State University, 195 U. S. 207, 25 Sup. Ct. 24, 49 L. ed. 160. 8 St. Louis & San Francisco Ry. Co. v. James, 161 U. S. 545, 40 L. ed. 802, 16 Sup. Ct. 621, reviewing the authorities, and cited in Utah-Nevada (^o. v. De Lamar, 113 Fed. 113, 118, 66 C. C. A. 179, distinguished in Patch v. Wabash Rd. Co., 207 U. S. 277, 28 Sup. Ct. 80, 52 L. ed. 208. See Dodd v. Louisville Bridge Co. (U. S. C. C), 130 Fed. 186, 196. Where a corporation is created by the laws of a State, the legal presump- tion is, that its members are citizens of the State in which alone the corpo- rate body has a legal existence. And a suit by or against a corporation, in 297 § 175 JURISDICTION OF COURTS presumption exists, however, that a president or stockholder of a corporation is a citizen of the same State as the corpora- tion when an individual's citizenship is in question upon his right to sue in the Federal Courts. But a suit by or against a corporation in its corporate name must be presumed to be a suit by or against citizens of the State which created the corporate body, and no averment or evidence to the contrary is admissible for the purpose of withdrawing the suit from the jurisdiction of the United States. This rule of the Supreme Court was made to prevent the interminable litigation that might arise if every corporation, when suing or being sued in the courts, was compelled to show that each and every one of its members was a citizen of the State in which the corpo- ration was organized. The necessity of the rule, the object in adopting it, was to fix the status of the corporations, and determine their rights in suing or being sued. For that pur- pose the presumption is indulged in. The constant tendency of the decisions of the Supreme Court of the United States has been towards putting corporations upon the same footing as natural persons in regard to the jurisdiction of suits by or against them.^ § 175. Citizenship— Joint-Stock Company Not a Corpo- ration for Jurisdictional Purposes. An allegation that a plaintiff is a joint-stock company or- ganized under the laws of a State is not an allegation that it is its corporate name, must be presumed to be a suit by or against citizens of the State which created the corporate body; and no averment or evidence to the contrary is admissible for the purpose of withdrawing the suit from the jurisdiction of a court of the United States. Ohio & Mississippi Rd. Co. V. Wheeler, 1 Black. (66 U. S.) 286, 17 L. ed. 130. While the members of a corporation are, for purposes of suit by or against it in the courts of the United States, to be conclusively presumed to be citizens of the State creating it, the corporation itself is not a citizen within the meaning of the provision of the Constitution that the citizens of each State shall be entitled to all privileges and immunities of citizens of the several States. Blake v. McClung, 172 U. S. 239, 43 L. ed. 432, 19 Sup. Ct. 165. 8 Utah-Nevada Co. v. De Lamar, 133 Fed. 113, 118, 66 C. C. A. 179. See Dodd v. Louisville Bridge Co. (U. S. C. C), 130 Fed. 186, 196. 298 OVER CORPORATIONS CONTINUED § 176 a corporation, but, on the contrary, that it is not a corporation but a partnership. And an averment that a joint-stock com- pany is a citizen of a State different from that of the defend- ant will not give the Supreme Court jurisdiction on the ground of citizenship.^" It is pertinent, however, in this connection to state that under several State Constitutions and certain State statutes the term "corporations" includes associations and joint-stock companies.^ ^ And it is determined by the Fed- eral Supreme Court that while that court is not conclusively bound by the judgment of the highest court of a State as to what is and is not a corporation of that State within the juris- dictional rule, it will accept such judgment unless a contrary view is demanded by the most cogent reasons.^^ § 176. Citizenship— Limited Partnership Not a Corpora- tion for Jurisdictional Purposes. A limited partnership, doing business under a firm name, and organized under a State statute entitled "an act author- izing the formation of partnership associations in which the capital subscribed shall alone be responsible for the debts of the association, except under certain circumstances" is not a corporation within the rule that a suit by or against a cor- poration in a court of the United States is conclusively pre- 10 Chapman v. Barney, 129 U. S. 677, 32 L. ed. 800, 9 Sup. Ct. 426, cited in Andrews Bros. Co. v. Youngstown Coke Co., 86 Fed. 586; Gregg v. San- ford, 65 Fed. 153. Examine Liverpool Ins. Co. v. Massachusetts, 10 Wall. (77 U. S.) 566, 574, 19 L. ed. 1029, aff'g Oliver v. Liverpool & London Life & Fire Ins. Co., 100 Mass. 531, Mr. Justice Bradley dissenting. Tide Water Pipe Co., Limited, v. State Board of Assessors, 57 N. J. L. 516, 27 L. R. A. 684, 31 Atl. 221 ; Fargo v. McVicker, 55 Barb. (N. Y.) 437. " See Joyce on Franchises, § 52. See also Id., §§ 52-54, for discussion of question as to what extent the definition of a corporation includes a com- pany, association and joint-stock association or company and partnership. Examine Pubhc Service Commissions Law of New York, Laws 1907, p. 891, chap. 429, art. I, § 2; Joint-Stock Assoc. Law, N. Y. Laws 1894, chap. 235, §2. 12 Thomas v. Board of Trustees of the Ohio State University, 195 U. S. 207, 25 Sup. Ct. 24, 49 L. ed. 160. In this case, as we have stated in the text where we have considered this case it was decided by the highest State Court that a board of trustees of a State institution was not a corporation although possessing some of the attributes of a corporation. 299 §§177, 178 JURISDICTION OF COURTS sumed, for the purposes of the htigation to be one by or against citizens of the State creating the corporation. It is not sufficient that the association may be described as a quasi-corporation or as a ''new artificial person." The rule does not embrace a new artificial person that is not a corporation.^^ § 177. Citizenship — Board of Trustees Not a Corpora- tion for Jurisdictional Purposes. An averment that a Board of Trustees of a State institution was created by and exists under the laws of a State, other than that of complainant, and is a citizen of that State, with- out alleging that it is a corporation of the State, or that each individual member of the Board is a citizen of that State, and the highest court of the State has decided that the Board although possessing some of the attributes of a corporation is not a corporation of such State, is held insufficient to sustain the jurisdiction of the Circuit Court on the ground of diverse citizenship. But where a Board of Trustees of an institution can, by the legislative act creating it, sue and be sued collect- ively and is bound by the judgment, a citizen of another State can sue it as such Board collectively, without bringing in all the members thereof, in a Federal Circuit Court, provided it affirmatively appears that each member of the Board is a citizen of a State other than that of complainant.^"* § 178. Citizenship of Corporation of Two or More States — Ancillary or Permissive Charters or License. It was early decided that a corporation endued with the ca- pacities and faculties it possesses by the co-operating legislation of two States, cannot have one and the same legal being in both States. Neither State could confer on it a corporate ex- 13 Great Southern Fire Proof Hotel Co. v. Jones, 177 U. S. 449, 20 Sup. Ct. 69U, 44 L. ed. 842. See Fred Macey Co. v. Macey, 135 Fed. 727; Imperial Refining Co. v. Wyman, 38 Fed. 574, 3 L. R. A. 504. i< Thomas v. Board of Trustees of the Ohio State University, 195 U. S. 207, 25 Sup. Ct. 24, 49 L. ed. 160. See Fred Macey Co. v. Macey, 135 Fed. 727; Rees v. Olmstead, 135 Fed. 301. Compare Board of Levee Inspectors of Chicot County v. Crittenden, 94 Fed. 613, 616. 300 OVER CORPORATIONS CONTINUED § 178 istence in the otlirr, nor add to or diminish the powers to be th(>re exercised. The two corporations deriving their powers from distinct sovereignties, and exercising them within dis- tinct hmits, cannot unite as plaintiffs in a suit in a court of the United States against a citizen of either of the States which chartered them.^*^ It is competent, however, for a raih'oad corj)oration organized under the laws of one State, when au- thorized so to do by the consent of the State which created it, to accept authority from another State to extend its railroad into such State, and to receive a grant of powers to own and control, by lease or purchase, railroads therein, and to subject itself to such rules and regulations as may be prescribed by the second State; and such legislation on the part of two or more States is not, in the absence of inhibitory legislation by Congress, regarded as within the constitutional prohibition of agreements or compacts between States. Such corporations may be treated by each of the States whose legislative grants they accept as domestic corporations. But a provision in a State statute that a railroad corporation of another State which had leased or purchased a railroad in the first State and filed with its Secretary of State, as provided by the act, a cer- tified copy of its articles of incorporation, should become a corporation of the State enacting the statute, does not avail to create a corporation of such statutory State out of a foreign corporation complying with those provisions, in such a sense as to make it a citizen thereof within the meaning of the Fed- eral Constitution, and subject it to a suit in the Federal Courts sitting therein, brought by a citizen of the State of its origin.^^ So although a State statute provides that a foreign railroad company desiring to own property or carry on business, or exercise any corporate franchise within the State, must com- ply with certain specified provisions of the statute, and on complying therewith shall become a domestic corporation, 15 Ohio & Mississippi Rd. Co. v. Wheeler, 1 Black (66 U. S.), 286, 17 L. ed. 130. i« St. Louis & San Francisco Ry. Co. v. James, 161 U. S. 545, 40 L. ed 802, 16 Sup. Ct. 621. 301 § 178 JURISDICTION OF COURTS such fact does not affect the character of the original corpora- tion, and it does not thereby become a citizen of such State so far as to affect the jurisdiction of the Federal Courts upon a question of diverse citizenship. And where a corporation which has complied with such statutory provision is sued in the courts of the State enacting the statute, an order of removal made by the Federal Circuit Court operates to withdraw from the State Court the right to hear and determine the case." 17 Southern Ry. Co. v. Allison, 190 U. S. 326, 23 Sup. Ct. 713, 47 L. ed. 1078, distinguished in Patch v. Wabash Rd. Co., 207 U. S. 277, 284, 52 L. ed. 208, 28 Sup. Ct. 80, cited in Sun Printing & Publishing Ass'n v. Edwards, 194 U. S. 377, 381, 48 L. ed. 1027, 24 Sup. Ct. 696 (this case holds that an allegation in the complaint, which is admitted by answer, that defendant is a domestic corporation duly organized and existing under the laws of a designated State and having its principal office therein is a suffi- cient averment as to defendant's citizenship); St. Louis & San Francisco R. Co. V. Cross (U. S. C. C), 171 Fed. 480, 484 (that by compliance with State law a corporation " may be made what is termed a domestic corpora- tion or in form a domestic corporation, but that it does not thereby become a citizen of the State ' so far as to affect the jurisdiction of the Federal courts upon a question of diverse citizenship' "). Explained in Atlantic Coast Line R. Co. v. Dunning (U. S. C. C. A.), 166 Fed. 850, 857, cited in same case at p. 856. Cited and quoted from in Lee v. Atlantic Coast Line R. Co. (U. S. C. C), 150 Fed. 775, 795, 796, 797. Cited in Stonega Coal & Coke Co. v. Louisville & N. R. Co. (U. S. C. C), 139 Fed. 271 (in case where neither plaintiff nor defendant resided in the State or district the court was without jurisdiction and there was a de- murrer and no waiver) . Explained in Dodd v. Louisville Bridge Co. (U. S. C. C), 130 Fed. 186, 196 (as establishing that for the purposes of jurisdiction there is a con- clusive presumption that all the stockholders of a corporation are citizens of the State creating it " when a corporation, for example, of Pennsylvania, is, by its own name, instead of the names of citizens, incorporated by a law, for example, of Indiana, this would make the Pennsylvania corporation, and not the citizens who were its stockholders, a citizen of Indiana, for jurisdictional purposes, notwithstanding the rule that the stockholders of the Pennsylvania corporation were still presumed to be citizens of Pennsyl- vania. Memphis & Charleston Rd. Co. v. Alabama, 107 U. S. 581, 2 Sup. Ct. 432, 27 L. ed. 518. Priority of creation of a corporation in this connec- tion sometimes becomes important"). Cited in Goodwin v. Boston & Maine Rd. (U. S. C. C), 127 Fed. 986, 989, " It should be noticed, * * * that the older and general doctrine of a convenient rule of fiction, which, for certain jurisdictional purposes, treats a railroad system operating continuous lines through several States, under 302 OVER CORPORATIONS CONTINUED § 179 § 179. Same Subject— Removal of Causes. In St. Joseph & Grand Island Railroad Co. v. Steele/* it is decided that a railroad company, owning and operating a line running through several States, may receive and exercise powers granted by each, but does not thereby become a citizen of every State it passes through, within the meaning of the jurisdiction clause of the Constitution of the United States. In Goodlett v. Louisville & Nashville Rd. Co.,^» the company was held to be a corporation of Kentucky and not of Tennessee inasmuch as it had from the latter State only a license to con- struct a railroad within its limits, between certain points, and to exert there some of its corporate powers. In Pennsylvania Railroad Co. v. St. Louis, Alton & Terre Haute Railroad Co., 2" it is held that when an existing railroad corporation organized under the laws of one State, is authorized by the laws of an- other State to extend its road into the latter, it does not be- come a citizen of the latter State, unless the statute giving this permission must necessarily be construed as creating a new corporation of the State which grants this permission. charters independently granted under the same name in the different States, as a citizen of the several States in which it operates, has apparently been questioned or qualified, in a sense, by more recent cases, like Railroad v. Koontz, 104 U. S. 5, 26 L. ed. 643; St. Louis & San Francisco Rd. v. James, 161 U. S. 545, 16 Sup. Ct. 621, 40 L. ed. 802, and Southern Ry. Co. v. Allison, 190 U. S. 326, 23 Sup. Ct. 713, 47 L. ed. 1078. It is not necessary, however, to inquire in this case just how far such qualification results from the modern practice of taking a creative charter in one State, and ancillary or permissive charters in others, for the reason that the unmistakable trend of the au- thorities involving such situations is in the direction of treating citizenship for certain purposes as existing in the State of the corporate creation, or, in other words, in the State where the corporation was first chartered; and thus such authorities, if they bear at all upon the jurisdictional question here, sustain the view of the defendant." And the syllabus in this case reads: " The Boston & Maine Railroad, a corporation originally chartered in New Hampshire, but subsequently, by consolidation, also made a corpo- ration of both Massachusetts and Maine, is a citizen of New Hampshire, in such sense that the Circuit Court of the United States in that State is without jurisdiction of an action against it by another citizen of New Hamp- shire on the ground of diversity of citizenship." 18 167 U. S. 650, 663, 17 Sup. Ct. 925, 42 L. ed. 315. 19 122 U. S. 391, 7 Sup. Ct. 1254, 30 L. ed. 1230. 20 118 U. S. 290, 297, 30 L. ed. 83, 6 Sup. Ct. 1094. 303 § 180 JURISDICTION OF COURTS In Martin v. Baltimore & Ohio Railroad Co./^ it is held that under the act of Congress -^ authorizing an action brought in a court of a State between citizens of different States to be re- moved into the Circuit Court of the United States "by the de- fendant or defendants therein, being nonresidents of that State," a defendant corporation must be created by the laws of another State only, in order to entitle it to remove the ac- tion; and if it is such a corporation, and has not also been created a corporation by the laws of the State in which an ac- tion has been brought against it, by a citizen thereof, it may remove the action, even if it has been licensed by the laws of the State to act within its territory, and is, therefore, subject to be sued in its courts. So in that case the Baltimore & Ohio Railroad Co., was held to be a corporation of the State of Mary- land only, though licensed by the State of West Virginia to act within its territory, and Hable to be sued in its courts; and could, therefore, remove into the Federal Circuit Court for the District of West Virginia an action brought against it in a court of said State by a citizen thereof. A corporation incorpo- rated simultaneously and freely in several States exists in each State by virtue of the laws of that State, and when it incurs a liability under the laws of one of the States in which it is in- corporated and is sued therein it cannot escape the jurisdic- tion thereof and remove to the Federal Court on the ground that as it is also incorporated in the other States it is not a citizen of that State. A case of this character should be dis- tinguished from those cases wherein a corporation originally incorporated in one State is compelled to become a corporation of another State so as to exercise its powers therein.'^ § 180. Citizenship — Consolidated Corporations. It is held in numerous cases that by consolidation a new 21 151 U. S. 673, 38 L. ed. 311, 14 Sup. Ct. 533. 22 Act of March 3, 1887, chap. 373, 24 Stat, at L. 552. 23 Patch V. Wabash Rd. Co., 207 U. S. 277, 28 Sup. Ct. 80, 52 L. ed. 208, distinguishing Southern Ry. Co. v. AlHson, 190 U. S. 326, 47 L. ed. 107S, 23 Sup. Ct. 713; St Louis & San Francisco Ry. Co. v. James, 161 U. S. 545, 40 L. ed. 802, 16 Sup. Ct. 621. 304 OVER CORPORATIONS CONTINUED § 180 corporation is created and that the old consolidating companies cease their existence.^''* It is also held that a consolidation merges the franchises and privileges of each original corpora- tion in the new company so that they continue to exist in re- spect thereto, that is, the old constituent companies retain their original status towards the i)ublic and the State the same as if the consolidation had not taken place.^ But the consoli- dation of two companies does not necessarily work a dissolu- tion of both, and the creation of a new corporation. Whether such be its effect, depends upon the legislative intent mani- fested in the statute under which the consolidation takes place-^*^ It is held that a consolidated corporation is, for the purposes of jurisdiction, a citizen of either or each of the States under which it is organized." In Louisville, New Albany & Chicago Ry. Co. v. Louisville Trust Co.,^^ it is decided that the Circuit Court of the United States for the District of Kentucky has jurisdiction of a suit brought by a corporation, originally created by the State of Indiana, against citizens of Kentucky 24 Shaw V. City of Covington, 194 U. S. 593, 48 L. ed. 1131, 24 Sup. Ct. 754; Minneapolis & St. Louis Ry. Co. v. Gardner, 177 U. S. 332, 20 Sup. Ct. 656, 24 L. ed. 793; Keokuk & Western R. R. Co. v. Missouri, 152 U. S. 301, 38 L. ed. 450, 14 Sup. Ct. 592; Pullman's Palace Car Co. v. Missouri Pac. Ry. Co., 115 U. S. 587, 6 Sup. Ct. 194, 29 L. ed. 499; St. Louis, I. M. & S. Ry. Co. V. Berry, 113 U. S. 465, 5 Sup. Ct. 529, 28 L. ed. 1055; Clearwater V. Meredith, 1 Wall. (68 U. S.) 25, 17 L. ed. 604; Winn v. Wabash R. Co., 118 Fed. 55, 58; Citizens' St. Ry. Co. v. City of Memphis, 53 Fed. 715, 731, per Hammond, J.; Market St. R. Co. v. Hellman, 109 Cal. 571, 42 Pac. 225. See Rochester Ry. Co. v. City of Rochester, 205 U. S. 236, 51 L. ed. 237, 27 Sup. Ct. 469, aff'g 182 N. Y. 116. 25 Green County v. Conness, 109 U. S. 104, 27 L. ed. 872, 3 Sup. Ct. 69; Railroad Co. v. Maine, 96 U. S. 499, 24 L, ed. 836; Branch v. Charleston, 92 U. S. 677, 23 L. ed. 750; Charleston, City of, v. Branch, 15 Wall. (82 U. S.) 460, 21 L. ed. 189; Citizens' St. Ry. Co. v. City of Memphis, 53 Fed. 715, 731, per Hammond, J. See Chesapeake & Ohio R. Co. v. Virginia, 94 U. S. 718, 24 L. ed. 310; Delaware Rd. Tax, 18 Wall. (85 U. S.) 206, 21 L. ed. 888. 26 Central Railroad & Bkg. Co. v. Georgia, 92 U. S. 665, 23 L. ed. 757; Edison Electric Light Co. v. New Haven Electric Co., 35 Fed. 233, 236, per Shipman, J.; Henderson v. Central Passenger Ry. Co., 21 Fed. 358, 364, per Barr, J. 27 Baldwin v. Chicago & N. W. R. Co. (U. S. C. C), 86 Fed. 167; William- son v. Krohn (U. S. C. C. A.), 66 Fed. 655, 13 C. C. A. 668. 28 174 U. S. 552, 43 L. ed. 1081, 19 Sup. Ct. 821. 20 305 § 180 JURISDICTION OF COURTS and of Illinois, even if the plaintiff was afterwards and before the suit made a corporation of Kentucky also, and pending the suit became a corporation of both Indiana and Ilhnois by reason of consolidation with a corporation of Illinois; but that the court cannot, in such a suit, adjudicate upon the rights and liabilities, if any, of the plaintiff as a corporation of Ken- tucky, or as a corporation of Illinois. In another case, however, it is held that railroad corporations created by two or more States, though joined in their interests, in the operation of their roads, in the issue of their stock and in the division of their profits, so as practically to be a single corporation, do not lose their identity, but each has its existence and its standing in the courts of the country only by virtue of the legislation of the State by which it was created, and the union of name, of officers, of business and of property does not change their dis- tinctive character as separate corporations. In this case a railroad corporation was incorporated in New Hampshire, subsequently it was incorporated in Massachusetts under the same name with some of the same directors to form a junction with the former corporation's road. Thereafter the latter State provided for uniting the two corporations when the first named State should pass a similar enactment, which act was passed. A common stock was issued for the whole line and for forty- five years the two properties were under the management of one board of directors, but there was no other evidence that the stockholders had acted on these statutes. It was, there- fore, held that the New Hampshire corporation being a citizen of that State, was entitled to go into the Circuit Court of Mas- sachusetts and bring its bill there against a citizen of Massa- chusetts; and that its union or consolidation with another corporation of the same name, organized under the laws of Massachusetts, did not extinguish or modify its character as a citizen of New Hampshire, or give it any such additional citi- zenship in Massachusetts, as to defeat its right to go into that court .'^ 2» Nashua & Lowell Rd. Co. v. Boston & Lowell Rd. Co., 136 U. S. 356, 10 Sup. Ct. 1004, 34 L. ed. 363. 306 OVER CORPORATIONS CONTINUED § 181 § 181. When Federal Court Has Jurisdiction— Corpora- tion — Doing Business — Process — Service. A corporation created by, and transacting business in a State is to be deemed an inhabitant of the State, capable of being treated as a citizen, for all purposes of suing and being sued, and an averment of the facts of its creation and the place of transacting business is sufl&cient to give the Federal Circuit Court jurisdiction.^" "A corporation may for the purposes of suit be said to be born where by law it is created and organized, and to reside 30 Louisville, Cincinnati & Charleston Rd. Co. v. Letson, 2 How. (43 U. S.) 497, 11 L. ed. 55; Act of February 28, 1839, as to "inhabitants of or formed within the district" and absentee defendants. Jurisdiction over foreign corporation doing business or having agent or office in State — service of process, see the following cases: United States: De Castro v. Compagnie Frangaise du T616graphe (U. S. C. C), 76 Fed. 425; Gilbert v. New Zealand Ins. Co. (U. S. C. C), 49 Fed. 884, 15 L. R. A. 125, 21 Ins. L. J. 428; Van Dresser v. Oregon R. & Nav. Co. (U. S. C. C), 48 Fed. 202, 11 Ry. Corp. L. J. 58; Minford v. Old Dominion Steamship Co. (U. S. C. C), 48 Fed. 1; Land & R. Imp. Co. v. Bardon (U. S. C. C), 45 Fed. 706; Hohorst v. Hamburg-Amer. Packet Co. (U. S. C. C), 38 Fed. 273; Denton v. International Co. (U. S. C. C), 36 Fed. 1. Alabama: SulHvan v. Sullivan Timber Co., 103 Ala. 11, 25 L. R. A. 543, 15 So. 941, 47 Am. & Eng. Corp. Cas. 511. Illinois: Northwestern L. Assoc, v. Stout, 32 111. App. 31. Indiana: Rehm v. German Ins. & Sav. Inst., 125 Ind. 135, 25 N. E. 173, 44 Baltimore Underwriter, 254. Minnesota: Eichoff v. Fidehty & C. Co., 74 Minn. 130, 9 Am. & Eng. Corp. Cas. (N. S.) 379, 76 N. W. 1030. Ohio: Knox County Mut. Ins. Co. v. Bowersox, 6 Ohio C. C. 275. South Carolina: Pollock v. Carolina Interstate Bldg. & L. Assoc, 48 S. C. 65, 25 S. E. 977. Texas: American Well Works v. De Aguayo (Tex. Civ. App.). 53 S. W. 350; Shane v. Mexican International R. Co. (Tex. Civ. App.), 28 S. W. 456; Home Forum B. O. of 111. v. Jones, 20 Tex. Civ. App. 68, 48 S. W. 219; Western Union Teleg. Co. v. Clark, 14 Tex. Civ. App. 563, 38 S. W. 225. Vermont: Whitcomb v. Robbins, 69 Vt. 477, 38 Atl. 233. West Virginia: Brabham v. Phoenix Ins. Co., 41 W. Va. 139, 23 S. E. 553; Carson v. Phoenix Ins. Co., 41 W. Va. 136, 23 S. E. 552. When a national bank fixes its principal place of business, under its ar- ticles of association, at a certain city, in pursuance of the provisions of the National Banking Act [Rev. Stat., § 5134 (U. S. Comp. Stat., 1901, p. 3454)] it is to be deemed a resident of the State wherein such city is situate, within the meaning of said statute. Standard Oak Veneer Co. (U. S. Dist. Ct.), 173 Fed. 103. 307 § 181 JURISDICTION OF COURTS where, by or under the authority of its charter, its principal office is. A corporation, therefore, created by and organized under the laws of a particular State, and having its principal office there, is, under the constitution and laws, for the purpose of suing and being sued, a citizen of that State, possessing all the rights and having all the powers its charter confers." ^^ The Circuit Court of the United States, held within one State, has jurisdiction of an action brought by a citizen and resident of another State, against a foreign corporation doing business in the first State through its regularly appointed agents, upon whom the summons is there served, for a cause of action arising in a foreign country; although the statutes of the State confer no authority upon any court to issue process against a foreign corporation, at the suit of a person not residing within the State, and for a cause of action not arising therein.^' A citizen of one State can sue a corporation which has been created by, and transacts its business in, another State, the suit being brought in the latter State, although some of the members of the corporation are not citizens of the State in which the suit is brought, and even though the State itself may be a member of the corporation.^^ In order, however, for a State Court to obtain jurisdiction over a foreign corporation having neither property nor agent within a State it is essential for the corporation to be doing business in the State.^^ So an insurance company with out- 31 Railroad Co. v. Koontz, 104 U. S. 5, 12, 26 L. ed. 643, per Mr. Chief Justice Waite; case is cited in Utah-Nevada Co. v. De Lamar, 113 Fed. 117, 66 C. C. A. 179. 32 Barrow Steamship Co. v. Kane, 170 U. S. 100, 42 L. ed. 964, 18 Sup. Ct. 526. 33 Louisville, Cincinnati & Charleston Rd. Co. v. Letson, 2 How. (43 U. S.) 497, 11 L. ed. 55, reviewing and controlling Commercial & Railroad Bk. of Vicksburg v. Slocomb, 14 Pet. (39 U. S.) 60, 10 L. ed. 354; Bank of United States V. Deveaux, 5 Cranch (9 U. S.), 84, 3 L. ed. 41; Curtiss v. Strawbridge, 3 Cranch (7 U. S.), 267, 2 L. ed. 435. 34 Commercial Mutual Accident Co. v. Davis, 213 U. S. 245, 53 L. ed. 782, 29 Sup. Ct. 445, citing Peterson v. Chicago, Rock Island & Pacific Rail- way Co., 205 U. S. 364, 51 L. ed. 841, 27 Sup. Ct. 513; Lumberman's Ins. Co. V. Meyer, 197 U. S. 407, 49 L. ed. 810, 25 Sup. Ct. 483; Conley v. Math- ieson Alkali Works, 190,406, 47 L. ed. 1113, 23 Sup. Ct. 728; Connecticut 308 OVER CORPORATIONS CONTINUED § 1^2 standing policies in a State on which it collects premiums and adjusts losses was held to be doing business within that State, so as to render it hable to an action, and that service, according to the law of the State, on a doctor sent to investigate the loss and having power to adjust the same is sufficient to give the State Court jurisdiction.^^ At common law there was no method by which a State Court could obtain jurisdiction over the person of a foreign corporation to render a personal judg- ment against it.^^ And by the common law, to maintain a personal action against a corporation, there must have been service of process upon the principal officer within the juris- diction of the sovereignty creating it. The officer upon whom, in the sovereignty of its creation, service could be legally had, binding the corporation, it may be could be found in another jurisdiction, but he was not regarded as carrying with him his official functions, and service upon him there would not bind the corporation. State legislatures have, in order to obviate this inconvenience, and not infrequently injustice, enacted statutes providing a mode of service upon corporate representatives or agents within the State of the enactment." § 182. When Federal Court Has no Jurisdiction— Corpo- ration — Doing Business. Where a corporation has never maintained an office in a certain State for the transaction of business and has never had any resident agent there, or transacted any other business therein, save the soliciting of orders by mail or traveling sales- Mut. Life Ins. Co. v. Spratley, 172 U. S. 602, 43 L. ed. 569, 19 Sup. Ct. 308; Barrow Steamship Co. v. Kane, 170 U. S. 100, 42 L. ed. 964, 18 Sup. Ct. 526; Goldey V. Morning News, 156 U. S. 518, 39 L. ed. 517, 15 Sup. Ct. 559; St. Clair v. Cox, 106 U. S. 350, 27 L. ed. 222, 1 Sup. Ct. 354 35 Commercial Mut. Accident Co. v. Davis, 213 U. S. 245, 53 L. ed. 782, 29 Sup. Ct. 445. 3s Swarts v. Christie Grain & Stock Co. (U. S. C. C), 166 Fed. 338, citing St. Clair v. Cox, 106 U. S. 355, 1 Sup. Ct. 354, 27 L. ed. 222; Strain v. Chicago Portrait Co. (U. S. C. C), 126 Fed. 831. 37 Pullman Palace Car Co. v. Harrison, 122 Ala. 149, 153, 82 Am. St. Rep. 68, per Tyson, J., a case as to the jurisdiction of courts over a foreign cor- poration for a tort committed by it in another State. 309 § 183 JURISDICTION OF COtlRTS men, to be submitted for approval, such corporation is not "doing business within the State" so as to be subject to suit therein. ^^ While in a case of diverse citizenship the suit may be brought in the Circuit Court for the district of the residence of either party, there must be service within the district; and if the defendant is a nonresident corporation service can only be made upon it if it is doing business in that district in such a manner, and to such an extent, as to warrant the infer- ence that it is present there through its agent. But a railroad company which has no tracks within the district is not doing business therein in the sense that liability for service is incurred because it hires an office and employs an agent for the merely incidental business of solicitation of freight and passenger traffic.^''' By virtue of the acts of 1887 and 1888 ^^^ a corpora- tion incorporated by a State of the Union cannot be compelled to answer to a suit for infringement of a trade-mark'*^ in a district in which it is not incorporated and of which the plain- tiff is not an inhabitant although it does business and has a general agent in that district.^^ § 183. Where Plaintiffs Citizens of Different States. Where suit is brought in the district of defendant's residence by plaintiffs who are citizens of other States than that of 38 William Grace Co. v. Henry Martin Brick Mach. Mfg. Co. (U. S. C. C. A.), 174 Fed. 131, citing Green v. Chicago, Burlington & Quincy Ry. Co., 205 U. S. 530, 27 Sup. Ct. 595, 51 L. ed. 916; Conley v. Mathieson Alkali Works, 190 U. S. 406, 47 L. ed. 1113, 23 Sup. Ct. 728; Goldey v. Morning News, 156 U. S. 518, 15 Sup. Ct. 559, 39 L. ed. 517; Fitzgerald & Mallory Construction Co. v. Fitzgerald, 137 U. S. 98, 11 Sup. Ct. 36, 34 L. ed. 608; Wall V. Chesapeake & Ohio Ry. Co., 95 Fed. 398, 37 C. C. A. 129; Houston V. Filer Stowell Co. (C. C), 85 Fed. 757; Fairbank & Co. v. Cincinnati & N. O. Ry. Co., 54 Fed. 420, 423, 4 C. C. A. 403, 38 L. R. A. 271; Havens & Geddes Co. v. Diamond, 93 111. App. 557; March-Davis Cycle Mfg. Co. v. Strobridge Lithographing Co., 79 111. App. 683. 39 Green v. Chicago, Burlington & Quincy Ry. Co., 205 U. S. 530, 27 Sup. Ct. 595, 51 L. ed. 916, aff'g 147 Fed. 767. « Act of March 3, 1887, as corrected by act of August 13, 1888, chap. 866. « Under the act of March 3, 1881, chap. 138. « Keasbey & Mattison Co., In re, 160 U. S. 221, 40 L. ed. 402, 16 Sup. Ct. 273. See Westinghouse Air Brake Co. v. Great Northern Ry. Co., 88 Fed. 260; Southern Pac. Co. v. Earle, 82 Fed. 694. 310 OVER CORPORATIONS CONTINUED §§ 184, 185 defendant, the Circuit Court has jurisdiction, although plain- tiffs are not themselves citizens of the same State.'*' § 184. Citizenship— Territory Divided Into Two States. Under the act of Congress ^ for the division of the Territory of Dakota into two States, and for the admission of those and other States into the Union, and providing that the Circuit and District Courts of the United States shall be the successors of the Supreme and District Courts of each Territory, as to all cases pending at the admission of the State into the Union, "whereof the Circuit or District Courts by this act established might have had jurisdiction under the laws of the United States, had such courts existed at the time of the commence- ment of such cases," the Circuit Court of the United States for the District of South Dakota has jurisdiction, at the written request of either party, of an action brought in a District Court of that part of the Territory of Dakota which afterwards became the State of South Dakota, by a citizen of that part of the Territory, since a citizen of the State, against a citizen of another State, and pending on appeal in the Supreme Court of the Territory at the time of the admission of the State into the Union.'^ § 185. Jurisdiction of Circuit Court — Citizenship of Guardian in Suit Against Corporation. Wliere it appeared from the statutes of Texas and the decisions of the highest court of that State that a general guardian has the legal right to bring a suit in the State Courts of Texas in his own name, it follows that a citizen and resident of the Western District of Texas, who has been duly appointed by the proper court of Texas the guardian of the person and estate of a minor, whose father and mother are residents, citizens and inhabitants of another State and are not and never have been residents, citizens or inliabitants of Texas, 43 Sweeney v. Carter Oil Co., 199 U. S. 252, 26 Sup. Ct. 55, 50 L. ed. 178. « Act of February 22, 1889, chap. 180. 45 Koenigsberger v. Richmond Silver Mining Co., 158 U. S. 41, 39 L. ed. 889, 15Sup. Ct. 751. ;^ii § 186 JURISDICTION OF COURTS may bring an action in his own name in the United States Circuit Court for the Western District of Texas against a corporation of another State, as the jurisdiction of the Circuit Court is dependent on the citizensliip of the guardian and not on the citizenship of the ward.'*^ § 186. Citizenship of State — Diverse Citizenship. A State is not a citizen within the meaning of the provisions of the Constitution or acts of Congress regulating the jurisdic- tion of the Federal Courts.'*'' And in a suit against a corporation by one State, an averment that the defendant is a body politic by the law of another State, named and doing business in it, is not sufficient to give jurisdiction to the Federal Supreme Court; and that court has no original jurisdiction of a suit brought by a State against one of its own citizens.^* Under the Judiciary Acts of the United States, a suit taken between a State and a citizen or corporation of another State is not a suit between citizens of different States; and the Circuit Court of the United States has no jurisdiction of it, unless it arises under the Constitution, laws or treaties of the United States.^^ A State cannot maintain an action in equity to restrain a corporation from violating the provisions of the Antitrust Act ^^ on the ground that such violation by decreasing com- petition would depreciate the value of its public lands and enhance the cost of maintaining its public institutions, the damages resulting from such violations being remote and indirect and not such direct actual injury as is provided for in « Mexican Central Ry. Co. v. Eckman, 187 U. S. 429, 47 L. ed. 245, 23 Sup. Ct. 211. « Minnesota v. Northern Securities Co., 194 U. S. 48, 48 L. ed. 870, 24 Sup. Ct. 598. 48 Pennsylvania v. Quicksilver Co., 10 Wall. (77 U. S.) 553, 19 L. ed. 998. « Postal Tel. Cable Co. v. Alabama, 155 U. S. 482, 15 Sup. Ct. 192, 39 L. ed. 231. The Federal Circuit Courts have no jurisdiction based upon diverse citi- zenship of a suit between a State and a citizen or corporation of another State. State of Arkansas v. Kansas & T. Coal Co. (U. S. C. C), 96 Fed. 353. 60 Act of July 2, 1890, 26 Stat. 209. 312 OVER CORPORATIONS CONTINUED § 186 §7 of the act. The object of said enactment was to hmit direct proceedings in equity to prevent and restrain such violations of the said act as cause injury to the g(;neral pubHc, or to all alike, merely from the suppression of competition in trade and commerce among the several States and with foreign nations to those instituted in the name of the United States, under § 4 of the act, by district attorneys of the United States, acting under direction of the attorney-general; thus securing the enforcement of the act, so far as such direct proceedings in equity are concerned, according to some uniform plan, operative throughout the entire country .^^ But a bill in equity, filed in the name of a State, seeking to prevent by injunction a corporation organized under the laws of another State, with power to hold and acquire shares of the capital stock of any other corporation, from obtaining and exercising ownership and control of two or more competing railroad companies of the State, so as to evade and defeat its laws and pohcy forbidding the consohdation of such railroads when parallel and competing, is a controversy of which the Federal Supreme Court has jurisdiction .^^ Again, if the real controversy is between citizens of different States a Federal Court will retain jurisdiction even though the name of a State, supposed to be a necessary party, is formally used, where the ground of action is an attachment bond payable to said State as provided by statute which authorizes a suit thereon by any party injured.^^ The courts of a State may also take cognizance of a suit brought by the State, in its own courts, against citizens of other States, subject to the right of the defendant to have such suit removed to the proper Circuit Court of the United States, whenever the removal thereof is authorized by act of Congress, and subject also to the authority of the Supreme 51 Minnesota v. Northern Securities Co., 194 U. S. 48, 24 Sup. Ct. 598, 48 L. ed. 870. 52 Minnesota v. Northern Securities Co., 184 U. S. 199, 22 Sup. Ct. 308, 46 L. ed. 499. 53 State, Ranch, v. Bowles Milling Co. (U. S. C. C), 80 Fed. 161. 313 §§ 187, 188 JURISDICTION OF COURTS Court to review the final judgment of the State Court, if the case be one within its appehate jurisdiction.^'* § 187. Jurisdiction— Where " Found "—Suit to Restrain Enforcement Unreasonable Rates by Railroad Corporation. Under the act of 1875^^ a cause cognizable in the Federal Courts could be brought against a defendant in any district wherein he might be found at the time of serving process. The Interstate Commerce Act was passed when this statute was in force. The acts of 1887 and 1888,^« providing that no civil suit shall be brought before either the Circuit Court or the District Court "against any person by any original process or proceeding in any other district than that where- of he is an inliabitant," being hmited to actions of which there is concurrent jurisdiction in State Courts, do not apply to an action in which the Federal jurisdiction is exclusive, and, therefore, a suit to restrain railroad corporations from en- forcing unreasonable rates contrary to the Interstate Com- merce Act ^^ can be brought in any district in which the defend- ants can be found .^* § 188. Jurisdiction— Transitory Action of Trespass- Parties Residents of Other States Than That of Suit. It is held in a Mississippi case that in a transitory action of trespass the fact that both the plaintiff and the defendant, a foreign corporation, were and continued to be residents and citizens of another State constituted no defense; and that the 54 Plaquemines Trop. Fruit Co. v. Henderson, 170 U. S. 511, 42 L. ed. 1126, 18 Sup. Ct. 685. 85 Act of March 3, 1875, chap. 137, 18 Stat. 470, U. S. Comp. Stat., 1901, p. 508. 56 Act of March 3, 1887, chap. 373, 24 Stat. 552, U. S. Comp. Stat., 1901, p. 508; Act of August 13, 1888, chap. 866, 25 Stat. 433, U. S. Comp. Stat., 1901, p. 508. 87 Act of February 4, 1887, chap. 104, 24 Stat. 379, U. S. Comp. Stat., 1901, p. 3154. 58 So held in Northern Pac. Ry. Co. v. Pacific Coast Lumber Mfg.'s Assn. (U. S. C. C. A.), 165 Fed. 1, followed in Union Pac. Rd. Co. v. Oregon & Washington Lumber Mfg.'s Assn. (U. S. C. C. A.), 165 Fed. 13. 314 OVER CORPORATIONS CONTINUED § 189 fact that the injury was inflicted or the wrong done in another State than that of suit was also no defense. "We are aware that there is some divergence of opinion on this subject be- tween the courts of last resort in this country, and that ap- parent authority can be found for holding that a foreign corpo- ration resident in one State may not be sued in another State by a resident in the first State on a cause of action arising in the first State. But even these cases will be found to be governed by the peculiar statutes of the State declining to take jurisdiction, or that the refusal to take jurisdiction rested upon some unusual circumstance which deterred the court from entertaining the suit, or because of a supposed distinction between statutory rights and common-law rights. But in many States, and amongst them our own, the rule we first announced has been firmly established by repeated ad- judications."^^ § 189. When Federal Courts no Jurisdiction of Suit by Assignee of Chose in Action — Assignment of Judgment. In a late case in the Federal Circuit Court the cause of action arose in the following manner: A corporation of the State of New York made a promissory note to the order of a certain company, payable in four months. This note was duly in- dorsed by the payee and was afterwards transferred before maturity to a national bank of Pennsylvania. Said bank obtained judgment in the Supreme Court of New York against the maker and payee, and issued execution thereon, which 59 Pullman Palace Car Co. v. Lawrence, 74 Miss. 782, 796, 797, per Woods, C. J., citing or reviewing New Orleans, Jackson & Great Northern Rd. Co. V. Wallace, 50 Miss. 244; Chicago, St. Louis & New Orleans Rd. Co. v. Doyle, 60 Miss. 977; Ilhnois Cent. Rd. Co. v. Credup, 63 Miss. 291 ; McMaster V. Illinois Cent. Rd. Co., 65 Miss. 764, 4 So. 59; Burns v. Grand Rapids & In- diana Rd. Co., 113 Ind. 169, 15 N. E. 230; Knight v. West Jersey Rd. Co., 108 Pa. St. 250; Eingartner v. Illinois Steel Co., 94 Wis. 70, 34 L. R. A. 503. Code of 1892, of said State, § 849, provides: "Of foreign corporations. Cor- porations which exist by the laws of any other State of the Union, by the Acts of Congress, or the laws of any foreign State, may sue in this State by their corporate names, and they shall also be liable to be sued or proceeded against, by attachment or otherwise, as individual nonresident tlebtors may be sued or proceeded against," etc. 315 § 189 JURISDICTION OF COURTS writ was returned unsatisfied, but before this suit was brought the bank " duly sold, assigned, and transferred to this plaintiff all of its right, title, and interest in and to said judgment, and all of the rights and remedies to which it was or might be- come entitled under and by virtue of the laws of the State of New York, by reason of being the owner of said debt and of the subsequent proceedings taken by it for the collection of the same and by virtue of the corporation laws of the State of New York." It was also claimed that the defend- ant was a stockholder in the corporation, maker of the note, and that by virtue of such holding he was liable under the laws of New York for the full amount of the judgment. Upon these facts the defendant moved to dismiss the suit upon the ground that the plaintiff was proceeding upon a chose in action, that the title thereto was derived from an assignor, who could not have maintained the action in said Federal Court. Outside of these facts a controversy apparently existed within the jurisdiction of the Circuit Court, because of diverse citizenship of the parties. It was held under the statute making, for the purpose of jurisdiction of Federal Courts, national banks citizens of the States in which they are respectively located, and also providing that no Circuit or District Court shall have cognizance of any suit on a promissory note or chose in action brought by an assignee, unless such suit might have been prosecuted in such court if no assignment or transfer had been made, that the above assignment of a chose in action prevented the plaintiff as assignee of the bank to maintain this suit; that the judgment was a chose in action preventing tliis suit by plaintiff under the above mentioned statute.®^ 60 Sullivan v. Ayer (U. S. C. C), 174 Fed. 199. The court per McPherson, Dist. J., said: "In considering this position, it should first be observed that the original note was merged in the judgment. As was said in Olier v. Gal- lagher, 93 U. S. 206, 23 L. ed. 829: 'The note was no longer in existence as an outstanding liability. It had been merged in the judgment, and was, as a note, extinguished. Gallagher no longer claims as assignee of the note, but as the owner of a judgment in his favor against Thompson.' "In the collection of its judgment, therefore, the bank no longer pro- 316 OVER CORPORATIONS CONTINUED § HM) § 190. Jurisdiction Federal Courts— Suits by Assignee- Inquiry Relates to Time When Suit Is Brought. The inquiry as to the jurisdiction of the Circuit Court of ceeded upon the note, and upon the assignment or indorsement thereof, hut upon the judgment itself. If the bank had Ijeen thus proceeding against Ayer in this court to enforce the statutory liability (whatever that may be) created by the laws of New York, it would have been met by the ol)jection that the action could not be maintained in this forum, because the follow- ing provision of act of March 3, 1887, chap. 373, § 4, 24 Stat. 5.54 (1 U. S. Comp. Stat., 1901, p. 514), is in the way: '§ 4. All national banking asso- ciations established under the laws of the United States shall, for the pur- poses of all actions by or against them real, personal or mixed, and all suits in equity, be deemed citizens of the States in which they are respectively located; and in such cases the Circuit and District Courts shall not have jurisdiction other than such as they would have in cases between individual citizens of the same State.' "This being so, it follows, I think, that § 1 of the same statute [24 Stat. 552 (1 U. S. Comp. Stat., 1901, p. 508)] forbids the plaintiff also, as assignee of the bank, to maintain the suit in this court. The relevant language of the section is as follows: 'nor shall any Circuit or District Court have cog- nizance of any suit * * * to recover the contents of any promissory note or other chose in action in favor of any assignee * * * -unless such suit might have been prosecuted in such court to recover the said contents if no assignment or transfer had been made.' "The remaining question, therefore, is whether the present action is brought to recover the contents of a chose in action, and upon this question the decisions seem to leave no room for doubt. A judgment is a chose in action. The contents of a judgment, hke the contents of the promissory note of which Chief Justice Marshall was speaking in Sere v. Pitot, 6 ('ranch (U. S.), 335, 3 L. ed. 240, 'are the sum it shows to be due;' and this suit is brought to recover the sum due upon the judgment recovered by the bank, because that record forms the indispensable foundation of the action. If this were an action of debt upon the judgment, in which the Steel Company was pursued before some other tribunal than the Supreme Court of New York, there could, of course, be no doubt that the suit was brought to re- cover the contents of the judgment. And while it is true that the present proceeding is not directed against the Steel Company, and that the judg- ment alone would not support a recovery against the defendant Ayer, it is also true that the plaintiff is seeking to recover from him the sum due upon the judgment, and nothing else. The liabihty of the defendant depends upon the relation he bears to the Steel Company, and this, therefore, is a necessary part of the inquiry; but the object of the suit is to obtain a satis- faction of the judgment, and the enforcement of his statutory liability is merely a means to that end. When the money due upon the judgment is collected, its contents are recovered, and it is only a step in the process of recovery to invoke the defendant's liability as a stockholder. Corbin v. Black Hawk County, 105 U. S. 659, 26 L. ed. 1136; Shoecraft v. Bloxham, 317 § 191 JURISDICTION OF COURTS suits to recover the contents of choses in action relates, so far as the assignors are concerned, to the time when the suit is brought. If at that time the assignors could have brought suit in the Circuit Court, it is immaterial whether they could have done so when the assignment was made.®^ § 191. Jurisdiction of Federal Courts — Suits by Assignee of Promissory Note or Chose in Action — Exceptions to Statutory Prohibition. A Circuit Court has no jurisdiction for the recovery of the contents of promissory notes or other choses in action brought in favor of assignees or transferees except over (1) suits upon foreign bills of exchange; (2) suits that might have been prosecuted in such court to recover the said contents if no assignment or transfer had been made; (3) suits upon choses in action payable to bearer, and made by a corporation.*'^ Where the instruments sued on are payable to bearer, and are made by a corporation, they are expressly excepted by the Judiciary Act ^^ from the general rule prescribed in it that an assignee or subsequent holder of a promissory note or chose in action could not sue in a Circuit or District Court of the United States, unless his assignor or transferrer could have sued in such court .^^ The Circuit Court of the United States for the Eastern District of Louisiana has jurisdiction of a suit brought in it by a citizen of New York to recover from the city of New 124 U. S. 730, 8 Sup. Ct. 686, 31 L. ed. 574; Mexican Railroad Co. v. David- son, 157 U. S. 201, 15 Sup. Ct. 563, 39 L. ed. 672. The rule to dismiss is made absolute." As to merger in judgment, see Freeman on Judgments (4th ed.), §§ 221 ct seq. Suits by assignees under above statute, see 4 Fed. Stat. Annot., note pp. 306 et seq. 61 Emsheimer v. New Orleans, 186 U. S. 33, 46 L. ed. 1042, 22 Sup. Ct. 770. 62 New Orleans v. Quinlan, 173 U. S. 191, 43 L. ed. 664, 19 Sup. Ct. 329. Approving Newgass v. New Orleans, 33 Fed. 196. «3 Act of August 13, 1888, chap. 866. 64 Lake Co. Commrs. v. Dudley, 173 U. S. 243, 43 L. ed. 684, 19 Sup. Ct. 398. 318 OVER CORPORATIONS CONTINUED i^ I!>2 Orleans on a number of certificates, payable to bearer, made by the city, although the petition contains no averment that the suit could have been maintained by the assignors of the claims or certificates sued upon.^^ § 192. When Federal Courts Have Jurisdiction of Suits by Assignee. A suit filed in equity by the assignee of a mortgage to set aside tax deeds and a foreclosure decree is not a suit to recover the contents of a chose in action within the meaning of the act of 1875.^^ Where notes are made by a corporation payable to the order of its own treasurer, a citizen of the same State, as a matter of convenience and custom, and indorsed and delivered by him to a bona fide holder who, a citizen of a different State, furnishes the money represented by the note directly to the corporation, the treasurer is not in fact an assignee of the note within the meaning of the act of 1888," and suit may be brought by such holder in the Circuit Court of the United States having jurisdiction of the parties, not- withstanding such diversity does not exist as to the treasurer first indorsing the note.^^ In another case the maker of a promissory note signed it entirely for the benefit of the payee, who was really the party for whose use it was made. The maker and the payee were citizens of the same State. A citizen of another State discounted the note, and paid full considera- tion for it to the payee who indorsed it to him. The note not being paid at maturity, the indorsee, who had not parted with it, brought suit upon it against the maker in the Circuit Court of the United States. It was held that the court had jurisdiction, notwithstanding the provision in the act of 1888^^ that such court shall not have cognizance of a suit to recover the contents of a promissory note in favor of an assignee or 65 New Orleans v. Quinlan, 173 U. S. 191, 43 L. ed. 664, 19 Sup. Ct. 329. 66 Hobe-Peters Land Co. v. Farr (U. S. C. C), 170 Fed. 644. 67 Act of August 13, 1888, 25 Stat. 433. 68 Blair v. Chdcago, 201 U. S. 400, 26 Sup. Ct. 427, 50 L. ed. 801, rev'g 132 Fed. 848. 68 Act of August 13, 1888, 25 Stat. 433, 434, chap. 866. 319 §§ 193, 194 jumsDicTioN of courts subsequent holder, unless such suit might have been prosecuted in such court if no assignment had been made7° A bill filed by the assignee of a mortgage, and holding only an equitable title, to establish his title and interest and quiet said title and to cancel tax deeds and a judgment of foreclosure, is within the jurisdiction of a Federal Court of equity even though the tax deeds held by defendants carry the constructive or presumptive possession of the land and complainant is out of possession, where under the State law the latter could obtain the legal title in time to sue as above with any possibility of success, and as he could not maintain ejectment his only remedy was an action in equity. Such a case is an exception to the rule that a person out of possession cannot maintain a suit in equity to quiet title against a person in possession; and to the further rule that the equitable and legal titles must be joined in the complainant before beginning suit.'^ § 193. When Federal Court no Jurisdiction of Suit by Assignee —Contract to Convey Land. A Circuit Court of the United States has no jurisdiction over a suit to enforce a contract for the conveyance of land brought in the State where the land is situated, by the assignee of one party to the contract against the other party, if both parties to the contract are citizens of the same State although the assignee is a citizen of a different State.^^ § 194. Motive for Bringing Suit or in Obtaining Citizen- ship—Collusive Assignment or Transfer or Fraud To Give Jurisdiction. Where the averments of the bill are true, and there is no question as to the diversity of citizenship, or any evidence that a case was fraudulently created to give jurisdiction to the 70 Holmes v. Goldsmith, 147 U. S. 150, 37 L. ed. 118, 13 Sup. Ct. 288. 71 Hobe-Peters Land Co. v. Farr (U. S. C. C), 170 Fed. 644, citing to the exception Big Six Development Co. v. Mitchell, 138 Fed. 279, 70 C. C. A. 569, 1 L. R. A. (N. S.) 332. 72 Plant Investment Co. v. Jacksonville, T. & K. W. Ry. Co., 152 U. S. 71, 38 L. ed. 358, 14 Sup. Ct. 483. 320 OVER CORPORATIONS CONTINUED § 194 Federal Court, the case will not be regarded as collusive merely because the parties preferred to resort to the Federal Court instead of to a State Court; in the al)sence of any improper act the motive for bringing the suit is unimportant^^ Or, to state the proposition in another form, where there is a proper cause of action and diverse citizenship, jurisdiction of the Federal Courts exists, and the motive of the creditor who de- sires to litigate in that forum is immaterial, and does not affect the jurisdiction.; nor is such jurischction if it actually ex- ists, affected by the fact that a receivership was in view when judgments were entered/^ But while jurisdiction of the United States Circuit Court exists even if a complainant's motive in acquiring citizenship was to invoke that jurisdiction, the citizenship must be real, and actually with the purpose of establishing a permanent domicile/^ It is an established doctrine, adhered to in the Federal Supreme Court, that the constitutional privilege of a grantee or purchaser of property, being a citizen of one of the States, to invoke the jurisdiction of a Circuit Court of the United States for the protection of his right as against a citizen of another State, the value of the matter in dispute being sufficient for the purpose, cannot be impaired or affected merely because of the motive that induced his grantor to convey, or his vendee to sell and deliver, the property, provided such conveyance or such sale and delivery was a real transaction by which the title passed without the grantor or vendor reserving or having the right or power to compel or require a reconveyance or return to him of the property in question^^ So a bona fide and absolute transfer 73 Metropolitan Railway Receivership, In re, 20S U. S. 90, 52 L. ed. 403, 28 Sup. Ct. 219. 71 Blair v. Chicago, 201 U. S. 400, 26 Sup. Ct. 427, 50 L. ed. SOI, rcv'g 132 Fed. 848. See also South Dakota v. North Carolina, 192 U. S. 286, 24 Sup. Ct. 269, 48 L. ed. 448. 75 Miller & Lux, Incorp'd, v. East Side Canal & Irrigation Co., 211 U. S. 293, 53 L. ed. 189, 29 Sup. Ct. Ill ; Act of Congress, March 3, 1875, chap. 137, § 5, 18 Stat. 470, 472; Act of Congress, March 3, 1891, chap. 517, 26 Stat. 826. 76 Lehigh Mining & Mfg. Co. v. Kelly, 160 U. S. 327, 16 Sup. Ct. 307, 40 L. ed. 444, cited in Acord v. Western Pocahontas Corp. (U. S. C. C), 156 21 321 § 194 JURISDICTION OF COURTS of a cause of action to a citizen of another State to enable a suit to be brought does not defeat jurisdiction.^^ The fact that a domestic corporation permitted a mortgage on lands owned by it to be foreclosed, and tliat another corporation having in part the same officers and stockholders was organized in another State, which purchased such lands at the sale and also the stock of the former corporation, which was thereafter dissolved, is held not sufficient to establish a collusive transfer of the lands, for the purpose of enabling a suit in respect thereto to be brought in a Federal Court, such as deprived it of jurisdiction of such suit.^^ Again, assignments obtained by plaintiff without consideration and held practically in trust for the assignors, that is, where the proceeds, or some portion of them are to be turned back to the assignors in the event of success would constitute a collusive assignment, ^^ but where Fed. 989, 1000. See Lehigh Mining & Mfg. Co., In re, 156 U. S. 322, 15 Sup. Ct. 375, 39 L. ed. 438. Where the organization of a corporation is procured for beneficial pur- poses in subdividing lands and irrigating the same, and exercising eminent domain, and there is no evidence of any intention to reconvey the title to the land an objection that there is an organization of a corporation for the purpose of a fictitious conveyance to it will not be sustained in an action by a foreign corporation to quiet title to water rights, as there is not such col- lusion as to defeat jurisdiction. Irvine Co. v. Bond (U. S. C. C), 74 Fed. 849. When transfer by partnership to corporation is not simulated or sham so as to oust court of jurisdiction, see Slaughter v. Mallet Land & Cattle Co. (U. S. C. C. A.), 141 Fed. 282. Jurisdiction not defeated by selecting administrator to obtain requisite citizenship for jurisdiction, see Goff v. Norfolk & W. R. Co. (U. S. C. C), 36 Fed. 299. When not sufficiently clear that purpose of incorporation was solely to invoke jurisdiction and so defeat it, see Percy Summer Club v. Astle (U. S. C. C. A.), 163 Fed. 1; s. c, 166 Fed. 1020 (mem.), denying rehearing. " Cole v. Philadelphia & Easton Ry. Co. (U. S. C. C), 140 Fed. 944. 78 Syllabus to Acord v. Western Pocahontas Corp. (U. S. C. C), 156 Fed. 989. 78 Hartford Fire Ins. Co. v. Erie Rd. Co. (U. S. C. C), 172 Fed. 899, 902, citing Farmington v. Pillsbury, 114 U. S. 138, 5 Sup. Ct. 807, 29 L. ed. 114; Lehigh Mining Co. v. Kelly, 160 U. S. 327, 16 Sup. Ct. 307, 40 L. ed 444; Lake County Commissioners v. Dudley. 173 U. S. 213, 19 Sup. Ct. 398, 43 L. ed. 684; Waite v. Santa Cruz, 184 U. S. 302, 22 Sup. Ct. 327, 46 L. ed. 552. 322 OVER CORPORATIONS CONTINUl!:D § 195 the plaintiff under such circumstances obtains no <;r(?at('r rights of jurisdiction than the assignor had itself and the jurisdictional amount is exceeded, such assignment is not collusive so as to deprive a Federal Court of jurisdiction.*" § 195. Same Subject— When Jurisdiction Defeated. The facts may be such as to make a transaction a mere device to give jurisdiction to the Circuit Court, and constitute a fraud upon said court, as well as a wrong to the defendant , and prevent the jurisdiction of the court from being exercised. Thus in a Federal Supreme Court case citizens of Virginia were in possession of lands in that State, claiming title, to which also a corporation organized under the laws of Virginia had for some years laid claim. In order to transfer the corpora- tion's title and claim to a citizen of another State, thus giving the Federal Circuit Court jurisdiction over an action to recover the lands, the stockholders of the Virginia corporation organized themselves into a corporation under the laws of Pennsylvania, and the Virginia corporation then conveyed ^he lands to the Pennsylvania corporation, and the latter corporation brought action against citizens of Virginia to recover possession of the land. No consideration passed for the transfer, and at the time of suit both corporations were in existence.*^ A corpora- tion organized by citizens of one State in another State simply for the purpose of bringing suits on causes of action against citizens of the former State in the Federal Courts where juris- diction would not otherwise exist is a sham, and ^^ a suit brought by such a corporation does not really and substantially involve a dispute within the jurisdiction of the Circuit Court and should be dismissed as soon as such facts have been ascer- 8u Hartford Fire Ins. Co. v. Erie R. Co. (U. S. C. C), 172 Fed. 899, dis- tinguishing Lake County Commissioners v. Dudley, 173 U. S. 243, 19 Sup. Ct. 398, 43 L. ed. 684, in that it did not appear therein that Dudley had procured enough coupons from any one of the nonresident assignors to bring the case as to him up to the jurisdictional amount. 81 Lehigh Mining & Mfg. Co. v. Kelly, 160 U. S. 327, 16 Sup. Ct. 307, 40 L. ed. 444. See Lehigh Mining & Mfg. Co., In re,. 156 U. S. 322, 39 L. ed. 438, 15 Sup. Ct. 375. 82 Under § 5 of the act of March 3, 1875, chap. 137, 18 Stat. 470. 323 § 196 JURISDICTION OF COURTS tained.*' Assignment of stock and bonds of little value to a stenographer in the office of a corporation's attorney to enable him to sign a bill in the Federal Court for the appointment of a receiver constitutes a fraud on the court's jurisdiction and defeats the suit.*^ So where the complainant corporation was organized for the sole purpose of invoking the jurisdiction of the Federal Circuit Court, and any decree in its favor would be really under the control and for the benefit of another corporation of the same State as defendant, the suit should be dismissed as one so organized for the purpose of creating a case cognizable in the Circuit Court.^ And where from the evidence of the plaintiff below, it is clear that he does not own any of the coupons sued on, and that his name is being used with his own consent, to give jurisdiction to the Circuit Court to render judgment for persons who could not have invoked the jurisdiction of a Federal Court, the trial court, on its own motion, should have dismissed the case, without considering the merits.^ § 196. Jurisdiction — Rearrangement of Parties — Diverse Citizenship. An arrangement of parties which is merely a contrivance between friends to found jurisdiction on diverse citizenship in the Circuit Court will not avail, and when it is obvious that 83 Southern Realty Investment Co. v. Walker, 211 U. S. 603, 53 L. ed. 346, 29 Sup. Ct. 211. 84 Kreider v. Cole (U. S. C. C. A.), 149 Fed. 647. 85 Miller & Lux, Incorp'd, v. East Side Canal & Irrigation Co., 211 U. S. 293, 53 L. ed. 189, 29 Sup. Ct. Ill, citing Steigleder v. McQuesten, 198 U. S. 141, 143, 49 L. ed. 986, 25 Sup. Ct. 616; Waite v. Santa Cruz, 184 U. S. 302, 325, 22 Sup. Ct. 327, 46 L. ed. 552; Lehigh Mining & Mfg. Co. v. Kelly, 160 U. S. 327, 40 L. ed. 444, 16 Sup. Ct. 307, which is cited in Lake County Commissioners v. Dudley, 173 U. S. 243, 251, 43 L. ed. 684, 19 Sup. Ct. 398; Turnbull v. Ross, 141 Fed. 649, 652; Scott v. Mineral Development Co., 130 Fed. 497, 499; Board of Commissioners of Lake County v. Schrad- skey, 97 Fed. 1,2; Alabama Great Southern Rd. Co. v. Carroll, 84 Fed. 772, 780; Ashley v. Board of Supervisors, 83 Fed. 534, 537; Jackson v. Fidehty & Casualty Co., 75 Fed. 359, 370. 86 Lake Co. Commrs. v. Dudley, 173 U. S. 243, 43 L. ed. 684, 19 Sup. Ct. 398. 324 OVER CORPORATIONS CONTINUED § 196 a party who is really on complainant's side has been made a defendant for jurisdictional reasons, and for the purpose of reopening in the United States courts a controversy already decided in the State courts, the Court will look beyond the plead- ings and arrange the parties according to their actual sides in the dispute.^'' 87 Dawson, City of, v. Columbia Ave. Sav. Fund, S. D. T. & T. Co., 197 U. S. 178, 25 Sup. Ct. 420, 49 L. ed. 713. 32.^ JURISDICTION OF COURTS CHAPTER XIII JURISDICTION OF COURTS OVER CORPORATIONS CONTINUED 197. Nature of Jurisdiction of Na- tional Courts — Extent of Resort to Common Law. 198. Federal Jurisdiction — Effect of State Statutes — Rights and Remedies. 199. Power of State to Limit Juris- diction of Its Courts — Power to Administer Com- mon Law. 200. Jurisdiction — Consent of Parties. 201. Jurisdiction — Appearance — Consent — Waiver. 202 Waiver of Jurisdictional De- fect as to Particular Dis- trict. 203. Subsequent Change in Condi- tions After Jurisdiction of Circuit Court Has Attached. 204. Where Case Goes More Than Once to Highest State Court — Final Judgment — Writ of Error. 205. Jurisdiction of Federal Cir- cuit Courts Under Judiciary Act of 1888— Removal of Suits. 206. Removal of Suits— What Rec- ord Must Show. 207. No Cause Removable Unless It Is One of Which Circuit Courts Given Original Ju- risdiction. 208. Federal Question or Right — When Court Has Jurisdic- tion — Instances. 209. Federal Question or Right — When Court no Jurisdiction — Instances. 32() 210. Presentment of Federal Ques- tion — Record. 211. Removal of Suits — Corpora- tion Created by Congress — Constitution and Laws of United States — Separable Controversy. 212. Removal of Suits — Corpora- tions Created by Congress — National Banks. 213. Removal of Suits — Separal^le Controversy — Joint Action. 214. Removal of Suits — Separable Controversy — Joint Action — Torts — Diversity of Citi- zenship. 215. Removal of Suits — Separable Controversy — Joint Action — Fraudulent Joinder. 216. Removal of Suits — Separable Controversy — Joint Action — What Record Must Show. 217. Denial of Petition for Re- moval — Petitioners' Right to Elect Remedy. 218. Removal of Suit Denied in State Court — Filing Answer and Record — Asserting Af- firmative Remedy and De- nial of Jurisdiction. 219. Federal Circuit Court May Determine Removability of Cause and Protect Such Jurisdiction — Injunction. 220. Effect LTpon Jurisdiction of State Court of Removal of Cause. 221. Jurisdiction of Federal Su- preme Court After Removal Ordered by Circuit Court, OVER CORPORATIONS CONTINUED §§ 197, 198 § 197. Nature of Jurisdiction of National Courts— Extent of Resort to Common Law. While the jurisdiction of the national courts is limited they are not inferior courts, and their judgments present every attribute of finality and estoppel which appertain to those of general jurisdiction.^ The common law cannot be resorted to for aid in giving jurisdiction to the Federal Courts, but only in decid- ing certain questions after jurisdiction is otherwise obtained.^ § 198. Federal Jurisdiction— Effect of State Statutes- Rights and Remedies. A State cannot by any statutory provisions withdraw a suit in which there is a controversy between citizens of different States, from the cognizance of the Federal Courts.^ The equity jurisdiction of the Federal Courts is not subject to Umitations or restraints by State legislation giving jurisdiction to State Courts over similar matters."* Where an insurance company, citizen of one State, has voluntarily accepted a license from another State, and has been sued in a court of that State, the fact that the license is subject to be revoked if the company should remove the action to the Federal Courts, furnishes no ground for appealing to a Federal Court to take jurisdiction of a suit in equity to cancel the poHcy if otherwise the court would have no jurisdiction.^ But a foreign corporation may be precluded from enforcing 1 First National Bk. of Belle Fourche, In re (U. S. C. C. A.), 152 Fed. 64. Limited and special jurisdiction of Federal Supreme Court, see Rhode Island V. Massachusetts, 12 Pet. (37 U. S.), 657, 9 L. ed. 1233. 2 United States v. New Bedford Bridge, 1 Woodb. & Min. (U. S. C. C, 1846), 401 Fed. Cas. No. 15,867. Indictment; obstructing navigable waters by bridge; necessity of further legislation in Congress to punish crimes; non jurisdiction in Federal Courts over crimes unless some part of Consti- tution or a treaty or some law of Congress makes it a crime. 3 Madisonville Traction Co. v. Saint Bernard Min. Co., 196 U. S. 239, 49 L. ed. 262, 25 Sup. Ct. 251. See South Dakota Cent. Ry. Co. v. Chicago, M. & St. P. Ry. Co., 141 Fed. 582. 4 Waterman v. Canal-Louisiana Bank & Trust Co., 215 U. S. 33, 30 Sup. Ct. , 54 L. ed. ; National Surety Co. v. State Bank, 120 Fed. 5!)3. 5 Cable V. United States Life Ins. Co., 191 U. S. 288, 48 L. ed. 1S8, 24 Sup. Ct. 74. 327 § 198 JURISDICTION OF COURTS by action in a State or Federal Court a contract made in the State where its statute forbids it to do business therein until it has filed a declaration, appointed an agent upon whom the service of process may be made and prohibiting suing in the courts until it has done so.^ A State also has the power to prevent a foreign corporation from doing business at all within its borders unless such prohibition is so conditioned as to violate the Federal Constitution, and a State statute which, without requiring a foreign insurance company to enter into any agreement not to remove into the Federal Courts cases commenced against it in the State Court, provides that if the company does so remove such a case its Hcense to do business within the State shall thereupon be revoked is unconstitu- tional 7 Statutes and decisions of the courts of last resort of the several States defining what may or may not constitute a cloud on title, what may or may not constitute title itself or claim or color of title, and what may by possession ripen into good title, although void in initio, are parts of the substantive law of such States, affecting real estate therein, and are of controlling influence in Federal Courts held within such States, under well-settled authority.* But rights and remedies in equity in the Federal Courts may, however, so it is held, be enlarged since a party by going into such courts may avail himself of, and does not lose any right or proper remedy which he might have had in the State Courts in the same locaUty; that is, statutory rights of such party available in the State Courts may be enforced in the Federal Courts in accordance with the nature of the right or remedy whether it be at law, in equity or admiralty.^ 6 La Moine Lumber & Traction Co. v. Kesteson (U. S. C. C), 171 Fed. 9S0. 7 Security Mutual Life Ins. Co. v. Prewitt, Ins. Comm., 202 U. S. 246, 50 L. ed. 1013, 26 Sup. Ct. 619, following Doyle v. Continental Ins. Co., 94 U. S. 535, 24 L. ed. 148, and held not to be overruled by Barron v. Burnside, 121 U. S. 186, 7 Sup. Ct. 931, 30 L. ed. 915, or any other decision of the Supreme Court. 8 Acord V. Western Pocahontas Corporation (U. S. C. C), 156 Fed. 989, 998, per Dayton, Dist. J. 8 National Surety Co. v. State Bank, 120 Fed. 593; see Davis v. Gray, 16 Wall. (U. S.) 203, 221, 21 L. ed. 447. 328 OVER CORPORATIONS CONTINUED § 199 § 199. Power of State to Limit Jurisdiction of Its Courts — Power to Administer Common Law. The State Court determines the extent and limitations of powers conferred on its corporations. ^" Subject to the restric- tions of the Federal Constitution the State may determine the limits of the jurisdiction of its courts and the character of the controversies which shall be heard in them. The State's own policy determines the extent to which it will entertain in its courts transitory actions where the causes of action have arisen in other jurisdictions. But any policy adopted by a State must operate in the same way on its own citizens and those of other States; privileges afforded to one class must also be extended to the other. If a State discriminates as to the right to sue in favor of its own citizens against citizens of other States such act conflicts with the provisions of the State legislature cannot change or modify maritime law. Butler v. Bos- ton & S. Steamship Co., 130 U. S. 527, 32 L. ed. 1017, 9 Sup. Ct. 612, G Rd. 6 Corp. L. J. 124, 39 Alb. L. J. 488. See the S. A. McCauIIey (U. S. D. C), 99 Fed. 302. Exclusive jurisdiction of Federal Courts where a maritime lien exists by reason of maritime law, cannot be ousted by State statute declaring a lien in such cases. Scatcherd Lumber Co. v. Pike, 113 Ala. 555, 21 So. 136. See further as to effect of State laws upon Federal jurisdiction the follow- ing cases: Taylor v. Illinois Cent. R. Co. (U. S. C. C), 89 Fed. 119 (foreign corporation's compliance with State laws as to incorporation; conditions precedent to doing business; diverse citizenship; Federal Courts not de- prived of jurisdiction) ; Taylor v. Louisville & Nashville R. Co. (U. S. C. C. A.), 88 Fed. 350, 31 C. C. A. 537, 60 U. S. App. 166 (Federal Courts not governed by State statute proliibiting injunction to restrain collection of illegal tax); Eastern Building & L. Assn. v. Bedford (U. S. C. C), 88 Fed. 7 (noncomphance by corporation with State statute as to fihng charter; when Federal Court may enforce contract to repay loan even though State Court might refuse to do so); Duncan v. Atchison, Topeka & Santa Fe Rd. Co. (U. S. C. C. A.), 72 Fed. 808, 19 C. C. A. 202, 44 U. S. App. 427 (jurisdiction of Federal Circuit Court of Appeals by writs of error on bills of exceptions is based upon and controlled by acts of Congress and practice and rules of Federal Courts regardless of State statutes or practice of State Courts); Barling v. Bank of British North America (U. S. C. C. A.), 50 Fed. 260, 7 U. S. App. 194 (conditions as to compliance by banking corporations with State statute, as prerequisites to suing in State Courts not binding on Federal Courts); Bank of British North America v. Barling (U. S. C. C), 44 Fed. 641, 33 Am. & Eng. Corp. Cas. 53 (same point as last preceding case). 10 Buiea College v. Kentucky, 211 U. S. 45, 53 L. ed. 81, 29 Sup. Ct. 33. 329 § 200 JURISDICTION OF COURTS Federal Constitution." So consistently with the Constitution of the United States ^^ a State may deny jurisdiction to the courts of the State over suits by a corporation of another State against a corporation of another State on a foreign judgment." And a State statute providing that no action can be main- tained in the courts of the State for wrongful death occurring in another State except where deceased was a citizen of the State enacting said statute, the restriction operating equally upon representatives of the deceased whether they are citizens of such State or of other States, does not violate the privilege and immunity provision of the Federal Constitution.^"* The highest court of a State may administer the common law according to its own understanding and interpretation thereof, being only amenable to review in the Federal Supreme Court where some immunity or privilege created by the Federal power has been asserted and denied .^^ § 200. Jurisdiction — Consent of Parties. Consent of parties can never confer jurisdiction upon a Federal Court.^^ And the consent of a State to be sued in its own courts by a creditor does not give that creditor a right to sue in a Federal Court." Where the State prescribes condi- tions under which a court may act litigants cannot dispense " Chambers v. Baltimore & Ohio Rd. Co., 207 U. S. 142, 52 L. ed. 143, 28 Sup. Ct. 34, aff'g 73 Ohio St. 1, cited in General Oil Co. v. Crane, 209 U. S. 211, 224. See St. Louis & Iron Mountain Ry. Co. v. Taylor, 210 U. S. 281, 52 L. ed. 1061, 28 Sup. Ct. 616. 12 Art. IV, § 1. 13 Anglo-American Provision Co. v. Davis Provision Co., No. 1, 191 U. S. 373, 48 L. ed. 225, 24 Sup. Ct. 92. H Chambers v. Baltimore & Ohio Rd. Co., 207 U. S. 142, 52 L. ed. 143, 28 Sup. Ct. 34, aff'g 73 Ohio St. 1. 15 Pennsylvania R. R. Co. v. Hughes, 191 U. S. 477, 24 Sup. Ct. 132, 48 L. ed. 208, aff'g 202 Pa. 222, 51 Atl. 990. 18 Thomas v. Board of Trustees of the Ohio State University, 195 U. S. 207, 25 Sup. Ct. 24, 49 L. ed. 160; Minnesota v. Northern Securities Co., 194 U. S. 48, 24 Sup. Ct. 598, 48 L. ed. 870; Olds Wagon Works v. Benedict* (U. S. C. C. A.), 67 Fed. 1. See next following section, herein. 17 Murray v. Wilson Distillery Co., 213 U. S. 151, 53 L. ed. 458, 29 Sup. Ct. 458, rev'g 161 Fed. 152, citing Chandler v. Dix, 194 U. S. 590, 48 L. ed. 1129, 24 Sup. Ct. 766. 330 OVER CORPORATIONS CONTINUED § 201 with such conditions, for in such case the particular condition or status of the defendant is made a jurisdictional fact.^* A court cannot acquire jurisdiction by consent where the law conferring and limiting the court's jurisdiction does not confer it. And a complainant may be dismissed at the close of a trial for want of jurisdiction, even though the defendant corpora- tion appears generally and answers and does not object to the want of jurisdiction.^^ § 201. Jurisdiction — Appearance — Consent — Waiver. While a general appearance in the Circuit Court after re- moval may amount to a waiver of objection to the jurisdiction if some Circuit Court has jurisdiction of the cause, neither appearance nor consent can confer jurisdiction where no Circuit Court has jurisdiction of the controversy .^^ When a defendant 18 Davidsburgh v. Knickerbocker Life Ins. Co., 90 N. Y. 526 (appeal from judgment of General Term of the City Court of Brooklyn), citing Risley v. PhcEnix Bank, 83 N. Y. 318, 337, 38 Am. St. Rep. 421; Wheelock v. Lee, 74 N. Y. 495; Hoag v. Lamont, 60 N. Y. 96. 19 Davidsburgh v. Knickerbocker Life Ins. Co., 90 N. Y. 526, cited in Skinner v. Jordan, 91 N. Y. Supp. 323, 46 Misc. 93 (to point that question of jurisdiction can be raised at any time) ; Tyroler v. Gummersback, 59 N. Y. Supp. 319, 321, 28 Misc. 161; Colebrook, In re, 55 N. Y. Supp. 861, 863, 26 Misc. 142 (to point that voluntary appearance of one not an inhabitant does not give jurisdiction) ; Smith v. Crocker, 43 N. Y. Supp. 427, 430, 14 App. Div. 250, 4 Ann. Cas. 81; Gundlin v. Hamburg-American Packet Co., 28 N. Y. Supp. 572, 575, 8 Misc. 291, 296, 31 Abb. N. C. 437. It was also held in the principal case that a statute conferring jurisdiction upon a City Court in cases where any of the defendants shall reside or be personally served with summons within said city applied to natural persons and not to corporations. 2« Winn, In re, 213 U. S. 458, 53 L. ed. 873, 29 Sup. Ct. 515. A case of an application for a writ of mandamus to a District Judge acting as Circuit Judge. The petition was for a rule to show cause why mandamus should not issue commanding the judge to remand the case to the State Court. The petitioner, an assignee of the right of action of a shipper, brought in a State Court an action at law against an express company for the transpor- tation of a boar whereby the animal was killed; citizenship of the plaintiff or his assignor was not alleged, but that of defendant was alleged as of an- other State. The court, per Mr. Justice Moody, said upon the point in the text: "A subordinate question must receive some attention. It is said that the petitioner in this case appeared generally in the Circuit Court after the removal of the case, and thereby waived his right to object to the jurisdic- 331 § 201 JURISDICTION OF COURTS makes no appearance in the State Court or in the Circuit Court except for the purpose of raising the question of jurisdiction and removing the case to the Federal Court, such proceedings do not amount to a general appearance. '^ Nonresident de- tion, and In re Moore, 209 U. S. 490, 52 L. ed. 904, 28 Sup. Ct. 706, is cited in support of the position. But that case simply held that where there was a diversity of citizenship, which gave jurisdiction to some Circuit Court, the objection that there was no jurisdiction in a particular district might be waived by appearing and pleading to the merits, and anything to the con- trary said in Ex parte Wisner, 203 U. S. 449, 51 L. ed. 264, 27 Sup. Ct. 150, was overruled, though the Wisner case was otherwise left untouched. See Western Loan & Sav. Co. v. Butte & Boston Mining Co., 210 U. S. 368, 369, 52 L. ed. 1101, 28 Sup. Ct. 720. Here, however, is a case where, upon its face, no Circuit Court of the United States had jurisdiction of the contro- versy, originally or by removal. In such a case the consent of the parties cannot confer jurisdiction. Louisville & Nashville R. R. v. Motley, 211 U. S. 149, 53 L. ed. 126, 29 Sup. Ct. 42, and cases cited." 21 Commercial Mutual Accident Co. v. Davis, 213 U. S. 245, 53 L. ed. 782, 29 Sup. Ct. 445. As to effect of appearance, see the following cases: United States: Davidson Marble Co. v. Gibson, 213 U. S. 10, 53 L. ed. 675, 29 Sup. Ct. 324 (holding that a defendant, having a statutory right to ap- pear specially and object to the jurisdiction and the right to appeal to the Federal Supreme Court if the objection be overruled, cannot be compelled by a rule of court to waive the objection and appear generally; and that Rule 22 of the Circuit Court of the United States for the Ninth Circuit re- quiring a general appearance if the Circuit Court overrule such objection is inconsistent with § 918, Rev. Stat., and therefore invalid, as the jurisdiction of the Circuit Court is fixed by statute and a rule of court inconsistent with the statute is invahd) ; Gunter v. Atlantic Coast Line Rd. Co., 200 U. S. 273, 50 L. ed. 477, 26 Sup. Ct. 252 (suit against State officers to enjoin enforcing a tax; when appearance by attorney-general amounts to waiver by State of immunity from suit); Wabash Western Ry. Co. v. Brow, 164 U. S. 271, 41 L. ed. 431, 17 Sup. Ct. 126; s. c, 65 Fed. 941, 13 C. C. A. 222 (want of jurisdiction; when petition for removal not considered like a general appear- ance as a waiver of objection to jurisdiction) ; Interior Construction & Imp. Co. V. Gibney, 160 U. S. 217, 16 Sup. Ct. 272, 40 L. ed. 401 (jurisdiction of Circuit Court waiver by general appearance) ; Goldey v. Morning News, 156 U. S. 518, 39 L. ed. 517, 15 Sup. Ct. 559 (petition for removal; foreign cor- poration; special appearance; nonwaiver of objection to jurisdiction); Gal- veston, H. & S. Ry. Co. v. Gonzales, 151 U. S. 496, 38 L. ed. 248, 14 Sup. Ct. 401 (special appearance; nonresidence; when State statute making an ap- pearance a waiver not appHcable to actions in United States Circuit Court under Rev. Stat., § 914); Central Trust Co. v. McGeorge, 151 U. S. 129, 14 Sup. Ct. 286, 38 L. ed. 98 (voluntary submission of corporation to jurisdic- tion of United States Circuit Court; stockholders and creditors bound by); Mexican Central Ry. Co. v. Pinkney, 149 U. S. 194, 13 Sup. Ct. 859, 37 L. 332 OVER CORPORATIONS CONTINUED § 201 fendants appearing in the Circuit Court under protest for tlio sole purpose of denying jurisdiction do not waive the condi- tion under the statute of 1875 ^^ that any judgment of the court shall affect only property within the district. ^^ ed. 699 (State statute making special appearance to challenge jurisdiction a general appearance so as to confer jurisdiction over the person not binding upon Federal Courts under Rev. Stat., § 914) ; Texas & Pacific Ry. Co. v. Cox, 145 U. S. 593, 12 Sup. Ct. 905, 36 L. ed. 829 (receiver's right to be sued in certain district is personal privilege which he may waive by appearing and answering) ; Henderson v. Carbondale Coal & Coke Co., 140 U. S. 25, 35 L. ed. 332, 11 Sup. Ct. 691 (when a party who is ordered to appear in a pending suit in equity voluntarily appears, without service of process, and answers, setting up his claims, it is too late for him to object that there was error in the order) ; Fitzgerald & M. Const. Co. v. Fitzgerald, 137 U. S. 98, 11 Sup. Ct. 36, 34 L. ed. 608, 9 Ry. & Corp. L. J. 55 (voluntary appearance by nonresident without service upon him and pleading to merits makes him subject to a judgment against him); Clark v. Barnard, 108 U. S. 436, 27 L. ed. 780, 2 Sup. Ct. 878 (railroad corporations; when voluntary appeal - ance by State confers jurisdiction); Commercial & Railroad Bank v. Slo- comb, 14 Pet. (39 U. S.) 60, 10 L. ed. 354 (corporations; appearance by attorney is proper) ; Mecke v. Valley Town Mineral Co. (U. S. C. C.) , 89 Fed . •114 (petition for removal to Federal Court not a general appearance); Noonan v. Delaware, L. & W. R. Co. (U. S. C. C), 68 Fed. 1 (objection that action brought in wrong district waived by general appearance and demand for service of papers); Garner v. Second National Bk. (U. S. C. C), 66 Fed. 369 (appearance in State Court for removal proceedings to Federal Court not a general appearance so as to preclude objection to jurisdiction) ; Balti- more & Ohio Rd. Co. V. Ford (U. S. C. C), 35 Fed. 170 (when appearance in State Court to make motions, after filing petition and bond for removal to United States Circuit Court does not give State Court jurisdiction). Arkansas: Arkansas Coal, G. F. C. & Mfg. Co. v. Haley, 62 Ark. 144, 34 S. W. 545 (prosecution by corporation of appeal from order denying motion to quash service of summons gives jurisdiction). Illinois: Elting v. First National Bk., 173 111. 368, 50 N. E 1095, aff'g 68 111. App. 204 (no jurisdiction given; entry of appearance by attorney). Kansas: Salina National Bk. v. Prescott, 60 Kan. 400, 57 Pac. 121, 15 Am. & Eng. Corp. Cas. (N. S.) 696, rev'g 53 Pac. 769 (when papers in cause constitute voluntary appearance). North Dakota: William Decring & Co. v. Venne, 7 N. Dak. 576, 75 N. W. 926 (when appearance by counsel constitutes a voluntary appearance and a waiver of defects in the summons or its service). South Carolina: Chafee v. Postal Teleg. Cable Co., 35 S. C. 372, 14 S. E. 764 (jurisdiction of person of foreign corporation given by general appear- ance). 22 Under § 8, of act of March 3, 1875, 18 Stat. 470. 23 Citizens' Savings & Trust Co. v. Illinois Central Rd. Co., 205 U. S. 46, 51 L. ed. 703, 27 Sup. Ct. 425. oo §§ 202, 203 JURISDICTION OF COURTS §202. Waiver of Jurisdictional Defect as to Particular District. Where at the time of removal to the Federal Court neither of the parties was a resident nor citizen of the district, that defect although being jurisdictional, being only as to the particular district, can be waived; and is waived if the parties make up the issues on the merits without objecting to the jurisdiction.^^ § 203. Subsequent Change in Conditions After Jurisdic- tion of Circuit Court Has Attached. The general rule is that when the jurisdiction of a Circuit Court of the United States has once attached it will not be ousted by subsequent change in the conditions.^^ 24 Kreigh v. Westinghouse, Church, Kerr & Co., 214 U. S. 249, 53 L. ed. 984, 29 Sup. Ct. 619, rev'g 152 Fed. 120, "This case is here upon a writ of certiorari to the United States Circuit Court of Appeals for the Eighth Cir- cuit. The action was originally brought to recover for injuries received by. Eugene C. Kreigh, petitioner, hereinafter called the plaintiff, while engaged in the employ of the respondent, Westinghouse, Church, Kerr & Company, hereinafter called the defendant, superintending the construction of the brickwork in the erection of a brick and steel building for which the de- fendant was the contractor. " The case was originally commenced in the District Court of Wyandotte County, Kansas. On the application of the defendant it was removed to the United States Circuit Court for the District of Kansas. In the petition for the allowance of the writ of certiorari a question was made as to the jurisdiction of the Federal Court, as it appears that at the time of the re- moval neither party was a resident nor citizen of the Federal district to which the case was removed, and neither of them a resident nor citizen of the State of Kansas. But it appears that no motion was made to remand for want of jurisdiction in the Federal Court, and no question as to the juris- diction was made until the case came here. In that state of the record the defect as to the jurisdiction being simply as to the district to which the suit was removed, the parties being citizens of different States, the objection as to the jurisdiction might be, and, in our opinion, was waived by making up the issues on the merits without objection as to the jurisdiction of the court. It is unnecessary to enlarge upon this feature of the case, as it is controlled by the recent cases of In re Moore, 209 U. S. 490, 52 L. ed. 904, 28 Sup. Ct. ■ — ; Western Loan & Savings Co. v. Butte Mining Co., 210 U. S. 368, 28 Sup. Ct. 706, 52 L. ed. 1101," per Mr. Justice Day. ssKirby v. American Soda Fountain Co., 194 U. S. 141, 48 L. ed. 911, 24 Sup. Ct. 619. See Lebenskeger v. Schofield, 139 Fed. 384. 334 OVER CORPORATIONS CONTINUED § 204 § 204. Where Case Goes More Than Once to Highest State Court— Final Judgment— Writ of Error. If a case goes more than once to the highest court of a State, the last judgment is the final one. Thus where the highest court of a State reverses an order of an inferior State Court removing a cause and remands the case to the State Court for trial, and after trial and verdict for plaintiff, the judgment is sustained by the highest court, the last judgment is the only final one to which the writ of error will run from the United States Supreme Court; the defendant cannot prosecute a writ of error to the judgment remanding the cause/^ 26 Chesapeake & Ohio Ry. Co. v. McCabe, 213 U. S. 207, 53 L. ed. 765, 29 Sup. Ct. 430 (Mr. Justice McKenna, dissenting), citing Schlosser v. Hemphill, 198 U. S. 173, 49 L. ed. 1000, 25 Sup. Ct. 654. In the principal case an action was brought by the defendant in error in a County Circuit Court of Kentucky against the Chesapeake & Ohio Ry. Co., a Virginia cor- poration, and the Maysville & Big Sandy Rd. Co. of Kentucky to recover damages for death caused by neghgence, as alleged, of the Chesapeake & Ohio Ry. Co., in operating one of its trains over a railroad track, which had been leased to it by the other company. Thereafter the Chesapeake & Ohio Ry. Co. filed a petition for removal to the United States Circuit Court for the Eastern District of Kentucky. The petition was granted and the record was directed to be made up for transmission to said Federal Circuit Court. The plaintiff in the case excepted to the order and subsequently made a motion to set it aside, which was denied. An appeal from the order to the Court of Appeals was immediately granted and that court reversed the order and remanded the case for trial, 112 Ky. 186. The trial was had and the jury instructed by the court to find in favor of the defendant. This judgment was reversed by the Court of Appeals. 28 Ky. Law Rep. 636. Another trial was had resulting in a verdict for plaintiff in the sum of $2,500. The judgment was sustained by the Court of Appeals, 30 Ky. Law Rep. 1009. To this judgment the writ of error in this case was taken. Instead of taking the case to the Federal Supreme Court the plaintiff proceeded in the State Court, and that court denied effect to the P'ederal judgment. Writs of error to State Courts under § 709 of Revised Statutes of United States as amended: "A final judgment or decree in any suit in the highest court of a State in which a decision in the suit could be had, where is drawn in question the validity of a treaty or statute of, or an authority exercised under any State, on the ground of their being repugnant to the Constitution, treaties or laws of the United States, and the decision is in favor of their validity; or where any title, right, privilege or immunity is claimed under the Constitution, or any treaty or statute of, or commission held or authority exercised under, the United States, and the decision is against the title, right, privilege or 335 § 205 JURISDICTION OF COURTS A -citizen of Alabama brought suit in an Alabama State Court against a citizen of Maryland and a citizen of Alabama, whereupon the Circuit Court for the Northern District of Alabama ordered the removal of the case on the petition of the citizen of Maryland alleging prejudice or local influence. A motion to remand was denied, and the case went to trial and judgment. That judgment was affirmed by the Circuit Court of Appeals and a writ of error from the Supreme Court was there- upon prosecuted. It was held that as the jurisdiction of the Cir- cuit Court as exercised was dependent entirely on diversity of citizenship, the judgment of the Circuit Court of Appeals was final and the writ of error could not be maintained.^^ § 205. Jurisdiction of Federal Circuit Courts Under Ju- diciary Act of 1888 — Removal of Suits. The Judiciary Act as amended in 1888 provides: " § 2. That any suit of a civil nature, at law or in equity, arising under the Constitution or laws of the United States, or treaties made, or which shall be made, under their authority, of which the Circuit Courts of the United States are given original jurisdic- tion by the preceding section,^* which may now be pending, or which may hereafter be brought, in any State Court, may be removed by the defendant or defendants therein to the Circuit immunity specially set up or claimed by either party, under such Constitu- tion, treaty, statute, commission, or authority, may be re-examined and reversed or affirmed in the Supreme Court upon a writ of error. The writ shall have the same effect as if the judgment or decree complained of had been rendered or passed in a court of the United States. " The Supreme Court may reverse, modify, or affirm the judgment or de- cree of such State Court, and may, at their discretion, award execution, or remand the same to the court from which it was removed by the writ." U. S. Rev. Stat., § 709, as amended by act of February 18, 1875, chap. SO, 18 Stat. 318, U. S. Comp. Stat., 1901, p. 575. See also U. S. Rev. Stat., § 1003, U. S. Comp. Stat., 1901, p. 713, as to manner of issue of writs of error to State Courts. Examine as to appellate jurisdiction of Supreme Court, tJ. S. Comp. Stat. Supplement, 1907, p. 213. See extended note to said § 709, in 4 Fed. Stat. Ann., pp. 468 et seq. 27 Cochran & The Fidelity & Deposit Co. v. Montgomery County, 199 U. S. 260, 26 Sup. Ct. 58, 50 L. ed. 178, 182. 28 See § 161, herein. 336 OVER CORPORATIONS CONTINUED § 205 Court of the United States for the proper district. Any other suit of a civil nature, at law or in equity, of which the Circuit Courts of the United States are given jurisdiction by the preceding section, and which are now pending, or which may hereafter be brought, in any State Court, may be removed into the Circuit Court of the United States for the proper district by the defendant or defendants therein being non- residents of that State; and when in any suit mentioned in this section there shall be a controversy which is wholly be- tween citizens of different States, and which can be fully determined as between them, then either one or more of the defendants actually interested in such controversy may re- move said suit into the Circuit Court of the United States for the proper district. And where a suit is now pending, or may be hereafter brought, in any State Court, in which there is a controversy between a citizen of the State in which the suit is brought and a citizen of another State, any defendant, being such citizen of another State, may remove such suit into the Circuit Court of the United States for the proper district, any time before the trial thereof, when it shall be made to appear to said Circuit Court that from prejudice or local in- fluence he will not be able to obtain justice in such State Court, or in any other State Court to which the said defendant may, under the laws of the State, have the right, on account of such prejudice or local influence, to remove said cause: Provided, That if it further appear that said suit can be fully and justly determined as to the other defendants in the State Court, without being affected by such prejudice or local influence, and that no party to the suit will be prejudiced by a separation of the parties, said Circuit Court may direct the suit to be remanded, so far as relates to such other defendants, to the State Court, to be proceeded with therein. ''At any time before the trial of any suit which is now pend- ing in any Circuit Court or may hereafter be entered therein, and which has been removed to said court from a State Court on the affidavit of any party plaintiff that he had reason to beheve and did believe that, from prejudice or local influence, 22 337 § 205 JURISDICTION OF COURTS he was unable to obtain justice in said State Court, the Circuit Court shall, on apphcation of the other party, examine into the truth of said affidavit and the grounds thereof, and, unless it shall appear to the satisfaction of said court that said party will not be able to obtain justice in such State Court, it shall cause the same to be remanded thereto. "Whenever an}'^ cause shall be removed from any State Court into any Circuit Court of the United States, and the Circuit Court shall decide that the cause was improperly re- moved, and order the same to be remanded to the State Court from whence it came, such remand shall be immediately carried into execution, and no appeal or writ of error from the decision of the Circuit Court so remanding such cause shall be allowed. ^^ " § 3. That whenever any party entitled to remove any suit mentioned in the next preceding section, except in such cases as are provided for in the last clause of said section, may desire to remove such suit from a State Court to the Circuit Court of the United States, he may make and file a petition in such suit in such State Court at the time, or any time before the defendant is required by the laws of the State or the rule of the State Court in which such suit is brought to answer or plead to the declaration or complaint of the plaintiff, for the removal of such suit into the Circuit Court to be held in the district where such suit is pending, and shall make and file therewith a bond, with good and sufficient surety, for his or their entering in such Circuit Court, on the first day of its then next session, a copy of the record in such suit, and for paying all costs that may be awarded by the said Circuit Court if said court shall hold that such suit was wrongfully or improperly removed thereto, and also for their appearing and entering special bail in such suit if special bail was originally requisite therein. It shall then be the duty of the State Court to accept 28 Act of August 13, 1SS8, chap. 866, § 2, 25 Stat, at L. 434, 435, U. S. Comp. Stat., 1908, p. 509, amending act of March 3, 1887, chap. 373, § 2, 24 Stat, at L. 552, amending act of March 3, 1875, chap. 137, § 2, 18 Stat. at L. 470. 338 OVER CORPORATIONS CONTINUED § 205 such petition and bond, and proceed no further in such suit; and the said copy being entered as aforesaid in said Circuit Court of the United States, the cause shall then proceed in the same manner as if it had been originally commenced in the said Circuit Court; and if in any action commenced in a State Court the title of land be concerned, and the parties are citizens of the same State; and the matter in dispute exceed the sum or value of two thousand dollars, exclusive of interest and costs, the sum or value being made to appear, one or more of the plaintiffs or defendants, before the trial, may state to the court, and make affidavit if the court require it, that he or they claim and shall rely upon a right or title to the land under a grant from a State, and produce the original grant, or an exemplification of it, except where the loss of public records shall put it out of his or their power, and shall move that any one or more of the adverse party inform the court whether he or they claim a right or title to the land under a grant from some other State, the party or parties so required shall give such information, or otherwise not be allowed to plead such grant or give it in evidence upon the trial; and if he or they inform that he or they do claim under such grant, any one or more of the party moving for such information may then, on petition and bond, as hereinbefore mentioned in this act, re- move the cause for trial to the Circuit Court of the United States next to be holden in such district; and any one of either party removing the cause shall not be allowed to plead or give evidence of any other title than that by him or them stated as aforesaid as the ground of his or their claim." ^° 30 Act of August 13, 1888, chap. 866, § 3, 25 Stat, at L. 435, 436, U. S. Comp. Stat., 1901, p. 510, amending act of March 3, 1887, chap. 373, § 3, 24 Stat, at L. 552, which amends act of March 3, 1875, 18 Stat, at L. 470. Rev. Stat. U. S., § 640, providing for removal of suits commenced in any other than a Circuit or District Court of the United States against corpo- rations other than a banking corporation organized under a law of the United States upon petition of the defendant stating that it had a defense arising under or by virtue of the Constitution or of any treaty or law of the United States was repealed by act of March 3, 1887, chap. 373, § 6, and by act of August 13, 1888, chap. 866, § 6. For construction of repealed statute see Tennessee v. Union & Planters' Bank, 152 U. S. 454, 463, 38 L. ed. 511, 339 § 2()() JURISDICTION OF COURTS § 206. Removal of Suits— What Record Must Show. A case cannot be removed from a State Court, as one arising under the Constitution or laws of the United States, unless the plaintiff's complaint, bill or declaration shows it to be a case of that character.^^ A suit only arises under the Constitution and laws of the United States within the meaning of the Judiciary Act ^^ con- ferring jurisdiction on the Circuit Court when the plaintiff's statement of his own cause of action shows that it is based on those laws or that Constitution, and it is not enough that de- fendant may base his defense thereon .^^ And as a case cannot be removed on the ground that it is one arising under the 14 Sup. Ct. 654; Texas & Pacific Ry. Co. v. Kirk, 115 U. S. 1, 29 L. ed. 319, 5 Sup. Ct. 1113; Ames v. Kansas, 111 U. S. 449, 459, 28 L. ed. 482, 4 Sup. Ct. 437; Jones v. Oceanic Steam Navigation Co., 11 Blatchf. (U. S. C. C.) 406, 407; Manufacturers' Nat. Bk. of Chicago v. Baack, 8 Blatchf. (U. S. C. C.) 137. 31 Minnesota v. Northern Securities Co., 194 U. S. 48, 48 L. ed. 870, 24 Sup. Ct. 598. 32 Section 1 of the act of August 13, 1888, chap. 866, 25 Stat. 433. 33 Winn, In re, 213 U. S. 458, 53 L. ed. 873, 29 Sup. Ct. 515; Louisville & Nashville Rd. v. Mottley, 211 U. S. 149, 53 L. cd. 126, 29 Sup. Ct. 42. The court, per Mr. Justice Moody (at pp. 464, 465), said: "The only ground of jurisdiction which is or can be suggested is that the suit was one arising under the Constitution and the laws of the United States, 25 Stat. 433, 434. It is the settled interpretation of these words, as used in this statute confer- ring jurisdiction, that a suit arises inider the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or that Constitution. It is not enough, as the law now exists, that it appears that the defendant may find in the Constitution or laws of the United States some ground of defense. Louis- ville & Nashville Railroad v. Mottley, 211 U. S. 149, 53 L. ed. 126, 29 Sup. Ct. 42, and cases cited. If the defendant has any such defense to the plain- tiff's claim it may be set up in the State Courts, and if properly set up and denied by the highest court of the State may ultimately be brought to this court for decision. "Tested by these principles, the record, including the petition for removal, shows afh rmatively that the case was not one arising under the laws of the United States. In substance, the allegations of the petition for removal are, that the defendant was subject to the Federal laws to regulate commerce, and that under those laws the defendant had a defense in whole or in part to the cause of action stated in the declaration. But the cause of action itself is not based upon the interstate commerce law or upon any other law of the United States." 340 OVER CORPORATIONS CONTINUED § 206 Constitution, laws or treaties of the United States unless that appears by plaintiff's statement of his own claim, if it does not so appear, the want of it cannot be supplied by any state- ment of the petition for removal or in the subsequent plead- ings, or by taking judicial notice of facts not relied on and regularly brought into controversy.^^ Although a defendant of the State Court may set up a de- fense based upon Federal rights which will, if denied, entitle him ultimately to have the decision reviewed by the Supreme Court, if the Federal question does not appear in the plaintiff's statement the case is not removable to the Circuit Court of the United States.^^ Again, the jurisdiction of the Circuit Court must appear affirmatively from distinct allegations, or facts clearly proven, and is not to be established argumenta- tively or by mere inference, and where jurisdiction depends upon diverse citizenship, absence of sufficient averments or of facts in the record showing such diversity is fatal and the. defect cannot be waived by the parties.^^ If the plaintiffs are citizens of the State in which the action is brought and the defendant railway company is a citizen of another State, diverse citizenship is shown on the face of the record, authorizing on proper proceedings taken to bring it about, the removal of the action from the State Court to the Federal Court.^^ The right of a defendant jointly sued with others to remove the case into the Federal Court also depends upon the case made in the complaint against the defendants jointly, and that right, in the absence of showing a fraudulent joinder, does not arise from the failure of complainant to estabhsh a joint cause of action.^* 34 Arkansas v. Kansas & T. Coal Co. & S. F. Ry. Co., 183 U. S. 185, 46 L. ed. 144, 22 Sup. Ct. 47. 35 Winn, In re, 213 U. S. 458, 53 L. ed. 873, 29 Sup. Ct. 515. 36 Thomas v. Board of Trustees of the Ohio State University, 195 U. S. 207, 25 Sup. Ct. 24, 49 L. ed. 160. 37 Missouri, Kansas & T. Ry. Co. v. Missouri R. & W. Comm'rs, 183 U. S. 53, 46 L. ed. 78, 22 Sup. Ct. 18. 38 Alabama Great Southern Ry. Co. v. Thompson, 200 U. S. 206, 50 L. ed. 441, 26 Sup. Ct. 161. 341 § 207 JURISDICTION OF COURTS The Federal character of a suit must appear in the plaintiff's own statement of his claim, and where a defense has been interposed, the reply to which brings out matters of a Federal nature, those matters thus brought out by the plaintiff do not form a part of his cause of action .^^ In an action of tort, the cause of action is whatever the plaintiff declares it to be in his pleading, and matters of de- fense cannot be availed of as ground of removal .'*° If the record does not affirmatively show jurisdiction in the Circuit Court, the Federal Supreme Court must, upon its own motion, so declare, and make such order as will prevent the Circuit Court from exercising an authority not conferred upon it by statute.^^ § 207. No Cause Removable Unless It Is One of Which Circuit Courts Given Original Jurisdiction. The test of the right to remove a case from a State Court into the Circuit Court of the United States under § 2 of the act of March 3, 1887, as corrected by the act of August 13, 1888, is that it must be a case over which the Circuit Court might have exercised original jurisdiction under § 1 of that act."*^ And the rule is that no cause can be removed from the State Court to the Circuit Court of the United States unless it could have originally been brought in the latter court .^ And if the 39 Houston & T. C. C. R. Co. v. Texas, 177 U. S. 66, 44 L. ed. 673, 20 Sup. Ct. 545. " Chesapeake & Ohio Ry. Co. v. Dixon, 179 U. S. 131, 5 L. ed. 121, 21 Sup. Ct. 67. 41 Minnesota v. Northern Securities Co., 194 U. S. 48, 24 Sup. Ct. 598, 48 L. ed. 870. 42 Arkansas v. Kansas & T. Coal Co. & S. F. Ry. Co., 183 U. S. 185, 46 L. ed. 144, 22 Sup. Ct. 47. 43 Winn, In re, 213 U. S. 458, 53 L. ed. 873, 29 Sup. Ct. 515; Dunn, Matter of, 212 U. S. 374, 53 L. ed. 558, 29 Sup. Ct. 299; Wisner, Ex parte, 203 U. S. 449, 51 L. ed. 264, 27 Sup. Ct. 150; Madisonville Traction Co. v. Saint Bernard Min. Co., 196 U. S. 239, 25 Sup. Ct. 251, 49 L. ed. 262; Boston Min- ing Co. V. Montana Ore Co., 188 U. S. 632, 47 L. ed. 626, 23 Sup. Ct. 434. In the principal case the court, per Mr. Justice Moody (at p. 463), said: " The petition for removal alleged that the plaintiff was a citizen of Missouri and the defendant 'a joint stock association organized under the laws of 342 OVER CORPORATIONS CONTINUED § 207 suit as disclosed by the complaint could not have been brought originally in the Circuit Court then under the acts of 1887 and 1888, it should not be removed from the State Court and if removed it should be remanded.'^ Again, those suits only can be removed of which the Circuit Courts are given original ju- risdiction, and the right of removal because of diversity of citizenship can only be exercised by a defendant who is a cit- izen, or by defendants who are citizens, of a State other than that in which the suit is pending.^ A proceeding brought by a Kentucky railroad company in the County Court, under the statutes of that State,^^ to condemn lands for a public use, valued at over two thousand dollars, belonging to a corpo- ration which is a citizen of another State, is a suit involving a controversy to which the judicial power of the United States extends within the meaning of the judiciary clauses of the Constitution, and of which the Circuit Court has original cog- nizance under the Judiciary Act of 1887;''^ and may be re- moved to the Circuit Court of the United States.^* But where a suit is brought in plaintiff's State against a citizen of the same State and a citizen of another State it could not have the state of New York,' but contained no allegation of the citizenship of the members of the association. It wate agreed at the argument that the defendant was not a corporation but a joint stock association. Therefore the diversity of citizenship required to warrant a removal on that ground does not appear. The petition for removal" (printed in the margin of Vol. 213 U. S. 463 et seq.) "was not based upon diversity of citizenship but upon the ground that the suit was one arising under the laws of the United States. It is well settled that no cause can be removed from the State Court to the Circuit Court of the United States unless it could originally have been brought in the latter court. * * * The case could not have been brought originally in the Circuit Court of the United States and was there- fore not removable thereto. In holding otherwise we think the learned Judge of the Circuit Court erred." 44 Minnesota v. Northern Securities Co., 194 U. S. 48, 24 Sup. Ct. 598, 48 L. ed. 870. For statute see §§161, 204, 205 herein. 45 Cochran & The FideHty & Deposit Co. v. Montgomery County, 199 U. S. 260, 26 Sup. Ct. 58, 50 L. ed. 178, 182. 46 Ky. Stat., §§835-839. 47.See §§ 161, 204, 205, herein. 48 Madisonville Traction Co. v. Saint Bernard Min. Co., 196 U. S. 239, 25 Sup. Ct. 251, 49 L. ed. 262. 343 § 208 JURISDICTION OF COURTS been brought originally in the Circuit Court and removal will not be properly granted.'*'* § 208. Federal Question or Right— When Court Has Jurisdiction — Instances. When a statute of, or authority exercised under, a State is drawn in question, on the ground of its repugnancy to the Constitution of the United States, or a right is claimed under that instrument, the decision of the State Court in favor of the validity of such statute or authority, or adverse to the right so claimed, can be reviewed in the Federal Supreme Court.^** The Federal Supreme Court has jurisdiction to review a judg- ment on a writ of error ^^ if the opinion of the highest court of the State clearly shows that the Federal question was assumed to be in issue, was decided adversely, and the decision was essential to the judgment rendered.^^ Again, the Federal Su- preme Court cannot decline jurisdiction when it is plain that the fair result of a decision of the State Court is to deny a con- stitutional right.^^ Where the opinion of the State Court shows that it considered and denied the validity of a statute of another State, and its binding force to control the right of action asserted, a Federal right specially set up is denied, and the Supreme Court has jurisdiction to review the judgment under § 709 of the Revised Statutes of the United States.^^ <8 Cochran & The Fidehty & Deposit Co. v. Montgomery County, 199 U. S. 260, 26 Sup. Ct. 58, 50 L. ed. 178, 182. BO Home Ins. Co. v. Augusta, 93 U. S. 116. 61 Under § 709, U. S. Rev. Stat., given in note to § 204, herein. 62 Chambers v. Baltimore & Ohio Rd. Co., 207 U. S. 142, 28 Sup. Ct. 34, 52 L. ed. 143, aff'g 73 Ohio St. 1 ; original action was under State statute for damages for death caused by negligence of railroad corporation. 53 Smithsonian Institution v. St. John, 214 U. S. 19, 53 L. ed. 892, 29 Sup. Ct. 601 ; Rogers v. Alabama, 192 U. S. 226, 48 L. ed. 417, 24 Sup. Ct. 257. 54 Atchison, Topeka & Santa Fe Ry. Co. v. Sowers, 213 U. S. 55, 53 L. ed. 695, 29 Sup. Ct. 697, aff'g 99 S. W. 190, a case of writ of error to Court of Civil Appeals of Texas. Action was to recover for personal injuries sus- tained by defendant in error while employed as brakeman in the service of plaintiff. For § 709, Rev. Stat., see note under § 204, herein. 344 OVER CORPORATIONS CONTINUED § 208 Where the effect of the judgment of the State Court is to deny the defense that a statute of a Territory is a bar to the action a claim of Federal right is denied and the Supreme Court has jurisdiction under § 709 of the Revised Statutes .^^ Where in the State Court defendant distinctly claimed that a recovery would be prevented if full faith and credit were given to a judgment of the courts of another State, and this claim is ex- pressly denied, the Supreme Court has j urisdiction to review un- der § 709, Rev. Stat.^« Again, where the State Court denied the contention of plaintiff in error, defendant below, that a State statute as appHed to transportation of an article from one State to another was in conflict with the commerce clause of the Con- stitution, a Federal question is involved and the Supreme Court has j urisdiction.^'^ Where an act of a State legislature authorized the lease of such portion of water power as was not required by a State institution, and the question of legal title of the plaintiff to the lands in question was purely a local issue, and the question whether the erection of a steam plant by the de- fendant was an incident to its contract with the State institu- tion are not reviewable on writ of error from the Federal Su- preme Court to a State Court.^« Where the bill of the trustee of bondholders of a water company, claiming an exclusive contract with a municipality, shows that an act of the legis- lature and an ordinance of the city have been passed under which the city shall construct its own waterworks, and that during the life of the contract the source of the abihty of the water company to pay interest on, and principal of, its bonds will be cut off, a case is presented involving a constitutional w El Paso & Northeastern Ry. Co. v. Gutierrez, 215 U. S. 87, 54 L. ed. , 30 Sup. Ct. , aft'g 117 S. W. 426, and approving Hyde v. Southern Ry. Co., 31 App. D. C. . For § 709, Rev. Stat., see note under § 204, herein. 58 American Express Co. v. MulHns, 212 U. S. 311, 53 L. ed. 525, 29 Sup. Ct. 381. See § 204, note herein for § 709, Rev. Stat. 57 Adams Express Co. v. Kentucky, 214 U. S. 218, 53 L. ed. 972, 29 Sup. Ct. 633; Western Turf Assoc, v. Greenberg, 204 U. S. 359, 51 L. ed. 520, 27 Sup. Ct. .384, 124 Ky. 182, reversed. 58 Columbia Water Power C'o. v. Columbia Electric St. Ry. L. & P. Co., 172 U. S. 475, 43 L. ed. 521, 19 Sup. Ct. 247, aff'g 43 S. C. 154, 20 S. E. 1002. 345 § 208 JURISDICTION OF COURTS question, and irrespective of diverse citizenship, the Circuit Court of the United States has jurisdiction to determine the nature and validity of the original contract and whether the subsequent legislation and ordinance impaired its obhgations within the meaning of the Federal Constitution.^^ A State cannot inflict a penalty for the nondelivery of a telegram within the limits of a place under the exclusive juris- diction of the ITnited States; and it is held that under the stat- ute of Virginia in that regard the penalty cannot be collected for the nondelivery of a telegram to an addressee within the limits of the Norfolk Navy Yard. Congress alone can prescribe penalties in such a case. And where plaintiff in error, defend- ant below, in a suit for penalty under a State law asks and the court refuses an instruction that if the jury find that the de- fault occurred within a navy yard, over which the United States had exclusive jurisdiction, the recovery could not be had under the State law, the Federal Supreme Court has jurisdiction to review the judgment .^"^ 59 Mercantile Trust Co. v. Columbus, 203 U. S. 311, 27 Sup. Ct. 83, 51 L. ed. 198. eo Western Union Teleg. Co. v. Chiles, 214 U. S. 274, 53 L. ed. 994, 29 Sup Ct. 613, reversing 107 Virginia, 60. When Federal question exists and court has jurisdiction, see also the following cases: Columbia Water Power Co. v. Columbia Electric St. Ry. L. & P. Co., 172 U. S. 475, 43 L. ed. 521, 19 Sup. Ct. 247, aff'g 43 S. C. 154, 20 S. E. 1002 (impairment of obligation contract appeared) ; Chicago, Bur- hngton & Quincy R. Co. v. Nebraska, 170 U. S. 57, 42 L. ed. 948, 18 Sup. Ct. 513 (impairment of obligation of contract) ; Central National Bk. v. Stevens, 169 U. S. 432, 18 Sup. Ct. 403, 42 L. ed. 807 (Federal Court decree and effect of in State Court) ; California Bank v. Kennedy, 167 U. S. 362, 17 Sup. Ct. 831, 14 Bkg. L. J. 375 (writ of error; State Court; decision hold- ing national bank liable as stockholder in savings bank) ; Metropolitan Nat. Bk. V. Claggett, 141 U. S. 520, 35 L. ed. 841, 12 Sup. Ct. 60, 6 Bkg. L. J. 24 (national bank; conversion of State bank); Cates v. Producers & C. Oil Co. (U. S. C. C), 96 Fed. 7 (quieting title to mining claim); Chicago, Rock I. & P. R. Co. V. St. Joseph Union Depot Co. (U. S. C. C), 92 Fed. 22 (whether State Court gives full faith and credit to Federal judgment); San Joaquin & K. R. Canal & I. Co. v. Stanislaus County (U. S. C. C), 90 Fed. 516 (fixing water rates too low),- Minnesota v. Duluth & Iron Range Rd. (U. S. C. C), 87 Fed. 497 (resumption of lands granted railroad); Florida C. & P. R. Co. v. Bell (U. S. C. C. A.), 87 Fed. 369, 31 C. C. A. 9, 59 U. S. App. 189 (action to recover railroad lands; construction of acts of 340 OVER CORPORATIONS CONTINUED § 209 § 209. Federal Question or Right— When Court no Jurisdiction — Instances. Each State may, subject to restrictions of the Federal Con- stitution, determine the limit of the jurisdiction of its courts, and the decision of the highest court sustaining jurisdiction although the cause of action arose outside the border of the State is final and does not present a Federal question.^^ Although it appears from plaintiff's statement of his claim that it cannot be maintained at all because inconsistent with the Constitution or laws of the United States, it does not fol- low that the case arises under that Constitution or those laws.**- Where the validity of the local statute under which national bank shares are assessed was not drawn in question, but the only objection in the State Court was that the assessment was in excess of actual value, exorbitant, unjust and not in pro- portion with other like property, no Federal right was set up or denied and the Supreme Court has no jurisdiction to review the judgment under § 709, Revised Statutes.®^ Congress involved); Nashville, C. & St. L. R. Co. v. Taylor (U. S. C. C), 86 Fed. 168 (bill against State board of equalizers for injunction; taxation of railroad property; discrimination under alleged unconstitutional law); Consolidated Water Co. v. San Diego (U. S. C. C), 84 Fed. 369 (city ordi- nance fixing water rates); Indianapolis Gas Co. v. Indianapolis (U. S. C. C), 82 Fed. 245 (action for relief against statute fixing rates for public service corporation); Snohomish County v. Puget Sound Nat. Bk. (U. S. C. C), 81 Fed. 518 (suit to wind up affairs of insolvent national bank); Crystal Springs Land & W. Co. v. Los Angeles (U. S. C. C), 76 Fed. 148 (contested title to water rights; State statute as to transferring property); Rutter v. Shoshone Min. Co. (U. S. C. C), 75 Fed. 37 (adverse claim to appHcation for patent to mine); St. Paul, M. & M. R. Co. v. St. Paul & N. P. R. Co. (U. S. C. C. A.), 68 Fed. 2 (deeds of land to railroad; violation of PVleral grants); Kentucky & I. Bridge Co. v. Louisville & N. R. Co. (U. S. C. C), 37 Fed. 567, 2 L. R. A. 289, 2 Int. Com. Rep. 351 (enforcement of order of Interstate Commerce Commission). 61 St. Louis & Iron Mountain Ry. Co. v. Taylor, 210 U. S. 281, 52 L. ed. 1061, 28 Sup. Ct. 616. 62 Arkansas v. Kansas & T. Coal Co. & S. F. Ry. Co., 183 U. S. 185, 46 L. ed. 144, 22 Sup. Ct. 47. 63 First National Bank v. City Council of Estherville, 215 U. S. 341, 54 L_ ed. , 30 Sup. Ct. . Writ of error to review 136 Iowa, 203, dis- missed. For § 709, Rev. Stat., see note to § 204, herein. 347 § 209 JURISDICTION OF COURTS Where the State Court decides that, under the law of the State the constitutionahty whereof is not attacked, the action of defendant in giving replevy bond and answering amounted to a general appearance and waiver of objection to jurisdiction based on a Federal ground, the ruling of general appearance rests on a nonFederal ground sufficient to sustain it and can- not be reviewed by the Supreme Court. And where plaintiff in error did not set up in the State Court the contention that the contract of interstate shipment should be construed according to the act of Congress regulating interstate shipments instead of by the law of the State where made, but on the contrary, contended that it should be construed by the law of the State of destination and trial of the case, the record presents no Federal question properly set up in the court below that can be considered by the Supreme Court .*^^ A suit brought by ship- pers to enjoin a railroad company from putting a tariff schedule into effect on the ground that it violates rights secured by the act to regulate commerce is a case arising under the Constitu- tion and laws of the United States, and the jurisdiction of the Circuit Court over the person of the defendant must be deter- mined accordingly. And under the jurisdictional act*^-'^ the Circuit Court in the district of which the defendant is not an inhabitant has not jurisdiction of a case arising under the Con- stitution and laws of the United States, even though diverse citizenship exist, the plaintiff resides in the district, and the cause be one alone cognizable in a Federal Court ."^^ A writ of M Cincinnati, New Orleans & Texas Pae. Ry. Co. v. Slade, 216 U. S. 78, 54 L. ed. , 30 Sup. Ct. . Writ of error to review 3 Ga. App. 400, dis- missed. 65 Act of March 3, 1875, chap. 137, 18 Stat. 470, as amended by the act of March 3, 1887, chap. 373, 24 Stat. 552, U. S. Comp. Stat., 1901, p. 508, corrected by act of August 13, 1888, chap. 866, 25 Stat. 433, U. S. Comp. Stat., 1901, p. 508, noted under § 161, herein. 68 Macon Grocery Co. v. Atlantic Coast Line Rd. Co., 215 U. S. 501, 54 L. ed. , 30 Sup. Ct. , aff'g 166 Fed. 166. Mr. Justice Harlan dissented. The court, per Mr. Justice White (at p. 507), said: "In cases of the character of the one at bar the rulings of the lower Federal Courts have uniformly been to the effect that they arose under the Constitution and laws of the United States. Tift v. Southern Railway Co., 123 Fed. 789, 793; Northern 348 UVKR CORPUllATKJNS CONTINUED § 209 error will l)u dismissed for want of jurisdiction whore there is a nonFedend ground on which the judgin(>nt rested sufficient to sustain it without regard to the Federal (luestion.*^^ Although the IStatc Court may incoi'rectly charge as to cer- tain provisions of a statute if the jury finds that defendant has violated those provisions and also other provisions not involv- ing any Federal question, and only one penalty is assessed, the judgment rests on a nonFederal ground sufficient to sus- tain it, and the Supreme Court has not jurisdiction to review it under § 709, Revised Statutes.^^ When a State Court decides a case upon a nonFederal ground Pacific Ry. Co. v. Pacific, etc., Assn., 165 Fed. 1; Memphis Cotton Oil Co. v. Illinois Central R. R. Co., 164 Fed. 290, 292; Imperial Colliery (,'o. v. Chesa- peake & O. Ry. Co., 171 Fed. 589. And see Sunderland Bros. v. Chicago, R. I. & P. Ry. Co., 158 Fed. 877; Jewett Bros. v. C, M. & St. P. Ry. Co., 156 Fed. 160. We are of opinion that the case before us may properly be said to be one arising under a law or laws of the United States. As said by Taft, Circuit Judge, in Toledo, A. A. & N. M. Ry. Co. v. Pennsylvania Co. et al., 54 Fed. 730: " ' It is immaterial what rights the complainant would have had before the passage of the interstate commerce law. It is sufficient that ('ongress, in the constitutional exercise of power, has given the positive sanction of Federal law to the rights secured in the statute, and any case involving the enforcement of those rights is a case arising under the laws of the United States.' "The object of the bill was to enjoin alleged unreasonable rates, threat- ened to be exacted by carriers subject to the act to regulate commerce. The right to be exempt from such unlawful exactions is one prot(!ctcd by the act in question, and the purporje to avail of the benefit of that act, as well as of the anti-trust act, is plainly indicated by the averments of the bill. Of necessity, in determining the right to the relief prayed for, a con- struction of the act to regulate commerce was essentially involved. "The jurisdiction of the Circuit Court not being invoked solely upon the ground of diversity of citizenship, it inevitably follows that, as there was no waiver of the exemption from being sued in the court below, that court was without jurisdiction of the persons of the defendants. In re Keasby & Mattison Co., 160 U. S. 221, 40 L. ed. 402, 16 Sup. Ct. 273; In re Moore, 209 U. S. 490, 52 L. ed. 904, 28 Sup. Ct. 706; Western Loan & Sav. Co. V. Butte & Boston Min. Co., 210 U. S. 368, 52 L. ed. 1101, 28 Sup. Ct. 720." 67 St. Louis Southwestern Ry. Co. v. Tyler, 212 U. S. 552, 29 Sup. Ct. 684, 53 L. ed. 649, writ of error to review 99 Tex. 491, dismissed. 68 Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 53 L. ed. 417, 29 Sup. Ct. 220. 349 § 209 JURISDICTION OF COURTS which is sufficient to maintain the decision the Supreme Court will not review the judgment.^® The denial by the State Court to give to a Federal statute the construction insisted upon by a party which would lead to a judgment in his favor is a denial of a right or inmiunit}^ under the laws of the United States and prevents a Federal question reviewable by the Supreme Court under § 709, of the Revised Statutes^" 69 Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 53 L. ed. 417, 29 Sup. Ct. 220. 70 St. Louis & Iron Mountain Ry. v. Taylor, 210 U. S. 281, 52 L. ed. 1061, 28 Sup. Ct. 616. As to nonF'ederal question and nonjurisdiction of court, see also the following cases: Telluride Power Transmission Co. v. Rio Grande Western Ry. Co., 175 U. S. 639, 20 Sup. Ct. 245, 44 L. ed. 305, dismissing appeal, 16 Utah, 125, 51 Pac. 146 (questions of fact and local law; mining water rights; jurisdiction on writ of error does not extend to); Allen v. Southern Pac. Rd. Co., 173 U. S. 479, 43 L. ed. 775, 19 Sup. Ct. 518, dismissing writ of error in 112 Cal. 455, 44 Pac. 796 (case decided by State Court wholly independ- ent of Federal question set up, and adequately sustained independent of such nonFederal question) ; Capital National Bk., Lincoln, v. First Nat. Bk., Cadiz, 172 U. S. 425, 43 L. ed. 502, 19 Sup. Ct. 202, dismissing writ of error in 49 Neb. 795, 69 N. W. 1151 (allegation of organization of national bank under Banking Act and appointment of receiver who took possession as trustee and these averments were admitted but there was a failure to claim rights under Federal laws); Pierce v. Somerset Ry. Co., 171 U. S. 641, 43 L. ed. 316, 19 Sup. Ct. 64 (error to State Court; judgment based on distinct grounds; decision of one question sufficient notwithstanding Federal ques- tion, to sustain judgment; Supreme Court will not review); Galveston, H. & S. A. Ry. Co. V. Texas, 170 U. S. 226, 18 Sup. Ct. 603, 42 L. ed. 1017 (State Constitution prohibiting land grants enforced against railroad com- pany involves no infraction of Federal Constitution) ; St. Louis, C. G. & Ft. Smith R. Co. v. Merriam, 156 U. S. 478, 39 L. ed. 502, 15 Sup. Ct. 443 (writ of prohibition directed to State Court and to railroad receiver, directing him to turn over property to another receiver presents no Federal question) ; St. Paul, M. & M. Ry. Co. v. Todd County, 142 U. S. 282, 35 L. ed. 1014, 12 Sup. Ct. 281 (exemption from taxation; railroads; obligation of contract; not subject to review on error) ; Peabody Gold Min. Co. v. Gold Hill Min. Co. (U. S. C. C), 97 Fed. 657 (trespass upon mining claim) ; Cahfornia Oil & Gas Co. v. Miller (U. S. C. C), 96 Fed. 12 (suit to quiet title; question of fact and not construction of law of United States) ; Murray v. Chicago & N. W. R. Co. (U. S. C. C. A.), 92 Fed. 868, 35 C. C. A. 62, 13 Am. & Eng. Rd. Cas. (N. S.) 278, aff'g 62 Fed. 24 (constitutional question not raised; interstate transportation charges; common as affecting); Montana Ore Purchasing Co. v. Boston & M. C. C. & S. Min. Co. (U. S. C. C. A.), 85 Fed. 350 OVER CURPOKATIONS CONTINUED §§-10, 211 § 210. Presentment of Federal Question— Record. In order to give the United States Supreme Court jurisdic- tion, under § 709 ^^ of the Revised Statutes, not only must a right under the Constitution of the United States be specially set up, but it must appear that the right was denied in fact or that the judgment could not have been rendered without de- nying it. When the constitutional right was not set up in the original plea, and the record does not disclose the reasons of the State Court for refusing to allow a new plea setting up the constitutional right, and the record shows that the refusal might have been sufficiently based on nonFederal grounds, the Supreme Court of the United States cannot review the judg- ment under the above section of the Revised Statutes, and when it does not appear in the record that a telegraph message between two points in the same State had to be transmitted partly through another State, except by a plea which the State Court refused, on nonFederal grounds, to allow to be filed, no Federal question is involved and said Supreme Court cannot review the judgment under § 709 of the Revised Stat- utes.'''^ § 211. Removal of Suits — Corporation Created by Con- gress — Constitution and Laws of United States — Separable Controversy. A suit brought in a State Court against a corporation organ- ized under an act of Congress may be removed to a Federal Court. ''^ As a corporation created by act of Congress derives all its rights from the law creating it, suits brought against it, on account of its action, arise under the Constitution and laws of the United States and are removable into the Federal 867, 29 C. C. A. 462, 57 U. S. App. 13 (mining claim; right to follow vein; question of fact) ; Crystal Springs Land & Water Co. v. Los Angeles (U. S. C. C), 82 Fed. 114 (quieting title; averment that certain State statutes so attempt to transfer title defeated by denial). 71 Given in note under § 204, herein. 72 Western Union Teleg. Co. v. Wilson, 213 U. S. 52, 53 L. ed. 693, 29 Sup. Ct. 403. 73 Supreme Lodge Knights of P. v. Hill (U. S. C. C. A.), 76 Fed. 468, 22 C. C. A. 280, 42 U. S. App. 200, 5 Am. & Eug. Corp. Cas. (N. S.) 157. 351 § 212, 213 JURISDICTION OF COURTS Court.s.'^^ W^iere the Circuit Court has jurisdiction by reason of the fact that the defendant is a corporation created by an act of Congress the joinder of other defendants, citizens of plaintiff's State, does not prevent removal to the Circuit Court if there is no separable controversy and all the defendants unite in the petition; the Federal character permeates the en- tire case and affects all parties defendant.'^ § 212. Removal of Suits— Corporations Created by Con- gress — National Banks. Neither a national bank nor its receiver can remove a suit into the Federal Court since the act of 1887 ''^ on the ground that it is a Federal corporation.'^ § 213. Removal of Suits — Separable Controversy— Joint Action. In determining whether a case may be removed by one de- fendant the question is not what the rule of the Federal Court may be as to whether or not the action is joint, but whether the controversy is one made removable by Congress in § 2 of the acts of March 3, 1887, and August 13, 1888.'« In an action brought in a State Court by citizens of one State against two corporations, citizens of another State, and the 74 Dunn, Matter of, 212 U. S. 374, 53 L. ed. 558, 29 Sup. Ct. 299 (holding also that the Federal Supreme Court will judicially notice that a defendant corporation was incorporated by act of Congress) ; Osborn v. Bank of United States, 9 Wheat. (22 U. S.) 738, 6 L. ed. 204. 75 Dunn, Matter of, 212 U. S. 374, 53 L. ed. 558, 29 Sup. Ct. 299, holding also that the application of § 10 of the act of March 11, 1902, 32 Stat. 68, chap. 183, is not limited to local actions described in § 8 of act of March 3, 1875, chap. 137, 18 Stat. 470. 78 Act of March 3, 1887. 77 Wichita National Bk. v. Smith (U. S. C. C. A.), 72 Fed. 568, 36 U. S. App. 530, 19 C. C. A. 42, cited in Miller v. LeMars Xat. Bank (U. S. C. C.) 116 Fed. 551, 553. Examine Continental Xat. Bank v. Buford, 191 U. S. 119, 123, 124, 48 L. ed. 119, 24 Sup. Ct. 54; Petri v. Commercial Nat. Bank, 142 U. S. 644, 35 L. ed. 1144, 12 Sup. Ct. 325, per Mr. Chief Justice Fuller. See also note in Fed Stat. Annot. pp. 193 et seq.; Act of Aug. 13, 1888. 78 Alabama Great Southern Ry. Co. v. Thompson, 200 U. S. 206, 50 L. ed. 441, 26 Sup. Ct. 161. 352 OVER CORPORATIONS CONTINUED § 214 directors thereof, some of whom are citizens of the same State as the plaintiff, for the purpose of setting aside a conveyance made by one defendant corporation to the other, the action may be severable as to the conveying corporation; and if it is so, and as to the cause of action alleged against it, its directors are not necessary parties, it may remove the action as to it into the Circuit Court of the United States^** Where plaintiff in good faith insists on the joint liability of all defendants until the close of the trial, the dismissal of the complaint on the merits as to the defendants who are citizens of plaintiff's State does not operate to make the cause then removable as to non- resident defendants and to prevent the plaintiff from taking a verdict against the defendants who might have removed the cause had they been sued alone, or if there had originally been a separable controversy as to them.*" § 214. Removal of Suits — Separable Controversy — Joint Action — Torts — Diversity of Citizenship. A railroad corporation sued jointly with its servant for neg- ligence of the latter for which the former is responsible, may not remove the case into the Federal Court unless diversity of citizenship also exists as to the other defendants.*^ A railroad corporation may be jointly sued with the engineer 79 Gcer V. Mathieson Alkali Works, 190 U. S. 428, 47 L. ed. 1122, 23 Sup. Ct. S07. 8" Lathrop, Shea & Henwood Co. v. Interior Construction & Imp. Co., 215 U. S. 246, 53 L. ed. , 29 Sup. Ct. — . The action in this case was against defendant and a railroad company to recover upon a contract by plaintiff with the construction company and for the materials and use of certain articles by the railroad. Among other matters it was averred that the construction company was the agent and representative of the railroad company, and that the latter became and was responsible and lialjle for the acts and obligations of the construction company. Due performance by lilaintiff of the contract was alleged. It was also averred that the railroad company was a New York corporation, and the construction company a New Jersey corporation. The case was one of error to the Fetleral Court, and the facts invoh^ed the validity of the removal of a cause to the Fq.deral Court. 81 Cincinnati, N. O. & T. P. Ry. Co. v. Bohon, 200 U. S. 221, 50 L. ed. 48, 26 Sup. Ct. 166; .Vlabama Southern Railway v. Thompson, 200 U. S. 206, 50 L. ed. 441, 26 Sup. Ct. 161. 23 353 § 214 JURISDICTION OF COURTS and coiuluctor of one of its trains when it is sought to make the corporation hable only by reason of their neghgence, and solely upon the ground of the responsibility cjf a principal for the act of his servant, though not personally present or direct- ing and not charged with any concurrent act of neghgence. Such a suit is not removable by the corporation, as a separable controversy, even though the amount involved exceed two thousand dollars, exclusive of interests and costs, and the requi- site diversity of citizenship exists between the said company and the plaintiff, if the citizenship of the individual defendants sued with the company as joint tort feasors is identical with that of the plaintiff.*^ A State has the right by its Constitution and laws to regulate actions for negligence; and where it provides, as has been done by § 241 of the Constitution and § 6 of the statutes of Ken- tucky, that a plaintiff may proceed jointly or severally against those liable for the injury, nothing in the Federal removal statute converts such an action into a separable controversy for the purposes of removal, because of the presence of a non- resident defendant therein properly joined under the law of the State wherein it is conducting operations and is duly served with process.^ The following case was an ordinary action, under a State statute, for wrongfully causing the death of plaintiff's intestate, in which no Federal question was presented by the pleadings, or litigated at the trial, and in which the liability depended upon principles of general law, and not in any way upon the terms of the order appointing receivers; and whatever the rights of the receivers might have been to remove the cause if they had been sued alone, the controversy was held not a sep- arable controversy within the intent and meaning of the act of March 3, 1887, as corrected by the act of August 13, 1888, and this being so, the case came solely within the first clause of the 82 Alabama Great Southern Ry. Co. v. Thompson, 200 U. S. 206, 50 L. ed. 441, 26 Sup. Ct. 161. 83 Cincinnati, N. O. & T. P. Ry. Co. v. Bohon, 200 U. S. 221, 50 L. ed. 48, 26 Sup. Ct. 166. 354 OVER CORPORATIONS CONTINUED § 215 section, and it was not intended by Congress that, under such circumstances, there should be any difference between the rule api)lied under the first and second clauses of the act.*"* When one of several defendants in a suit on a joint cause of ac- tion in a State Court loses his right to remove the action into a Circuit Court of the United States by failing to make ihv aj)- plication in time, the right is lost as to all.*^ § 215. Removal of Suits — Separable Controversy — Joint Action — Fraudulent Joinder. ^\'llile an action conmienced in a State Court against two defendants, one of whom is a resident and the other a nonresi- dent, may be removed to the Circuit Court of the United States by the nonresident defendant if it can be shown that the cause of action is separable and the resident is joined fraudulently for the purpose of preventing the removal of the cause to the Federal Court, such removal cannot be had if it does not ap- pear that the resident defendant is fraudulently joined for such purpose. This rule will be adhered to even if on the trial of the action the lower court holds that no evidence was given by the plaintiff tending to show liability of the resident de- fendant, and a second application for removal from the State to the Federal Court has been made and denied after a trial, and the trial court has sustained a demurrer to the evidence as to the resident defendant, and where it appears that the ruling was on the merits and in invitum.^^ 84 Chicago, R. & P. Ry. Co. v. Martin, 178 U. S. 245, 44 L. ed. 1053, 20 Sup. Ct. 854. 85 Fletcher v. Hamlet, 116 U. S. 408, 29 L. ed. 679, 6 Sup. Ct. 426. 8« Kansas City Suburban Belt & Ry. Co. v. Herman, 187 U. S. 63, 23 Sup. Ct. 24, 47 L. ed. 76; Whitcomb v. Smithson, 175 U. S. 635, 44 L. ed. 303, 20 Sup. Ct. 248; Powers v. Chesapeake & Ohio Railway Co., 169 U. S. 92, 42 L. ed. 673, 18 Sup. Ct. 264. In Illinois Central Rd. Co. v. Sheegog, 215 U. S. 308, 54 L. ed. , 30 Sup. Ct. , the court, per Mr. Justice Holmes, said: "Of course if it ap- pears that the joinder was fraudulent as alleged, it will not be allowed to prevent the removal. Wecker v. National Enameling & Stamping Co., 204 IT. S. 176, 51 L. ed. 430, 27 Sup. Ct. 184. And further there is no doubt that the allegations of fact, so far as material, in a petition to remove, if controverted, must be tried in the court of the United States, and there- 355 § 21(3 JURISDICTION OF COURTS § 216. Removal of Suits ^Separable Controversy —Joint Action —What Record Must Show. Where the right of removal depends upon the existence of a separable controversy, the question is to be determined by the condition of the record in the State Court at the time of the filing of the petition to remove. When concurrent negli- gence is charged, the controversy is not separable, and as the complaint in this case, reasonably construed, charged concur- rent negligence, the court declined to hold that the State Courts erred in retaining jurisdiction.*'' Again, whether or not a cause presents a separable controversy which authorizes a re- moval from a State Court to a Circuit Court of the United States is to be determined by the plaintiff's own statement, made in good faith in the petition filed by him in the State Court, of his cause of action against the defendants. The plaintiff has the right to prosecute his action to final determination in his own way, and if in his petition he states in good faith a joint cause of action against two or more defendants, it is not open to either or both or all of them by answering separately or pleading separate defenses to make that a several suit or ac- fore must be taken to be true when they fail to be considered in the State Courts. Crehore v. Ohio & Mississippi Ry. Co., 131 U. S. 240, 244, 33 L. ed. 144, 9 Sup. Ct. 692; Chesapeake & Oliio Ry. Co. v. McCabe, 213 U. S. 207, 53 L. ed. 765, 29 Sup. Ct. 430. On the other hand, the mere epithet fraudulent in a petition does not end the matter. In the case of a tort whicli gives rise to a joint and several liability the plaintiff has an absolute right to elect, and to sue the tort-feasors jointly if he sees fit, no matter what his motive, and therefore an allegation that the joinder of one of the defend- ants was fraudulent, without other groimd for the charge than that its only purpose was to prevent removal, would be bad on its face. Alabama Great Southern Ry. Co. v. Thompson, 200 U. S. 206, 50 L. ed. 441, 26 Sup. Ct. 161; Cincinnati, New Orleans & Texas Pacific Ry. Co. v. Bohon, 200 U. S. 221, 50 L. ed. 448, 26 Sup. Ct. 166. If the legal effect of the declaration in this case is that the Illinois Central Railroad Company was guilty of certain acts and omissions by reason of which a joint lialjility was imposed upon it and its lessor, the joinder could not be fraudulent in a legal sense on any ground except that the charge against the alleged wrongdoer, the Illinois Central Railroad itself, was fraudulent and false." Illinois Central Ry. Co. V. Shcegog, 215 U. S. 308, 316, 54 L. ed. , 30 Sup. Ct. . 87 Chesapeake & Ohio Ry. Co. v. Dixon, 179 U. S. 131, 5 L. ed. 121, 21 Sup. Ct. 67. 356 OVER CORPORATIONS CONTINUED §§ 217, 218 tion which the pkhitiff has elected to make joint. But, if the plaintiff fails to state any cause of action against one of the defendants, the presence of that defendant as a party to the suit may be disregarded in determining the right of removal.^* § 217. Denial of Petition for Removal— Petitioners' Right to Elect Remedy. While a petitioner, if the State Court denies his petition for a removal, may remain in that court and take the case to the Federal Supreme Court for review on a writ of error after final judgment, he is not obliged so to do, but may file the record in the Circuit Court, and that court has jurisdiction to deter- mine the question of removability, and, notwithstanding § 720 of the Revised Statutes, it may protect its jurisdiction by in- junction against further proceedings in the State Court.*** § 218. Removal of Suit Denied in State Court— Filing 88 Reinartson v. Chicago Great Western Ry. Co. (U. S. C. C), 174 Fed. 707, 709, 710, citing as settling the above points: Ahibama Great Southern Ry. Co. V. Thompson, 200 U. S. 200, 26 Sup. Ct. IGl, 50 L. ed. 441. Com- pare Illinois Central Rd. Co. v. Sheegog, 215 U. S. 308, 30 Sup. Ct. , 54 L. ed. . 89 Chesapeake & Ohio Ry. Co. v. McCabe, 213 U. S. 207, 53 L. ed. 765, 29 Sup. Ct. 430. The court, per Mr. Justice Day, said: "It is not necwsary to determine . whether the case was removable or not. The Federal Court was given jurisdiction to determine that question, it did determine it, and its judgment was conclusive upon the parties Isefore it, until reversed by a proper proceeding in this court. Instead of liringing the case here the plaintiff proceeded in the State Court, and tiiat court denied effect to the Federal judgment. The .plaintiff in error lost no right when thus com- pelled to remain in the State Court, notwithstanding the Federal judgment in his favor, and brought the suit here by writ of error to the final judg- ment of the State Court, denying the right secured by the Federal judg- ment. It was open to the plaintiff to bring the adverse decision of the Federal Court on the question of jurisdiction to this court for review. This course was not pursued, but the action proceeded in the State Court evi- dently upon the theory that the judgment of the Federal Court was a nul- lity if it had erred in taking jurisdiction. For the reasons stated we think this hypothesis is not maintainable. The judgment of the Court of Appeals of Kentucky is reversed and the cause is remanded for further proceedings not inconsistent with this opinion," Mr. Justice McKenna dissenting. For statement of facts in this case see note 26 to § 204, herein. 357 § 'ilS JURISDICTION OF COURTS Answer and Record —Asserting Affirmative Remedy and Denial of Jurisdiction. The fact that defendant, after refusal of the State Court to grant the order of removal, filed an answer, is held not to af- fect its right to file the record in the Circuit Court and obtain an order of removal before the time for filing the answer as ex- tended had expired.^" Even though a defendant's petition to remove is wrongfully denied by the State Court, and in his answer he protests against the right of the State Court to retain jurisdiction, if he asserts an affirmative remedy in the State Court, in which he brought in a third party for liability over, he submits his whole case and cannot attack the action of the State Court in denjdng his petition for removal in the Federal Supreme Court on writ of error.^^ soAvent v. Deep River Lumber Co. (U. S. C. C), 174 Fed. 298, citing Dillon on Removal, § 156; Wilcox & Gibbes Guano Co. v. Phoenix Ins. Co. (U. S. C. C), 60 Fed. 929 ["whatever may have been held in other circuits, and whatever may be the strength of the reasons upon which the decisions to the contrary are based, the Wilcox case has been uniformly followed in this circuit, and, in the absence of any decision by the Supreme Court of the United States, is controlling authority. The opinion of Judge Simon- ton " (in the Wilcox case, who examines the decisions of the Federal Courts in the several circuits and concludes that the correct rule is that stated by Judge Dillon) " is well considered and sustained by reason. It is followed in the Second Circuit. Lord v. Lehigh Valley Rd. Co. (U. S. C. C), 104 Fed. 929," per Connor, Dist. J.]. As to filing answer attacking facts on which the right to remove, etc., de- pends, and determining issue in Federal Court, see Phillips v. Western Terra Cotta Co. (U. S. C. C), 174 Fed. 873. 91 Texas & Pacific Ry. Co. v. Eastin & Knox, 214 U. S. 153, 53 L. ed. 94G, 20 Sup. Ct. 564, aff'g 100 Tex. 556 (this was an action against a railroad corporation and its agents for wrongfully billing and shipping cattle over one road when requested to ship over another resulting in injury and dam- age to the cattle). In this case Mr. Justice McKeuna said: "The assign- ments of error present the question of the right of the Texas and Pacific Company to a removal of the case to the Circuit Court of the United States, (I) Because, being a corporation chartered under an act of Congress, the suit was one arising under the laws of the United States, and that this char- acter was not taken from it by joining a local defendant when it was an ac- tion to establish a joint liability. (2) Where the facts stated in the petition for removal show a cause properly removable from a State to a Federal Court, the State Court has no jurisdiction to pass finally upon them; that :J58 OVER CORPORATIONS CONTINUED § 219 The right of a defendant who has petitioned for removal of a case to the Federal Court cannot be extended beyond what is necessary to defend the case; he cannot deny the jurisdiction after invoking it for affirmative relief.**^ § 219. Federal Circuit Court May Determine Remova- bility of Cause and Protect Such Jurisdiction — Injunction. The United States Circuit Court has jurisdiction to deter- mine for itself the removability of a cause and may take juris- diction thereof and protect such jurisdiction even though the State Court refuse to make the removal order.^^ So after the presentation of a sufficient petition and bond to the State Court in a removable case, it is competent for the Circuit Court, by a proceeding ancillary in its nature, without violating the Federal statute ^'^ forbidding a court of the United States from enjoining proceedings in a State Court, to restrain the party right is one for the Federal Court, it having the exclusive province of pass- ing upon such questions of fact. "The first proposition is sustained in the Matter of Dunn, 212 U. S. 374, 53 L. ed. 558, 29 Sup. Ct. 299; the second proposition is sustained in Chesa- peake & Ohio Railway v. Emma R. McCabe, Administratrix, 213 U. S. 207, 53 L. ed. 765, 29 Sup. Ct. 430. The latter case also decides that if an application for removal be denied the petitioner loses no right by being compelled to stay in the State Court. In other words, that the petitioner may stay in the State Court and defend the action against him, and if the judgment go against him bring the case to this court and have the question of removal determined. But plaintiffs in error did not defend only against the cause of action. They instituted a cause of action against the St. Louis & San Francisco Railroad Company, in which the defendant in error had no concern, and recovered a judgment against that company in the sum of •SI, 800. By doing so they invoked the jurisdiction of the State Court in their own account and for their own purpose, and the case is brought within the ruling in Merchants' Heat & L. Co. v. Clow & Lens, 204 U. S. 286, 51 L. ed. 488, 27 Sup. Ct. 285." 92 Texas & Pacific Ry. Co. v. Eastin & Knox, 214 U. S. 153, 54 L. ed. 946, 30 Sup. Ct. 564, aff'g 100 Tex. 556. 93 Chesapeake & Ohio Ry. Co. v. McCabe, 213 U. S. 207, 29 Sup. Ct. 430, 53 L. ed. 765. When the Federal Supreme Court is called upon to exercise its own judg- ment it will not be controlled by decisions of State Courts. Dunn, Matter of, 212 U. S. 374, 53 L. ed. 558, 29 Sup. Ct. 299; Cochran & The Fidelity & De- posit Co. V. Montgomery, 199 U. S. 260, 26 Sup. Ct. 58, 50 L. ed. 178, 182. 94 Rev. Stat., § 720. 3-)9 § 220 JURISDICTION OF COURTS against whom a case has been legally removed from taking further steps in the State Courts.^^ Where a petition for re- moval is denied and the petitioner files the record in the Cir- cuit Court and that court determines for itself the question of removability and protects its jurisdiction by injunction against further proceedings in the State Court, the judgment rendered by the Circuit Court under such conditions is not void, even if jurisdiction be improperly assumed and retained, as the jurisdictional question can be reviewed by the Federal Supreme Court, and until reversed it is binding on the State Court and cannot be treated as a nulhty.^^ Where the State Court re- fuses to remove a cause to the Circuit Court and afterwards on filing the record in the Circuit Court that court remands the cause to the State Court, if there was any error in the rul- ing of the State Court it becomes wholly immaterial.^^ § 220. Effect Upon Jurisdiction of State Court of Re- moval of Cause. When the proper petition for removal accompanied by a sufficient bond is filed, the petitioner is entitled to an order for removal, and the jurisdiction of the State Court then ceases except for the purpose of passing on and making an order for removal. ^^ And when the petitioner presents to the State Court 95 Madisonville Traction Co. v. Saint Bernard Mining Co., 196 U. S. 239, 25 Sup. Ct. 251, 49 L. ed. 262. Injunction not granted to stay proceedings in State Courts, except, etc., "The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy." U. S. Rev. Stat., § 720, U. S. Comp. Stat., 1901, p. 581, Act of March 2, 1793, chap. 22, § 5, 1 Stat. 334. 96 Chesapeake & Ohio Ry. Co. v. McCabe, 213 U. S. 207, 29 Sup. Ct. 430, 53 L. ed. 564, citing Dowell v. Applegate, 152 U. S. 327, 38 L. ed. 463, 14 Sup. Ct. 611. For statement of the facts in the principal case, see note to that case in § 204, herein. 97 Telluride Power Trans. Co. v. Rio Grande Western Ry. Co., 187 U. S. 569, 47 L. ed. 307, 23 Sup. Ct. 178. 98 Philhps V. Western Terra Cotta Co. (U. S. C. C), 174 Fed. 873. The court, per Phillips, Dist. J., at pp. 875, 876, said: "The Supreme Court, with reiteration, has held that when the defendant presents to the State Court his petition for removal, accompanied with the required bond, praying for removal of cause into the Federal Court, if the petition on its face shows SfiO OVER CORPORATIONS CONTINUED § 220 a sufficient cause for removal it is the duty of that court to pro- ceed no further in the suit. The jurisdiction of the Circuit Court then attaches. ^'^ In other words, it is settled as to re- the facts essential to entitle the defendant to such removal, the only ques- tion left for decision by the State court is whether or not, taking the record then before it, the order should be made. If the petition be sufficient and the bond be given, eo instante every other jurisdiction of the State (;ourt ceases, and that of the Federal Court attaches over the parties and subject- matter. ' The State Court is only at liberty to inquire whether, on th(> face of the record (i. e., the petition of the plaintiff and the petition for removal) a case had been made which requires it to proceed no further. * * * With that fact established, the necessary citizenship for a removal existed. Whether it was a fact or not could only be tried in the Circuit Court.' Car- son v. Hyatt, 118 U. S. 287, 6 Sup. Ct. 1054, 30 L. ed. 167. 'Upon the filing of the petition and bond, the suit being removable under the statute, the jurisdiction of the State Court absolutely ceased, and that of the Circuit Court of the United States immediately attached. The duty of the State Court was to proceed no further in the cause. Every order thereafter made in that court was coram non judice, unless its jurisdiction was actually re- stored.' Steamship Co. v. Tugman, 106 U. S. 122, 1 Sup. Ct. 60, 27 L. ed. 87; Crehore v. Ohio & Mississippi Ry. Co., 131 U. S. 244, 9 Sup. Ct. 692, 33 L. ed. 144; Stone v. South Carolina, 117 U. S. 432, 6 Sup. Ct. 799, 29 L. ed. 962. So Judge Sanborn, in Boatmen's Bank v. Fritzlein, 135 Fed. 653, 68 C. C. A. 291, said: 'When a petition for removal and the bond required by the act of Congress are filed, and the record on its face shows the right of the petitioner to a removal, the jurisdiction of the State Court ceases, and that of the Federal Court attaches. If issues of fact arise upon the averments of the petition for removal, the jurisdiction to try them is in the Federal Court, and not in the State Court.' In Donovan v. Wells, Fargo & Co. (U. S. C. C. A.), 169 Fed. 363, the court again said: 'On the filing of a removal petition, it becomes a part of the record, and if, on the face of the record as so constituted, the suit appears to be a removable one, the State Court is bound to surrender jurisdiction.' The inevitable corol- lary is that no other pleadings, no other issues, are permissible in the State Court after the sufficient petition and bond are presented for removal." In this case the petition of the plaintiff in the State Court was silent as to the citizenship of the parties. The petition of the defendant for removal, sup- ported by affidavit, and accompanied with sufficient bond, alleged that at the time of bringing suit, and since, the plaintiff was a citizen of the State of Kansas, and the defendant was a citizen of the State of Missouri. When the transcript was filed in the Circuit Court, the record proper on its face showed the requisite jurisdictional facts to authorize the Circuit Court to proceed to judgment. In this state of the record the plaintiff filed a motion to remand and filed a motion to set aside the order overruling the motion to remand the cause to the State Court and for rehearing, which was denied. 9a Railroad Co. v. Koontz, 104 U. S. 5, 26 L. ed. 643. A defendant's right to remove to the Federal Court is amply protected. 301 § 221 JURISDICTION OF COURTS moval of causes, if the cause be a removable one, that is, if the suit in its nature be one of which the Circuit Court could right- fully take jurisdiction, then upon filing a petition for removal, in due time, with a sufficient bond, the case is, in law, removed, and the State Court in which it is pending will lose jurisdic- tion to proceed further and all subsequent proceedings in that court will be void. But if upon the face of the record, includ- ing the petition for removal, a suit does not appear to be a re- movable one, then the State Court is not bound to surrender its jurisdiction, and may proceed as if no application for re- moval had been made.^ Where the Federal Circuit Court takes jurisdiction and protects the same upon its determina- tion of the removabihty of a cause, where the State Court re- fuses to make the removal order, a final judgment, rendered by and under such conditions, by the Circuit Court, cannot be reviewed by the State Court until reversed by the United States Supreme Court .^ § 221. Jurisdiction of Federal Supreme Court After Removal Ordered by Circuit Court. When a State Court refuses permission to remove to a Fed- eral Court a case pending before the State Court, and the Fed- eral Court orders its removal, the United States Supreme Court has jurisdiction to determine whether there was error on the part of the State Court in retaining the case.^ He may file his record in the Circuit Court and thereby completely take jurisdiction from the State Court. Texas & Pacific Ry. Co. v. Eastin & Knox, 214 U. S. 153, 53 L. ed. 946, 29 Sup. Ct. 564, aff'd 100 Tex. 556. 1 Madisonville Traction Co. v. Saint Bernard Mining Co., 196 U. S. 239, 49 L. ed. 262, 25 Sup. Ct. 251. 2 Chesapeake & Ohio Ry. Co. v. McCabe, 213 U. S. 207, 53 L. ed. 765, 29 Sup. Ct. 430, Mr. Justice McKenna dissented. For statement of facts in this case, see note 89 to § 217, herein. 3 Missouri, Kansas & T. Ry. Co. v. Missouri R. & W. Comm'rs, 183 U. S. 53, 46 L. ed. 78, 22 Sup. Ct. 18. 362 PARTIES §222 CHAPTER XIV PARTIES 224. 225. 226. 227. 222. Preliminary Statement. 223. Powers of Corporations Gen- erally. Corporation as Entity. Corporation as Entity — Equity. Directors of One Corporation. Directors of Another Does Not Prevent Suit by or Against — Merger. Corporations May Sue and Be Sued. 228. Corporations as Necessary or Indispensable Parties. 229. Same Subject— Equity. 230. Corporation as Salvors May Maintain Suit for Salvage. 231. Power of Corporation to Sue and Be Sued Includes Power to Arbitrate. 232. State Bank Converted Into National Bank — Right to Sue in Former Name. 233. Corporation's Right to Sue — Waiver — Foreign Corpora- tion. § 234. 235. 236. 237. 238. 239. 240. 241. 242. 243. 244. When Corporation Not Enti- tled to Equitable Considera- tion of Courts — Consolida- tion to Prevent Competition — Fraud on Public. Consolidation — Successor of Corporation — Rights of. Foreign Corporation — Par- ties. Foreign Corporation — Parties — Presumptions. Right of Corporation to Sue as Affected by Dissolution. Same Subject. Same Subject. Injuries to Persons in Execu- tion of Public Trust — Rule as to When Not Applicable to Private Corporations. Injuries to Property Gen- erally. Right of Consignor to Sue Corporation. Suits by and Against Con- signees. § 222. Preliminary Statement. Logically the power of corporations is the basis of their right to sue and be sued and to defend. We have treated of their rights and remedies generally; and particularly under the Constitution which is necessarily the foundation of all actions and defenses. In what follows we shall only treat of corpora- tions as parties in a general way because there are compara- tively few cases in which corporations stand out distinctively and separate from the general rules of law. 363 § 223 PARTIES § 223. Powers of Corporations Generally. In the United States a corporation can only have an ex- istence under the express laws of the State by which it is created and can exert no power or authority which is not granted to it by the charter under which it exists or by some other legislative act. If a corporation is organized through articles of association entered into under general laws, the memorandum of association stands in the place of a legisla- tive charter in so far that its powers cannot exceed those enumerated therein, but powers enumerated and claimed therein which are not warranted by statute are void for want of authority.^ A corporation has only such power as is conferred upon it expressly or by imphcation to enable it to carry out the ob- jects of its creation.^ Again, the powers of a corporation are, strictly speaking, twofold; those that are derived from express grant, and those that are incident and necessarily appertain to it, whether ex- pressed in the grant or not. In modern times, it has been usual to embrace all these incidental powers in the act of in- corporation, so that it may now be considered a general rule, that the powers of a corporation are regulated and defined by the act which gives it existence. A corporation is strictly limited to the exercise of the powers specifically conferred upon it; and the exercise of the corporate franchise cannot be ex- tended beyond the letter and spirit of the act of incorpora- tion.^ In brief, corporations can possess and exercise only those powers which are expressly conferred or which are necessarily implied, essential to the exercise of those expressly granted, incidental and necessary to carry into effect the purposes for which it was created. Powers incidental or supplemental to 1 Oregon Ry. & Nav. Co. v. Oregonian Ry. Co., 130 U. S. 1, 32 L. ed. 837, 9 Sup. Ct. 409, 5 Rd. & Corp. L. J. 364. 2 Bankers' Union v. Crawford, 67 Kan. 449, 73 Pac. 79, 100 Am. St. Rep. 465. 3 Leggett V. New Jersey Manufacturing & Banking Co., 1 N. J. Eq. 541, 23 Am. Dec. 728. 364 PARTIES § 223 the very existence of the corporation are such as are best calculated to effect the object for which they were granted; they should be directly and immediately appropriate to the execution of the specific powers and not merely those which sustain only a slight, indirect or remote relation to the specific purposes of the corporation.^ 4 United States: Horn Silver Min. Co. v. New York, 143 U. S. 305, 36 L. ed. 164, 12 Sup. Ct. 403 ("a corporation being the mere creature of the legis- lature, its rights, powers and privileges are dependent solely upon the terms of its charter." Id., 312, per Mr. Justice Field, a case of taxation of corporate franchises); Thomas v. Railroad Co., 101 U. S. 71, 25 L. ed. 950 [(explained in Oregon Ry. & Nav. Co. v. Oregonian Ry. Co., 130 U. S. 1, 32 L. ed. 837, 9 Sup. Ct. 409). The power of a corporation organized under a legislative charter are only such as the statute confers; and the enumeration of them implies the exclusion of all others. " We take the general doctrine to be in this country, though there may be exceptional cases and some authorities to the contrary, that the powers of corporations organized under legislative statutes are such and such only as those statutes confer. Conceding the rule applicable to all statutes, that what is fairly implied is as much granted as what is expressed it remains that the charter of a corporation is the measure of its powers, and that the enumeration of these powers implies the exclusion of all others." Id., 82, per Mr. Justice Miller]; Dartmouth College V. Woodward, 4 Wheat. (17 IT. S.) 518, 4 L. ed. 629 (a corporation, " being the mere creature of the law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created." Id., 635, per Mr. Chief Jus- tice Marshall); Cumberland Teleph. & Teleg. Co. v. Evanville (U. S. C. C), 127 Fed. 187; New Albany Water Works v. Louisville Bkg. Co. (U. S. C. C. A.), 122 Fed. 776, 58 C. C. A. 576; Sherman v. American Congregational Assn. (U. S. C. C. A.), 113 Fed. 609, 51 C. C. A. 529. Alabama: Meyer v. Johnston, 53 Ala. 237 ("a corporation, being a creature of the legislative enactment, has only such powers and capacity as it is endowed with by its creator." Id., 324, per Manning, J.). Georgia: First M. E. Church v. Atlanta, 76 Ga. 181. Illinois: People v. Illinois Cent. Rd. Co., 233 111. 378, 84 N. E. 368, 122 Am. St. Rep. 181 (the general rule is that corporations may exercise those powers expressly given and such others as are necessary to carry the ex- press powers into effect. A power which the law may regard as existing by implication must be one in a sense necessary, needful and suitable to ac- complish the objects of the grant; one that is directly and immediately appropriate to the execution of the specific powers and not one that has but a slight, indirect or remote relation to the specific purposes of the corporation); People, Moloney, v. Pulhnan's Palace Car Co., 175 111. 125. 51 N. E. 664, 64 L. R, A. 366 {incidental or implied powers enable a corpora- 365 § 223 PARTIES Public corporations' powers are not coextensive with those of individuals in respect to the surrender of their franchises and tion to carry in effect its express powers to accomplish the objects for which it exists but cannot enlarge such express powers and permit it to engage in enterprises remotely connected with its specific objects) ; Chicago Municipal Gas Light & Fuel Co. v. Town of Lake, 130 111. 42, 53, 22 N. E. 616 (where a private corporation is organized under the general incorporation law, the franchises conferred by the State when it was organized are to be ascer- tained and determined from the objects of the incorporation as stated and set forth in its articles of incorporation. And although the statute under which it was organized vests it with, and authorizes it to exercise all the powers necessary and requisite to carry into effect the objects for which it was formed, nevertheless the general powers intended by the enactment are such powers only as are necessarily incident and supplemental to the special powers granted). Louisiana: Milwaukee Trust Co. v. Germania Ins. Co., 106 La. 669, 31 So. 298; State, Jackson, v. Newman, 51 La. Ann. 833, 25 So. 408, 10 Am. & Eng. Corp. Cas. (N. S.) 217. Minnesota: Fuller Laundry Co., In re, 79 Minn. 414, 82 N. W. 673. Missouri: State, Crow, v. Lincoln Trust Co., 144 Mo. 562, 46 S. W. 593. Nebraska: Herrick v. Humphrey Hardware Co., 73 Neb. 809, 103 N. W. 685, 119 Am. St. Rep. 917 (the powers of a corporation in effecting its ob- jects are as broad and comprehensive as those of an individual, unless expressly prohibited) ; Lees v. Atchison & N. R. Co., 24 Neb. 143, 38 N. W. 43. New York: Brooklyn Heights Rd. Co. v. City of Brooklyn, 152 N. Y. 244 (what powers are implied); People ex rel. Tiffany v. Campbell, 144 N. Y. 166 (what powers are implied); Jemison v. Citizens' Sav. Bk., 122 N. Y. 135 (as to power foreign to charter); Sistare v. Best, 88 N. Y. 527 (as to contracts within apparent scope of powers); Curtis v. Leavett, 15 N. Y. 9 ["corporations, I admit also, can only exercise the powers ex- pressly or incidentally conferred. It scarcely needed a statute of this State to declare a principle of the common law so familiar; and there is nothing in the terms of the statute (1 Rev. St. 600, § 3) quoted with so much em- phasis to give greater intensity to the doctrine." Id., 54, per Comstock, J.]. See McGraw, In re, v. Cornell University, 10 N. Y. Supp. 495, 45 Hun, 354, and cases cited. Ohio: Central Ohio Natural Gas & F. Co. v. Capital City Dairy Co., 60 Ohio St. 96, 63 N. E. 711, 41 Ohio L. J. 312, 10 Am. & Eng. Corp. Cas. (N. S.) 228, 64 L. R. A. 395. Oregon: Beers v. Dallas, 16 Oreg. 334, 18 Pac. 835. Texas: Ft. Worth St. Rd. Co. v. Rosedale St. Rd. Co., 68 Tex. 169, 4 S. W. 434; Gulf, Colorado & Santa Fe R. Co. v. Morris, 67 Tex. 692, 4 S. W. 156. Utah: Weyeth Hardware & M. Co. v. James-Spencer-Bateman Co., 15 Utah, 110, 47 Pac. 604. Articles of incorporation under general laws have the effect of a charter when necessary to ascertain the extent of the powers conferred upon the 366 PARTIES § 224 the delegation of their duties to otliors; an individual owns property unaffected by a necessity to use it in the performance of duties in which the public has an interest, and is not re- strained by charter limitations.'^ § 224. Corporation as Entity. A corporation is an entity irrespective of, and entirely dis- tinct from, the persons who own its stock, and it is well settled that all the shares in a corporation may be held by a single person and yet the corporation continue to exist; nor does the fact that one person owns all the stock, make him and the corporation one and the same person. The corporation does not lose its legally distinct and separate personality by reason of the ownership of the bulk or whole of its stock by another; nor does the fact that all the shares of a corporation pass into the ownership of one person, operate to dissolve the cor- poration. It is also immaterial whether the sole owner of stock is a man or another corporation, and the corporation owning such stock is as distinct from the corporation whose stock is owned as the man is from the corporation of which he is the sole member.^ corporation so organized. North Point Consol. Irrig. Co. v. Utah & S. L. Canal Co., 16 Utali, 246, 52 Pac. 168, 4 L. R. A. 851, 8 Am. & Eng. Corp. Cas. (N. S.) 98. See also Detroit Driving Club v. Fitzgerald, 109 Mich. 670, 67 N. W. 899, 4 Am. & Eng. Corp. Cas. (N. S.) 546, 3 Det. L. N. 232; Inter- national Boom Co. V. Rainy Lake River Boom Corp., 97 Minn. 513, 107 N. W. 735. Assignment of claim for damages not connected with corporation's purposes of incorporation and based upon a claimed conspiracy to defraud is not within the power of the corporation to acquire. John V. Farwell Co. v. Josephson, 96 Wis. 10, 70 N. W. 289, 37 L. R. A. 138, 142, 71 N. W. 109. Railroad corporations possess only those rights, powers or properties which the charters of such corporations confer upon them, either expressly or as incidental to their existence and this applies to all other corporations. St. Louis, Iron Mountain & Southern Ry. Co. v. Paul, 64 Ark. 83, 40 S. W. 705, 62 Am. St. Rep. 154, 37 L. R. A. 504. 5 Southern Electric Securities Co. v. State, 91 Miss. 195, 44 So. 785. 6 Commonwealth v. Monongahela Bridge Co., 216 Pa. St. 108, 114, 115, 64 Atl. 909, per Potter, J., citing or quoting Exchange Bank of Macon v. Mason Construction Co., 97 Ga. 1, 6, 25 S. E. 326; Kendall v. Klapperthal Co., 202 Pa. 596, 607, 52 Atl. 92; Rhawn v. Edge Hill Furnace Co., 201 367 § 224 PARTIES It is also held that a corporation is an entity, irrespective of the persons who own all of its stock; that the fact that one person owns all the stock does not make such owner and the corporation one and the same person; and that there is not any identity between the individual or the corporation which owns such stock in another corporation, and that latter corporation^ Pa. 637, 51 Atl. 360; Monongahela Bridge Co. v. Pittsburg & Birmingham Traction Co., 196 Pa. 25, 46 Atl. 99, 10 Cyc. 1277. 7 Ulmer v. Lime Rock R. Co., 98 Me. 579, 57 Atl. 1001. As to corporation being entity distinct from stockholders, see the following cases: United States: Central Trust Co. of N. Y. v. Western North Carolina Rd. Co., 89 Fed. 31, per Simonton, Cir. J. (" this sovereign power made of several persons a single entity"); M'Cabe v. Illinois Central Rd. Co., 13 Fed. 827, 828 (is a legal entity, per Love, D. J.). Alabama: State v. Stebbins, 1 Stew. (Ala.) 209, 306-308 [per Saffold, J., citing Bank of United States v. Dandridge, 12 Wheat. (25 U. S.) 91, per Marshall, C. J., to point that it is one entire impersonal entity]. Illinois: Ford v. Chicago Milk Shippers' Assoc, 155 111. 166, 39 N. E. 651, 27 L. R. A. 298 (while legal entity and distinct from persons composing it, it cannot act independently of natural persons constituting it, per Phillips, J.). Kentucky: Lewis v. Maysville & Big Sandy Rd. Co., 25 Ky. L. Rep. 948, 70 S. W. 526 (when statute refers to entity and not to individual stock- holder's right of removal to Federal Court, cannot he defeated on ground that corporation not a legal entity). Maryland: Folsom v. Detrick Fertilizer & Chemical Co., 85 Md. 52, 69, 36 Atl. 446 (corporation is person distinct from stockholders, per Bryan, J.). Nebraska: Home Fire Insurance Co. v. Barber, 67 Neb. 644, 666, 93 N. W. 1024 (stating when separate and distinct in law and when not in equity, per Pound, C). New York: Buffalo Loan, Trust & Safe Deposit Co. v. Medina Gas & Elec. Light Co., 42 N. Y. Supp. 781, 788, 12 App. Div. 199 (word "entity" is merely descriptive but cannot act independently of persons composing it, per Green, J.); People v. North River Sugar Refining Co., 3 N. Y. Supp. 401, 408, 16 Civ. Proc. R. 1, 2 L. R. A. 33 (is not in reality distinct, although in one point of view an entity, per Barrett, J.) ; Supervisors of Niagara v. People, 7 Hill (N. Y.), 504, 507 (individuality of natural persons is merged in entity, per Bockee, Senator). Pennsylvania: Rhawn v. Edge Hill Furnace Co., 201 Pa. 637, 51 Atl. 360 (is an entity irrespective of persons owning stock) ; Monongahela Bridge Co. V. Pittsburg & Birmingham Traction Co., 196 Pa. St. 25, 46 Atl. 99 (same statement as last case). South Carolina: State v. Hood, 15 Rich. L. (S. C.) 177, 188 (corporation is wholly distinct from natural persons composing it, per Inglis, J.). 368 PARTIES § 225 The distinction between the conduct of a corporation and of its stockholders is important and controls as to questions between the corporation and its stockholders, and between the corporation, or its stockholders, and third persons. This dis- tinction, however, is introduced for convenience and to subserve the ends of justice; but when invoked in support of an end subversive of its pohcy should be and is disregarded by the courts.^ Where a corporation is proceeding at law, or where it is asserting a title to property, or the title to property is involved the corporation is regarded as a person separate and distinct from its stockholders or any or all of them. But where it is proceeding in equity to assert rights of an equitable nature, or is seeking relief, upon rules and principles of equity, the court of equity will not forget that the stockholders are the real and substantial beneficiaries of a recovery, and if the stockholders have no standing in equity, and are not equitably entitled to the remedy sought to be enforced by the corpora- tion in their behalf and for their advantage, the corporation will not be permitted to recover.® § 225. Corporation as Entity — Equity. The doctrine of corporate entity is not so sacred that a court of equity, looking through forms to the substance of things, Tennessee: City of Nashville v. Ward, 16 Lea (84 Tenn.), 27, 30 (is not distinct, per Deaderick, C. J.). 8 Southern Electric Securities Co. v. State, 91 Miss. 195, 207, 44 So. 785, per Calhoun, J., citing People v. North River Refining Co., 3 N. Y. Supp. 401, 7 N. Y. Supp. 406, 54 Hun, 354, 2 L. R. A. 33, 5 L. R. A. 386; State V. Standard Oil Co., 49 Ohio St. 137, 30 N. E. 279, 15 L. R. A. 145, 34 Am. St. Rep. 541. In Doctor v. Harrington, 196 U. S. 579, 586, 49 L. ed. 606, 25 Sup. Ct. 355, the court, per McKenna, J., in discussing the question of jurisdiction, and diversity of citizenship for the purpose thereof, makes a distinction between the corporation as such and its stockholders, and merely states in this connection that a corporation has rights and obligations separate from the stockholders and can sue and be sued. 9 Home Fire Ins. Co. v. Barber, 67 Neb. 644, 108 Am. St. Rep. 716, 93 N. W. 1024, considering many authorities. 24 369 § 226 PARTIES may not, in a proper case, ignore it to preserve the rights of innocent parties or to circumvent fraud.^° § 226. Directors of One Corporation, Directors of An- other, Does Not Prevent Suit by or Against— Merger. Although there is a comminghng of officers of two corpora- tions, as when some of the directors of one corporation are directors of another, still it does not prevent them from being distinct corporations, with a right to contract with each other in their corporate capacities, and to sue and be sued by each other in regard to such contracts, where the relations of the parties have not been abused." The fact that the stockholders of two separately chartered corporations are identical, that one owns shares in another, and that they have mutual deal- ings, will not, as a general rule, merge them into one corpora- tion or prevent the enforcement against the insolvent estate 10 Rieger. Kapner & Atlmark, In re, 157 Fed. 609, 19 Am. B. Rep. 622. 538. The court, per Sater, Dist. J. (p. 629), cites First National Bank of Chicago V. Trebein Co., 59 Ohio St. 316, 52 N. E. 834, and the following is a part of the quotation in the said case, given by the court: "In contem- plation of law, a corporation is a legal entity, an ideal person, separate from the real persons, who compose it. This fiction, however, is limited to the uses and purposes for which it was adopted — convenience in the transaction of business, and in suing and being sued in its corporate name, and the continuance of its rights and liabilities, unaffected by changes in its corporate members. But the fiction cannot be abused. A corporation cannot be formed for the purpose of accomplishing a fraud or other illegal act under the dis- guise of the fiction." The court in the principal case cites also the follow- ing authorities: Cincinnati, Volksblatt Co. v. Hoffmeister, 62 Ohio St. 189, 200, 56 N. E. 1033, 48 L. R. A. 732, 78 Am. St. Rep. 707; State v. Standard Oil Co., 49 Ohio St. 137, 177-179, 30 N. E. 279, 15 L. R. A. 145, 34 Am. St. Rep. 541; Brundred v. Rice, 49 Ohio St. 640, 32 N. E. 169, 34 St. Rep. 589; Thompson on Corp., § 1077p; Cook on Corp. (4th ed.) 23; 7 Am. & Eng. Ency. of Law, 633, 634. See also United States v. Milwaukee Refrigerator Co., 142 Fed. 247 (holding corporation a legal entity as a general rule, but will be regarded in law as an association of persons under certain circum- stances). 11 Pauly V. Pauly, 107 Cal. 8, 48 Am. St. Rep. 98, citing and quoting from Leavenworth v. Chicago, Rock Island & Pac. Ry. Co., 134 U. S. 688, 707, 33 L. ed. 1064, 10 Sup. Ct. 708 (a case where a foreclosure of a mort- gage on a railroad, and its sale under a decree, was held valid, in a suit attacking them for fraud, because of the trust relations of the parties, when there was no collusion or fraud in fact). 370 PARTIES § 227 of the one of an otherwise vaHd claim of the other. It is an elementary and fundamental principle ^^ that a corporation is an entity separate and distinct from its stockholders and from other corporations with which it may be connected.^' § 227. Corporations May Sue and Be Sued. As stated in a preceding section there arc, independently of any express powers, certain incidental or implied powers possessed by corporations the exercise of which are necessary to enable them to effect the purposes for which they were created, and among these incidental, implied and necessary powers is that of the common-law right to sue and be sued, plead and be impleaded, in the absence of some special statu- tory restriction or prohibition, and in the several States there are also provisions under Constitutions and statutes empower- ing suits to be brought and maintained by and against corpo- rations, or to sue and be sued in their corporate name, or to maintain and defend judicial proceedings, etc.^^ So a power 12 Watertown Paper Co., In re, 169 Fed. (C. C. A.) 252. 13 That corporation an entity, see Dec. Dig. Corp., § 378. 14 United States: Railroad Co. v. Harris, 12 Wall. (79 U. S.) 65, 20 L. ed. 354 ("a corporation is in law, for civil purposes, deemed a person. It may sue and be sued." Id., 81, per Mr. Justice SwajTie, in discussing the right to sue a railroad corporation in Virginia, for injuries done there said corpora- tion having been chartered in Maryland and thereafter having its charter confirmed in Virginia); Bank of United States v. Dandridge, 12 Wheat. (25 U. S.) 64, 6 L. ed. 552 ("to corporations, however erected, there may be said to be certain incidents attached, without any express words or authority for this purpose, such as the power to plead and be impleaded." Id., 67, per Mr. Justice Story, in discussing the acts of aggregate corpora- tions at the common law); Falconer v. Campbell, 2 McLean (U. S. C. C), 195, 198 (the court declares that the power " to sue and be sued " is among "the ordinary powers of a corporation," but the action was against the directors of a bank to recover the amount of a bill of exchange drawn by the bank, which was incorporated under a statute giving it the power to sue and be sued, plead and be impleaded, etc.). Alabama: Planters' & Merchants' Bk. of Mobile v. Andrews, 8 Port. (Ala.) 404 (the incidental power and liability of suing and being sued appertains to all corporations, even at common law, unless taken away by positive enactment. Id., 425, per Collier, C. J., in discussing the authority to per- form by agents, services incident to the commencement and prosecution of suits). 371 § 227 PARTIES given to a corporation "to receive, hold and manage" a fund, implies the power to sue for it.^^ It is also well settled that a corporation represents the stockholders in all matters within Arkansas: See Rogers v. Galloway Female College, 64 Ark. 627, 44 S. W. 454, 39 L. R. A. 636 (as to college established by church standing in loco ecclesire as to right to sue). Colorado: Breene v. Merchants' & Mechanics' Bk., 11 Colo. 97, 17 Pac. 281 (under the laws corporations may sue and be sued as individuals). Illinois: Marsh v. Astoria Lodge, 27 111. (Peck.) 421 (if right to sue is not expressly granted, corporation may still exercise the faculty, if all the powers incident to corporations are conferred upon it); Estell v. Knights- town & Middletown Turnpike Co., 41 Ind. 174 (legal capacity to sue is one of the capacities of every corporation). Maryland: McKim v. Odom, 3 Bland's Ch. (Md.) 407 (is an incident to bodies politic of all descriptions. Id., 419, per Bland, Ch.). New Hampshire: Libbey v. Hodgdon, 9 N. H. 394 ("there seems to be nothing in the character of a corporation to prevent its suing and being sued like a natural person. It is, in legal contemplation, a person, having exist- ence, invested with rights, and subjected to liabilities; and very properly a party to proceedings in courts of law or equity, whenever these rights and liabilities are drawn in controversy." Id., 396, per Willcox, J., in discussing right to sue foreign corporation in State). New .Jersey: M. B. Faxon Co. v. Lovett Co., 60 N. J. L. 128, 30 Atl. 602, 6 Am. & Eng. Corp. Cas. (N. S.) 497 (foreign corporations expressly authorized by statute to sue in State on contracts irrespective of where made) ; Leggett v. New Jersey Mfg. & Bkg. Co., 1 N. J. Eq. 541, 23 Am. Dec. 728 (right to sue and be sued incident to every corporation). New York: Thomas v. Dakin, 22 Wend. (N. Y.) 9 ("the 'franchises and Hberties,' or in more modern language, and as more strictly applicable to private corporations, the powers and faculties which are usually specified as creating corporate existence are: * * * 1. The power to sue and be sued. * * * These indicia were given by judges and elementary writers at a very early day. * * * We may, in short, conclude by say- ing, with the most approved authorities at this day, that the essence of a corporation consists in a capacity; * * * 2. To * * * sue and be sued by its corporate name as an individual." Id., 70, 71, per Nelson, C. J.; Id., 98, per Cowen, J. A case where an action was brought by plaintiff as president of a bank, an association formed under the general banking law of 1838 to recover in assumpsit demands or debts due the institution as a bank and not to the members of the association jointly) ; Clarrisey v. Metro- poUtan Fire Department, 7 Abb. Prac. N. S. (N. Y.) 352 (bodies created by the legislature have an incidental capacity to sue and be sued, independently of any express power; and for such purposes are to be regarded as corpora- tions sub modo). Oregon: Capital Lumbering Co. v. Learned, 36 Oreg. 544, 50 Pac. 454, 15 Proprietors of White School House v. Port, 31 Conn. 242. 872 PARTIES § 227 the scope of its corporate powers transacted in good faith by the officers of the corporation; and this applies to the con- ceded powers of corporations in bringing and defending ac- 78 Am. St. Rep. 792 ("the rule is well settled that, notwithstanding a corporation may have been created for the transaction of certain buainess, which is specified in the articles of incorporation, it may invoke any legal or equitable remedy which would be available to an individual under similar circumstances. 1 Morawitz, Priv. Corp. 357. The right of a corporation to sue is a necessary incident to its creation, and whatever its business may be, any right of action which necessarily arises therefrom will receive the consideration of a court to which it may apply for relief." Id., 549, per Moore, J.); Grant County v. Lake County, 17 Oreg. 453 (creating a corpora- tion for any purpose impliedly confers upon it the incidental power to sue and be sued. The point, however, in this case was that a county could not be sued at law except as provided by statute). Tennessee: Jonesboro v. M'Kee, 2 Yerg. (10 Tenn.) 167 (some powers are incident to a corporation, although not expressly given, as to sue and be sued, etc.). "The power of a corporation to sue is * * * one of its incidental powers, although it is most generally expressly given in charters to private corporations." And "it is very obvious that a corporation would be en- tirely incapacitated to manage its concerns and to carry into effect the objects for which it is constituted if it had not the capacity of protecting its rights and enforcing the just claims in its favor by ordinary judicial process." Angell & Ames on Corp. (9th ed.), § 369. "A corporation is a creature of the charter that constitutes and gives it being, and prescribes bounds and limits to its operations, beyond which it cannot regularly proceed ; yet there are some things, incident to a corporation, which it may do without any express provision in the act of incorporating " and " it is incident to sue and be sued." 2 Bacon's Abridg. (ed. 1860), "Corporations," pp. 445, 446 and note. " After a corporation is formed and named, it acquires many powers, rights, capacities, and incapacities. * * * Some of these are neces- sarily and inseparably incident to every corporation; which incidents as soon as a corporation is duly erected, are tacitly annexed of course, * * * (2) to sue and be sued plead and be impleaded, * * * by its corporate name." 1 Blackstone, Coram. 475 (Hammond's ed., 830) (Lewis's ed., bot. p. 453) (Wendell's ed., 475); 3 Stephens' Coram, (ed. 1845), 175. " It is usual, however, in the United States by the charter or act of in- corporation to enable this body politic to sue and be sued." 1 Dane's Abridg. (ed. 1823), chap. 22, p. 460; 5 Id., chap. 143, p. 144. "Corporations have a capacity to sue and be sued by their corporate name " and " private moneyed corporations are not only liable to be sued like private individuals in assumpsit for breaches of contract, but they may be sued by special action on the case for neglect and malfeasance and breaches of duty, and in actions of trespass and trover for damages resulting from trespass and torts com- mitted by their agents under their authority; and the authority of such 373 § 228 PARTIES tions concerning the rights and obKgations of the corporation.^*"' A corporation must, however, be sued in the mode prescribed by the legislature.^' So a corporation organized for the pur- pose and engaged in the business of operating a machine shop for the construction and repair of machinery, clearly has ca- pacity to sue for work performed in its capacity as a machin- ist.^* But corporation rights and interest in law and equity, wrongfully and injuriously affected, must, unless some special ground be shown, be generally asserted by defendant in its corporate name.^^ A corporation cannot be sued without its consent outside of the parish of its domicile on an implied promise to pay the liabilities of a commercial firm.^° § 228. Corporations as Necessary or Indispensable Parties. Corporations are indispensable parties to a bill which affects corporate rights or liabilities.^^ So in an action in a Federal agents need not be under seal." 2 Kent's Comm. (13th ed.) *284, bot. p. 379. " When a corporation is duly created all other incidents are tacitly annexed." "It is an incident to sue and be sued, plead and be impleaded." 6 Viners' Abridg. (2d ed., 1792), "Corporations," " g," p. 265 and note. 16 Singer v. Hutchinson, 183 111. 606, 613, 75 Am. St. Rep. 132. 17 Holgate V. Oregon Pac. R. Co., 16 Oreg. 123, 17 Pac. 859. 18 Pacific Iron & Steel Works v. Goerig (Wash., 1909), 104 Pac. 151. In this case the contention that the corporation had no legal capacity to sue was founded on .the wording of a statute authorizing the filing of liens; it being thought that the classification of the persons authorized to take advantage of the statute was not broad enough to include the corporation (respondent). But whether or not it could claim a lien was declared not to be a material question. "In this proceeding it was not allowed a lien thereimder," per Fullerton, J. ' 19 Bradley v. Richardson, 2 Blatchf. (U. S. C. C.) 343, Fed. Cas. No. 1,786. 20 Police Jury Parish of Iberville v. Texas & Pacific Ry. Co., 122 La. 388, 47 So. 692. A case of an action to recover damages for the destruction by fire of a parish bridge alleged to have been occasioned by the negligence of defendant railway and a "firm." A third defendant, an oil corporation, was sought to be held liable as having assumed the said commercial firm's obligations and liabilities by taking over its property and rights. The oil company was a foreign corporation with a local domicile in another parish than that of Iberville. 21 Swan Land & Cattle Co. v. Frank, 148 U. S. 603, 37 L. ed. 577, 13 Sup. Ct. 091. 374 PARTIES § 229 Court in Pennsylvania, brought against Pennsylvania stock- holders of an insolvent foreign corporation under the laws of the foreign State the corporation is an indispensable party de- fendant .^^ §229. Same Subject— Equity. All persons materially int(;rested in the subject of a suit in chancery, ought to be made parties, either plaintiffs or defend- ants; but this is a rule established for the convenient admin- istration of justice, and is more or less within the discretion of the court; and it should be restricted to parties whose in- terests are in the issue, and to be affected by the decree; the relief granted, will always be so modified, as not to affect the interests of others.^^ Again, persons or corporations interested must be made parties to a bill in equity for an injunction, es- pecially where the object of the bill cannot be attained without seriously affecting the interests of such persons or corporations.^'* The proposition, that to a shareholder's suit to enforce a corporate right in protection of their equitable interest in the corporate assets the corporation is a necessary party, has been approved and followed in numerous cases. Such corporation is said to be a necessary party because its rights are involved in the litigation which would necessarily be fruitless unless the corporation and the stockholders represented by it other than the plaintiffs, are bound thereby .^^ Some text-writers and some cases go farther and hold such corporation to be an indispensable party, not simply on the general principles of equity pleading, in order that it may be bound by the decree, but in order that the relief when granted may be awarded to it, as a party to the record, by the decree; ^^ 22 Elkhart Nat. Bank v. Northwestern Guaranty Loan Co. (U. S. C. C), 84 Fed. 76, 7 Pa. Dist. Rep. 13, 287. 23 Mechanics' Bank v. Seton, 1 Pet. (26 U. S.) 299, 7 L. ed. 152. 24 Northern Indiana Rd. Co. v. Michigan Cent. Rd., 5 McLean (U. S. C. C), 444, Fed. Cas. No. 10,321. 25 Citing March v. Railroad, 40 N. H. 548, 568; Davenport v. Dows, 18 Wall. 626; Bagshaw v. Railway, 7 Hare, 114, 131; Cook, Stock and Stock- holders, § 692. 28 Citing 3 Pomeroy's Equity Jurisprudence, § 1095. 375 § 229 PARTIES or, as it is otherwise expressed, because the rehef asked for "must be worked out by or through" the corporation.^^ If the rehef sought requires a personal judgment against the corporation the principle is well stated in this manner, though as thus broadly put it is not sustained by all the au- thorities. The ground generally stated is the necessity that the corporation should be bound by the judgment.'^ There is a well-defined distinction between necessary and proper parties defendant in suits in equity, and in New York where a complete determination of the controversy cannot be had without the presence of other parties, the court should di- rect them to be brought in pursuant to § 452 of the Code of Civil Procedure, and it is error for the court to proceed to judgment in the absence of such necessary parties although no objection has been previously taken. As a corollary to the rule afore- said, where a complaint in equity discloses that certain of the defendants are proper parties, although possibly not necessary parties, the proper party defendant as distinguished from a nec- essary party is not entitled to test the complaint by the strict rules of demurrer .2^ Although, in general, a bill in chancery will not be dismissed for want of proper parties, the rule resting as it does upon the supposition that the fault may be remedied, and the necessary parties suppUed, does not apply when this is impossible, and whenever a decree cannot be made without prejudice to one not a party. In such a case the bill must be dismissed. Hence, in a case where, if all the partners were made parties to the bill, the court in which the bill was filed would, from the char- acter of its jurisdiction (which was confined to persons resi- dent within particular districts, which one of the partners here was not), be without any jurisdiction of the controversy, the bill must be dismissed.^" 27 Citing Black v. Huggins, 2 Tenn. Ch. 780; 1 Morawitz, Corp., § 257. 28 Kidd V. New Hampshire Traction Co., 72 N. H. 273, 286, per Par- sons, C. J. 29 Mawhinney v. Bliss, 124 App. Div. 609, 109 N. S. Supp. .3.32. 30 Bank v. Carrollton Railroad, 11 Wall. (78 U. S.) 624, 20 L. ed. 82. 376 PARTIES § 230 But it is not indispensable that all the partie.s in a suit in equity should have an interest in all the matters contained in the suit; it will be sufficient, in order to avoid the objection of multifariousness, if each party has an interest in some ma- terial matters in the suit, and they are connected with the others. To support the objection to multifariousness to a bill in equity, because the bill contains different causes of suit against the same person, two things must concur; first, the grounds of suit must be different; second, each ground must be sufficient, as stated, to sustain a bill.^^ A pubHc nuisance may be abated on a bill in equity, brought by a private party, who has suffered special damage, and it is necessary for the plaintiff in such a bill to show that he has sustained individual injury by the nuisance. In such a case the private party, though nominally suing on his own account, acts rather as a public prosecutor, on behalf of all who are or may be injured. If he has partners in the particular business affected by the nuisance, he need not join them as plaintiffs, any more than he need join other persons who have suffered similar injuries .^^ § 230. Corporation as Salvors May Maintain Suit for Salvage. A corporation is not disqualified, by the simple fact of its being a corporation, from maintaining a suit for salvage. Hence, where a service, in its nature otherwise one of salvage, was performed by a stock company, chartered to hire or own vessels manned and equipped to be employed in saving vessels and their cargoes wrecked, and to receive compensation in like manner as private persons, and where the persons actually ])erforming the service had no share in the profits of the com- pany, but were hired and paid under permanent and liberal arrangements and rates of pay — the net profits being di- vided among stockholders — such service was held to be a 31 Brown v. Guarantee Trust & S. D. Co., 128 U. S. 403, 32 L. ed. 468, 9 Sup. Ct. 127. 32 Mississippi & Missouri Ry. Co. v. Ward, 2 Black (67 U. S.), 485, 17 L. ed. 311. 377 §§ 231-233 PARTIES salvage service, and the corporation to be entitled to pay as salvors accordingly.^^ §231. Power of Corporation To Sue and Be Sued In- cludes Power to Arbitrate. Although the charter of a company does not, in terms, give the power to refer, yet a power to sue and be sued includes a power of reference, that being one of the modes of prosecuting a suit to judgment. So, also, a power to agree with a pro- prietor for the purchase or use of land, includes a power to agree to pay a specified sum or such sum as arbitrators may fix upon. But it is immaterial whether the power of reference is lodged in the president and directors or in the stockholders assembled in general meeting; for the entire corporation is represented in court by its counsel, whose acts, in conducting the suit, are presumed to be authorized by the party .^ § 232. State Bank Converted Into National Bank- Right To Sue in Former Name. The conversion of a State bank into a national bank, with a change of name, under the National Banking Act, does not affect its identity or its right to sue upon liabilities incurred to it by its former name.^^ § 233. Corporation's Right To Sue — Waiver — Foreign Corporation. The want of capacity of a foreign corporation to sue because of noncompliance with statutory conditions precedent, such as the prohibition against suing, etc., without alleging and proving the payment of its annual license fee last due, may, it is held, be waived and is waived if objection is not taken by demurrer or answer, and the action cannot be dismissed for failure to prove payment of the fee.^^ 33Camanche, The, 8 Wall. (75 U. S.) 448, 19 L. ed. 397, cited in Black- wall, The, 10 Wall. (77 U. S.) 1, 11, 19 L. ed. 870. 34 Alexandria Canal Co. v. Swann, 5 How. (46 U. S.) 83, 12 L. ed. 60. 35 Michigan Ins. Bank v. Eldred, 143 U. S. 293, .36 L. ed. 162, 12 Sup. Ct. 450. 38 Rothchild Bros. v. Mahoney, 51 Wash. 633, 99 Pac. 1031 (three judges dissenting). 378 PARTIES §§ 234-236 On a trial upon the merits, it is too late to take exception to the corporate capacity of the plaintiffs to sue; this should be done by a plea in abatement, before the trial; and the omission to do this is a waiver of the objection.^^ § 234. When Corporation Not Entitled to Equitable Consideration of Courts— Consolidation to Prevent Com- petition—Fraud on Public. The public welfare lies at the basis of corporate privileges. The interests of the stockholders are but secondary. There- fore, if a corporation willfully frustrates the intention so under- lying its grant of power, by an act which is a fraud on the pub- he, it is not entitled to the equitable consideration of the courts. This rule was applied in a case where the aid of equity was sought by an electric light and heat company, to restrain competition in furnishing electric light. The injunction sought was refused, it appearing that the charter privileges of the petitioner had been misused, so as to hinder the public interests by a combination with another corporation, so as to suppress the use of the commodity for the supplying of which the franchise was granted.^* § 235. Consolidation— Successor of Corporation— Rights of. A successor of a corporation which had been sued at law on a liability existing before consolidation, can assert all the rights and equities and defenses that the original corporation could assert, it having succeeded to the merged corporations' respective rights, etc., and become liable for their debts, etc.^" § 236. Foreign Corporations — Parties. In Florida it is held that under the law of comity the courts of Florida will entertain a suit in chancery brought by a for- eign corporation where the question presented by the bill is 37 Conard v. Atlantic Ins. Co., 1 Pet. (26 U. S.) 3S6, 7 L. ed. 189. 38 Scranton Elec. L. & H. Co. v. Scranton Ilium. H. & P. Co., 122 Pa. St. 154, 9 Am. St. Rep. 79, 3 Am. Elec. Cas. 499, 15 Atl. 446. 39 Southern Steel Co. v. Hopkins et al., 157 Ala. 175, 117 So. 274. 379 § 236 PARTIES the right of such a corporation to protect its real estate from trespass, of which equity has jurisdiction, inasmuch as such a corporation is not forbidden by the statute law there from hold- ing real estate .'*° In Idaho where a foreign corporation rightfully acquired title to real property within the State at a time when it had in all respects complied with the law of the State in respect to foreign corporations, but failed to comply with a subsequent enactment, but no forfeiture of its title has been judicially de- clared, it will be allowed a standing in court to protect its title and right of possession as against a private party who trespasses thereon or seeks or attempts to appropriate the same to his own use and benefit.'*^ Under the Massachusetts statute, prohibiting the maintenance of actions or a recovery in the State Courts by foreign corporations, so long as they fail to comply with the requirements of the statute, failure to comply with the said enactment must be pleaded seasonably in order to avail a defendant; and the effect of the statute is, when noncompliance with its terms is seasonably and prop- erly pleaded to stay proceedings until the temporary disa- bility is removed, which can be done at any time after as well as before resort to the courts.^ 40 Indian River Mfg. Co. v. Wootin, 55 Fla. 745, 46 So. 185. « War Eagle Con. Min. Co. v. Dickie, 14 Idaho, 5.34, 94 Pac. 1034. 42 National Fertilizer Co. v. Fall River Five Cent Sav. Bk., 196 Mass. 458, 82 N. E. 671 (the court, per Rugg, J., said: "The great weight of au- thority in other jurisdictions supports the conclusion here reached) ; Buffalo Zinc & Copper Co. v. Crump, 70 Ark. 525, 534, 69 S. W. 572, 91 Am. St. Rep. 87; Woolfort v. Dixie Cotton Oil Co., 77 Ark. 203; 91 S. W. .306, 113 Am. St. Rep. 139; Sutherland-Innes Co. v. Chaney, 72 Ark. 327, 80 S. W. 152; Carson-Rand Co. v. Stern, 129 Mo. 381, 31 S. W. 772, 32 L. R. A. 420; State V. American Book Co., 69 Kan. 1, 76 Pac. 411, 1 L. R. A. (N. S.) 1041; Deere v. Wyland, 69 Kan. 255, 261, 76 Pac. 863; Hamilton v. Reeves, 69 Kan. 844, 76 Pac. 418; Ryan Livestock & Feeding Co. v. Kelley, 71 Kan. 874, 81 Pac. 470; California Savings & Loan Society v. Harris, 111 Cal. 133, 43 Pac. 525. There is nothing in conflict with this view in Wood Co. v. Caldwell, 54 Ind. 270, or in Security Savings & Loan Association v. Elbert, 153 Ind. 198, 54 N. E. 753; Neuchatol Asplialt Co. v. Mayor of New York, 155 N. Y. 373, 49 N. E. 1043, and Huttig Bros. Manuf. Co. v. Denny Hotel Co., 6 Wash. 122, 32 Pac. 1073, were proceedings to enforce liens where the statement was filed before but the petition brought after compliance with 380 PARTIES § 236 Under § 15 of the General Corporation Law of New York,''=» providing that "no foreign stock corporation other than a moneyed corporation shall do business in this State without having first procured * * * ^ certificate that it has com- plied with all the requirements of law * * *," and that "no foreign stock corporation doing business in this State upon any contract made by it in this State, unless prior to the making of such contract it shall have procured such certificate," an action by a foreign stock corporation engaged in the busi- ness of manufacturing within the State, to recover upon a policy of fire insurance executed within the State, for a loss occasioned by the destruction of its property within the State by fire, can- not be maintained, unless prior to the making of the contract of insurance it had procured the required certificate.'*'* In cer- tain cases a foreign insurance company may maintain an ac- tion even though it has failed to comply with the State laws in respect to being authorized to do business within its bound- aries.^ Where it does not appear anywhere in the pleadings the statute, and it was held that the proceedings might be maintained. See Blodgett v. Lanyon Zinc Co., 120 Fed. 89.3, 897; Wetzel & Tyler Rail- way V. Tennis Bros. Co., 145 Fed. 458; Crefeld Mills v. Goddard, 69 Fed. 141; Swift V. Little, 28 R. I. 108, 65 Atl. 615; Hastings Industrial Co. v. Moran, 143 Mich. 679, 107 N. W. 706. There are contrary authorities. Thompson Co. v. Whitehead, 185 111. 454, 56 N. E. 1106, 76 Am. St. Rep. 51; United Lead Co. v. Reedy Elevator Manuf. Co., 222 111. 199, 78 N. E. 567; Heileman Brewing Co. v. Peimeise, 85 Minn. 121, 88 N. W. 441. These cases, however, construe statutes of different phraseology, and proceed upon reasoning respecting the effect of statutes as to foreign corporations, which is not in harmony with the trend of decisions in this commonwealth as indicated in the cases cited. Allen v. Milwaukee, 128 Wis. 678, 106 N. W. 1099, 5 L. R. A. (N. S.) 680; Cary Lombard Lumber Co. v. Thomas, 92 Tenn. 587, 22 S. W. 743, and Halsey v. Jewett Dramatic Co., 99 N. Y. Supp. 1122, 114 App. Div. 420, deal with statutes so different from our's that, although apparently contrary to this decision, they throw no light upon the question here depending." « L. 1892, chap. 687, am'd L. 1901, chap. 538, § 1. « South Bay Co. V. Howey, 190 N. Y. 240, 83 N. E. 26, rev'g 98 N. Y. S. 909, 113 App. Div. 3S2. Action by foreign corporation; defense to pay license fee ; facts must be pleaded ; defense available against assignee. Halsey V. Jewett Dramatic Co., 190 N. Y. 231, rev'g 114 App. Div. 420. ■*5 Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. German Ins. Co. (Ind. App., 1909), 87 N. E. 995 (citing Phoenix Ins. Co. v. Pennsylvania 381 § 237 PARTIES that the cause of action in any manner grew out of, or was af- fected by, the alleged wrongful act of a foreign corporation in doing business in a State without complying with its statute, which in such case makes it liable to a fine and prohibits it from suing in said State either in contract or tort but does not invalidate its contracts, such corporation is not precluded from suing in the Federal Courts within the State upon a cause of action arising under a United States statute.^ § 237. Foreign Corporations — Parties — Presumptions. All corporations and persons are presumed to have complied with the law and to have legal capacity to sue; this applies to a foreign corporation and compliance with State statutes re- quiring it to appoint a resident agent.^^ But under a New York decision it is held that a foreign corporation suing on a contract made in that State must allege and prove a com- pliance with the General Corporation Law^^ governing the right of foreign stock corporations to do business and sue in that State; and that where the plaintiff, suing on such aeon- tract, alleges that it is a foreign corporation, there exists a presumption that it is a foreign stock corporation and within the prohibition contained in said General Corporation Law.^" Rd. Co., 134 Ind. 215, 33 N. E. 970, 20 L. R. A. 405), an action by the insur- ance company against the railway company to recover damages on account of insurance on property burned by fire negligently set to other property and spreading; by payment of the insurance the company became sub- rogated to the rights of the insured and brought suit in that capacity. It was also declared in the case that an answer, which does not amount to a plea that a party is not a corporation or deny its corporate existence, and at the most denies its right to do business in the State, falls short of deny- ing the corporation's right to prosecute an action sounding in tort. <" Vitagraph Co. of America v. Twentieth Century Optiscope Co. (U. S. C. C), 157 Fed. 699. «F. H. Rogers Lumber Co. v. McRea (Ind. Ty. Ct. App., 1907), 104 S. W. 803. ** Section 15. See next following note. *9 Portland Company v. Hall & Grant Construction Co., 108 N. Y. Supp. 821, 123 App. Div. 495, granting rehearing in 106 N. Y. Supp. 641, 121 App. Div. 779; § 15, Gen. Corp. Law (Laws 1892, chap. 687). See Laws 1909, chap. 28, § 15; 2 Birdseye's Gumming & Gilbert's Consol. Laws N. Y. Annot., p. 1979. See Groton Bridge & Mfg. Co. v. American Bridge Co., 382 PARTIES §§ 238, 230 § 238. Right of Corporation To Sue as Affected by Dis- solution. In a large majority of the States there are statutory pro- visions which either expressly or impliedly extend the corpo- rate existence for the purpose of prosecuting or defending suits or other specified purposes so that the decisions in re- lation to the right of a corporation to sue or be sued must be considered in the light of these statutes. § 239. Same Subject. Although a corporation is insolvent and a creditor's suit pending, and even though a receiver of its assets has been appointed and a decree rendered for the sale of the same cor- porate existence is held not to be thereby affected or the corporation prevented from acting as such and incurring in- debtedness.^" In a Federal case it appeared that there were pro- ceedings under the statutes of a State, brought at the instance of the bank commissioners, to wind up a banking corporation and the property and assets were transferred and vested in a duly appointed and qualified assignee to be converted into money and distributed by decrees of the State Court as pro- vided by statute; a commissioner was also appointed in ac- cordance with the statute to examine and allow claims, against the corporation, of depositors and other creditors. It was held that the corporation was not at once dissolved by the proceedings so that a judgment could not be rendered against it by the Federal Court .^^ Under an Alabama case after the char- 151 Fed. 871, as to noncompliance with said section not preventing action in Federal Courts. 50 Atlas Ry. Supply Co. v. Lake & River Ry. Co., 134 Fed. 503. 61 Anglo-American Land, Mortgage & Agency Co. v. Cheshire Prov. Inst. (U. S. C. C), 124 Fed. 464, aff'd in Cheshire Provident Inst. v. Anglo- American Land Mortgage & Agency Co. (U. S. C. C. A.), 132 Fed. 968; 8. c, 134 Fed. 152. In this case in 132 Fed. 968, affirming the case in the lower court, it was said, per Brown, Dist. J.: "Upon an examination of chap. 162, Pub. St. N. H., 1901, §§ 12 to 24, inclusive, in connection with the plea and stipulation, it is clear that the Circuit Court was right in holding that the corporation had not been dissolved. * * * The argument that, be- cause the assets of the corporation are in the hands of an assignee, a creditor should not be permitted to pursue to judgment an action against the corpo- 383 § 239 PARTIES ter of a corporation is declared forfeited, it can do no act by which rights can be acquired, nor can it maintain a suit to en- force those acquired during the continuance of the charter, unless its power and capacity for that purpose is continued by statute, after its existence as a corporation is ended .^^ Under another case in the same State a bank has no power, after a judg- ment declaring its charter forfeited, to make a contract, except so far as it may be authorized to act by a statute providing for the ascertainment of the fact, whether its charter was forfeited or not.^^ In Colorado the dissolution of a corporation cannot be pleaded in bar of an action against it where the cause of action arose before the dissolution.^^ And in that State it is held that no action lies against a corporation as such after its dissolution. But before dissolution and until some action is taken in court, which, in its nature and effect, may operate to restrain or defeat the right so to do, creditors are at liberty and have the right to pursue the remedies provided by law for the collection of demands justly due to them from such corporation, unless they have in some way deprived themselves of such right .^^ In a Connecticut case an adjudication, on quo ration, is disposed of by the case of Parsons v. Eureka Powder Works, 48 N. H. 66. See also Moran v. Sturges, 154 U. S. 256, 274, 275, 14 Sup. Ct. 1019, 38 L. ed. 981. Furthermore, in chap. 148, Pub. St. N. H., 1901, §§ 18, 19, are provisions similar to those of other States, continuing as a body corporate, for the purpose of prosecuting and defending suits, a corporation whose corporate existence has been terminated in any way, and providing that the repeal or amendment of a charter or laws under which it was estab- lished shall not impair a liability previously incurred. There was no legal obstacle to a judgment of the Circuit Court against the corporation to deter- mine the question of debt or no debt. Chemical Bank v. Hartford Deposit Co., 161 U. S. 1, 16 Sup. Ct. 439, 40 L. ed. 595; Hess v. Reynolds, 113 U. S. 73, 77, 5 Sup. Ct. 377, 28 L. ed. 927; Clark v. Bever, 139 U. S. 103, 11 Sup. Ct. 468, 35 L. ed. 88; Byers v. McAuley, 149 U. S. 620, 13 Sup. Ct. 906, 37 L. ed. 867; Yonley v. Lavender, 21 Wall. 276, 22 L. ed. 536; Kittredge V. Race, 92 U. S. 116, 121, 23 L. ed. 488; Edwards v. Hill, 59 Fed. 723, 8 C. C. A. 233; Walker v. Brown, 63 Fed. 204, 11 C. C. A. 135." 52 Saltmarsh v. Planters' & Merchants' Bk., 17 Ala. 761. 53 Saltmarsh v. Planters' & Merchants' Bk., 14 Ala. 668. 54Steinhauer v. Colmar, 11 Colo. App. 494. 55Breene v. Merchants' & Mechanics' Bk., 11 Colo. 97, 100, 17 Pac. 280, per De France, C. 384 PARTIES § 239 warranto proceedings, that a corporation had no legal existence after a certain date, does not destroy such rights of proj)erty as it then held. Its effect is to transfer the custody of the property of the supposed corporation from the directors, as such, to them as trustees for those interested in the succession, in order to satisfy such indebtedness as may exist and to trans- fer the balance, if any, to the stockholders pro rata.^^ In the same State creditors of a corporation who had no knowledge of the pendency of })roceedings for its dissolution, and were intentionally prevented from receiving notice thereof by those who were conducting the winding-up suit, are ag- grieved by a judgment dissolving such corporation while it has outstanding liabilities and owns property or rights of ac- tion which are applicable to their payment. And notwith- standing the dissolution of a corporation by judicial decree, those really interested in it — its members or its creditors — can always rely upon obtaining adequate protection from the courts. So long as the control of the court over the winding-up proceedings continues according to the ordinary course of judicial procedure, so long it may open and set aside the judg- ment of dissolution for sufficient cause duly shown, and at the same time revive the corporation for the purpose of enabling it to be wound up properly. So one corporation which has transferred all its assets to another, upon the agreement of the second to pay the debts of the first, can proceed in equity to compel the performance of the agreement; and that right constitutes an asset which its creditors can pursue in equity. If it has been improperly dissolved, the reopening of the judg- ment of dissolution, so that the company or its receiver may enforce the agreement for the benefit of its creditors, is an appropriate remedy. And, while a surety cannot sue the prin- cipal debtor, at law, until he has been damnified, if he has, as 56 New York, Bridgeport & Eastern Ry. Co. v. Motil, 81 Conn. 466, 71 Atl. 563. But what powers the directors, as such trustees, would have in the disposition of such property, in the absence of the appointment of a receiver, qxicere. The case was an action under the General Statutes, § 4053, to settle title to land. 25 385 § 239 PARTIES part of the contract of suretyship, put all his property in the principal's hands, he may have relief in equity, should the latter, while retaining the property, avoid payment of the debt in violation of the rights of the creditor .'^^ "The analogy between the death of a natural person and the dissolution of an artificial person is an imperfect one. Behind the artificial person stand and survive the other per- sons, natural or artificial, who really composed it. "The artificial person known as the Connecticut River Manufacturing Company never existed save in contemplation of law. When it sought dissolution by means of a judicial action, and assumed the position of an ordinary suitor, it be- came entitled to all the benefits and subject to all the burdens that are incident to that position. A corporation which re- sists unsuccessfully a stockholder's application for its dissolu- tion could not be precluded by the judgment from appealing for errors in law, notwithstanding the judgment pronounced its existence at an end. It would remain in existence for the purpose of protecting itself against that judgment, the op- eration of which the appeal would meanwhile suspend.^* So if it procure a judgment of dissolution, third parties ought not to lose a remedy against it, or one which can only be enforced through it, if, as to them, that judgment is one that, in equity, cannot stand, and to open it and reinstate the corporation in life would smooth the way towards making that remedy ef- fectual. "A corporation is called into existence and invested with the attribute of personality by the sovereign power of the State. If created for a limited term, and for that only, or if consti- tuted subject to conditions the performance of which becomes impossible, a franchise thus expiring may be extended in du- ration or renewed by subsequent action on the part of the sovereign, even if that be had after a dissolution has occurred.^^ 57 Sullivan County Railroad v. Connecticut River Lumber Co., 76 Conn. 464, 465. 58 Giles V. Stanton, 86 Tex. 620. 59 Colchester v. Seaber, 3 Burr, 186(5; Rex v. Passmore, 3 T. R. 199; 386 PARTIES § 239 This does not create a new artificial person. It is a revival of the original corporation, and a revival after it had once ceased to exist. The harsh doctrine of the common law, that the absolute and unqualified dissolution of a corporation extin- guished iyso facto ahke all its property rights and all its obli- gations was never received in equity. Those really interested in them — its members or its creditors — can always rely on obtaining adequate protection from the courts. Every mon- eyed corporation is, in a sense, a trustee for those who own its capital or have a right to look to it for security. A trust never fails for want of a trustee, and whenever necessary the State, in some form of proceeding, can and will supply one. "It follows from these principles that when the legislative power has committed to the judicial power jurisdiction to dissolve corporations by judgments rendered in winding-up proceedings, so long as the control of the court over those proceedings continues according to the ordinary course of judicial procedure, so long may it open and set aside such a judgment, for sufficient cause duly shown, and at the same time reinstate the corporation in life foi- the purpose of enabling that to be done properly which had been undone because done improperly. The Superior Court opened the judgment be- cause the affairs of the manufacturing company had not been properly wound up. That they might now be properly wound up, it was within its power to revive the company and thus facihtate at once resistance to any unjust demands against it, and the enforcement of all just demands in its favor." ^° Again, in that State receivers of corporations are author- ized by statute to bring suits in their own names, or in the names of the corporations, to defend all suits brought against either, and to do in their own names, or in the names of the corporations, all things necessary or proper in the execution of their trusts. It is held not to be a legislative recognition of Bleakney v. Farmers' & Mechanics' Bank, 17 S. & R. (Pa.) 64. See Wilcox V. Continental Life Ins. Co., 56 Conn. 468, 477. «o Sullivan County Railroad V. Connecticut River Lumber Co., 76 Conn. 464, 473, 474, per Baldwin, J. 387 § 240 PARTIES the capacity of such corporations to sue and be sued after a decree annulling their charters.*^^ So where by decree of court receivers were appointed for a life insurance company and the company's property was vested in them and its charter an- nulled; and a suit was pending at the time against the company in which its property had been attached, it was held that the suit was abated and the attachment lien destroyed by the dis- solution of the company .^2 The legal existence of a corporation is not cut short by its insolvency and the consequent appointment of a receiver, and there is nothing in the statutes relating to national banks which takes them out of the operation of this general rule.^^ § 240. Same Subject. In Michigan a corporation is dissolved with the expiration of its charter, and, except as given the right to wind up its business after such expiration, within a time limited by stat- ute, its subsequent transactions are void."^"* So a corporation chartered by a special act of the legislature to exist for a cer- tain period of time and which subsequently has by statute an additional period of time given it for the purpose of winding up its affairs cannot sue thereafter under a claim that its char- ter is extended by another statute where such statute is un- constitutional.^^ Under a Kansas decision in 1892 the First State Bank of Jetmore was chartered for all the purposes then permitted by law to banking corporations. It commenced business and continued to operate as a banking corporation until 1897. It then went into voluntary liquidation, paid off its depositors, 81 Wilcox V. Continental Life Ins. Co., 56 Conn. 469, 16 Atl. 249. 62 Wilcox V. Continental Life Ins. Co., 56 Conn. 468, 16 Atl. 249. 63 Chemical Nat. Bank v. Hartford Deposit Co., 161 U. S. 1, 16 Sup. Ct. 439, 40 L. ed. 595. 64 Clark V. American Cannel Coal Co., 165 Ind. 21.3, 73 N. E. 1083. Time is limited to three years under Indiana statute, § 3429; Burns, 1901; § 3006, Rev. Stat., 1881, and Horner, 1901. 65 Clark V. American Cannel Coal Co., 165 Ind. 213, 73 N. E. 1083, 112 Am. St. Rep. 217. 388 PARTIES § 240 surrendered to the bank commissioner the certificate of au- thority to transact business which it had obtained from him, and ceased to transact any })usiness exce})t to collect what it could of the debts owing to it and to distribute the proceeds among its stockholders by way of closing up its affairs. In 1905 it brought a suit upon a promissory note given to it in 1896. It was held (1) that the bank continued to be a bank- ing corporation after the steps taken in 1897, as before; (2) that the period for which the bank was chartered not having ex- pired, no forfeiture having been suffered, and no judgment of dissolution having been rendered against it, the corporation is still in existence; (3) that the bank had capacity to sue as a banking corporation when the action referred to was insti- tuted; (4) that after the bank had paid its depositors and had surrendered its certificate of authority to do business it was no longer subject to the provisions of the banking act requiring reports of its financial condition to be made to the bank com- missioner; (5) that after the steps taken in 1897 the bank was not "doing business" within the meaning of §1283 of the General Statutes of 1901, requiring financial statements to be filed with the' Secretary of State as a condition precedent to the maintenance of an action or the recovery of a judgment; (6) that the bringing of the suit referred to did not constitute "doing business" within the meaning of the statute just cited ."^^ In another case in the same State it is held that after a cor- poration is dissolved and has ceased to exist it cannot main- tain an action in its former name as a corporation against one of its own members who had received property from the com- pany, or who had received more than his share thereof, or who owed the company. The only proper remedy, in such a case, would be an action by one or more of the members against the others for an accounting, and to settle and close up all the affairs of the company .^^ In Louisiana although a corporation had expired by limi- «6 Wilson V. First State Bank of Jetmore, 77 Kan. 589, 95 Pac. 404. «7 Kurtz V. Paola Town Co., 20 Kan. 397. 389 § 240 PARTIES tation, and judgment of forfeiture of charter had also been pronounced against it on behalf of the State, yet, where, from the nature and objects of the institution, a power to liquidate its affairs, after the expiration of its charter, might have been foreseen as absolutely necessary, the power to accept from the State an extension of the charter, for the purposes of liqui- dation, will be implied; and this extension enabled it to sue a defaulting stockholder, notwithstanding the enabling stat- ute was passed subsequent both to the decree of forfeiture, and the expiration of the charter by limitation.^* The Compiled Laws of Michigan,'^'' in relation to the volun- tary dissolution of corporations, provide that, on entry of a decree dissolving the corporation and appointing a receiver, the corporation shall cease. Section 10,887, provides that, whenever a receiver of a corporation has been appointed, new suits may be brought and carried on by the receivers in their own names or in the name of the corporation; and § 8, chap. 230, p. 2627, provides that corporations whose charters shall have been annulled by forfeiture, or otherwise, shall continue to be bodies corporate for the term of three years after the time when they would have been so dissolved, for the purpose of prosecuting or defending suits by or against them. After the rendition of a judgment in a court of Illinois against a Michigan corporation, the voluntary dissolution of the defendant was had and a receiver appointed, but the Circuit Court in which the re- ceivership proceedings were had made an order authorizing the receiver to sue out a writ of error in the Supreme Court of Illi- nois, to review the judgment in question. Held, that the re- ceiver had a right to sue out the writ of error in the name of the corporation.'^" In Nebraska after the dissolution of a corporation by the expiration of its franchise, or otherwise, an action may be 68 Consolidated Assoc, of the Planters of Louisiana v. Claiborne, 7 La. Ann. 318. 69 Comp. Laws Mich., Art. 10, 859. 70 Syllabus in Eau Claire Canning Co. v. Western Brokerage Co., 213 111. 561, 73 N. E. 430. 390 PARTIES § 240 maintained in the corporate name on a cause of action which accrued to the corporation 7^ In New Hampshire even though a corporate franchise has been practically abandoned by those possessing control over it nevertheless its stockholders may maintain a suit in equity in another State for the recovery of property of said foreign corporation found within its jurisdiction.'^ Under a New York decision an action brought against the directors of a stock corporation after voluntary dissolution to recover damages for a negligent injury for which the corpora- tion is answerable cannot be maintained as it is not governed by the general corporation law but by the stock corporation law which makes specific provision for the enforcement of de- mands against a stock corporation after voluntary dissolution, and, therefore, the cause of action is one which continues against the corporation.'^ 71 Lincoln Butter Co. v. The Edwards-Bradford Lumber Co., 76 Neb. 477, 107 N. W. 797. 72 Kidd V. New Hampshire Traction Co., 72 N. H. 273, 56 Atl. 465. 73Cimningham v. Glauber, 115 N. Y. Supp. 259, 61 Misc. 443. Genl, Corp. Law (Laws, 1892, p. 1811, chap. 687), § 30, controlled by § 57 of Stock Corporation Law (Laws, 1896, p. 994, chap. 932), providing that "said corporation shall nevertheless continue in existence for the purpose of paying * * * any existing debts * * * ^nd may sue and be sued for the purpose of enforcing such debts and obligations." Marstaller V. Ogden Mills, 143 N. Y. 398, 38 N. E. 370 (held not an authority in point as the case was that of a business corporation and arose prior to the above § 57 of the stock corporation law); O'Reilly v. Greene, 41 N. Y. Supp. 1056, 18 Misc. 423, 426, is cited; Bank of Louisiana v. Wilson, 19 La. Ann. 1 (holding that an insolvent, after his surrender, cannot maintain an action against a faithless agent or mandatory; such action and the right to main- tain revocatory actions, pass to the syndic, and can be maintained by him alone for the benefit of the creditors; by the forfeiture decree, the corpora- tion loses the faculty of suing in its corporate name); Miami Exporting Co. V. Gano, 13 Ohio, 269 (corporation adjudged forfeited and receiver appointed cannot prosecute suit after such dissolution. The corporate name can only be used to prosecute a suit by the receivers, and suit will be dismissed unless receivers set forth sufficient to show character in which they sue). See Renick v. Bank of West Union, 13 Ohio, 298 (holding that a writ of error will not lie upon a judgment in favor of a defunct corporation; that a writ directed to a defunct corporation is a nullity; and that the trustees of such corporation must be brought before the court). 391 §§ 241, 242 PARTIES §241. Injuries to Persons in Execution of Public Trust — Rule as to, When Not Applicable to Private Corporations. It is a rule that no action can be maintained for injuries re- sulting to individuals from acts done by persons in the execu- tion of a public trust and for the public benefit, acting with due skill and caution and within the scope of their authority, but this rule does not apply to a private corporation author- ized to construct works of public improvement, by private capital for private emolumentJ^ § 242. Injury to Property Generally. An action on the case may be maintained by a railroad com- pany, as a bailee for hire, for an injury to property, or cars in its possession belonging to another corporation.'^ So a person having a special or absolute ownership in or possession of stock which is injured or killed by a locomotive engine or train of a railroad company may maintain an action for such injury or loss."^^ To entitle a property owner to recover for injury to his property by reason of the location of a railroad on a public street, road, or alley, it is not necessary, where the statute permits such a remedy, that the property should be situated upon the street so occupied, but it is sufficient that the prop- erty should be situated near enough to it to be injured by the location and occupation.'^' An abutting owner cannot maintain an action to restrain an electric street railway company, or telegraph or other 74 Downing v. Indiana State Board of Agriculture, 129 Ind. 443, 28 N. E. 123, 12 L. R. A. 664. 75 Montgomery Gas Light Co. v. Montgomery & E. R. Co., 86 Ala. 372, 5 So. 735. 76 St. Louis, I. M. & S. R. Co. v. Biggs, 50 Ark. 169, 6 S. W. 724, under Mansfield's Ark. Dig., § 5540. 77 Shepherd v. Baltimore & Ohio Rd. Co., 130 U. S. 426, 32 L. ed. 970, 9 Sup. Ct. 598, 5 Rd. & Corp. L. J. 580, 17 Wash. L. Rep. 406, 21 Ohio L. J. 343, under Rev. Stat. Ohio, § 3283. As to abutting owners' rights compare Joyce on Electric Law (2d ed.), § 1022. See also §§ 295-348. 392 PARTIES § 242 electric company from constructing its line on the ground that it has not complied with certain conditions or requirements imposed by statute or ordinance or that it is a public nuisance, but he must, in order to obtain such relief, show some special or particular injury to his individual rights. This is the gen- eral rule since, in case of a public injury, the action must be in the name of the Stated* 78 Illinois: Chicago Teleph. Co. v. Northwestern Tel. Co., 100 111. App. 57, aff'd in 199 111. 324, 65 N. E. 329. Maine: Taylor v. Portsmouth, K. & Y. St. Ry. Co., 91 Me. 193, 39 Atl. 560. New Jersey: Halsey v. Rapid Transit St. Ry. Co., 47 N. J. Eq. 380, 20 Atl. 859, 3 Am. Elec. Cas. 283; Borden v. Atlantic Highlands, R. B. & L. B. E. R. Co. (N. J. Ch.), 33 Atl. 276, 28 Chic. L. News, 69, 5 Am. Elec. Cas. 179. See Stockton v. Atlantic Highlands, R. B. & L. B. E. R. Co., 53 N. J. Eq. 418, 32 Atl. 680 (holding that abutting owners and attorney-general are entitled to injunction to restrain construction of street railway where it does not comply with conditions precedent imposed by statute). New York: Black v. Brooklyn H. R. Co., 53 N. Y. Supp. 312, 32 App. Div. 468. Ohio: Dietz v. Cincinnati & M. V. Tract. Co. (C. P.), 6 Ohio Dec. 513, 4 Ohio N. P. 399; SeUs v. Columbus St. Ry. Co. (Ohio), 28 Week. L. Bull. 172, 4 Am. Elec. Cas. 163. Pennsylvania: Philadelphia & T. R. Co. v. Philadelphia & B. Pass. R. Co., 6 Pa. Dist. Rep. 269. Rhode Island: Taggart v. Newport St. Ry. Co., 16 R. I. 668, 19 Atl. 326, 3 Am. Elec. Cas. .306. Wisconsin: Linden Land Co. v. Milwaukee Elec. Ry. & L. Co., 107 Wis. 493, 83 N. W. 851. Compare, however, the following cases: United States: Beeson v. Chicago (U. S. C. C), 75 Fed. 880, 12 Nat. Corp. Rep. 608, 28 Chic. L. News, 367. Connecticut: Canastota Knife Co. v. Newington Tramway Co., 69 Conn. 146, 36 Atl. 1107 (holding that owner of the fee in the highway may, by action, enjoin a street railway from laying its tracks where the location is not part of the route authorized under the company's charter). Ohio: McMaken v. Cincinnati & H. Elec. St. R. Co., 5 Ohio N. P. 367; Denver v. United States Tel. Co., 10 Ohio S. & C. P. Dec. 273. Pennsylvania: Thomas v. Inter-County St. Ry. Co., 167 Pa. St. 120, 31 Atl. 476, 5 Am. Elec. Cas. 175 (abutting owner may have street railway enjoined when local authorities have not consented to construction) ; Penn- sylvania R. Co. V. Montgomery Pass. Ry. Co., 167 Pa. St. 62, 31 Atl. 468, 46 Am. St. Rep. 468 (injunction to prevent construction of electric railway until compensation made, but operation will not be enjoined if constructed without opposition); Russ v. Pennsylvania Teleph. Co., 15 Pa. Co. Ct. 393 § 243 PARTIES § 243. Right of Consignor to Sue Corporation. In Illinois the consignor for a breach of duty, be he but a bailee, may sue, as he has such a special property in the goods as to give him the right of action. The company cannot excuse itself, in a suit by the consignor for negligence, on the ground that the real title was in his bailor, unless they can show that the property has been taken out of their possession by him without any injury to the lender or bailor; and even in the action of assumpsit the rule is not modified; nor does any dis- tinction exist between the right of a consignor to bring suit against common carriers or against warehousemen, either in the action of tort or ex contractu; and a consignee may sue the carrier in tort for loss of goods even though they were shipped to him to be sold on commission.'^^ The court, however, per Carter, J.,*" said: "The decisions in the various jurisdictions on this question" as to the right of a person without property or interest in the goods to sue in an action ex delicto for a breach of duty by the carrier "cannot be harmonized, and the distinctions between the rights of parties when the action is in assumpsit and when in tort are not always clearly de- fined." Under a Pennsylvania decision it is held that the right of action against a common carrier for goods lost or damaged while in the carrier's custody follows ownership of the goods, and anyone having a beneficial interest in them may maintain the action. If the action is in tort it should be brought by the owner of the goods, whether he be consignor, consignee or a third person; anyone having a beneficial interest in the goods may maintain an action for damages thereto; that it is a mat- ter of no consequence at whose hands a common carrier may Rep. 26, 3 Dist. Rep. 654 (case of injunction allowed to stand to restrain planting pole in front of door or window of plaintiff). West Virginia: Maxwell v. Central District & Printing Teleg. Co., 51 W. Va. 121, 41 S. E. 125, 8 Am. Elec. Cas. 209. 79 Edgerton v. Chicago, Rock Island & Pac. Ry. Co., 240 111. 311, 88 N. E. 808. The case of Great Western Rd. Co. v. Comas, 33 111. 185, is followed. s" At pp. 314, 315. 394 PARTIES § 243 have received goods for transportation, and it does not con- cern him to know who is the real owner of the goods.^^ In Texas it is held that the shipper is entitled to recover for injuries to the property covered by his contract with the car- rier, for which the latter is liable, notwithstanding the shipper did not own the property.*^ But in a case in the Appellate Division of the Supreme Court of New York it is held that the presumption is that the consignee is the owner of goods shipped, but the presumption may be rebutted by the consignor. It was shown that the goods were ordered of a traveling salesman on samples and were made up on such orders by the consignor; that there was no memorandum signed by the consignee; that each package of goods was upwards of fifty dollars in value; that no part of the price had been paid, and that the goods were sent sub- ject to inspection and approval, with the understanding that if the vendees were satisfied upon such inspection, and ap- proved the style, quality, material and price, the goods were to be considered as bought; it was held that the title remained in the consignor so as to entitle him to sue the carrier for con- version, and that delivery to the carrier was not an acceptance by the consignee.*^ Where, under the averments of the peti- 81 Lloyd V. Haugh & Keenan Storage & Transfer Co., 223 Pa. St. 148, 72 Atl. 516. 82 Chicago, Rock Island & Gulf Ry. Co. v. Jones (Tex. Civ. App., 1909), 118 S. W. 759, citing Railway Co. v. Smith, 84 Tex. 348, 19 S. W. 509; Parks V. Railway Co. (Tex. Civ. App.), 30 S. W. 708; Railway Co. v. Barnett (Tex. Civ. App.), 26 S. W. 783; Railway Co. v. Klepper (Tex. Civ. App.), 24 S. W. 568. 83 Fein v. Weir, 114 N. Y. Supp. 426, 129 App. Div. 299. In this case the court, per Clarke, J., said: "The right to recover damages against a common carrier is determined by the answer to the question of where the title to the goods delivered to it for carriage remains. The presumption is ordinarily that the consignee is the owner of the goods, but this presumption is re- buttable," citing and considering Angell on Carriers (5th ed.), §§ 495, 496, 498; Schouler on Bailments and Carriers (3d ed.), § 565; Krulder v. Ellison, 47 N. Y. 36; Sweet v. Barney, 23 N. Y. 335; Green v. Clarke, 12 N. Y. 343; Price V. Powell, 3 N. Y. 322. The court then adds: "I am satisfied in the case at bar that no title passed to the vendee; that the vendor had no cause of action against the vendee for the purchase price of the goods in question." 395 § 244 PARTIES tion, it appeared that the plaintiff had agreed to furnish to parties named certain car loads of coal at a stated place, on board of cars, payment therefor to be made on receipt of the same at the places of destination; that the plaintiff had de- livered the coal to the railroad company, on its cars, to be transported accordingly, and that the company refused to deliver the coal to the consignees, but wrongfully confiscated and converted it to its own use; that thirty days had elapsed and the defendant had failed and refused to pay for the coal so taken, although duly demanded in writing, and the petition prayed judgment, etc., it was held that the action could be maintained by the plaintiff upon the causes of action so stated; upon rehearing the court, per Benson, J., said: "It has also been held by many courts in this country that the consignor with whom the contract of shipment is made may maintain an action in such a case for injury to the goods, although he has no property therein," and the motion for a rehearing was denied.*^ § 244. Suits by and Against Consignees. The rule is well established that a consignee may sue in a court of admiralty either in his own name, as agent, or in the name of his principal as he thinks best.^ A vessel with a perishable cargo, driven by stress of weather See also as to presumption of title in consignee and rebuttal thereof, Wertheimer v. Wells, Fargo & Co., 112 N. Y. Supp. 1062. Goods on approval and rejection by consignee, the consignor has right of action for negligence in transporting. Chicago & E. I. R. Co. v. Boggs, 134 111. App. 348. 84 St. Louis & San Francisco Rd. Co. v. Stpne, 78 Kan. 505, 510, 97 Pac. 471, 104 Pac. 1067. The court cites Blanchard v. Page, 74 Mass. 281; Spence v. Norfolk, etc., Rd. Co., 92 Va. 102, 29 L. R. A. 578; 1 Hutchinson on Carriers (3d ed.), 197, 3 Id., §§ 1307-1312, 1320. It was further decided in the principal case: That upon an objection to the evidence under the petition the court committed no error prejudicial to the defendant in hold- ing that the action could be proceeded with on the theory that it was an action on an implied contract, and that the measure of recovery if the plain- tiff should show a right to recover was the reasonable value of the property at the time of such appropriation. 85 McKinlay v. Morri.sh, 21 How. (62 IT. S.) 34.3, 16 L. ed. 100. 396 PARTIES § 244 out of her course and into a strange port for repairs, is not liable for such injuries to the cargo as are caused merely by the delay of the voyage and the consignee cannot recover against the vessel for the loss thus occasioned to the cargo without showing some fault, misbehavior, or negligence of the master or crew. If the master was justified in putting into port for repairs— if he used proper diligence in getting the repairs made — if he exerted himself to preserve the cargo under the best advice he could get — and if he was unable to send the cargo forward by another vessel— his conduct is blameless, and the consignee has no claim against the vessel.^" It is held in a case in the Federal Court that a consignee may be charged with violating the Elkins Law,*' as well as could the consignor, where concessions or rebates are received by him from an interstate carrier's published tariffs, where ter- minal charges are canceled at the point of destination forming a part of such published tariffs.** 80 Collenberg, The, 1 Black (66 U. S.), 170, 17 L. ed. 89. 87 Of February 19, 1903, chap. 708, § 1, 32 Stat. 847; U. S. Comp. Stat., Supp. 1905, p. 599. 88 United States v. Standard Oil Co. (U. S. D. C), 148 Fed. 719. 397 245 PARTIES CONTINUED CHAPTER XV PARTIES CONTINUED § 245. Corporation De Facto May Sue and Be Sued. 246. What Constitutes a Corpora- tion De Facto Generally — Legislative Power to Cure Defective Organization. 247. Collateral Attack— De Facto Corporation — Estoppel to Deny Legal Corporate Ex- istence. 248. Same Subject — Instances. 249. Collateral Attack — State or Public Officials as Parties — De Facto Corporation — In- stances. 250. State or State Officers as In- dispensable or Proper Par- ties Defendant in Suits by Corporation. 251. State or State Officers as § 252 Parties Plaintiff in Suits Against Corporation. United States as Plaintiff — Right to Recover from Bank — Forgery of Payee's Name on Pension Checks — Internal Revenue Taxes — Action Against Railroads. Reorganized or Successor Cor- poration. Same Subject. Same Subject. Levee Districts or Levee Boards Whether Public or Private Corporations May Sue and Be Sued. Banks as Parties Generally. 258. Suit by Corporation as Tax- payer — Suit by Taxpayer Against Corporation. 253. 254. 255. 256. 257. § 245. Corporation De Facto May Sue and Be Sued. A corporation must exist as a corporation de jure or de facto or it has no legal capacity to sue or be sued nor any capacity of any kind. ^ But a de facto corporation may sue,^ and this applies to an undertaking entered into with one who has 1 Oroville & Virginia Rd. Co. v. Plumas County, 37 Cal. 354, 360, per Rhodes, J., cited in Martin v. Deetz, 102 Cal. 55, 41 Am. St. Rep. 151. See Evenson v. Ellington, 63 Wis. 734. 2 Baltimore & Potomac Rd. Co. v. Fifth Baptist Church, 137 U. S. 568, 34 L. ed. 784, 11 Sup. Ct. 185 (actions in the nature of actions on the case for the continuance of a nuisance to the plaintiff's use and enjoyment of its house of public worship, by the noise, smoke, cinders, ashes and vapors from the defendant's adjoining engine house, repair shop and locomotive engines and by the obstruction of access to the plaintiff's building by the defendant's unlawful use of its side track in front of it). 398 PARTIES CONTINUED § 246 dealt witli it as such.^ And whei'c a corporation exists as one (k facto, and common honesty dc^nands that its debts should be paid it will be held liable therefor and cannot escape lia- bility on the ground that it was never legally organized as a corporation.'* A contract may validly exist by the loan of money to a de facto corporation where it is believed at the time by all the parties that it was legally incorporated even though it was not a corporation de jure and in such case the lender cannot main- tain an action for such loan against the members as unincor- porated persons.^ § 246. What Constitutes a Corporation De Facto Gen- erally — Legislative Power to Cure Defective Organization. While persons cannot organize as a corporation de facto when they cannot become one de jure,^ still a defect in the organization of a corporation does not prevent it from being a corporation de facto 7 But an unconstitutional act of the legislature is not a suffi- cient basis for a corporation de facto. That can exist only in case of a law under which it might have been created de jure.^ In order to create a corporation de facto it is held that sub- stantial comphance with the statutory requirements as to organization is not necessary since a colorable compliance therewith is sufficient.^ A corporation may also be a ck facto 3 Riemann v. Tyroler & Vorarlberger Verein, 104 III. App. 413. 4 Tulare Irrigation District v. Shepard, 185 U. S. 1, 22 Sup. Ct. 531, 46 L. ed. 773. 5 Lamed v. Beal, 65 N. H. 184, 23 Atl. 189. 6 Evenson v. Ellington, 63 Wis. 734. 7 New York, Bridgeport & Eastern Ry. Co. v. Motil, 81 Conn. 466, 71 Atl. 563. 8 Huber v. Martin, 127 Wis. 412, 105 N. W. 1031, 1135, 3 L. R. A. (N. S.) 653, 115 Am. St. Rep. 1023. » Johnson v. Schulin, 70 Minn. 303, 73 N. W. 147. Examine Finnegan v. Noerenberg, 52 Minn. 239, 18 L. R. A. 778; Bibb V. Hall, 101 Ala. 79; Central Agric. & M. Assoc, v. Alabama Gold Life Ins. Co., 70 Ala. 120. "Counsel for the defendants argue with much force and persuasiveness that they escape liability because they became a corporation de jure, and 399 § 246 PARTIES CONTINUED corporation although it has not fully complied in all respects with the requirements of the statute under which it is or- ganized.^" in support of this position they cite, among other cases: Wells Co. v. Gastonia Cotton Mfg. Co., 198 U. S. 177, 25 Sup. Ct. 640, 49 L. ed. 1003; Andes v. Ely, 158 U. S. 312, 322, 15 Sup. Ct. 954, 39 L. ed. 996; New Orleans De- benture Redemption Co. v. Louisiana, 180 U. S. 320, 327, 21 Sup. Ct. 378, 45 L. ed. 550; Gartside Coal Co. v. Maxwell (C. C), 22 Fed. 197; Johnson V. Okerstrom, 70 Minn. 303, 73 N. W. 147; Tennessee Automatic Lighting Co. V. Massey (Tenn. Ch. App.), 56 S. W. 35; Finnegan v. Noerenberg, 52 Minn. 239, 53 N. W. 1150, 18 L. R. A. 778, 38 Am. St. Rep. 552; Doty v. Patterson, 155 Ind. 60, 56 N. E. 668; Merchants' National Bank v. Stone, 38 Mich. 779; Gow v. Collin Lumber Co., 109 Mich. 45, 66 N. W. 676, 678; Eaton V. Aspinwall, 19 N. Y. 119; Leonardsville Bank v. Willard, 25 N. Y. 574; Cahall v. Citizens' Mutual Bldg. Assn., 61 Ala. 232; Fay v. Noble, 7 Cush. (Mass.) 188, 192, 193; Snider Sons' Co. v. Troy, 91 Ala. 224, 8 So. 658, 11 L. R. A. 515, 24 Am. St. Rep. 887; Cochran v. Arnold, 58 Pa. 399, 404; Lafflin & Rand Powder Co. v. Sinsheimer, 46 Md. 315, 321, 24 Am. St. Rep. 522; Rutherford v. Hill, 22 Oreg. 218, 99 Pac. 946, 17 L. R. A. 549, 29 Am. St. Rep. 596. But in every one of these authorities articles of in- corporation had been filed under a general enabHng act, or a charter had been issued and there had been a user of the franchise of the supposed corporation which had been colorably created by the filing of the articles or the issue of the charter before the indebtedness in question was created, while nothing of this nature had been done before the debt for the $4,700 which we are now considering was incurred. The authorities which have been recited rest upon the proposition that where parties procure a charter or file articles of association under a general law, thereby secure the color of a legal incorporation, believe that they are a corporation and use the supposed franchise of the corporation in good faith, and third parties deal with them as a corporation, they become a corporation de facto and exempt from individual liability to such third parties, although there are unknown defects in the proceedings for their incorporation." Harrill v. Davis (U. S. C. C. A.), 168 Fed. 187, 191, per Sanborn, Cir. J. 10 Marsh v. Mathias, 19 Utah, 350, 56 Pac. 1074, 11 Am. & Eng. Corp. Cas. (N. S.) 532. When corporation is one de facto; what constitutes, see the following cases: United States: Baltimore & Potomac Rd. Co. v. Fifth Baptist Church, 137 U. S. 568, 34 L. ed. 784, 11 Sup. Ct. 185 (holding that at the trial of an action of tort upon a plea of nul tiel corporation, evidence that the plaintiff, after filing a defective certificate of incorporation under a general corpora- tion law, acted for years as a corporation, and recovered a judgment as such in a similar action against the defendant without any objection made to its capacity to sue, is sufficient and competent to prove it a corporation de facto and entitled to maintain the action); Continental Trust Co. v. Toledo, St. Louis & K. C. R. Co. (U. S. C. C), 82 Fed. 642 (when con- solidated corporation of several States is one de facto). 400 PARTIES CONTINUED § 240 The right to sue a raih-oad corporation is held not to rest as a condition precedent upon comphance with statutory require- ments as to obtaining the certificate of railroad commissioners and the prepayment of an organization tax, even though specified as prerequisites to the exercise of corporate powers.^^ When a legislature has full power to create corporations, its act recognizing as valid a de facto cor[)oration, whether private or municipal, operates to cure all defects in steps leading up to an organization,- and make a de jure out of what was before only a de facto corporation.^^ Again, even if a defect exists in Alabama: Owensboro Wagon Co. v. Bliss, 132 Ala. 253, 31 So. 81, 90 Am. St. Rep. 907; H'arris v. Gateway Land Co., 128 Ala. 652, 29 So. 611. Connecticut: Mackay v. New York, New Haven & Hartford R. R. Co., 82 Conn. 73, 72 Atl. 583, 586. Dakota: Caledonia Gold Min. Co. v. Noonan, 3 Dak. 189 (evidence held sufficient to establish a corporation de facto). Georgia: Brown v. Atlanta Ry. & Power Co., 113 Ga. 462, 468, 39 S. E. 71, per Cobb, J. Illinois: Imperial Bldg. Co. v. Chicago Open Board of Trade, 238 111. 100, 87 N. E. 167; Lincoln Park Chapter, R. A. M. No. 177, v. Swatek, 105 111. App. 604, aff'd in 204 111. 228, 68 N. E. 429; Joliet, The, v. Frances, 85 111. App. 243; Edwards v. Cleveland Dryer Co., 83 111. App. 643. New Jersey: McCarter v. Ketcham, 72 N. J. L. 247, 62 Atl. 693. Ohio: State v. Toledo & Lucas County Burial Assoc, 28 Ohio Cir. Ct. R. 397; Shawnee & Sav. Bank Co. v. Miller, 24 Ohio Cir. Ct. R. 198. Oregon: United States Mortgage Co. v. McClure, 42 Oreg. 190, 70 Pac. 543 (what is prima facie of existence). South Dakota: Mason v. Stevens, 16 S. Dak. 320, 92 N. W. 424. Tennessee: Tennessee Automatic Lighting Co. v. Massey (Tenn. Ch. App., 1899), 56 S. W. 35. Wisconsin: Oilman v. Druse, 111 Wis. 400, 87 N. W. 557; Slocum v. Head, 105 Wis. 431, 81 N. W. 673, 50 L. R. A. 324. When corporation is not one de facto, see Duke v. Taylor, 37 Fla. 64, 19 So. 172, 3 Am. & Eng. Corp. Cas. (N. S.) 261, 31 L. R. A. 484; Middle Branch Mut. Telephone Co. v. Jones, 137 Iowa, 396, 115 N. W. 3; Louisiana Nat. Bank v. Henderson, 116 La. 413, 40 So. 779; Card v. Moore, 74 N. Y. Supp. 18, 68 App. Div. 327, aff'd m 173 N. Y. 598, 66 N. E. 1105; Whaley v. Bankers' Union (Tex. Civ. App., 1905), 88 S. W. 259. Essentials to constitute corporation de facto, see Stanwood v. Sterling Metal Co., 107 111. App. 569. 11 Muehlenbeck v. Babylon & N. S. R. Co., 55 N. Y. Supp. 1023, 26 Misc. 136. 12 Commanche County v. Lewis, 133 U. S. 198, 33 L. ed. 604, 10 Sup. Ct. . 26 401 § 247 PARTIES CONTINUED proceedings for an incorporation, the defect may be cured by subsequent legislation.^^ § 247. Collateral Attack — De Facto Corporation — Es- toppel to Deny Legal Corporate Existence. It may be generally stated here that a de facto corporation cannot be made the subject of a collateral attack in a private suit, and can only be questioned in a direct proceeding brought for that purpose.^'* 13 Smith V. Haven's Relief Fund Society, 103 N. Y. Supp. 770, 118 App. Div. 67S, aff'd in (mem.) 190 N. Y. 557, S3 N. E. 1132. See also Brown v. Atlanta Railway & Power Co., 113 Ga. 642, 39 S. E. 71. 14 United States: Miller v. Ferris Irrig. Dist. (U. S. C. C), 85 Fed. 693; Louisville Trust v. Louisville, Nashville, A. & C. R. Co. (U. S. C. C. A.), 84 Fed. 539, 56 U. S. App. 208, 28 C. C. A. 202; Continental Trust Co. v. Toledo, St. Louis & K. C. R. Co. (U. S. C. C), 82 Fed. 642. See Harrill v. Davis (U. S. C. C. A.), 168 Fed. 187. Alabama: First Nat. Bank v. Henry (Ala., 1906), 49 So. 97; Owensboro Wagon Co. v. Bliss, 132 Ala. 253, 31 So. 81, 90 Am. St. Rep. 907; Harris v. Gateway Land Co., 128 Ala. 652, 29 So. 611. California: California Cured Fruit Ass'n v. Stellings, 141 Cal. 713, 75 Pac. 320; Raphael Weill & Co. v. Crittenden, 139 Cal. 488, 73 Pac. 238; People v. Linda Vista Irrig. Dist., 128 Cal. 477, 61 Pac. 86; Los Angeles Holiness Band v. Spires, 126 Cal. 541, 58 Pac. 1049. Connecticut: Fish v. Smith, 73 Conn. 377, 47 Atl. 711. Delaware: Wilmington, City of, v. Addicks, 7 Del. Ch. 56, 8 Del. Ch. 310, 43 Atl. 297. Illinois: Gillette v. Aurora Ry.'s Co., 228 111. 261, 81 N. E. 1005 (rule stated but qualified in the case of the power of a railroad corporation to condemn land); Stanwood v. Sterling Metal Co., 107 111. App. 569; Lincobi Park Chapter, R. A. M. No. 177, v. Swatek, 105 111. App. 604, aff'd in 204 lU. 228, 68 N. E. 429. Indiana: Clark v. American Cannel Coal Co., 165 Ind. 213, 73 N. E. 1083; Baker v. Neff, 73 Ind. 68; Cleveland, C. C. & St. Louis Ry. Co. v. Feight, 41 Ind. App. 416, 84 N. E. 15. Kansas: Short, In re, 47 Kan. 250, 27 Pac. 1005. Maine: Seven Star Grange, Patrons of Husbandry No. 73, v. Ferguson, 98 Me. 176, 56 Atl. 648. See Taylor v. Portsmouth, K. & Y. St. Ry. Co., 91 Me. 193, 39 Atl. 560, 64 Am. St. Rep. 216. Nebraska: Otoe County Fair & Driving Assoc, v. Doman, 1 Neb. Unoflf. 179, 95 N. W. 327. New Jersey: Bell v. Pennsylvania, S. & N. E. R. Co., 10 N. J. L. 336. New York: Geneva Mineral Springs Co. v. Coursey, 61 N. Y. Supp. 98. Pennsylvania: Monongahela Bridge Co. v. Pittsburgh & B. Traction Co., 196 Pa. St. 25, 46 Atl. 99, 79 Am. St. Rep. 685. 402 PARTIES CONTINUED § 247 The facts necessary to constitute a corporation de facto may, however, be required to be shown.^^ And as there cannot be a de facto corporation where there cannot be one de jure, then, if there is no law under which a corporation de jure can exist, there may be a collateral attack upon the existence of a de facto corporation.^^ Again, the law that corporate existence cannot be inquired into, except by judicial proceedings in the name of the State, does not apply to a pretended but not even a de facto corporation.^^ The rule which precludes a collateral attack upon corporate existence is founded in public policy and is not to be so applied as to defeat the assertion of just legal rights by parties in the courts. It is said that it is essential to the doctrine that there be in existence a law by virtue of which a corporation might legally exist and "that the rule is the same where there is only an unconstitutional law." Even this quaHfication of the rule seems to be subject to the exceptions applicable in cases where the attacking party sustains certain relations to the al- leged corporation or has no right of his own to be protected by allowing the inquiry.^* Although the doctrine precluding a collateral attack upon Wisconsin: Gilman v. Druse, 111 Wis. 400, 87 N. W. 557. 15 Stanwood v. Sterling Metal Co., 107 111. App. 569. 16 Clark V. American Cannel Coal Co., 165 Ind. 213, 73 N. E. 1083. See also Imperial Building Co. v. Chicago Open Board of Trade, 238 111. 100, 87 N. E. 167, distinguishing Patterson v. Northern Trust Co., 230 111. 341, 82 N. E. 837, and 231 111. 28, 82 N. E. 840, 121 Am. St. Rep. 299. See as to first point in text the following cases: Uniied States: Davis v. Stevens (U. S. D. C), 104 Fed. 235. Colorado: Jones v. Aspen Hardware Co., 21 Colo. 263, 40 Pac. 457, 29 L. R. A. 143. Georgia: Brown v. Atlanta Ry. & Power Co., 113 Ga. 462, 468, 39 S. E. 71, per Cobb, J. Michigan: Eaton v. Walker, 76 Mich. 579, 43 N. W. 638, 6 L. R. A. 102. Texas: McLeary v. Dawson, 87 Tex. 524, 29 S. W. 1044. 17 Huber v. Martin, 127 Wis. 412, 105 N. W. 1031, 1135, 115 Am. St. Rep. 1023, 3 L. R. A. (N. S.) 653. 18 Parks V. West (Tex., 1908), 111 S. W. 726. The court, per Williams, J., said : " But it is urged that the attack of plaintiffs is upon the corporate exist- ence of the Mertins school district in a collateral proceeding, and that the validity of such incorporation can be questioned only by the State in a 403 § 247 PARTIES CONTINUED corporate existence is often applied to de facto corporations, or is usually applied by reason of some defect or irregularity in organization, still the circumstances surrounding the deal- ing or contracting with a corporation may be such, or the at- tacking party may sustain such a relation to the corporation as to create an estoppel and preclude, in a suit between the corporation and a private party, the denial of corporate ex- istence, or the setting up an irregularity or defect in corporate organization.^^ direct proceeding. Such a proposition is often applied in favor of de facto corporations, and it is sometimes difficult to determine its exact scope and application. El Paso v. Ruckman, 92 Tex. 86, 46 S. W. 25; Brennan v. City of Weatherford, 53 Tex. 331, 37 Am. St. Rep. 758; Graham v. City of Greenville, 67 Tex. 62, 2 S. W. 742. Usually it is applied where the attack is because of some defect in organization under a law by virtue of which such a corporation could lawfully exist. Sometimes the attacking party sustains such relation to the corporation as to estop him from questioning its corporate existence and there are other cases in which it is not essential to the protection of any right of his that inquiry should be made into the validity of the incorporation." 19 United States: Chubb v. Upton, 95 U. S. 665, 24 L. ed. 523 (cited in Bailey v. Tillinghast, 99 Fed. 808; First Nat. Bank of Concord v. Hawkins, 79 Fed. 52; Laredo Imp. Co. v. Stevenson, 66 Fed. 636), compare McCormick v. Market Bank, 165 U. S. 538, 17 Sup. Ct. 433, 995, 41 L. ed. 817 [a case of absence of authority of a national bank to commence banking business and the invalidity of a lease; not made good by estoppel (cited in vSeeberger v. McCormick, 175 U. S. 274, 278, 44 L. ed. 161, 20 Sup. Ct. 128; De la Vergne Refrigerating M. Co. v. German Sav. Inst., 175 U. S. 40, 59, 20 Sup. Ct. 20, 44 L. ed. 65; Concord First Nat. Bank v. Hawkins, 174 U. S. 364, 371, 19 Sup. Ct. 739, 43 L. ed. 1007; California Bank v. Kennedy, 167 U. S. 362, 367, 42 L. ed. 198, 17 Sup. Ct. 831; East St. Louis Connecting Ry. Co. v. Jarvis, 92 Fed. 744)]; Western Bank & Trust Co., In re (U. S. D. C), 163 Fed. 713; Rannels v. Rowe, 145 Fed. 296; Old Colony Trust Co. v. Wichita, 123 Fed. 762, aff'd 132 Fed. 641; W. L. Wells Co. v. Avon Mills, 118 Fed. 190, aff'd 148 Fed. 1018, s. c, 198 U. S. 177, 40 L. ed. 1003, 25 Sup. Ct. 640; Deitch V. Staub, 115 Fed. 309; American AlkaH Co. v. Campbell, 113 Fed. 398; Manship v. New South Bldg. & Loan Assoc, 110 Fed. 845; Cunning- ham V. City of Cleveland, 98 Fed. 657, 39 C. C. A. 211, s. c, 127 Fed. 667, s. c, 152 Fed. 908; Millar v. Ferris Irrig. District, 85 Fed. 693. Alabama: Greenville, City of, v. Greenville Waterworks Co., 125 Ala. 625, 27 So. 764. California: Truckee & Tahoe Turnpike R. Co. v. Campbell, 44 Cal. 89. Colorado: Plummer v. Struby-Estabrooke Mercantile Co., 23 Colo. 190, 47 Pac. 294. Georgia: Collins v. Citizens' Bank & Trust Co., 121 Ga. 513, 49 S. E. 594; 404 PARTIES CONTINUED § 247 The fact, however, that a plaintiff has, in a previous suit, recognized defendants as forming a company, without any reference to its liaving been regularly incorporated, is not Etowah Milling Co. v. Crenshaw, 116 Ga. 406, 42 S. E. 709; Petty v. Bruns- wick & Western Ry. Co., 109 Ga. 666, 35 S. E. 82. Illinois: Dubs v. EgH, 167 111. 514, 47 N. E. 766; Smith v. Mayfield, 16:5 111. 447, 45 N. E. 157; Eggert v. Cleveland, 138 111. App. 434; Spreyne v. Garfield Lodge of United Slavonian Benev. Soc. No. 1, 117 111. App. 253. Iowa: State Security Bank v. Hoskins, 130 Iowa, 339, 106 N. W. 764; Seaton v. Grimm, 110 Iowa, 145, 81 N. W. 225; Grand Lodge Ancient Order U. W. V. Graham, 96 Iowa, 592, 65 N. W. 837, 31 L. R. A. 133. Kentucky: Tanner v. Nichols, 25 Ky. L. Rep. 2191, 80 S. W. 225. See Calor Oil & Gas Co. v. Franzell, 33 Ky. L. Rep. 98, 109 S. W. 328. Louisiana: Pattison v. Gulf Bag Co., 116 La. 963, 41 So. 224. Maine: Seven Star Grange, Patrons of Husbandry No. 73, v. Ferguson, 98 Me. 176, 56 Atl. 648; Taylor v. Portsmouth, K. & Y. Street R. Co., 91 Me. 193, 39 Atl. 560. Michigan: Niles, City of, v. Benton Harbor, St. Joe Ry. & Light Co., 154 Mich. 378, 15 Det. Leg. N. 757, 117 N. W. 937; Gow v. Collin & P. Lumber Co., 109 Mich. 45, 66 N. W. 676, 3 Am. & Eng. Corp. Cas. (N. S.) 615, 2 Det. L. N. 1007. See Wyandotte Electric Light Co. v. City of Wyandotte, 124 Mich. 43, 7 Det. Leg. N. 1111, 82 N. W. 821. Minnesota: Hause v. Mannheimer, 67 Minn. 194, 69 N. W. 810, 5 Am. & Eng. Corp. Cas. (N. S.) 619. Mississippi: Johnston v. Gumbel (Miss.), 19 So. 100. Missouri: West Missouri Land Co. v. Kansas City S. B. Co., 161 Mo. 595, 61 S. W. 847. See School District v. Hodgin, 180 Mo. 70, 79 S. W. 148. Nebraska: Crete Building & Loan Assoc, v. Patz (Neb., 1901), 95 N. W. 793; Otoe County Fair & Driving Park Assoc, v. Doman, 1 Neb. Unoff. 179, 95 N. W. 327; Livingston Loan & Bldg. Assoc, v. Drummond, 49 Neb. 200, 68 N. W. 375; Nebraska Nat. Bank v. Ferguson, 49 Neb. 109, 68 N. W. 370. New Jersey: Campbell v. Perth Amboy Ship-Building & Engineering Co., 70 N. J. Eq. 40, 62 Atl. 319, aff'd in 71 N. J. Eq. 302; Bell v. Pennsylvania, S. & N. E. R. Co. (N. J.), 10 Atl. 741. New Mexico: Palatine Ins. Co., Ltd., of Manchester, Eng., v. Santa Fe Mercantile Co. (N. M., 1905), 82 Pac. 363. New York: Green v. Grigg, 90 N. Y. Supp. 565, 98 App. Div. 445; United Growers Co. v. Eisner, 47 N. Y. Supp. 906, 22 App. Div. 1, 15 Nat. Corp. Rep. 661. Ohio: Hatry v. Painesville & Y. Ry. Co., 1 Ohio C. D. 238; Lattimer v. Mosaic Glass Co., 13 Ohio C. C. 163. Oregon: Hackett v. Wilson, 12 Oreg. 25, 6 Pac. 652. Pennsylvania: Monongahela Bridge Co. v. Pittsburg & Birmingham Traction Co., 196 Pa. St. 25, 46 Atl. 99; Commonwealth v. Philadelphia County, 193 Pa. St. 236, 44 Atl. 336; Twelfth St. Market Co. v. Philadelphia & Reading R. Co., 142 Pa. St. 580, 581, 21 Atl. 989; Goodbread v. Philadel- phia, B. & B. M. Tump. Co., 15 Mont. Co. L. Rep. 21; Olyphant Sewage- 405 § 247 PARTIES CONTINUED such an admission as will estop him from showing that the company has no legal existence as a corporation. In order to estop him there should at least be an admission that the com- pany was entitled to exercise corporate rights and privileges.^" Again, while the forfeiture of a corporate franchise cannot be collaterally taken advantage of in a private action, still one sued for bridge tolls by a corporation may defend on the ground that the period of assent b}^ the supervisors to the exercise by the corporation of the franchise of taking tolls has expired; for this is not a question of corporate existence. The franchise of being a corporation may continue to exist although any par- ticular franchise annexed to it may have been surrendered or forfeited.^^ Drainage Co. v. Borough of Olyphant, 5 Lack. Leg. N. 346. Compare Windsor Glass Co. v. Carnegie Co., 204 Pa. St. 459, 54 Atl. 329. Wisconsin: Clausen v. Head, 110 Wis. 405, 85 N. W. 1028. What is not evidence of want of legal corporate existence; fraud of third party in wrecking corporation. See Boatmen's Bank v. Gillespie, 209 Mo. 217, 108 S. W. 74. 20 Spencer Field & Co. v. Cooks, 16 La. Ann. 153. 21 Grand Rapids Bridge Co. v. Prange, 35 Mich. 400, 404, 24 Am. St. Rep. 585. When no estoppel to deny corporate existence or to set up irregularity of organization, see the following cases: United States: Harrill v. Davis (U. S. C. C. A.), 168 Fed. 187, 195. Delaware: Wilmington City Ry. Co. v. Wilmington & B. S. Ry. Co. (Del. Ch., 1900), 46 Atl. 12. Illinois: Kanawha Dispatch Line v. Fish, 219 111. 236, 76 N. E. 352, rev'g Fish v. Kanawha Dispatch Line, 118 111. 284. Louisiana: Louisiana Nat. Bank v. Henderson, 116 La. 413, 40 So. 779; Provident Bank & Trust Co. v. Saxon, 116 La. 408, 40 So. 778. Maryland: Maryland Tube & Iron Works v. West End Improv. Co., 87 Md. 207, 39 L. R. A. 810, 39 Atl. 620 (holding that the valid existence of a corporation may be raised collaterally, and its legal existence may alwayf^ be made the subject of inquiry). Minnesota: Byronville Creamery Assoc, v. Ivers, 93 Minn. 8, 100 N. W. 387. Missouri: Florscheim & Co. v. Fry, 109 Mo. App. 487, 84 S. W. 1023. New York: Card v. Moore, 74 N. Y. Supp. 18, 68 App. Div. 327, aff'd in 173 N. Y. 598, 66 N. E. 1105. Pennsylvania: See Windsor Glass Co. v. Carnegie Co., 204 Pa. St. 459, 54 Atl. 329. When corporate existence subject to collateral attack, see Christian & Craft Grocery Co. v. Fruitdale Lumber Co., 121 Ala. 340, 25 So. 566. 406 PARTIES CONTINUED § 248 § 248. Same Subject — Instances. One who contracts with a corporation as such is estopped to afterwards avoid the obhgations so assumed by him on the ground that the supposed corporation was not one de jure}'^ And where a raih'oad company has been a corporation de facto from the date of its organization, its existence and its abihty to contract cannot be called in question in a suit brought upon evidence of debt given to it.^^ So where the required number of individuals attempt in good faith to organize a corporation, and for that purpose sign articles of incorporation which contain substantially the provisions required by the statute, and file the same with the county clerk of the proper county and proceed to do business as a corporation in the name adopted by the articles, one who transacts business with such company in its corporate name will not be allowed to deny its existence as a corporation de facto; and if, in an action against the company in its corpo- rate name he attaches its property upon a claim arising from business so transacted, he will not be allowed to deny that the business of the company was conducted by it in its corporate capacity.^"* If a party does business with a corporation in its corporate name, and the contract is executed on its behalf, such party is estopped from denying the incorporation of the company .^^ Again, where a bank, prior to its failure, had taken steps to extend its corporate existence under a statute ^^ authorizing the extension of Hfe of corporations, and had thereafter op- erated and been treated as a banking association legally or- ganized, both by the pubhc and the State government, a bor- 22 Andes v. Ely, 158 U. S. 312, 39 L. ed. 996, 15 Sup. Ct. 954. 23 Douglas County v. BoUes, 94 U. S. 104, 24 L. ed. 146. See Toledo St. Louis & K. C. R. Co. v. Continental Trust Co., 95 Fed. 507. 24 Lincoln Butter Co. v. Edwards-Bradford Lumber Co., 76 Neb. 477, 107 N. W. 797. 25 Toledo Computing Scale Co. v. Young, 16 Idaho, 187, 101 Pac. 257, citing Bank of Shasta v. Boyd, 99 Cal. 604, 34 Pac. 337; First Congregational Church V. Grand Rapids Fur Co., 15 Colo. App. 46, 60 Pac. 948; Grande Ronde Lumber Co. v. Cotton, 12 Colo. App. 375, 55 Pac. 610. 26 1 Gen. Stat. N. J. 972, § 302. 407 § 249 PARTIES CONTINUED rower, was estopped, in an action by the bank's receiver to foreclose certain mortgages securing certain loans, to allege that at the time the loans were made the bank had no legal corporate existence.^^ In another case the defendant was a member of one of three informal mutual telephone associations, a portion of whose members agreed upon consolidation and the adoption of ar- ticles of incorporation, and elected officers and directors. Prior to incorporation the proposed directors contracted with an existing telephone company for joint operation of their lines, but upon subsequent disagreements the defendant and another proposed director refused to act further and the board attempted to fill their places. The reorganized board levied an assessment for incorporation and other expenses which de- fendant and others refused to pay. Afterwards articles of incorporation were signed and filed by one member from each of two of the original associations and two from the third, but the articles did not include or recognize as members all who previously attempted to act as directors, and did not ratify their action. It was held that the attempted assessment could not be enforced against the defendant on the theory that there was a de facto corporation; and never having partici- pated in the levy of the assessment, the work of incorporation or its benefits, he was not estopped to question the validity of the organization or the assessment.^* § 249. Collateral Attack— State or Public Officials as Parties — De Facto Corporation — Instances. A railroad corporation cannot question the right of another railroad company to exercise the powers conferred upon it by statute as only the State can test such corporate authority .^^ So the invalidity of the charter of a street railroad company is a question which can be raised only by the State, as a private 27 Campbell v. Perth Amboy Shipbuilding & Engineering Co., 70 N. J. Eq. 40, 62 Atl. 319, aff'd in 71 N. J. Eq. 302, 71 Atl. 1133. 28 Middle Branch Mut. Telephone Co. v. Jones, 137 Iowa, 396, 115 N. W. 3. 2a Terre Haute & I. R. Co. v. Peoria & P. U. R. Co., 167 111. 296, 47 N. E. 513, aff'g 61 111. App. 405. 408 PARTIES CONTINUED § 249 person cannot set up such a claim .^" If a railroad company fails to complete its road within the time required by statute, the suit for the breach of such duty or the right to enforce the same must be exercised by the State alone.^^ Again, on a bill by a toll-road company to restrain unlawful interference by the toll-road commissioner with its exercise of its franchises, a claim by defendant that complainant does not come into court with clean hands, for the reason that it did not complete its road, keep it in repair, nor file its annual report, as required by the statute, is untenable since only the State, in some proper proceeding, can question complainant's right to exercise its fianchises.^^ So the power of a corporation under the law by which it is created to purchase a particular character of property cannot be questioned in an action be- tween it and another corporation or person. It is a question between the corporation and the State, to be determined in a proceeding by the latter for a forfeiture.''^ The validity of corporate existence cannot be attacked col- laterally in an action by a testimentary trustee holding a trust estate for the benefit of that institution asking a determina- tion of the validity of the trust and for a settlement of his accounts. The question of the legal existence of the corpora- tion can only be raised by the sovereign power to which the corporation owes its life in some proceeding for that purpose brought by and on behalf of the sovereignty itself.^"* Where a corporation exists de facto it may exercise the powers assumed, and the question of its having a right to ex- ercise them is one which can only be raised by the State.^^ But although the statute of a State makes certain provisions 30 Taylor v. Portsmouth, K. & Y. Street R. Co., 91 Me. 193, 39 Atl. 560. 31 Cincinnati, H. & I. R. Co. v. Clifford, 113 Ind. 460, 15 N. E. 524. 32 Gravel Road Co. v. Hogadone, 150 Mich. 638, 14 Det. Leg. N. 851, 114 N. W. 917; Besson v. Crapo, 150 Mich. 655, 14 Det. Leg. N. 858, 114 N. W. 924. 33 California State Teleg. Co. v. Alta Teleg. Co., 22 Cal. 398, per Cope, C. J. 34 Smith V. Haven's Relief Fund Society, 103 N. Y. Supp. 770, 118 App. Div. 678, aff'd in (mem.) 190 N. Y. 557, 83 N. E. 1132. 35 Board of Education v. Berry, 62 W. Va. 433, 125 Am. St. Rep. 975, 59 S. E. 169. 409 § 250 PARTIES CONTINUED whereby the attorney-general is to bring actions against ben- efit societies such enactments will not be exclusive where it does not preclude controversies between officers and members in relation to the fundamental law of the society .^^ § 250. State or State Officers as Indispensable or Proper Parties Defendant in Suits by Corporation. A State is an indispensable party to any proceeding in equity in which its property is sought to be taken and subjected to the payment of its obligations. Thus, a State subscribed for capital stock in a railway company which had been incorpo- rated by its legislature, issued its bonds with thirty years to run, sold them, and with the proceeds paid its subscription, and received certificates of stock therefor, which certificates it never parted with and held at the time of the suit. In the act incorporating the company and authorizing the issue of the bonds, it was provided that as security for their redemp- tion "the pubhc faith of the State" "is hereby pledged to the holders," "and in addition thereto all the stock held by the State" in the railroad company "shall be pledged for that purpose" and that "any dividend" on the stock "shall be ap- plied to the payment of the interest accruing on said coupon bonds." The State being in default in the payment of the in- terest due on bonds for twenty years, a bondholder who was a citizen of another State, brought suit in the Circuit Court of the United States in the State issuing said bonds against the railroad company, its president and directors, the person holding the proxy of the State upon the stock held by it, and the treasurer of the State, praying to have the complainant's bonds decreed to be a lien upon the stock owned by the State and upon any dividends that might be declared thereon, and that such dividends might be paid to complainant and to such bondholders as might join in the suit, and for the sale of the stock if the dividends should prove insufficient, and for an ac- count, and for the appointment of a receiver, and for an in- 38 Bastian v. Modern Woodmen of America, 166 111. 595, 46 N. E. 1090, rev'g 68 Til. App. 378. 410 PARTIES CONTINUED § 250 junction. It was held that as the State was an indispensable party to the suit the bill must be dismissed. ^^ And where a corporation seeks to estabhsh the lease of a railroad to it the governor and attorney-general of a State are proper parties to the suit, where their adverse acts are an endeavor to use the name of the State as stockholders in a private corporation to set aside its acts and they are the owners of a majority of the stock of the lessor railroad and have appointed a majority of its directors. In such a case their acts are not an exercise of the functions of sovereignty.^^ So where a bill was brought by the Bank of the United States, for the purpose of protecting it in the exercise of its franchises which were threatened to be invaded, under unconstitutional laws of a State, it was held that as the State itself could not, under the Eleventh Amend- ment of the Federal Constitution, be made a party defendant to the suit, it could be maintained against the officers and agents of the State, who were intrusted with the execution of such laws.^^ A suit may be brought by a foreign corporation doing busi- ness both interstate and intrastate against a Secretary of State to obtain a decree that a statute of such State, to permit for- eign corporations to do business therein and fixing fees to be paid by all corporations, is unconstitutional and void and also to enjoin the defendant in his official capacity from attempting to revoke the authority of the plaintiff corporation to do business in the State or from proclaiming through official news- paper pubHcations that he had revoked such authority. Such a statute is unconstitutional and such an injunction will be granted and the suit is not an action against the State within the meaning of the Eleventh Amendment."*" Whenever it is clearly seen that the State is an indispen- 37 Christian v. Atlantic & N. C. Rd. Co., 133 U. S. 233, 33 L. ed. 589, 10 Sup. Ct. 260. 38 Southern R. Co. v. North CaroHna Rd. Co. (U. S. C. C), 81 Fed. 595. 39 Osborn v. United States Bank, 9 Wheat. (22 U. S.) 738, 6 L. ed. 204. 40Ludwig V. Western Union Teleg. Co., 216 U. S. 146, 30 Sup. Ct. , 54 L. ed. . See also Western Union Teleg. Co. v. Andrews, 216 U. S. 165, 54 L. ed. , 30 Sup. Ct. . 411 § 251 PARTIES CONTINUED sable party to enable the court, according to the rules which govern its procedure, to grant the relief sought, it will refuse to take jurisdiction; and where the facts in the bill show that the State is so interested in the property that final relief can- not be granted without making it a party the court is without jurisdiction. This applies to the following facts: The State of Georgia indorsed the bonds of a railroad company, taking a hen upon the railroad as security. The company faihng to pay interest upon the indorsed bonds, the governor of the State took possession of the road, and put it into the hands of a re- ceiver, who made a sale of it to the State. The State then took possession of it, and took up the indorsed bonds, substi- tuting the bonds of the State in their place. The holders of an issue of mortgage bonds issued by the railroad company subsequently to those indorsed by the State, but before the default in payment of interest, filed a bill in equity to fore- close their own mortgage and to set aside the said sale and to be let in as prior in lien, and for other rehef affecting the prop- erty, and set forth the above facts, and made the governor and the treasurer of the State parties, and those officers de- murred .^^ § 251. State or State Officers as Parties Plaintiff in Suits Against Corporation. A petition for mandamus to compel a railroad corporation to perform a definite duty to the public, which it has distinctly manifested an intention not to perform, is rightly presented in the name of the State, at the relation of its prosecuting at- torney, and without previous demand .^^ As to suit against State officers not being suit against State, see § 155, herein. 41 Cunningham v. Macon & Brunswick Rd. Co., 109 U. S. 446, 27 L. ed. 992, 3 Sup. Ct. 292, 609. In this case the cases at law in which the court has taken jurisdiction, where the objection has been interposed that a State was a necessary party to enable the court to grant relief are examined and classified. The case of United States v. Lee, 106 U. S. 196, 27 L. ed. 171, 1 Sup. Ct. 240, is examined and the limits of the decision defined and the case of Davis v. Gray, 16 Wall. (83 U. S.) 203, 21 L. ed. 447, is questioned. 42 Northern Pacific Rd. Co. v. Dustin, 142 U. S. 492, 12 Sup. Ct. 283, 412 . PARTIES CONTINUED § 251 An action to restrain a corporation from doing business in a State must be brought by the attorney-general where the provisions of the statute so require even though under another provision he is vested with a discretion as to bnnging suit."*^ And where a statute requires a certified statement of bonds issued and a corporation neglects or refuses to comply there- with a civil suit may be brought in the governor's name against such corporation.^ So the attorney-general may, in the name of the State, institute an action, in behalf of the people directl}'- involving their rights and interests, to quiet title to land, as where there exist adverse claims to a water front claimed by the State .^ So abutting owners and the attorney-general are entitled to an injunction to restrain the construction of a street railway where the company has not complied with con- ditions precedent imposed by statute.'*® For the purpose of procuring a decree enjoining a corporation from acting as such on the ground of the nullity of its or- ganization, it is not necessary that the individual corporators or officers of the company be made defendants, and process be served upon them as such, but the State by which the cor- porate authority was granted is the proper party to bring such an action through its proper officer, and it is well brought when brought against the corporation alone.^''' Where a statute provides that an action, in addition to other remedies, may be brought in the name of the State, to recover taxes assessed against a telegraph company, when it has failed or refused to pay the same, such action may be brought in be- half of the State, even though an injunction has issued re- straining the county auditor aud county treasurer from main- 35 L. ed. 1092 (a case of mandamus to compel a railroad company to build a station at a particular place; writ was not issued upon facts). *3 State, Childs, v. American Sav. & L. Assoc, 64 Minn. 349, 67 N. W. 1, 4 Am. & Eng. Corp. Cas. (N. S.) 332. 44 McDaniel v. Gate City Gaslight Co., 79 Ga. 58, 3 S. E. 693. 45 People V. Oakland Water Front Co., 118 Cal. 234, 50 Pac. 305. 48 Stockton V. Atlantic Highlands, R. B. & L. B. E. R. Co., 53 N. J. Eq. 418, 32 Atl. 680. 47 New Orleans Debenture Co. v. Louisiana, 180 U. S. 320, 45 L. ed. 550, 21 Sup. Ct. 378. 413 § 252 PARTIES CONTINUED taining an action against said company to recover taxes.''* And where the right to maintain an obstruction in the streets, even though placed there with the city's permission, is to be tested as a pubUc injiuy, the action should be brought by the city or its proper representative.^^ § 252. United States as Plaintiff — Right to Recover from Bank — Forgery of Payee's Name on Pension Checks — In- ternal Revenue Taxes — Action Against Railroads. The United States can recover from a bank presenting pen- sion checks to, and receiving the money from, a subtreasury, where the names of the payees have been forged; and the right to recover is not conditioned upon either demand or the giv- ing of notice of the discovery of facts which by the operation of the legal warranty were presumably within the knowledge of the bank. The United States is not chargeable with the knowledge of the signatures of the vast numbers of persons en- titled to receive pensions, and the exceptional rule as to cer- tain classes of commercial paper that the person having knowledge of the genuine signature of the payee whose sig- nature is forged is negligent in paying on such an indorsement and therefore cannot recover, does not apply to the United States in regard to pension checks.^^ WTiere under the statute ^^ taxes "may be sued for and re- covered in the name of the United States in any proper form of action" the United States may bring an action of debt or adopt any other common-law remedy to collect what is due to it for taxes imposed by law upon a bank and for which the bank is a debtor in the sum prescribed.^^ 48 Western Union Teleg. Co. v. State, 146 Ind. 54, 44 N. E. 793; Ind. Rev. Stat., 1894, § 8488. 48 Chicago Telephone Co. v. Northwestern Telephone Co., 100 III. 57, alT'd in 199 111. 324, 65 N. E. 329. 50 United States v. National Exchange Bank of Providence, 214 U. S. 302, 53 L. ed. 1006, 29 Sup. Ct. 665. 51 Internal Revenue Law, act of July 13, 1866. 52 Dollar Savings Bank v. United States, 19 WaU. (86 U. S.) 227, 22 L. ed. 80. 414 PARTIES CONTINUED § 253 The act of Congress of 1873 ^^ is a valid and constitutional exercise of legislative power. Congress, by requiring the attorney-general to bring a suit in equity in the name of the United States in any Circuit Court against the Union Pacific Railroad Company and others, intended, not to change the substantial rights of the parties to the suit, but to provide a specific mode of procedure, which, by removing certain re- strictions on the jurisdiction, process, and pleading which are in other cases imposed, would give a larger scope to the action of the court, and a more economical and efficient remedy than before existed .^^ § 253. Reorganized or Successor Corporation. A new corporation may sue in its own name without making the stockholders parties upon a demand against a judgment creditor held by the old company which it was intended the new company should sue on, any excess recovered over the claim of said creditor against the old company to go by agree- ment to the old stockholders. The judgment in question here had been obtained before the reorganization, and, in view of contemplated litigation with the judgment creditor, the pur- chase note given by the new stockholders was deposited with a trustee for the purpose of indemnifying the reorganized com- pany against any loss which might be sustained by it on ac- count of said contemplated litigation.^^ And where stock- holders have the same interest in the new corporation as in the old and there exists no new consideration they cannot by forming such new corporation and transferring to it the prop- erty of the old company thereby release themselves from lia- bility to the vendor for the value of property obtained by the latter corporation in its corporate name on credit .^^ One who owns stock in a railroad corporation and delivers 53 Act of March 3, 1873, 17 Stat. 509. 54 United States v. Union Pac. R. R. Co., 98 U. S. 569, 25 L. ed. 143, 140 Sup. Ct. 62. 55 St. Francis Electric Light Co. v. Electric Supply Co., 69 Ark. 174, 61 S. W. 912. 56 Hancock v. Holbrook, 40 La. Ann. 53, 3 So. 351. 415 § 253 PARTIES CONTINUED it, for the purpose of reorganization, to a committee whose discretion as to the disposition and use of the new corporation's securities is absolute, is obligated, in order to maintain a suit against such committee for breach of trust in relation to the purchase of securities and the delivery of preferred stock to noteholders and for commissioners, to show that the said acts were not warranted and that the preservation of the value of his holding requires that the alleged wrongful acts should cease, and the entire acts of the committee should be shown." If a reorganization of a corporation into a foreign one has been brought about without the consent of a stockholder he can maintain an action against the original corporation, such reorganization not being void on its face but voidable; but, since the foreign corporation is not made a party, although a necessary one to any decree of restitution, the most relief which can be afforded is the annulling of the action of the original corporation.^* The rules of pleading in equity are more elastic than in ac- tions at law, and where the plaintiff in equity knows that a third person claims an interest in the subject-matter but does not know the nature, extent or merit of the claim, these facts may be stated and the claimant made a defendant and re- quired to disclose his alleged interest. Thus, where a stock- holder suing members of a reorganization committee in equity for waste and misapplication of securities deposited with them, shows that a trust company, the original depositary, had re- ceived certain securities but was superseded as depositary by a new trust company, to which it delivered the securities, and alleges on information and belief that the original deposi- tary assisted the members of the reorganization committee in misappropriating and wasting the property of the plaintiff's corporation and shared in the profits so made, there is suffi- cient to put the first depositary to an answer and explanation. And where such complaint alleges positively that an individual, made defendant, signed the reorganization agreement, he 57 Venner v. Fitzgerald (U. S. C. C), 91 Fed. 335. 68 Farish v. Cieneguita Copper Co. (Ariz., 1909), 100 Pac. 781. 416 PARTIES CONTINUED § 254 should be required to answer, although his name does not aj)- pear among the parties to the agreement, the actual signatures thereto not being printed in the case. , 59 § 254. Same Subject. A new corporation cannot be considered as a continuation of the original one and liable at law for its debts even though composed of the officers and stockholders of the old corpora- tion where it has acquired the latter's property and assets by- purchase at judicial sales; and this applies irrespective of what- ever might be the new corporation's Hability in equity to the creditors of the original corporation had the transfers of prop- erty been fraudulent.'^" A railroad company is not hable for 59 Mawhinney v. Bliss, 12-1 App. Div. 609, 109 N. Y. Supp. 3.32. The atatement of facts in this case is as follows (per Houghton, J.): "The action is brought by the plaintiff as a stockholder against certain members of the reorganization committee under a reorganization agreement respecting the American Cotton Company and other subsidiary corporations. A demurrer to the complaint by one of the committee was considered by this court under the title of Mawhinney v. Bliss, 117 App. Div. 255, 102 N. Y. Supp. 279, aff'd 189 U. S. 801, 81 N. E. 1169, where the general facts alleged are fully stated, rendering a further statement unnecessary. "The Bankers' Trust Company, one of the present appellants, was the depository of the securities under the reorganization agreement, and it demurs on the principal ground that the complaint states no cause of action against it. The complaint shows that the Bankers' Trust Company was the original depository, and received certain stocks and securities; but it further alleges that it was superseded by the MetropoUtan Trust Company as depository, and that it delivered to its successor all the certificates of stock and other corporate securities which had been deposited with it. The only other allegation of the complaint connecting the Bankers' Trust Company with the acts complained of is on information and beUef that it assisted the individual members of the reorganization committed in misappropriat- ing or wasting the money and property of the American Cotton Company, and shared in the profits so made by them. The allegation respecting the misappropriation and wasting of the assets of the corporation by these individuals is upon information and belief, with an express statement that plaintiff has no knowledge of the amount of money or what property was so mismanaged or wasted." 60 Armour v. E. Bement's Sons (U. S. C. C. A.), 123 Fed. 56. As to extent of liability or duties of reorganized or successor corporation, see the following cases: United States: Barkley v. Levee Commissioners, 93 U. S. 258, 23 L. ed. 893 (obligations of successor of public corporation); American Creosote 27 417 § 254 PARTIES CONTINUED the torts or contracts of its predecessor merely because it has purchased or is operating a railwa}' Hne of another compan}-; it must in such case be charged by law with the liability or obligation, or it must have assumed the same, and this applies to a breach of contract which the other com]jany had entered into.*'' Although a creditor may have a right to follow in equity the assets of an old corporation to whose assets and business a new corporation has succeeded, still, in the absence of a novation, the latter corporation cannot be held liable in an action at law for the old corporation's debts when it has not assumed the same.®^ Where a corporation is embarrassed and agrees upon a plan to reorganize whereby its debts are to be satisfied by bonds to be issued, and before such agreement for reorganization is executed there is a disputed understanding to the effect that payment was to be in cash, a creditor of the Works V. C. Lembcke & Co. (U. S. C. C), 165 Fed. 809; Kittel v. Augusta, T. & G. R. Co. (U. S. C. C), 78 Fed. 855 (when railroad corporation not liable; case of property sold under execution and transferred; transferee had nothing to do with proceeds) ; Glidden & J. Varnish Co. v. Interstate Nat. Bank (U. S. C. C. A.), 69 Fed. 912, 16 C. C. A. 534, 32 U. S. App. 654. Indiana: Louisville N. A. & C. R. Co. v. Boney, 117 Ind. 501, 3 L. R. A. 435. Louisiana: Charity Hospital v. New Orleans Gas Light Co., 40 La. Ann. 382. Massachusetts: Aldridge v. Fore River Shipbuilding Co., 201 Mass. 131, 87 N. E. 485; Day v. Worcester, N. & R. R. Co., 151 Mass. 302. Minnesota: Plainview v. Winona & tit. P. Rd. Co., 36 Minn. 505. Nebraska: Austin v. Tecumseh Nat. Bank, 49 Neb. 412, 68 N. W. 628, 35 L. R. A. 444, 5 Am. & Eng. Corp. (as. (N. S.) 382. New York: Pohhemus v. Ktchburg Rd. Co., 123 N. Y. 502, 26 N. E. 31, 46 Am. & Eng. R. Cas. 330, 43 Alb. L. J. 149, 9 R. R. & Corp. L. J. 149, 50 Hun, 397, 20 N. Y. St. Rep. 117; Baker v. Appleton & Co., 95 N. Y. Supp. 125, 107 App. Div. 358, aff'd in (mem.) 187 N. Y. 548, 80 N. E. 1104; Ferguson v. Ann Arbor Rd. Co., 45 N. Y. Supp. 172, 17 App. Div. 336; Fernschild v. D. G. Yuengling Brew. Co., 40 N. Y. Supp. 1119, 18 Misc. 49; Janes v. Fitchburg R. Co., 50 Hun (N. Y.), 310. Pennsylvania: Campbell v. Pittsburgh & W. Rd. Co., 137 Pa. St. 574. Virginia: Supreme Lodge Knights of P. v. Weller, 93 Va. 605, 25 S. E. 891, 5 Am. & Eng. Rd. Cas. (N. S.) 376. 61 Seaboard Air Line Ry. Co. v. Leader, 115 Ga. 702, 42 S. E. 38. 62 Ewing v. Composite Brake-Shoe Co., 169 Mass. 72, 47 N. E. 241, 7 Am. & Eng. Corp. Cas. (N. S.) 181. 418 PARTIES CONTINUED § 255 corporation cannot maintain a suit against the committee of reorganization to recover such claimed cash payment.**^ § 255. Same Subject. If a contract exists whereby the corporation purchasing the assets of another corporation is to pay the latter's debts th(> vendee corporation may be sued at law by a creditor of the vendor.^'* And where a new corporation is organized to cure defects in the organization of an old de facto corporation and takes the property and assumes the obligations of the old company it will be liable upon a judgment obtained against the latter subsequent to such reorganization.^^ Where the articles of a fire insurance company are defective and a new mutual company, with the same name, is organized for the purpose of obviating such defects, and it acquires the assets of, and continues in force the policies of the old company, in case the members do not elect to take out new policies, and practically the same officers and members are retained, such new company will be held Hable upon a policy issued by the old company on the same basis as if it had itself issued it.®^ In case of success in form, of an attempt to reorganize a mu- tual insurance company on the stock plan under a law, in terms authorizing it, the insurance business formerly carried on by the old company being continued ostensibly by the new crea- tion, using the former's assets and good will, if the attempt is fruitless because of the enabling act being void such continued business is to be regarded as really that of the old corporation; as belonging to it.*'^ A corporation which succeeds another in its business, pur- chases all its property and assets and assumes its liabilities and contracts may hold liable in equity an assignee of a con- es Glens Falls Paper Mill Co. v. Trask, 51 N. Y. Supp. 977, 29 App. Div. 449, aff'd in 164 N. Y. 604, 58 N. E. 1087. M Central Electric Co. v. Sprague Electric Co. (U. S. C. C. A.), 120 Fed. 925, 57 C. C. A. 97. 85 Calumet Paper Co. v. Stotts Investment Co., 96 Iowa, 147, 64 N. W. 782. 68 Benesh v. Mill Owners' Mut. F. Ins. Co., 103 Iowa, 465, 72 N. W. 674. 87Huber v. Martin, 127 Wis. 412, 105 N. W. 1031, 1135, 115 Am. St. Rep. 1023, 3 L. R. A. (N. S.) 653. 419 § 256 PARTIES CONTINUED tract constituting part of the assets and it is not necessary that the assignor should be made a party to the suit.^* A bondholder of an insolvent corporation who is a party to a reorganization agreement cannot have the aid of a court of equity in compelling a committee of reorganization, author- ized to act by the bondholders, to deliver to him new bonds of the reorganized company until he has placed himself on an equality with the other bondholders by repajdng money which he has collected on matured coupons, detached by him, be- fore depositing his bonds in accordance with the plan of re- organization for the purpose, as agreed, of paying for the prop- erty of the old company upon foreclosure and purchase thereof .^^ § 256. Levee Districts or Levee Boards Whether Public or Private Corporations May Sue and Be Sued. Under a Federal decision a levee district is a public corpo- ration with power to sue and be sued even though a statute creating a board of levee inspectors with powers usually in- cident to such corporations does not expressly declare it to be a corporation 7*^ So a levee board may be a corporation with large discretionary powers as a fiduciary agent to carry out public purposes, such as the power to aid in building levees, or other works of public improvement; and it may also possess authority to sue.^^ It is also held that a levee district board exercises only pubhc duties and functions and cannot be sued outside of the Stated- In Ilhnois a board of directors appointed by statute to locate and superintend the construction of a levee, with power to contract, sue and be sued, under a spec- ified name, is strictly a private corporation.''^ 68 Dancel v. Goodyear Shoe Mfg. Co. (U. S. C. C), 137 Fed. 157, aff'd in 144 Fed. 679, s. c, 202 U. S. 619. 69 Fuller V. Venable (U. S. C. C. A.), 118 Fed. 543, 55 C. C. A. 309. ™ Board of Levee Inspectors of Chicot County v. Crittenden, 94 Fed. 613. 71 Louisiana, A. & M. R. Co. v. Tensas Basin Levee Dist. Commrs., 87 Fed. 594, 31 C. C. A. 121, 58 U. S. App. 281. 72 Board of Directors of St. Francis Levee Dist. v. Bodkin (Tenn.), 69 S. W. 270. 73 Board of Directors for Leveeing Wabash River v. Houston, 71 111. 318, 322. 420 PARTIES CONTINUED § 257 § 257. Banks as Parties Generally. In an early case in the Federal Supreme Court where a bank had become insolvent and had made an assignment of its effects to trustees for the benefit of its creditors, it was allowed to sue in its own name at the instance and for the benefit of creditors, and the case was held to be the same as if the law permitted the suit to be brought and the same had been brought in the name of such trustees/'' But where the charter of a bank is repealed and a provision made for the distribution of its funds by a receiver the bank is thereby incapacitated to any longer sue or be sued in a court of law, otherwise than to promote the objects confided to the receivers.'^ Where money was borrowed from a bank upon a promissory note, signed by the principal and two sureties, and the principal debtor, by way of counter security conveyed certain property to a trus- tee for the purpose of indemnifying his sureties it is necessary to make the trustee and the cestui que trust parties to a bill filed by the bank, asserting a special lien upon the property thus conveyed. But where the principal debtor had made a fraudulent conveyance of the property, which had continued in his possession, after the execution of the trust deed, and then died, a bill is good, which was filed by the bank against the administrators, for the purpose of setting aside the fraudulent conveyance, and bringing the property into the assets of the deceased, for the benefit of all the creditors who might apply."'' Although a bank is the equitable owner of property as against its cashier who has purchased personal property in his own name upon a consideration moving from the bank still where the cashier replevies such property the bank is not a necessary party.^^ 74 Lyman v. United States Bank (1851), 12 How. (5.3 U. S.) 225, 13 L. ed. 965. The act of incorporation of the Bank of the United States gave the Federal Circuit Courts jurisdiction of suits by and against the bank. Osborn v. United States Bank (1824), 9 Wheat. (22 U. S.) 738, 6 L. ed. 204. 75 Whitman v. Cox, 26 Me. 335. 78 McRea v. Bank of Alabama, 19 How. (60 U. S.) 376, 15 L. ed. 688. 77 Church V. Foley, 10 S. Dak. 74, 71 N. W. 759. 421 § 258 PARTIES CONTINUED § 258. Suit by Corporation as Taxpayer — Suit by Tax- payer Against Corporation. A corporation may, as taxpayer, sue to enjoin the breaking up of a street pavement, done without legal authority.'* If a trolley company is illegally constructing its road, a taxpayer may take action against the company to restrain it, and need not wait therefor, until the assessment is laid.'''* A taxpayer cannot maintain an action to revise, control, or vacate the acts of a municipal government, except as inci- dental or subsidiary to the protection of some private right or prevention of some private wrong, or to prevent any wrong- ful squandering or surrender of the moneys, property, or property rights of the municipality, or when unlawful increase in the burdens of taxation is threatened by the proposed ac- tion. Thus, under a State statute providing for the formation, etc., of street railway corporations,*" a city was empowered to grant the use of streets and bridges to such corporations upon such terms as the proper authorities should determine. A city, acting under such statute, granted the defendant street railway company a franchise to extend its hnes, thus in op- eration, on certain designated streets, without receiving any money consideration therefor, but in consideration that the company should charge a reduced fare. The company had formerly offered a large sum of money for such franchise, with the right to charge the former fare; and other parties had of- fered a large sum of money for the additional franchise, but they owned no connecting Hnes. It was held, that the grant- ing of the franchise was a question addressed to the sound dis- cretion of the common council; and that when it decided that the reduced fares were more desirable for the public, while it might or might not have exercised good discretion, such ac- tion could not be called, in any proper or reasonable sense, a 78 Potomac Elect. Power Co. v. United States Elect. L. Co., 26 Wash. L. Rep. (Dist. Col.) 19. hastate, Lewis, v. Board of Freeholders of Cumberland, 56 N. J. L. 4] 6, 28 Atl. 553. 8t> Section 1862, Wis. Stat., 1898. 422 PARTIES CONTINUED § 258 squandering of public funds or property. The owner of prop- erty abutting on a street in wliicli it is proposed to construct a street railway under a franchise, conditioned that it should be accepted by the railway company, even though he might be entitled to enjoin the construction of the railway in front of his lot, cannot enjoin the company from accepting the franchise, and thus in effect annul the entire grant.*' 81 Linden Land Co. v. Milwaukee Electric Ry. & Light Co., 107 Wis. 493, 83 N. W. 851. See § 242, herein. 423 PARTIES CONTINUED — RIGHTS AND LIABILITIES- CHAPTER XVI PARTIES CONTINUED — RIGHTS AND LIABILITIES — REMEDIES- PROMOTERS — OFFICERS — DIRECTORS — STOCKHOLDERS 259. Promoters' Duties — Remedy Against Them — Corporate Liability for Acts of, Gen- erally. 260. Internal Management of Cor- porations — General Rule. 261. Officers or Directors — Duties and Liabilities of, Generally — Parties. 262. Suit by Corporation Against Officers or Directors — Dam- ages — Accounting. 263. Suit by Stockholders Against Officers or Directors — Cor- poration as Party. 264. Suit by Stockholders Against Directors - — Negligence — Maladministration — Aver- ments Necessary — What Must Be Shown. 265. Individual Liability of Offi- cers and Trustees to Credit- ors Where Capital Stock Not Subscribed — Suit in Equity by Creditors Against Directors. 266. Suits by and Rights of Minor- ity Stockholders — When Corporation Should Be Made Party. 267. Suits by and Rights of Minority Stockholders — Creating New Corporation — Consolidation Agree- ment. 268. When Stockholder May and May Not Sue in Equity. 424 § 269. Right of Stockholders to Sue in Equity in a Federal Court for Surplus Assets After Decree of Forfeiture of Franchises. 270. Suit by Stockholder Against Trustee of Funds for Divi- dends — Defense — Counter- claim. 271. Suit by Stockholder to Com- pel Successor in Interest of Lessee to Pay Rent Re- served. 272. Right of Subsequent Stock- holders to Sue. 273. When Corporation and Not Stockholders Should Sue Under Sherman Anti-Trust Act. 274. When Corporation Should Sue or Be Made Party to Suit by Stockholder. 275. When Stockholder May Be Made Party Defendant by Court — Refusal to Permit Stockholders to Defend. 276. Stockholders as Necessary Parties in Suit by Policy Holder Against Insurance Company for Accounting and Receivership — Equity Jurisdiction. 277. Transfers of Stock— Pledge for Collateral Securitj^ — Liability of Pledgee as Stockholder — National Banks — Bailment. REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, B^TC. § 259 § 259. Promoters' Duties— Remedy Against Them— Cor- porate Liability for Acts of, Generally. Promoters of a corporation ai-c bound to the exercise of good faith toward all the stockholders, to disclose all the facts relating to the property, and to select competent persons as directors, who will act honestly in the interest of the share- holders, and are precluded from taking a secret advantage of other shareholders.^ In a case decided in the New York Court of Appeals, in 1890, the facts were as follows: The defendant B. having acquired, in his own name, but for the joint benefit of himself and the other individual defendants therein, options, giving a right to purchase certain mining property, entered with them into a contract, by the terms of which it was agreed to issue a prospectus and invite subscriptions for the stock of a corporation which it was proposed to organize, in case subscriptions were obtained sufficient to pay for the property; in which case the purchase' was to be made and title taken by B. for himself and as trustee for his associates; he to convey to the corporation, receiving therefor the whole capital stock. All that remained of said stock, after delivery to the sub- scribers, was to.be divided between the contracting parties in specified proportions. A prospectus and subscription paper were accordingly issued; the former set forth the terms and conditions upon which the corporation was proposed to be organized, and in it the names of the associates were given as the officers and trustees of the corporation. In the subscrip- tion paper H., one of the associates, was named as trustee for the subscribers. The capital stock of the proposed corpora- tion was fixed at one million five hundred thousand dollars, divided into shares of the par value of ten dollars each. The prospectus stated that only a portion of the shares were to be sold at four dollars per share; they were to be fully paid up and nonassessable. Subscriptions having been received from 1 Dickerman v. Northern Trust Co., 176 U. S. 181, 44 L. ed. 423, 20 Sup. Ct. 311. See also Camden Land Co. v. Lewis, 101 Me. 78, 63 Atl. 523; Fred Macey Co. v. Macey, 143 Mich. 138, 13 Detroit Leg. N. 948, 106 N. W. 722, 5 L. R. A. (N. S.) 1036. 425 § 259 PARTIES CONTINUED — RIGHTS AND LIABILITIES — plaintiffs and others for about sixty-one thousand shares at the prices agreed upon, the corporation was organized. The associates, who had performed or directed everything that was done previous to the incorporation, signed the necessary certificate therefor, naming themselves as trustees for the first year. B. thereupon completed the purchase of the prop- erty, received a deed, and immediately conveyed to the cor- poration; all the stock was thereupon issued to him; he as- signed the shares subscribed for to the purchasers and applied the money in payment of a loan made to him and his associates to make the purchase. After paying the cost of the purchase and other expenses, the associates had remaining on hand fifty-eight thousand two hundred and thirty-five shares of stock, for which they paid nothing, and which were divided between them as provided in their contract. Plaintiffs, when they received and paid for their, stock, had no knowledge of the contract or notice that defendants were to acquire shares without paying for them. In an action to recover damages, it was held, that plaintiffs had the right and were led to believe, from the documents and circumstances, that defendants were acting in the interest of all the investors, and defendants knew that plaintiffs so believed; and so that the relation between the parties was not that of vendors and vendees simply, but was one of trust and confidence, binding defendants to the exercise of good faith, and to disclose the information they possessed affecting the value of the property; and that plain- tiffs were entitled to recover.^ In another case decided in 1909 in the Appellate Division of the New York Supreme Court there was an action at law to recover, as moneys had and received, the amounts paid by the plaintiff and his assignor on stock subscriptions pursuant to a syndicate agreement. This agreement provided for the purchase of the stock of an iron company at par, together with certain coal lands, for the erection of furnaces, and the sale of the properties thus purchased and equipped to a cor- - Brewster v. Hatch, 122 N. Y. 349, .3.3 N. Y. St. Rep. 527, 25 N. E. 505, 9 Rd. & Corp. L. J. 5, 19 Am. St. Rep. 498. 426 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 259 l)oration to be organized, the stock of which was to be issued to the syndicate subscribers in proportion to their subscrip- tions. This agreement was carried out and the stock of the new corporation issued to subscribers. The plaintiff sued one of the promoters of the enterprise to recover the amount paid for the stock upon the grounds (1) that the defendant had agreed to pay his subscription in cash without intending to do so, and (2) that, being agent of the syndicate he purchased stock of the iron company of which he himself owned a large I^ortion. On all the evidence it was held^ that a judgment for the plaintiff should be reversed for the reason that no fraud, either actual or constructive, on the part of the defend- ant had been shown; and^ because, even if the defendant agreed to pay his subscription in cash, the remedy for the breach, if any, was not an action for fraud. It was also decided that, while the defendant was guilty of constructive fraud in purchasing the stock of the iron company for the syndicate, the defendant's principal was the syndicate, which was suc- ceeded by the corporation, and the right of the latter to rescind the sale of the stock did not give the syndicate subscribers the right to rescind their subscription contract, for the contract for the purchase of the stock, not the subscription contract, was rendered voidable by the defendant's fraud.^ The cor- poration itself must institute any equitable suits to redress wrongs by promoters or ciirectors violating duties as trustees.*' And a corporation has a remedy at law to enforce the liability of promoters to refund to the corporation their profits where such promoters are guilty of actionable fraud.'' So a corpora- tion may, after rescission, sue in equity its promoter to recover back the consideration received for property sold to it for large profits by the promoters who have failed to disclose 3 Per Woodward, J. * Per Miller and Jenks, JJ. 5 Heckscher v. Edenborn, 115 N. Y. Supp. 67.3, 1.31 App. Div. 253. « Wills V. Nehalem Coal Co. (Oreg., 1908), 96 Pac. 528. 7 Pietsch V. Milbrath, 123 Wis. 647, 107 Am. St. Rep. 1017, 101 N. W. 388, 102 N. W, 342. See Groel v. United Electric Co., 70 N. J. Eq. 616, 61 Atl. 1061. 427 § 259 PARTIES CONTINUED — RIGHTS AND LIABILITIES — material facts; the defendant may be charged directly with a violation of his fiduciary duty and compelled to make restitu- tion of what was so acquired. The plaintiffs can waive their remedy founded on the implied contract to return the con- sideration on the contracts being rescinded and sue for the tortious violation of the duty owed by them to it because of the fiduciary relation in which they stood. The bill in equity may be brought against one of two promoters, even though the title to the property conveyed to the corporation stood in the name of the other promoter who held a half interest in the contract, the other promoter being dead.^ Promoters of a consolidated corporation are not liable to it in a fiduciary capacity even though the properties to be consolidated are purchased by them in their own names in order to capitahze their combined values by transferring them to the company in payment of their stocks, but bonds and such purchases are not shown under the contract therefor to have been made in a fiduciary capacity.'' Corporations are not bound by con- tracts made by promoters before incorporation.^" A corpora- 8 Old Dominion Copper Mining & Smelting Co. v. Bigelow, 188 Mass. 315, 74 N. E. 65.3, 108 Am. St. Rep. 480. See the following cases: United States: Central Trust Co. v. East Tennessee Land Co. (U. S. C. C), 116 Fed. 743. California: Burbank v. Dennis, 101 Cal. 90, 35 Pac. 444. Maine: Camden Land Co. v. Lewis, 101 Me. 78, 63 Atl. 523. Massachusetts: Hayward v. Leeson, 176 Mass. 310, 57 N. E. 656, 49 L. R. A. 725. Michigan: Carmody v. Powers, 60 Mich. 26, 26 N. W. 801. Missouri: Exter v. Sawyer, 146 Mo. 302, 47 S. W. 951; South Joplin Land Co. V. Case, 104 Mo. 572, 16 S. W. 390. New York: Brewster v. Hatch, 122 N. Y. 349, 25 N. E. 505, 19 Am. St. Rep. 498. Virginia: Newberry Land Co. v. Newberry, 95 Va. Ill, 27 S. E. 897. West Virginia: Richardson v. Graham, 45 W. Va. 134, 30 S. E. 92. Wisconsin: Pietsch v. Milbrath, 123 Wis. 647, 102 N. W. .342, 101 N. W. 388. 8 Tompkins v. Sperry, Jones & Co., 96 Md. 500, 45 Atl. 254. 10 Davis V. Ravenna Creamery Co., 48 Neb. 471, 67 N. W. 436. Examine the following cases: United States: Old Colony Trust Co. v. Dubuque Light & T. Co. (U. S. 428 REMEDIES — PROMOTEKS — OFFICERS — DIRECTORS, ETC. § 260 tion which has ratified acts of promoters in entering into a contract prior to incorporation may become Hable for what has been done in conformity with said contract which was intended to carry out the purposes authorized by the corporate organization." The promise of a single promoter of a national bank, made prior to incorporation, that the plaintiff should be paid for services to be rendered in procuring subscriptions to the capital stock, will impose no liability upon the bank after incorpora- tion.^^ § 260. Internal Management of Corporations — General Rule. The courts will not as a general rule interfere with the in- ternal management of a corporation.*^ That is, to state the rule in another way, in the absence of fraud or bad faith courts have nothing to do with the internal management of business cor- porations provided they keep within their corporate powers.*** C. C), 89 Fed. 794 (when corporation bound by contract of purchase); Winters v. Hub. Min. Co., 57 Fed. 287. Alabama: Moore & Handley Hardware Co. v. Towers Hardware Co., 87 Ala. 206, 6 So. 41. California: San Joaquin Land & Water Co. v. West, 94 Cal. 399, 20 Pac. 785. Colorado: Ruby-Chief Min. & Mill. Co., 17 Colo. 199, 29 Pac. 668. Michigan: Durgin v. Smith, 133 Mich. 331, 10 Detroit Leg. N. 215, 94 N. W. 1044. Minnesota: McArthur v. Times Printing Co., 48 Minn. 319, 51 N. W. 216. Pennsylvania: Tift v. Quaker City Nat. Bank, 141 Pa. 550, 21 Atl. 660. Tennessee: Pittsburg & T. Copper Min. Co. v. Quintrell, 91 Tenn. 693, 20 S. W. 248. Texas: Weatherford Mineral Wells & Northwestern Rd. Co. v. Granger, 86 Tex. 350, 24 S. W. 795. Wisconsin: Buffington v. Bardon, 80 Wis. 635, 50 N. W. 776. 11 Stanton v. New York & E. Co., 59 Conn. 272, 22 Atl. 300. See Old Colony Trust Co. v. Dubuque Light & T. Co. (U. S. C. C), 89 Fed. 794; Weatherford Mineral Wells & Northwestern Rd. Co. v. Granger, 86 Tex. 350, 24 S. W. 795. 12 Tift V. Quaker City National Bank, 141 Pa. St. 550, 21 Atl. 660, 9 Ry. & Corp. L. J. 426, affirming 8 Pa. Co. A. 606. 13 Miller v. Murray, 17 Colo. 408, 30 Pac. 46. 14 Schwab V. Potter Co., 194 N. Y. 409, 87 N. E. 670, affirming 113 N. Y. Supp. 439, 129 App. Div. 36. 429 § 2(30 PARTIES CONTINUED — RIGHTS AND LIABILITIES — And in order to warrant the interference of a court, in a stock- holder's suit, with the internal management of a corporation it must also appear that there will otherwise be a failure of justice. ^^ Nor will the internal management of a corporation be inter- fered with by the court, at the instance of a minority stock- holder, unless the majority stockholders are actmg without the charter powers, or a strong case of mismanagement, or fraud, is shown. ^^ The minority stockholders cannot come into court upon allegations of a want of judgment or lack of efficiency on the part of the majority and change the course of administration. Corporate elections furnish the only remedy for internal dissensions, as the majority must rule so long as it keeps within the powers conferred by the charter.^' Again, it seems, that as to questions of mere administration, or of policy, as to which there is an honest difference of opinion among the shareholders, the will of the majority should govern, and so the court would not be justified in interfering, even in doubtful cases, where the action of the majority might be susceptible of different constructions. To warrant the inter- position of the court when the proposed action is within the corporate powers, a case must be made out which plamly 15 Miller v. Murray, 17 Colo. 408, 30 Pac. 46. 16 Barton Lumber Co. v. Enwright, 131 Ga. 329, 62 S. E. 233. The court, per Holden, J., said: "The right to control the affairs of a corporation is vested by law in its stockholders — those whose pecuniary gain is dependant upon its successful management. The majority stockholders, or the ma- jority of the directors, when directors are chosen to act on behalf of the stockholders, have the right to determine the business policy of the corpo- ration, and the minority must submit to their judgment in such matters, when exercised in good faith and not involving ultra vires, or in breach of trust. As was said by this court in Hand v. Dexter, 41 Ga. 4.54, 461, 'The very foundation principle of a corporation is that the majority of its stock- holders have the right to manage its affairs, so long as they keep within their charter rights.' No principle of law is more firmly fixed in our jurisprudence than the one which declares that the courts will not interfere in matters involving merely the judgment of the majority in exercising control over corporate affairs." 17 Schwab V. Potter Co., 194 N. Y. 409, 87 N. E. 670, affirming 113 N. Y. Supp. 4.39, 129 App. Div. 36. 430 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 261 shows that such action is so far opposed to the true interests of the corporation itself as to necessarily lead to the inference that none thus acting could have been influenced by an honest desire to secure such intere.sts, but that he must have acted with intent to subserve some outside purpose, regardless of the consequences to the company and in a manner inconsistent with its interests.^* §261. Officers or Directors — Duties and Liabilities of, Generally — Parties. Although the relation of managing officers of a corporation to a stockholder is not strictly that of trustee and cestui que trust, it is in a sense fiduciary, and their superior i)Osition im- poses upon them a duty to an individual stockholder not to take advantage of the opportunity offered by their position to wrong him by any affirmative act designed to injure. Thus, they may not intentionally abuse their power by actually or apparently depressing the value of stock for the purpose of acquiring it from a stockholder at an undervaluation, and, having so injured a stockholder, it is immaterial that they may also have wronged the corporation. This is true although the stock purchased is that of a private business corporation hav- ing no market value .^^ Each director of a corporation is liable only for his own acts or omissions. One director is not liable for the acts or omis- sions of another unless he participated therein to the injury of the corporation, or had some knowledge by which in the exercise of reasonable care he could have prevented the loss, or unless he connived at it or failed to perform his duty of exercising the authority he possessed to prevent loss which could in the exercise of reasonable care and skill have been 18 Gamble v. Queens County Water Co., 123 N. Y. 91, 33 N. Y. St. Rep. 8S, 25 Abb. N. C. 410, 25 N. E. 401, S Ry. & Corp. L. J. 484, 9 L. R. A. 527, 31 Am. & Eng. Corp. Cas. 313, reversing 5 N. Y. Supp. 124, 52 Hun, 166, 23 N. Y. St. Rep. 409, cited in Mills v. United States Printing Co., 99 App. Div. 605, 617, 91 N. Y. Supp. 193, a case as to status of stockholder to attack an agreement with a trade union made by an executive committee of the corporation. 19 "Von Au V. Magenheimer, 110 N. Y. Supp. 629, 126 App. Div. 257. 431 § 2()1 PARTIES CONTINUED — RIGHTS AND LIABILITIES — foreseen and guarded against. Nor are directors liable for mere errors of judgment where they act without corrupt intent and in good faith and are fairly competent to discharge the duties of the position, unless the acts be unlawful or ultra vires. ^'^ A person, however, who contracts as agent, without having in fact authority to do so, is personally responsible to those, who, in ignorance of his want of authority contract with him, though he acts in good faith, believing that he is invested with such authority. This liability is founded upon the implied promise of the person so contracting as agent, that he has authority to bind the principal; and the measure of damages is the loss sustained by the other contracting party by reason of his not having the vahd contract which the agent assumed to make. So under an Ohio decision, the corporate powers, business and property, of corporations formed for profit, must be exercised, conducted and controlled by a board of directors, who cannot be chosen until ten per cent of the capital stock specified in the articles of incorporation has been subscribed. Persons contracting as directors, when less than that amount of stock has been subscribed, are without authority to create any corporate obligation, and become personally liable, though they believe in good faith that they are contracting in behalf of a legally constituted corporation, and that they have au- thority to bind it l)y the contract. ^^ Directors of a corporation, conducting its business and re- ceiving moneys belonging to it after the expiration of the term for which it was incorporated, will be held to an account on the dissolution and the final liquidation of the affairs of the corporation in a court of equity .^^ Where a corporation had certain theatrical leases, the right to a renewal belonged to the corporation, and an injury resulting from a wrongful failure 20 People V. Equitable Life Assurance Society, 109 N. Y. Supp. 53, 124 App. Div. 714, rev'g 101 N. Y. Supp. 354, 51 Misc. 389. 21 Trust Company v. Floyd, 47 Ohio St. 525, 25 Ohio L. J. 35, 26 N. E. 110, 12 L. R. A. 346, 19 Wash. L. Rep. 514, 33 Am. & Eng. Corp. Cas. 218. 22 Mason v. Pewabic, 133 U. S. 50, 33 L. ed. 524, 10 Sup. Ct. 524. 432 REMEDIES — I'RUAIUTERS — OFFICERS— DIRECTORS, ETC. § 261 to secure that right by the malfeasance of directors was an injury to the corporation for which it was entitled to sue.^^ The word "creditors" as used in the provision of a General Manufacturing Act,^"* making the stockholders of a corpora- tion organized under it liable to the creditors of the company until the whole amount of the capital stock has been paid in and a certificate thereof filed, does not include directors of the corporation, and a director to whom the corporation has be- come indebted cannot enforce the liability so imposed. This rule applies to one named as a trustee in the certificate of in- corporation of the company and who acts as such, although he owns none of its stock; he may legally act as trustee al- though not a stockholder.-^ In case of neglect or mismanage- ment of corporate affairs by officers or directors of a corpora- tion whereby losses are sustained by it, the recovery is for the benefit of all creditors and stockholders regardless of the fact as to what party prosecutes such action, that is, whether it is the corporation or creditors or shareholders.'^ In an action against trustees for an accounting all are neces- sary parties if a right of contribution exists; not so, however, where the action is at law, for then there is no right to con- tribution. Moreover, even if such suits be in equity and some of the defendants be innocent of wrongdoing and yet liable to account with others guilty of wrongdoing there can be no contribution as between those who neither participated in the same acts nor served on the board of directors at the same time. Those sections of the New York Code of Civil Proce- dure ^^ which allow an action to be brought by the attorney- general on behalf of the people, or in certain cases by a creditor, trustee, etc., against the directors of a corporation for mis- conduct, do not confer upon the parties enumerated in the 23 Syllabus in Singers-Bigger v. Young (U. S. C. C. A.), 166 Fed. 82. 24 Section 10, chap. 40, Laws 1848. 25 McDowall V. Sheehan, 129 N. Y. 200, 41 N. Y. St. Rep. 415, 36 Am. & Eng. Corp. Cas. 137, 29 N. E. 299. 26 Wallace v. Lincoln Savings Bank, 89 Tenn. 630, 15 S. W. 448, 9 Ry. & Corp. L. J. 482, 13 Am. & Eng. Corp. Cas. 253, 4 Bkg. L. J. 249. 27 Sections 1781, 1782. 28 433 § 262 PARTIES CONTINUED — KICiHTS AND LIABILITIES — latter section any new cause of action, except in respect to tiic removal or suspension of directors, but merely authorize the enforcement by the individuals named of causes of action which have accrued to the corporation and which might be enforced by it or its receivers, or by a stockholder in behalf of himself and all other stockholders in the right of the corpora- tion. The action though brought in the name of the people is in the right of the corporation and for its benefit and to enforce causes of action which might have accrued to the corporation and might be enforced by it, or its receiver, or by a stock- holder in behalf of himself and all other stockholders in the right of the corporation/* § 262. Suit by Corporation Against Officers or Directors —Damages —Accounting. No recovery can be had by a corporation for damages sus- tained by it by reason of a mere error of judgment of one of its officers in doing an act ultra vires but in a business carried on by the corporation itself.^^ But a corporation may sue one or more directors in equity for an accounting with respect to property of the corporation which has actually come into his or their hands, or for fraudulent breach of trust in the manage- ment of the corporation or its property and for the recovery of the value of property lost and incidental damages. So, too, it has an action at law against one or more directors for damages sustained by the corporation in consequence of his or their wrongful, negligent official acts of misfeasance or nonfeasance. But a suit in equity may not be joined with an action at law against the same directors.^" 28 People V. Equitable Life Assur. Soc, 109 N. Y. Supp. 53, 124 App. Div. 714, 729, reversing 101 N. Y. Supp. 354, 51 Misc. 389. In this case the action was by the attorney-general against former and present directors and the corporation was joined as defendant for an accounting for funds and for repayment. 29 Holmes v. Willard, 125 N. Y. 75, 34 N. Y. St. Rep. 455, 25 N. E. 1089, 9 Ry. & Corp. L. J. 117, .33 Am. & Eng. Corp. Cas. .385. 30 People V. Equitable Life Assur. Soc, 109 N. Y. Supp. 53, 124 App. Div. 714, reversing 101 N. Y. Supp. 354, 51 Misc. 389. 434 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 203 § 263. Suit by Stockholders Against Officers or Directors — Corporation as Party. Stockholders may sue for an accounting against corporation officers with assets where the rights of parties would otherwise be lost, and the corporation in such case should be made a party defendant. Although ordinarily the corporation itself should bring suit for such accounting.^^ An individual stockholder who has been induced to sell her stock to the managing officers of a corporation for an inade- quate consideration by means of false representations as to the condition of the company and the amount of dividends it could pay, has an action on the case for damages, even though the fraud may have wronged the corporation and would sup- port an action on its behalf by a stockholder. Where in such an action it appears that the defendant officers owning a large percentage of the stock, which had previously paid dividends from nine to fourteen per cent, declared only a three per cent dividend and represented to the plaintiff, a stockholder, that the company had suffered reverses, and at the same time in- creased their own salaries from two thousand five hundred dollars to seven thousand five hundred, but the day after purchasing plaintiff's stock, and less than a month from the time they declared said dividend, declared a special dividend of ten per cent and used the proceeds to meet the check given to the plaintiff in payment for her stock, and at the next regular meeting reduced the salaries of the officers to four thousand, a case of fraud and deceit is established.^^ Where, however, the loss suffered by a stockholder, by reason of the wrongful and malicious acts of corporate officers done with specific intent to injure him, is not in addition to that which the cor- poration has sustained he cannot maintain any action there- for.^^ Individual stockholders cannot question in judicial pro- ceedings, the corporate acts of directors, if such acts are within the power and in furtherance of the purposes of the 31 Byers v. Rollins, 13 Colo. 22, 21 Pac. 894. 32 Von Au V. Magenheimer, 110 N. Y. Supp. 629, 126 App. Div. 257. 33 Wells V. Dane, 101 Me. 67, 63 Atl. 324. 435 § 263 PARTIES CONTINUED — RIGHTS AND LIABILITIES — corporation, are done in good faith, in the exercise of an honest judgment, and are not unlawful or contrary to good morals. Questions of policy of management, of expediency of contracts or action, of adequacy of consideration not grossly dispropor- tionate, or of lawful appropriation of corporate funds to ad- vance corporate interests, are left solely to the honest decision of the directors if their powers are without limitation and free from restraint.^"* An action at law cannot be maintained by a single stockholder against the corporation directors for mis- management of its affairs or for defrauding it, since such di- rectors stand in the relation of agents to the company and are liable only to it as their principal for their acts.^^ Although, by reason of the payment of excessive dividends a deficit exists recovery cannot be had by a shareholder in a suit against the directors.^^ The fact that an offer to purchase the corporate property has not been communicated to the stockholders by the directors does not render them liable to the stockholders for effecting in pursuance of a vote of the stocldiolders a lease of the corporate property, it not appearing that the stock- holders would have acted differently had they had knowledge of such offer or that there was a responsible offer .^'' The cor- poration is a necessary party defendant in an action by one or more stockliolders, brought for the benefit of all, against the corporate directors for misappropriating funds, and even in an equitable action the failure to do so is not excused by averments of inability to make service upon such corporation in the State where the action is brought, that it was organized under the law of another State, and that it refuses to appear; nor is such failure excused by a prayer to appoint a trustee to hold such moneys as may be found due.^^ 34 Ellerman v. Chicago Junction Rys. & Union Stock Yards Co., 49 N. J. Eq. 217, 23 Atl. 287, 11 Ry. & Corp. L. J. 97, 35 Am. & Eng. Corp. Cas. 388. 35 Allen V. Curtis, 26 Conn. 456. 38 Wallace v. Lincoln Savings Bank, 89 Tenn. 630, 15 S. W. 448, 9 Ry. & Corp. L. J. 482, 13 Am. & Eng. Corp. Cas. 253, 4 Bkg. L. J. 249. 37 Strunk v. Owen, 199 Pa. St. 73, 48 Atl. 888. 38 Deming v. Beatty Oil Co., 72 Kan. 614, 84 Pac. 385. 436 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 264 § 264. Suit by Stockholders Against Directors —Negli- gence — Maladministration — Averments Necessary — What Must Be Shown. In an action against directors of a corporation for negli- gently wasting the property of the corporation brought under the New York Code of Civil Procedure,^^ the plaintiff must allege the facts constituting negligence or misconduct, mis- feasance or malfeasance the same as if the action had been brought by the corporation itself. It was not the intention of the legislature in enacting the New York Code of Civil Pro- cedure ^" to require cUrectors of a corporation to account as in cases of trustees of express trusts and more must be alleged than the mere fact that the defendant was a director. Thus, where a defendant is sued solely for acts of omission as a director and it is not alleged that he received any property of the corporation for which he failed to account, or voted in favor of any unlawful disposition of corporate property or fraudulently connived thereat, or was guilty of any breach of trust, and he is not charged with having profited directly or indirectly by any of the acts of other defendants vested with executive functions, and it is not charged that he was guilty of neghgence in failing to insist upon the adoption of appro- priate by-laws to safeguard the corporation, or in voting for officers or approving the appointment of employes or in voting for or refraining from voting against any specific action of the directors, or that he had any knowledge or reason to suspect misconduct of members of executive committees or other offi- cers or employes of the corporation, or that he has failed to take part in the proceedings at any meetings of the directors at which he should have attended, or has been guilty of any- thing more than an honest error of judgment, the complaint fails to state a cause of action against him.^^ In a case in the United States Supreme Court which has very often been cited 39 Section 1781. 40 Sections 1781, 1782. « People V. Equitable Life Assur. See, 109 N. Y. Supp. 53, 124 App. Div. 714, reversing 101 N. Y. Supp. 354, 51 Misc. 389. 437 § 265 PARTIES CONTINUED — RIGHTS AND LIABILITIES — and quoted from, a shareholder in a waterworks company brought his bill in equity against a city, the company and its directors, alleging that the company was furnishing the city with water, free of charge beyond what the law required it to do, and that the directors, contrary to his request, continued to do so to the great injury of himself, the other shareholders and the company. It was held that in such case there must be shown: (1) Some action or threatened action of the directors or trustees which is beyond the authority conferred by the charter, or the law under which the company was organized; or (2) such a fraudulent transaction, completed or threatened, by them, either among themselves or with some other party, or with shareholders, as will result in serious injury to the company or the other shareholders; (3) that the directors, or a majority of them, are acting for their own interests, in a manner destructive of the company, or of the rights of the other shareholders; or (4) that the majority of the shareholders are oppressively and illegally pursuing, in the name of the com- pany, a course in \'iolation of the rights of the other share- holders, which can only be restrained by a court of equity; and (5) it must also be made to appear that the complainant made an earnest effort to obtain redress at the hands of the directors and shareholders of the corporation, and that the ownership of the stock was vested in him at the time of the transactions of which he complains, or was thereafter trans- ferred to him by operation of law.^ § 265. Individual Liability of Officers and Trustees to Creditors Where Capital Stock Not Subscribed — Suit in Equity by Creditors Against Directors. Officers and trustees of corporations are not individually liable to the corporation creditors because the capital stock of the corporation was not subscribed where the statute does not impose individual liability in express terms and where subscription to the capital stock is not essential to the legal existence of a corporation; unless liability is fixed by the mere « Hawes v. Oakland, 104 U. S. 450, 26 L. ed. 827. 438 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 266 act of transacting business before the whole capital stock was subscribed.'*^ Equity will peraiit defrauded creditors to sue directors of a dissolved corporation to recover assets or money which the directors have wrongfully converted."" § 266. Suits by and Rights of Minority Stockholders— When Corporation Should Be Made Party. Where the action resulting from the votes of the shareholders owning a majority of the stock of a corporation is so detri- mental to the corporation itself as to lead to the necessary *3 American Radiator Co. v. Kinnear (Wash., 1909), 105 Pac. 630, a case of action by the plaintiff corporation against certain parties as officers and trustees of a manufacturing company. The court, per Rudkin, C. J., said: " Cases may be found where officers of corporations have been held indi- vidually liable to the corporation creditors because the capital stock of (he corporation was not subscribed, but these cases rest upon an express statute imposing individual liability in such cases, or upon the ground that there is no corporation until the capital stock is subscribed. In First Na- tional Bank of Salem v. Almy, 117 Mass. 476, and Cummings v. Winn, 89 Mo. 51, 14 S. W. 512, cited by the appellant, the liability was based upon an express statute, and similar statutes exist in many of the States. In Walton v. Ohver, 49 Kan. 107, 30 Pac. 172, 33 Am. St. Rep. 355, and Wechselberg v. Flour City Bank, 64 Fed. 90, 12 C. C. A. 56, 26 L. R. A. 470, the individual liability was upheld on the ground that there was no cor- poration to be bound. These decisions are not controlling here, for our statute does not impose individual liability in express terms, and subscrip- tion to the capital stock is not essential to the legal existence of a corpora- tion. Spokane v. Amsterdamsch Trustees Kantoor, 22 Wash. 172, 60 Pac. 141. For the like reason. Farmers' Co-op. Trust Co. v. Floyd, 47 Ohio St. 525, 26 N. E. 110, 12 L. R. A. 346, 21 Am. St. Rep. 846, and other like cases, basing liability on excess of authority of corporate agents, are inapplicable, for if the corporation is bound there is no excess of authority. The very fact that the appellant recovered judgment against the corporation affords conclusive evidence that the trustees in contracting the debt did not exceed their authority. For these reasons there is no liability on the part of the respondents in the present case, unless their liability is fixed by the mere act of transacting business before the whole capital stock was subscribed. While there is some conflict of authority on this question, the weight of au- thority denies individual liability in such cases, holding that the State alone can complain of the violation of its laws." The court then considers and quotes from Whitney v. Wyman, 101 U. S. 392, 25 L. ed. 1050, and quotes at length from Snider Sons' Co. v. Troy, 91 Ala. 224, 8 So. 658, 11 L. R. A. 515, 24 Am. St. Rep. 887, and also relies upon Title 23, chap. 1, 1 Ballinger's Ann. Codes & St., §§ 4250, 4265, 4266 (Pierce's Code, §§ 7063, 7067, 7068). « Lewisohn v. Stoddard, 78 Conn. 575, 63 Atl. 621. 439 § 206 PARTIES CONTINUED — RIGHTS AND LIABILITIES — inference that the interests of the majority he wholly outside of and in opposition to the interests of the corporation and of a minority of the stockliolders and that such action is a wanton or fraudulent destruction of the rights of the minority, it may be subjected to the scrutiny of a court of equity at the suit of the minority shareholders, and where, in such case, the di- rectors or trustees have acted with and formed part of the majority, an action may be sustained by one of the minoiity shareholders, suing in his own behalf and in that of all others coming in, to enjoin the action contemplated; in such suit the corporation should be made a party defendant ."^^ In order, however, to give a standing in a court of equity to a small minority of stockholders contesting an ultra vires act of the directors, against which a large majority makes no objection, it must appear that they have exliausted all the means within their reach to obtain redress of their grievances within the corporation itself, and that they were stockholders at the time of the transactions complained of, or that the shares have devolved upon them since by operation of law."*^ Where the statute requires that the question of a lease be submitted to a vote of the stockholders and the lease is made without com- pliance with such requirement a bill to set aside the lease may be maintained by minority stockliolders.'*^ A court of equity « Gamble v. Queens County Water Co., 123 N. Y. 91, 33 N. Y. St. Rep. 88, 25 Abb. N. C. 410, 25 N. E. 401, 8 Ry. & Corp. L. J. 484, 9 L. R. A. 527, 31 Am. & Eng. Corp. Cas. 313, reversing 5 N. Y. Supp. 124, 52 Hun, 166, 23 N. Y. St. Rep. 409, cited in Farmers' Loan & Trust Co. v. New York & Northern Ry. Co., 150 N. Y. 410, 426 (as to right of minority stockholders to come into equity for relief where act of majority is fraudulent, etc.); Rathbone v. Ayer, 121 App. Div. 355, 360, 105 N. Y. Supp. 1044 (a case of sale by directors to corporation; fair price of property; good faith, etc.), cited and quoted from in Continental Ins. Co. v. New York & Harlem Rd. Co., 103 App. Div. 282, 297, 93 N. Y. Supp. 39 (as to circumstances under which minority stockholders can maintain an action in equity to rescind act of majority). «Dimpfell v. Ohio & Mississippi Ry. Co., 110 U. S. 209, 3 Sup. Ct. 357, 28 L. ed. 121. Right of minority stockholder to sue in equity; laches. See Alexander V. Searcy, 81 Ga. 536, 12 Am. St. Rep. .337. 47 Rogers v. Nashville, C. & St. L. R. Co. (U. S. C. C. A.), 91 Fed. 294, 440 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 26G has power at the suit of a minority of the stocklioldcrs to order a dividend of the corporation's assets where the safety of the interests of the minority requires it. In determining whether to exercise such powers in a particular case, the object of the corporation and the situation of its affairs must be taken into consideration. So where a majority of the stockholders have combined to so manage the corporate business as to divert all the profits of the enterprise from their legitimate channel and destination, and to appropriate them to their own use, and have in part executed their plan, and the circumstances are such as to render any change in the personnel of the manage- ment impracticable, a proper case exists for the intervention of the court to make division of the assets.^^ Equity will also grant rehef to a minority stockholder in a corporation by the appointment of a receiver where there was collusion between the officers to unfairly deal with the plain- tiff by dismissing him from office and absorbing the profits of the business in large increased salaries to themselves.'*^ A recovery cannot, however, be had from a board of directors because of a loss sustained by minority stockholders conse- quent upon the winding up and liquidation of the corporate aiTairs by reason of the acts of the majority of the stock- holders .^° A bill will also be dismissed for want of equity when brought by a minority stockholder of a trading corpora- tion when, although it complains of the management of the majority still it does not sufficiently and specifically allege any ultra vires or prima facie fraudulent act, but deals only in general suggestions and allegations of fraud and conspiracy, and all the allegations of fact relate only to the ordinary busi- ness and management of the corporation, while the real grava- men of the bill appears to be that a near relative is not per- mitted to be an active official, president, director or clerk in 33 C. C. A. 517, 62 U. S. App. 49, 697, 10 Am. & Eng. Corp. Cas. (N. S.) 82. 48 Fongeray v. Cord, 50 N. J. Eq. 185, 24 Atl. 499, 12 Ry. & Corp. L. J. 89. « Hampton v. Buchanan, 51 Wash. 155, 98 Pac. 374. 50 Trisconi v. Winship, 43 La. Ann. 45, 9 So. 29, 9 Ry. & Corp. L. J. 469, 33 Am. & Eng. Corp. Cas. 271. 441 § 2()7 PARTIES CONTINUED — RIGHTS AND LIABILITIES — the corporation and in sucli capacity to represent plaintiff's interest as he formerly did. Such averments do not warrant an injunction restraining the dissipation of assets or the retention of the bill for the purpose of ascertaining the value of complainant's stock with a view to compel the corporation or the majority stockholders to buy or pay for the same, especially when to carry out such a purpose would be either to force a liquidation of the corporation not insolvent, or the majority stockholders to buy or sell to protect their interests .^^ That a corporation may be involved in litigation by the acts of a majority of the stockholders does not constitute a suffi- cient ground for equity to interfere at the suit of the minority stockholders.^^ § 267. Suits by and Rights of Minority Stockholders — Creating New Corporation — Consolidation Agreement. In a late case in the Court of Appeals of New York a pro- posed plan, by which a majority of the stockholders of a cor- poration authorized, empowered and directed its directors to create a new corporation in which the old corporation should be the only stockholder with only the capital of the old cor- poration, was examined and held to be an evasion of the law, which does not permit one corporation to create another, endow it with capital from its own assets and take all its shares of stock in exchange and hold them for sale. Therefore, a minority stockholder who opposed the scheme was held en- titled to an injunction, even without alleging injury or the certainty thereof in the future; and in such case the fact that the agreement to sell was claimed to have been ratified by two- thirds of the stockholders does not vahdate the method of selling as to any stockholder who objected, since ratification may confirm a voidable act but not one utterly void.^^ 51 Thomas & Barton Co. v. Thomas (U. S. C. C. A.), 165 Fed. 29. 52 Converse v. Hood, 149 Mass. 471, 21 N. E. 878, 4 L. R. A. 521. 53 Schwab V. Potter Co., 194 N. Y. 409, 87 N. E. 670, affirming 113 N. Y. Supp. 439, 129 App. Div. 36. (1) The decision in this case in the court below was as follows: The complaint of a minority stockholder wliich in 442 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 267 A consolidation agreement entered into by tlie directors of two corporations is neither void nor voidable at the election of a minority stockholder, merely on the ground that the directors making the agreement were the common directors of both corporations, or on the ground that the consolidation may be practically a sale to one of the corporations which is a majority stockholder of the other corporation. And one purchasing stock in a corporation, organized for a specified period, cannot object to its subsequent exercise, in a legal manner, of the power to consolidate with another corporation, where the power existed at the time of the purchase, but was conferred subsequent to its organization, but the right to ob- ject to the consolidation belongs only to the persons who were shareholders before the power to consolidate was given. Again, in this connection it may be stated that individual stockholders are not trustees for each other, but each may, as a member of the general corporate body, exercise his in- dividual right and vote equally with other stockholders on the ratification of a contract in which he is interested, sub- ject to the qualification that the majority stockholders cannot substance alleges that at a meeting the majority stockholders directed the organization of another corporation at the expense of their own corporation and that real estate owned by their corporation should be transferred to the new corporation at an inadequate price in exchange for all its capital stock which the directors were empowered to offer for sale to stockholders on certain terms, and praying that the proposed transaction be enjoined, states a cause of action. (2) This, because while an act within the powers of directors and majority stockholders will not be interfered with by the courts in the absence of fraud, the scheme aforesaid is a mere device to increase the capital stock of the corporation without complying with the statute governing such proceeding, and hence the proposed action is ultra vires. (3) A minority stockholder who does not desire to pay what is in effect a forced assessment by subscribing for the stock of the new corpora- tion in order to preserve his proportionate interest in his corporation, is a party aggrieved and entitled to sue for an injunction. (4) It is no answer to said complaint to allege that it was necessary to sell the property at a certain sum, or even less, to conserve the interests of the stockholders, that being a mere conclusion. (5) Nor is it a defense to allege that an agreement to sell the property pursuant to said resolution was ratified and confirmed by the majority stockholders, for they could not ratify an act which was unlawful. 443 § 268 PARTIES CONTINUED — RIGHTS AND LIABILITIES — SO deal with the assets of the corporation as to divide them between themselves to the exclusion of the minority.^'* § 268. When Stockholder May and May Not Sue in Equity. A stockholder may sue for an injunction to prevent ultra vires acts of the corporation.^^ A demurrer to a stockholder's bill will not be sustained on the ground that the corporation itself must sue for the relief prayed for, where the bill, which asks for an accounting and the appointment of a receiver, shows the passage of a resolution several years prior thereto by the stockholders of a bank, of which the defendants were directors, whereby the corporate affairs were to be wound up and the stock with the profits thereon were to be returned to the stockholders by the bank's officers; but that notwith- standing such resolution only a part of said stock had been returned and the business was still carried on at a great loss of assets consequent upon the business inability of said officers and that the complainant had been unable to obtain a dis- tribution of her stock or any information concerning the bank's affairs .^^ Stockholders, although controlled by action of the directors, cannot fraudulently repurchase stock and sell it back to the corporation at an advance on the market price, where the original purpose for which such stock was given them was to sell the same and pay certain corporate debts out of the proceeds, but they converted such proceeds for re- purchasing; and stockholders who do not consent thereto are not bound by a ratification of the fraudulent sale made by a majority of the stockholders.^^ A single stockholder cannot sustain a suit to set aside a sale at public auction, after due notice and advertising, of a part of the property of a corpora- tion, made for the purpose of pajdng debts incurred by trustees 54 Colgate V. United States Leather Co., 73 N. J. Eq. 72, 72 Atl. 126. ssTeachout v. Des Moines Broad Gauge Street Rd. Co., 75 Iowa, 722, 38 N. W. 145. 56 Matthews v. Bank of Allendale, 60 S. C. 183, 38 S. E. 437. 57WoodroofT v. Howes, 88 Cal. 184, 26 Pac. Ill, 9 Ry. & Corp. L. J. 352, a suit in equitj' brought by three stockholders against a corporation. 444 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 269 and ill furtherance of an authority conferred at a stockholder's meeting where the full worth of the property was obtained and was approved by the stockholders who had combined to pro- tect the property from being sold at a sacrifice, and in whose interest one of the trustees who was the secretary had pur- chased the property.^* And where one corporation attempts to infringe a trade-mark of another corporation and to inter- fere with its business a suit cannot be brought by a stock- holder of the latter corporation to restrain such acts.^^ Although there was an agreement between the original stockholders of a corporation providing that if unissued stock were offered for purchase all parties should have a right to purchase an equal amount thereof, a stockholder deriving her title under a will of one of the parties to the agreement, which will provided that the conditions of the agreement should be binding upon his representatives and legatees, is not entitled to maintain a suit as a stockholder representing the corporation to have a sale of stock to an employe of the company canceled upon the ground that she was not offered an opportunity to subscribe for a proportionate part of the shares sold. This, because the corporation itself not being a party to the agree- ment could not bring such action, and whatever rights the plaintiff had under the will were personal to her and to be asserted against the parties to the agreement. Such action cannot be based upon fraud perpetrated upon the corporation where it appears that all stockholders with the exception of the plaintiff acquiesced in the sale and that the directors sub- sequently ratified the same by resolution. ^'^ § 269. Right of Stockholders to Sue in Equity in a Federal Court for Surplus Assets After Decree of Forfeiture of Franchises. In a case decided in 1855 in the Supreme Court of the United States it appeared that in the State of Mississippi a judgment 58 Hayden v. Official Hotel Red-Book & D. Co. (U. S. C. C), 42 Fed. 875. 59 Converse v. Hood, 149 Mass. 471, 21 N. E. S78, 4 L. R. A. 521. 60 Waters v. Waters & Co., 115 N. Y. Supp. 432, 130 App. Div. 678. 445 §270 PARTIES CONTINUED — RIGHTS AND LIABILITIES — of forfeiture was rendered against the Connnercial Bank of Natchez, and a trustee was appointed to take charge of the books and assets of the bank. Under the laws of that State and the general principles of equity jurisprudence, the surplus of the assets which might remain after the payment of debts and expenses, was held to belong to the stockholders of the bank. The court examined the Enghsh cases as to what be- comes of the property of a corporation whose charter had been forfeited by a judicial sentence and determined that the rules of the English courts had been adopted in the United States, extending the protection of chancery over the civil rights of members of moneyed corporations, and recognizing the exist- ence of distinct and individual rights in their capital and business; that the trustee was estopped from denying the title of the stockholders to a distribution; that the courts of the United States had jurisdiction over such a case; and that a bill could be maintained, filed by a number of stockholders owning one-fifth part of the capital stock, suing for themselves and such of the stockholders as were not citizens of Mississippi nor defendants in the bill.^^ § 270. Suit by Stockholder Against Trustee of Funds for Dividends — Defense— ^Counterclaim. Where trustees acting under an agreement for the voluntary dissolution of a corporation taken pursuant to the Stock Corporation Law of New York,^^ qj. ^^ jg^st taken along lines quite similar to those prescribed by such statute, declare a dividend upon the stock of the corporation, deposit the funds applicable to the payment of the dividend with a trust com- pany, acting as their agent in the matter, and notify the stock- holders that the dividend will be paid by the trust company on demand, the stockholders may, in the event of the refusal of the trust company to pay the dividends on demand, main- tain an action against the trustees to recover the amount of 61 Bacon v. Robertson, 18 How. (50 U. S.) 480, 15 L. ed. 499. See Mason V. Penabic Min. Co., 66 Fed. 396. See also § 238, herein. 62 Section 57. 446 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 271 the dividend as for money had and received, although such money is still in the hands of the trust company. The action not being brought to recover the specific amount of money appropriated for dividends, but rather on the theory that the trustees have had and received for the use and benefit of the stockholders the amount of the dividends to which they, the latter, were entitled, it is no defense to the trustees that after having received the moneys they wrongfully parted with the possession thereof. Where, in such an action, the trustees interposed a counterclaim alleging that they appropriated the money delivered to the trust company for the payment of the dividends to the satisfaction of an alleged indebtedness of the plaintiff's assignors to the corporation, the interposition of such counterclaim is evidence that the trustees controlled the action of the trust company .^^ § 271. Suit by Stockholder to Compel Successor in In- terest of Lessee to Pay Rent Reserved. Where the possession of property has been transferred under a contract legal in itself, but induced by fraud, while the fraud 63Janeway v. Burn, 86 N. Y. Supp. 628, 91 App. Div. 165, affirmed (mem.) 180 N. Y. 560, 73 N. E. 1125. It appeared that certain of the stockholders claiming the dividend had contracted with the trustees for the purchase of certain real and personal property owned by the corporation. Possession thereof was to be given to the purchasers on or before August .31, 1900. The contract provided that " the company and trustees shall, when- ever thereunto advised by their counsel, execute and deliver to the pur- chaser" a deed of the premises containing covenants against the grantor's acts and execute and deliver a bill of sale of the personal property. The bill of sale was executed March 15, 1901, and the deed on April 4, 1901. Prior to the delivery of possession or of the bill of sale of the personal property to the purchasers, the trustees paid taxes which were assessed against the personal property April 15, 1900. After delivery of possession of the realty to the purchasers and prior to the execution and delivery of the deed, taxes which had become a lien on the realty September 1, 1900, were paid by the trustees. It was not pretended that the taxes were paid at the request or by the direction of the purchasers, nor did it appear that the corporation was personally liable for such taxes. It was held, that the trustees could not counterclaim against the dividend the amounts paid for taxes on the real or personal property; and that the payments made for taxes were mere voluntary payments imposing no liability on the purchasers as for money had and received. 447 § 271 PARTIES CONTINUED — RIGHTS AND LIABILITIES — furnishes ground for rescinding the contract and avoiding the obligations imposed thereby, it may not be availed of as a means of continuing possession of the property without meet- ing those obligations. Express ratification need not be shown, but where the party, after knowledge of the fraud and an opportunity to rescind, still retains the possession and use of the property, without any offer to return the same, the fraud is waived and the contract becomes valid by acquiescence. While the rule which forbids persons who fill fiduciary positions from using them for their own benefit, is strict in its require- ments and extends to all transactions where the individuals' personal interest may be brought into conflict with his acts in a fiduciary capacity, and works independently of the ques- tion whether there was fraud or good intention, it does not operate to avoid ab initio all transactions of a trustee where he is interested, but it is generally limited in its operation to rendering them voidable at the election of the party whose interests are concerned ; and so, if nothing is done in avoidance the transaction remains undisturbed.*'^ In this case the S. B. & E. J. R. R. Co., defendant, was incorporated to construct a railroad to connect the road of the E. R. Co. with other rail- roads; some of the incorporators were directors of the latter company. In June, 1870, a contract was made by the new company ostensibly with one S., who agreed to construct the road, the company to issue in payment therefor one million dollars of its bonds and five hundred thousand dollars of its capital, which was to constitute all of its stock and bond debt. S. in reality acted for a syndicate composed wholly of members of the board of directors of said company, part of whom were also directors of the E. R. Co.; S., a few days thereafter, as- signed the contract to the syndicate. In July, 1870, the new company leased all of its property and franchises to the E. R. Co., the lessee agreeing to pay as rent a certain proportion of the gross earnings, guaranteeing that this should never be M Barr v. New York, Lake Erie & Western R. R. Co., 125 N. Y. 263, 31 N. Y. St. Rep. 743, 43 Abb. L. J. 151, 26 N. E. 145, 9 Ry. & Corp. L. J. 174, reversing 5 N. Y. Supp. 623, 52 Hun, 555, 24 N. Y. St. Rep. 188. 448 KEMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 271 less than one hundred and five thousand dollars. The executive committee of the E. R. Co. passed a resolution, which, after reciting the lease and the guaranty of a rental equal to seven per cent interest on the bonds, and seven per cent dividends on the stock of the lessor, authorized the execution of a guar- anty of the payment of semiannual dividends of three and one-half per cent on the stock. The stock and bonds were issued to members of the sjmdicate; they expended about eight hundred and fifty thousand dollars in the construction of the road. In December, 1870, the road, being about com- pleted, was taken possession of by the lessee. In February, 1871, the directors of the lessor formally ratified the lease. In 1875, the lessee became insolvent; a receiver was appointed who, by authority of the court, continued to operate the leased road. The lessee and its receiver bought in all of the stock of the lessor, except certain shares owned by plaintiffs, and thereby obtained complete control, and thereafter elected directors in the interest of the lessee. The property and assets of the lessee, including the lease, were sold under a mortgage foreclosure judgment. In 1878, the New York, Lake Erie & Western Railroad Company became the owner, it covenanting to pay all of the receiver's liabilities, and it had still continued to operate the leased road, which was of great value to it as con- necting its own and other roads, but it had paid nothing except interest on the bonds, refusing to pay that portio:. oi the rental represented by the guaranty of dividends on the stock. In an action to compel the N. Y., L. E. & W. R. R. Co., as successor in interest of the lessee, to pay the balance of the rent reserved, the trial court found that the syndicate, fraudulently and for their own benefit and gain, caused the building contract, the lease and the guaranties to be made, and directed a dismissal of the complaint. It was held an error; that the fraudulent nature of the transaction did not render the lease absolutely void, but simply voidable; and that the lessee and its successor in interest could not retain the possession and enjoy the use of the leased property, after knowledge of the fraud and with opportunity to act in repudiation, without becoming Hable to 29 449 § 272 PARTIES CONTINUED — RIGHTS AND LIABILITIES pay the rent reserved; that the vice in the original transaction did not necessarily so affect the lease as to prevent ratification, or its survival after acts on the part of the lessee and its suc- cessors in interest, with knowledge of the fraud, amounting in effect to acquiescence and waiver. It was also held, that plaintiffs, as stockholders, could maintain the action, as their corporation was wholly under the control of its lessee. Again it was held, that defendant, the N. Y., L. E. & W. R. R. Co., was not in a position to question the legaHty or validity of the issue of the shares of stock held by plaintiffs, as the members of the syndicate that built the road of the S. B. & E. J. R. R. Co. were practically the company, they holding all of its stock, and so, the manner in which they chose to build the road and to divide up their interests, concerned only themselves, and however illegal the transaction, no one, so far as appeared, could complain. It seems that no principle of law forbade the said company from agreeing to pay for the construction of its road in the way or in the amount it did.^^ § 272. Right of Subsequent Stockholders to Sue. The weight of authority seems to be that a person who was not a stockholder at the time of the transactions complained of cannot complain or bring a suit to have them declared illegal .*^^ A distinction exists between the right of a stock- holder to complain of an ultra vires act committed before he acquires the shares, and which the prior owner neither partici- pated in nor assented to, and the attitude of one who acquires shares with knowledge that the prior owner had voted them in favor of the act subsequently sought to be annulled by the subsequent holder. In the first case the present holder is not debarred or estopped from maintaining suit, unless prevented by some statute or rule of court. In the latter case, however, it would seem that the assignee of shares stands in the former owner's place, in so far that he cannot object to the act ap- es Id.; Munson v. S. G. & C. R. R. Co., 103 N. Y. 58; Wardell v. R. R. Co., 103 U. S. 651, 26 L. ed. 509, distinguished. 66 Alexander v. Searcy, 81 Ga. 536, 12 Am. St. Rep. 337, 8 S. E. 630. 450 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 273 proved of by such prior owner, and this applies to enable a bona fide purchaser to obtain an injunction against the ratifica- tion of an illegal transfer of corporate i)ro[)erty, which was made prior to the purchase of the stock, was ultra vires, and was never acquiesced in by such prior owncr.*^^ Subsequent stockholders, therefore, have no standing as a general rule to attack prior mismanagement of the corporation. Such a stockholder ought not to be allowed to sue unless the mis- management or its effects continue and are injurious to him, or it affects him specially and peculiarly in some other man- ner.*^^ So stockholders who have acquired their shares and their interest in the corporation from the alleged wrongdoers and through prior mismanagement, have no standing to com- plain thereof.^** Nor have stockholders any remedy in a suit for alleged frauds occurring prior to becoming stockholders by purchase, as where illegal salaries are paid directors prior to acquiring such stock, but otherwise where the grievance com- plained of thereafter occurred without his knowledge 7° § 273. When Corporation and Not Stockholders Should Sue Under Sherman Anti-Trust Act. In a case in the Federal Circuit Court, decided in 1909, the declaration was framed in reliance upon the Sherman Anti- Trust Act '^ and claimed threefold damages under said act. It was averred in substance that the plaintiff was a stockholder in a named company, organized to operate an independent telephone system throughout the United States and that the defendant secured control thereof by the purchase of shares of its stock for the purpose of preventing the free operation of competition in the interstate telephone traffic and commerce "7 Forrester v. Boston & Montana Consol. Copper & S. Min. Co., 21 Mont. 565, 55 Pac. 353. 68 Home Fire Ins. Co. v. Barber, 67 Neb. 644, 93 N. W. 1024, 108 Am. St. Rep. 716, considering fully many authorities pro and con. 89 Home Fire Ins. Co. v. Barber, 67 Neb. 644, 108 Am. St. Rep. 716, 93 N. W. 1024, 60 L. R. A. 927. 70 Rankin v. Brewery & Ice Co., 12 N. Mex. 54, 73 Pac, 614. 71 Act July 2, 1890, chap. 647, § 1, 26 Stat. 209, U. S. Comp. Stat. 1901, p. 3200. 451 §273 PARTIES CONTINUED — Kl!iHT8 AND LIABILITIES — which it had planned to carry on, and in the attempt to monopolize such commerce; that said controlled corporation had since been managed by the defendant, not for the purpose of developing its business, but for the purpose of preventing it from doing business and to suppress and smother competi- tion, causing the said controlled company to be placed in a receiver's hands; and that by the exercise of said control the defendant had since monopolized such interstate telephone commerce, and that plaintiff's shares of stock in his company were being rendered worthless. Upon demurrer the question was whether the declaration set forth any injury whereby the plaintiff had sustained any special damage pecuHar to himself and distinguishable in kind from that common to the other shareholders as the result of an injury to the corporation in its business or property under § 7 of the Sherman Act. It was held, however, that the injury set forth was to the corporation, and that it alone could maintain an action at law under the enactment. The court said in this connection that: "The Sherman Act does not by its terms affect the question whether an injury is in legal contemplation an injury to the corporation or an injury to the stockliolder. This question must be deter- mined upon ordinary principles of law. There can be httle doubt that the ordinary principle of representation of the stockholders by the corporation is as applicable to a violation of the Sherman Act as to any other violation of law. There is no indication of an intention of Congress to subject a defend- ant to independent suits by a multitude of stockholders for an act for which the statute affords redress to the corporation itself." '2 It was further held that the possibility that at the trial, proof might be introduced of an injury other than that averred in the declaration, was not a good reason for overruling the demurrer and could not be considered upon demurrer; that under the general averment that "the plaintiff has been greatly injured in his business and property" a special injury constituting a different cause of action could not be shown. As the plaintiff's company, however, was in a receiver's hands 72 Per Brown, Dist. J. 452 REMEDIES — PROMOTERS — OFFICHRS — DIRECTORS §§274, 275 the court declared that " there should be httle practical diffi- culty in working out the stockholder's right through directions to the receiver as to suits upon causes of action belonging to the corporation." '^^ § 274. When Corporation Should Sue or Be Made Party to Suit by Stockholder. The general rule is that when directors or officers of a corpora- tion are charged with the mismanagement of the corporate property, the action to redress should be instituted by the corporation.'^ And although a stockholder may bring a suit when the corporation refuses, yet, as in such a case the suit can be maintained only on the ground that the rights of the corporation are involved, the corporation should be made a party to the suit.''^ Again, even though the corporation itself should sue for damages in a case where the minority stock- holder's interest has been injured by the wrongful foreclosure of a mortgage, yet if said corporation refuses to bring an action it is a necessary party to a suit for relief brought by a stock- holder in behalf of all others injured in like manner; but a minority stockholder cannot sue where the injury is common to all the stockholders.'^^ § 275. When Stockholder May Be Made Party Defendant by Court — Refusal to Permit Stockholders to Defend. Stockholders of a corporation who have been allowed to put in answers in the name of a corporation, cannot be regarded as answering for the corporation itself. In a special case, however, where there is an allegation that the directors fraudu- lently refused to attend to the interests of the corporation, a court of equity will, in its discretion, allow a stockholder to become a party defendant, for the purpose of protecting, from unfounded and illegal claims against the company, his own 73 Ames V. American Telephone & Teleg. Co. (U. S. C. C), 166 Fed. 820. 74 Sigwald V. City Bank, 82 S. C. 382, 385, 64 S. E. 398. 75 Davenport v. Dows, 18 Wall. (85 U. S.) 620, 21 L. ed. 938. 76 Niles V. New York Central & H. R. Rd. Co., 71 N. Y. Supp. 271, 35 Misc. 69. 453 § 276 PARTIES CONTINUED — RIGHTS AND LIABILITIES interest and the interest of such other stockholders as choose to join him in the defense.'^ When stockholders intervene in a suit filed against the corporation and allege that through fraud and collusive con- duct the officers and directors refuse to defend such suit, it is not error to refuse to permit such stockholders to appear and defend in the name of the corporation, when they de- cline to proceed in their own names as stockholders, in be- half of themselves and other stockholders who may see proper to join with them in defense of such suit/* § 276. Stockholders as Necessary Parties in Suit by Policy Holder Against Insurance Company for Accounting and Receivership — Equity Jurisdiction. In a late case in the Supreme Court of the United States the following points were decided: (1) The wrongdoing of former officers of an insurance company, and their continu- ance in power, in the absence of any trust relation, gives no jurisdiction for an accounting in equity in a suit in which the company is the only defendant as between a simple debtor and creditor. (2) The Equitable Life Assurance Society is not a trustee of its policy holders under its charter and poli- cies as the same have been construed by the highest courts of the State of New York. (3) As the charter and contract have been construed by the highest court of New York, a policy holder in the Equitable Life Assurance Society can only participate in the surplus of the society according to the terms of the policy; and a discretion rests with the offi- cers of the society as to what amount of surplus shall be re- tained and distributed, and when the distribution shall be made. (4) While wrongdoing, waste and misapplication of funds reducing the surplus of an insurance company before distribution, might give ground of action to a policy holder, " Bronson v. La Crosse & M. Rd. Co., 2 Wall. (69 U. S.) 2S3, 17 L. ed. 725. When person should not he adrnitted to defend although claimed by plaintiff to be a stockholder but he does not admit that he is one. See Meyer v. Bristol Hotel Co., 163 Mo. 59, 63 S. W. 96. '« Cornell V. Sims, 111 Ga. 828, 36 S. E. 627. 454 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 277 it would not necessarily, where there is no allegation of in- solvency, give ground for equitable action. (5) Where the bill avers solvency of defendant at present, a prediction of in- solvency in the future on account of inability to meet claims of policy holders by reason of mismanagement is a mere con- clusion of law and not a fact which is admitted by demurrer or on which a court can grant equitable relief. (6) Where a suit for accounting by a pohcy holder against an insurance company as sole defendant avers that the stockholders claim to own the surplus, no decree can be made as to such owner- ship without the presence of the stockholders as parties. (7) Equity does not now take jurisdiction in cases of fraud where the relief properly obtainable on that ground can be obtained in a court of law, and where, so far as necessary, discovery may be obtained as well as in equity.^'' (8) A complainant who can obtain all the relief to which he is entitled in a sin- gle suit cannot invoke the interference of a court of equity on the ground that defendant may be saved a multiplicity of suits against it by others situated similarly to himself.*^*^ §277. Transfers of Stock— Pledge for Collateral Se- curity — Liability of Pledgee as Stockholder — National Banks — Bailment. One to whom corporate stock has been transferred as col- lateral security, but who appears upon the books of the cor- poration as the general owner thereof, is hableas a stockholder for the debts of the corporation. Where, however, shares of stock are transferred to a party as collateral security, and they are so registered in the stock record of the corporation, whereby his true relation to the stock appears, he is not Uable as a stockholder for the debts of the corporation." So a party who, by way of pledge or collateral security for a loan of 7s See Rev. Stat., § 724; United States v. Bitter Root Co., 200 U. S. 451, 50 L. ed. 550, 26 Sup. Ct. 318. so Equitable Life Assurance Soc. v. Brown, 213 U. S. 25, 53 L. ed. , 29 Sup. Ct. , reversing 151 Fed. 1. SI Marshall, Field & Co. v. Evans, Johnson, Sloane & Co., 106 Minn. 85, 118 N. W. 55. 455 § 277 PARTIES CONTINUED — RIGHTS AND LIABILITIES — money, accepts stock of a national bank which he causes to be transferred to himself on its books, incurs unniediate liability as a stockholder, and he cannot relieve himself there- from by making a colorable transfer of the stock, with the understanding that at his request it shall be transferred. A national bank which had so accepted, and caused to be trans- ferred to it, shares of stock of another national bank, was, on the latter becoming insolvent, sued as a stockholder. It was held, that a loan of money by a national bank on such security is not prohibited by law; and if it were, the defendant could not set up its own illegal act to escape the responsibility resulting therefrom. The order of the Comptroller of the Currency prescribing to what extent the individual liability of the stockholders of an insolvent national bank shall be enforced, is conclusive.^^ A creditor who receives from his debtor a transfer of shares in a national bank as security for his debt, and who surrenders the certificates to the bank and takes out new ones in his own name in which he is described as pledgee, and holds them afterward in good faith as such pledgee, and as collateral security for the payment of his debt, is not a shareholder subject to the personal liability imposed upon shareholders by act of Congress. The previous cases relating to the liability of such shareholders were examined by the court in this case and were held to establish that the real owner of the shares of the capital stock of a national bank- ing association may, in every case, be treated as a shareholder within the meaning of said enactment.*^ It was also held (1) That if the owner transfers his shares to another person as collateral security for a debt due to the latter from such owner, and if, by the direction or with the knowledge of the pledgee, the shares are placed on the books of the association in such way as to imply that the pledgee is the real owner, then the pledgee may be treated as a shareholder within the mean- ing of the Revised Statutes of the United States,*^ and there- 82 National Bank v. Case, 99 U. S. 268, 25 L. ed. 448. 83 Rev. Stat., § 5151. 84 Rev. Stat., § 5151. 456 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 277 fore liable upon the basis prescribed by that statute ^ for the contracts, debts and engagements of the association; (2) that if the real owner of the shares transfers them to another per- son, or causes them to be placed on the books of the associa- tion in the name of another person, with the intent simply to evade the responsibility imposed by said section of the stat- ute ^ on shareholders of national banking associations, such owner may be treated, for the purposes of that section, as a shareholder, and liable as therein prescribed; (3) that if one receives shares of the stock of a national banking association as collateral security to him for a debt due from the owner, with power of attorney authorizing him to transfer the same on the books of the association, and being unwilling to incur the responsibilities of a shareholder as prescribed by the statute, causes the shares to be transferred on such books to another, under an agreement that they are to be held as se- curity for the debt due from the real owner to his creditor — the latter acting in good faith and for the purpose only of securing the payment of that debt without incurring the responsibihty of a shareholder — he, the creditor, will not, although the real owner may, be treated as a shareholder within the meaning of said statute ; ^^ and (4) that the pledgee of per- sonal property occupies toward the pledgor somewhat of a fiduciary relation, by virtue of which, he being a trustee to sell, it becomes his duty to exercise his right of sale for the benefit of the pledgor.^^ Again, one who holds shares of national bank stock, the bank being at the time insolvent, cannot escape the individual liability imposed by the statute by transferring his stock to avoid that liability, knowing or having reason to believe at the time of the transfer on the books of the bank, that it is insolvent or about to fail. A transfer with such intent and under such circumstances, is a fraud upon the creditors of 85 Rev. Stat., § 5151. 86 Rev. Stat., § 5151. 87 Rev. Stat., § 5151. 88 Pauly V. State Loan & T. Co., 165 U. S. 606, 41 L. ed. 844, 17 Sup. Ct. 465. 457 § 277 PARTIES CONTINUED — RIGHTS AND LIABILITIES — the bank, and may be treated by the receiver as inoperative between the transferrer and himself, and the former held liable as a shareholder without reference to the financial condition of the transferee. The right of creditors of a national bank to look to the individual liability of shareholders, to the extent indicated by the statute, for its contracts, debts and engage- ments, attaches when the bank becomes insolvent; and the shareholder cannot, by transferring his stock, compel creditors to surrender this security as to him, and force the receiver and creditors to look to the person to whom his stock has been transferred. If the bank be solvent at the time of the transfer, that is, able to meet its existing contracts, debts and engage- ments, the motive with which the transfer is made is im- material, as a transfer under such circumstances does not impair the security given to creditors; but if the bank be insolvent, the receiver may, without suing the transferee and litigating the question of his liability, look to every shareholder who, knowing or having reason to know, at the time, that the bank was insolvent, got rid of his stock in order to escape the individual liabihty to which the statute subjected him.*^ The State creating a corporation may determine how transfers of stock shall be made and evidenced, and a change in the law imposing no restraint upon the transfer, but only affecting the method of procedure, does not impair the obligation of the charter contract within the meaning of the contract clause of the Federal Constitution, therefore, a State statute ^° is not void as to stockholders who purchased stock prior thereto and sold it thereafter, because it required a statement of the transfer of stock to be filed in the office of the Secretary of State in order to relieve the transferrer of a stockholder's Hability, the 89 Stuart V. Hayden, 169 U. S. 1, 42 L. ed. 639, 18 Sup. Ct. 274. Whether the bank, being in fact insolvent, the transferrer is liable to be treated as a shareholder in respect of its existing contracts, debts and engagements, if he believed in good faith, at the time of the transfer that the bank was solvent, was not decided; although he may be so treated, even when acting in good faith, if the transfer is to one who is financially irresponsible. Id. 9" Corp. Law of Kan. of 1899 given in note to report of case cited in next following note. 458 REMEDIES — PROMOTERS — OFFICERS — DIRECTORS, ETC. § 277 act not depriving him of any defense that might be made at the time the stock was acquired. In becoming a stocliholder of a corporation one does not acquire as against the State a vested right in any particular mode of procedure for enforcement of liabiUty, but it is assumed that parties make their contracts with reference to the existence of the power of the State to regulate such procedure. Methods of procedure in actions on contract that do not affect substantial rights of parties are within the control of the State, and the obligation of a stock- holder's contract is not impaired within the meaning of the contract clause of the Federal Constitution by substituting for individual actions for statutory liability a suit in equity by the receiver of an insolvent corporation.^^ 91 Henley v. Meyers, 215 U. S. 373, 30 Sup. Ct. , 54 L. ed. . 459 PARTIES CONTINUED — CUEDITOUS — STOCKHOLDERS- CHAPTER XVII PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — RIGHTS, LIABILITIES AND REMEDIES OF, CONTINUED. 279. 280. 281. § 278. Suits by Creditors — Parties, Generally. " Trust Fund " Doctrine — Capital Stock — Unpaid Subscriptions. When Unpaid Subscriptions or Unpaid Stock Are and Are Not Assets. Stockholders' Liability to Creditors, Generally. 282. Same Subject. 283. Subscriptions to Aid Organi- zation — Fictitious and Colorable Subscriptions — Defense of Illegality of Corporate Scheme. 284. Whether Stockholders' Lia- bility Contractual, Statu- tory or Penal. 285. Right of Action by Stock- holder After Receiver Ap- pointed. 286. Liability of Nonresident Stockholder. Liability of Stockholders — Pleading — What Must Be Shown, Generally. Liability of Stockholders to Creditors — Unpaid Sub- scriptions or Stock. Same Subject. Liability of Stockholders — Unpaid Subscriptions — Parties. Liability of Stockholders to Creditors Where Stock Re- ceived Without Considera- 460 287. 288. 289 290 29 L tion or for Less Than Its Value — " Bonus Stock." 292. Same Subject Continued — Stockholders' Rights. 293. Consideration for Issue of Stock — Property, etc. — When Payinent in Stock to Contractor Is Not a Stock Subscription. 294. Stock Issued for Property — Valuation Should Be Fair and Just — Necessity of Good Faith in Transac- tion. 295. Stock Issued for Property — Material Overvaluation — Stockholders Not Neces- sarily Liable to Creditors Therefor— Good Faith. 296. Stock Issued for Property — Shareholder May Be Li- able Where Overvaluation Shows Fraud Upon Credit- ors Though None Intended. 297. Stock Issued for Property — Valueless Property — Ma- terial Overvaluation. 298. .Stock Issued for Property Which Subsequently Be- comes Valueless or Con- sideration Fails. 299. Judgment Creditors — Stock- holders' Liability to, for Unpaid Stock — Parties. 300. Amount of Creditor's Recov- ery on Stock May Be Limited by His Knowledge RIGHTS, LIABILITIES AND REMEDIES OF § 278 of Agreement Under Which dies Against Corporation — Shares Issued. When Judgment and Exe- § 301. Creditor or Stockholder May cution Unsatisfied Are Con- Sue After Demand Upon ditions Precedent. and Refusal of Corporate § 308. Enforcing Stockholders' Lia- Authorities to Act — Stock- bility — Exhausting Reme- holder May Defend. dies Against Corporation— 302. When Demand Upon Corpo- When Judgment and Exe- rate Authorities and Their cution Unsatisfied Are Not Refusal a Condition Prec- Conditions Precedent, edent to Suit. 309. Stockholders' Liability — Dis- 303. When Demand Upon and Re- solution as Condition Prec- fusal of Corporate Author- edent to Enforcing Same, ities Not a Condition Prec- 310. Effect of Equity Rule 94— edent to Suit. When Demand Upon Di- 304. Effect of Demand and Re- rectors for Relief Is and Is fusal Dependent Upon Cir- Not Condition Precedent — cumstanccs — Discretion of Stockholders — Right to Directors — Simulated De- Protect Corporation When mand. Directory Derelict. 305. Demand Upon and Refusal of 311. Judgment Creditor's Right to Corporate Authorities — Ne- Sue — Parties — Conditions cessity of Alleging and Precedent. Showing Same. 312. Order of Court Requiring 306. Same Subject. Remedies To Be Exhausted 307. Enforcing Stockholders' Lia- — Statute Limitations. bility — Exhausting Reme- § 278. Suits by Creditors — Parties, Generally. A single creditor of a corporation can, by a suit at law, en- force his own claim alone against any single shareholder of a corporation upon a dissolution of the company to the amount of the par value of the shares held by such person at the time of the dissolution, without resort to a court of equity, and with- out suing on behalf of himself and all other creditors of the company, and without joining all the stockholders of the com- pany as parties defendant.^ So the individual liabihty of stock- holders may be enforced in the Federal Circuit Court in an action at law in accordance with State statutory provisions giv- ing new rights and remedies.^ But a creditor of a corporation 1 Gibbs V. Davis, 27 Fla. 531, 8 So. 633. 2 Borland v. Haven (U. S. C. C), 37 Fed. 394, writ of error dismissed (mem.), 159 U. S. 255, 40 L. ed. 140, 15 Sup. Ct. 1039. 461 § 278 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — cannot maintain an action at law for lii.s own exclusive benefit to enforce the liability imposed by the KStock Corporation Law of New York,' upon stockholders, but his remedy is to bring suit in equity on behalf of himself and all other creditors, to enforce such Uability. As the law existed prior to the amend- ment of 1901 a creditor of the corporation could maintain an action to enforce the statutory liability for his individual bene- fit. This right is preserved to a creditor of a corporation whose claim matured four months prior to the time when the amend- ment of 1901 went into effect. The plaintiff in such an action need not allege that a judgment has been obtained and an ex- ecution returned unsatisfied where a complaint alleges that the corporation has been dissolved, and that the judgment of dis- solution enjoined all creditors from instituting any action against the corporation to enforce their claims.'* Where a bank charter provided that on the failure of the bank "each stock- holder shall be liable and held bound * * * for any sum not exceeding twice the amount of * * * his * * * shares," it was held (1) that a suit in equity by or for all the creditors was the appropriate mode of enforcing the liability incurred on such failure; (2) that if an action at law were main- tainable by one creditor, the stockholders must be separately sued as their liability was several.^ No repeal of the charter of a corporation can impair or take away the remedy of a creditor against it for a previously incurred liability, or af- fect a pending suit against it where the State statute so pro- vides.^ Under the Stock Corporation Law of New York, governing 3 N. Y. Laws, 1890, chap. 564, § 54, as amended by Laws, L892, chap. 688, and Laws, 1901, chap. 354. See Laws, 1909, chap. 61, § 56, Birdseye's Cummmg & Gilbert's ConsoL L. of N. Y. Ann., p. 5773. 4 Lang V. Lutz, 82 N. Y. Supp. 319, 83 App. Div. 534, aff'd in 180 N. Y. 254. 5 Terry v. Little, 101 U. S. 216, 25 L. ed. 864, citing and approving Pollard V. Bailey, 20 Wall. (87 U. S.) 520, 22 L. ed. 376. See Brunswick Terminal Co. V. National Bank, 99 Fed. 639; Wechselberg v. Flour City National Bank, 64 Fed. 94. 6 Blake v. Portsmouth & Concord Rd., 39 N. H. 435. 462 RIGHTS, LIABILITIES AND REMEDIES OF § 278 the liabilities of holders of capital sto(^k not fully i)aid, (;tc.,' the obligation imposed upon stoekholders is personal to the creditors and can only be enforced in an action by them or by someone directly representing thehi. Such liability cannot be enforced by an assignee for the benefit of creditors of a corporation. The liability thus imposed is a contractual lia- bihty, not between the corporation and its stockholders, but between the creditors and the stockholders. It is a personal right vested in the creditor, not a right which vested in the corporation, and, therefore, not a right that either the corpo- ration or its assignee can enforce.* If a creditor obtains a de- cree in another State directing a receiver to collect claims of such a character, the former's right to individually sue stock- holders becomes merged in the decree.^ Where a creditor's bill is brought by a nonresident in a Federal Court to subject property of a debtor, according to priorities, to all liens resting upon it, the court is not bound by comity or other considera- tion to stay the suit because another suit is already pending in a State Court against the same defendant debtor to subject the same property, but in which it is only sought to settle the relative priorities of the liens of two of the lien creditors, no others of the lien creditors of the defendant being parties in that suit. If the property itself were actually in the corporeal possession of the State Court, in the person of a receiver or other officer, that would be conclusive and the Federal Court would not and could not interfere; but where such is not the fact, the only duty of the Federal Court is to inquire whether the controversy exhibited by the bill was within the cognizance of the State Court when the bill before the Federal Court was brought, for if it was then that fact would conclude the latter court.^" ^ N. Y. Laws, 1890, chap. 564, § 54, as amended by Laws, 1892, chap. 688, § 54, and by Laws, 1901, chap. 354, Laws, 1909, chap. 61, § 56, Birdseye's Ciimming & Gilbert's Consol. L. of N. Y. Ann., p. 5773. 8 Thompson v. Knight, 77 N. Y. Supp. 599, 74 App. Div. 316. 9 Castleman v. Templcman, 87 Md. 546, 40 Atl. 275, 41 L. R. A. 367. 10 Hay V. Alexandria & Washington Rd. Co., 4 Hughes (U. S. C. C, 1882), 331. 463 § 279 PARTIES CONTINUED —CREDITORS — STOCKHOLDERS — § 279. " Trust Fund " Doctrine --Capital Stock— Unpaid Subscriptions. It is the settled doctrine of the Federal Supreme Court that unpaid subscriptions to the stock of a corporation constitute a trust fund for the benefit of creditors, which may not be given away or disposed of by it without consideration or fraudulently to the prejudice of creditors.^^ So it is held that even before a corporation's insolvency unpaid subscriptions create a fund in equity for the benefit of creditors of the corporation.^^ And balances unpaid on subscriptions are a trust fund for benefit of creditors.^^ And the special individual hability of a stock- holder in a banking corporation or institution, superadded to his ordinary liability by the Constitution of Nebraska,^^ is for the creation of a trust fund for the benefit of all creditors of the banking corporation or institution in which stock is held, and an action to render available such liability must be prosecuted by one creditor or such corporation or institution for the bene- fit of all other creditors, or by the receiver of such corporation or institution when there is a receiver.^^ But an active cor- poration, finding its original capital impaired by loss or mis- fortune, may for the purpose of recuperating itself, and of producing new conditions for the successful prosecution of its business, issue new stock, and put it upon the market, and sell it for the best price that can be obtained; and in such case no trust in favor of a creditor arises against the purchaser who, in good faith buys, for less than par.^^ Under an Alabama de- cision the "trust fund" doctrine, whereby a corporation's 11 Fogg V. Blair, 139 U. S. 118, 11 Sup. Ct. 476, 35 L. ed. 104. Case ex- plained in Camden v. Stuart, 144 U. S. 104, 36 L. ed. 363, 12 Sup. Ct. 585. 12 Albright v. Texas, S. F. & N. R. Co., 8 N. M. 422, 46 Pac. 448, rev'g 8 N. M. 110, 42 Pac. 73. 13 Cooper V. Adel Security Co., 122 N. C. 463, 30 S. E. 348. "Const, of Neb., § 7, Art. 11, "Corporations" holds that "every stock- holder in a banking corporation or institution shall be individually responsi- ble and liable to its creditors over and above the amount of stock by him held to an amount equal to his respective stock or shares so held, for all its liabilities accruing while he remains such stockholder." 15 Farmers' Loan & Trust Co. v. Funk, 49 Neb. 353, 68 N. W. 520. 18 Handley v. Stutz, 139 U. S. 417, 11 Sup. Ct. 530, 35 L. ed. 227, 9 Ry. & 464 RIGHTS, LIABILITIES AND REMEDIES OF § 280 capital stock and debts due it on subscriptions to such stock are a trust fund available for the payment of its debts, does not exist so as to render available in equity, in satisfaction of a judgment against it, debts due on subscriptions.^^ Under a Minnesota decision the capital of a corporation is its own property, which, unless prohibited by charter, it may use and dispose of the same as a natural person. It is not held in trust for creditors except in the sense that there can be no distribu- tion of it among stockholders without provision being first made for the payment of corporate debts, and, as in the case of a natural person, any disposition of it in fraud of creditors is void; and in this respect there is no distinction between unpaid capital and paid capital, between " stock subscriptions" and any other assets of the corporation.^^ § 280. When Unpaid Subscriptions or Unpaid Stock Are and Are Not Assets. Unpaid subscriptions become assets, upon the corporation becoming insolvent, which are available for the payment of creditors who have extended credit to the corporation in re- liance upon an agreement made between the corporation and its stockholders that they need pay in only a certain propor- tion of the amount of the stock subscribed; such creditors having no knowledge of any other or different agreement .^^ And if the statute requires the articles of a corporation to be recorded in the office of the county recorder and the Secretary of State, such record gives notice of the liability of stock- holders to the extent of the proportionate amount of the par value of the stock which the subscribers are required to pay in, Corp. L. J. 362. Case explained in Camden v. Stuart, 144 U. S. 104, 12 Sup. Ct. 585, 36 L. ed. 363. 17 Henderson v. Hall, 134 Ala. 455, 32 So. 840. 18 Hospes V. Northwestern Mfg. & Car Co., 48 Minn. 174, 50 N. W. 1117, 15 L. R. A. 470, 45 Alb. L. J. 277, 36 Am. & Eng. Corp. Cas. 206. " Trust-fund" doctrine that the capital of a corporation is a trust fund for the payment of its debts considered and criticised in Hospes v. Northwestern Mfg. & Car Co., 48 Minn. 174, 50 N. W. 1117, 15 L. R. A. 470, 45 Alb. L. J. 277, 36 Am. & Eng. Corp. Cas. 206. 18 Bent V. Underdown, 156 Ind. 516, 60 N. E. 307. 30 465 § 281 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS— SO that, upon the corporation becoming insolvent, the unpaid portion of such stock does not constitute an asset for the benefit of the corporation creditors/" §281. Stockholders' Liability to Creditors, Generally. Within the common-law rule there was no individual lia- bility of stockholders in a corporation for its debts.-^ And in the absence of any legislation a stockholder is not liable to creditors of the corporation after he has fully paid up his stock.-' But where a State statute ^ makes each of the stockholders and directors of an incorporated co-operative association indi- vidually liable for goods sold the corporation, ''to the amount of his capital stock therein, and no more," it imposes a lia- bility equal to and over and above the full-paid value of the stock held. 24 Holders of preferred stock are subject to the statutory lia- bility, equally with the common stockholders, in an action by creditors of an insolvent corporation to enforce the statutory liability of stockholders.'^ If a State statute repeals a former statute, which made the stock of stockholders in a chartered company liable to the 20 Bent V. Underdown, 156 Ind. 516, 60 N. E. 307. 21 Gorder v. Connor, 56 Neb. 781, 77 N. W. 383, 9 Am. & Eng. Corp. Cas. (N. S.) 175. 22 Bicknell v. Altman (Kan., 1909), 105 Pac. 694. In this case several stockholders of a Kansas corporation, which was organized in 1905, guaran- teed its notes, and, on its default, were compelled to pay them. The corpo- ration being insolvent its affairs were wound up by a receiver. Some of the stockholders, including the guarantors of the notes, voluntarily contributed an amount equal to their stock to increase the fund from which the corporate debts were to be paid. The assets of the corporation, with this increase, being insufficient to meet its obligations, the guarantors brought action against the stockholders who had refused to make any such contributions, seeking to recover from each a sum equal to the amount of his stock (which was fully paid up) so far as might be necessary for their own reimbursement. The trial court overruled a demurrer to a petition stating these facts, and defendant appealed. It was held that the petition stated no cause of action and the judgment was reversed with directions to sustain the demurrer. 23 1 How. Mich. Stat., § 3940. 24 Kirkpatrick v. Bessalo, 116 Mich. 657, 5 Det. L. News, 97, 74 N. W. 1042. 25 Railroad Company v. Smith, 48 Ohio St. 219, 31 N. E. 743. 466 RIGHTS, LIABILITIES AND REMEDIES OE § 282 corporation's debts, it is, as respects creditors of tlie corpora- tion existing at the time of the re})eal, a law impairing the obligation of contracts, and void. And this is so, even though the hability of the stock is in some respects conditional only; and though the stockholder was not made, by the statute re- pealed, liable, in any way, in his person or property generally, for the corporation's debts.^^ § 282. Same Subject. In Minnesota a stockholder's liability is fixed and measured by the Constitution." And under the Kansas Constitution the liability of stockholders f-or the debts of the corporation is limited to the amount of their stock.^^ But in a State having a constitutional provision imposing lialjility on stockholders, if the legislature intended those of a new corporation created by it should be exempt, it would express the intention directly, and not commit it to disputable inference from provisions 28 Hawthorne v. Calef, 2 Wall. (69 U. S.) 10, 17 L. ed. 776. 27 Bernheimer v. Converse, 206 U. S. 516, 528, 529, 51 L. ed. 163, 27 Sup. Ct. 755. The court, per Mr. Justice Day, said: "The stockholders' liability in Minnesota, as in some other States, has its origin in a constitutional pro- vision, and arises under section 3, article X of the constitution of the State. The language is: ' Liabilities of stockholders. Each stockholder in any corpo- ration (excepting those organized for the purpose of carrying on any kind of manufacturing or mechanical business) shall be liable to the amount of stock held or owned by him.' " The courts of Minnesota have held that a stockholder's liability is, there- fore, fixed and measured by the constitution. Willis v. Mabon, 48 Minn. 140; McKusick v. Seymour, Sabin & Co., 48 Minn. 158. It is apparent from a consideration of this constitutional provision that its purpose was to make a stockholder liable to the creditors of the corporation in an amount not exceeding the par value of the stock held by him, and thus secure for the benefit of such creditors, in addition to the assets and property which the corporation might possess, the liability of those who hold its stock in a sum necessary to make good any deficiency between the amount of the assets and the debts within the limitation stated. It is evident from the general lan- guage used in this constitutional provision that while a remedy might have been worked out in the courts of equity in the State, it was proper if not necessary that a statute should be passed to make more effectual the liability thus secured by the constitution." 28 Bicknell v. Altman (Kan., 1909), 105 Pac. 694. As to Constitution of Nebraska see Wyman v. Bowman (U. S. C. C. A.), 127 Fed. 257. 467 § 283 PARTIES CONTINUED— CREDITORS — STOCKHOLDERS— which apply by name to the corporation.''"* The sale, though made in good faith, by a stockholder in a corporation of his stock, only a small part of the par value of which has been paid, does not terminate his liabihty for the existing debts of the company, under a code enactment ^° providing that the transfer of shares is not valid except as between the parties unless it is regularly entered on the books of the company, but that such transfer shall not in any way exempt the person mak- ing it from any liability of the corporation created prior thereto, and under a section of said statute,^^ providing that nothing- contained in such chapter shall exempt the stockholders from individual liability to the amount of the unpaid installments on the stock owned by them or transferred by them for the purpose of defrauding creditors.^^ Stockholders and members may be held lial^le as partners for the acts and contracts of a body of persons who, by reason of their failure to comply with statutory conditions precedent to organization, have never become even a de facto corporation.^^ The liability of stock- holders of national banks is conditional, and the right to sue does not obtain until the comptroller has acted; his order is the basis of the suit.^^ § 283. Subscriptions to Aid Organization — Fictitious and Colorable Subscriptions — Defense of Illegality of Corporate Scheme. If, in order to aid the scheme of organization, stock is sub- scribed for in the wife's name by her husband with the intent that such stock should be delivered to her by the promoters, but she does not claim any stock, the corporate members can- not hold her liable for the fraud of such promoters, in which 29 Minneapolis & St. Ry. Co. v. Gardner, 177 U. S. 332, 44 L. ed. 793, 20 Sup. Ct. 656. 30 Iowa Code, 1873, § 1078. 31 Iowa Code, 1873, § 1082. 32 White V. Green, 105 Iowa, 176, 74 N. W. 928, 70 N. W. 182, 8 Am. & Eng. Corp. Cas. (N. S.) 414. 33 Bergeron v. Hobbs, 96 Wis. 641, 71 N. W. 1056. 31 McClaine v. Rankin, 197 U. S. 154, 49 L. ed. 702, 25 Sup. Ct. 410. 468 RIGHTS, LIABILITIES AND REMEDIES OF § 284 she did not participate, in concealing the fact that commissions were to be paid them upon the amount of the purchase price of property which constituted the corporation's capital stock.^ Fictitious or colorable subscriptions to stock, made and used with intent to induce others to subscribe, with the secret understanding that no liability shall attach to the subscribers, or that they shall be allowed to withdraw, are as binding on the subscribers as if originally made in good faith, and the existence of such subscriptions does not operate as a release of bona fide subscribers.^^ And if debts have been contracted upon the strength of the stock subscriptions the stockholders cannot avoid their liability to creditors by setting up the ille- gality of the corporate scheme when the same was not apparent upon the face of the subscription contract or set forth in the prospectus referred to in the same.^^ § 284. Whether Stockholders* Liability Contractual, Stat- utory or Penal. Under a decision in the Federal Supreme Court, the hability imposed upon stockholders in corporations by a State con- stitutional provision, that "dues from corporations shall be secured by individual liabihty of stockholders to an additional amount equal to the stock owned by each stockholder, and such other means as shall be provided by law; but such individual liabilities shall not apply to railroad corporations, nor corpo- rations for religious or charitable purposes," and by statute in the same State, though statutory in origin, is contractual in its nature; and an action on this liability, not being one to enforce a penal State statute, but only to secure a private remedy, can be maintained in any court of competent juris- diction, whether Federal or State.^* It is said in a California 35 Cook V. Southern Columbian Climber Co., 75 Miss. 121, 21 So, 795. 38 Wilson V. Hundley, 96 Va. 96, 4 Va. L. Reg. 317, 30 S. E. 492. 37 Cardwell v. Kelly, 95 Va. 570, 28 S. E. 953, 40 L. R. A. 240. See Sprague V. National Bank of America, 172 111. 149, 50 N. E. 19, 42 L. R. A. 606. 38 Whitman v. Oxford Nat. Bank, 176 U. S. 559, 20 Sup. Ct. 477, 44 L. ed. 587, cited in Bemheimer v. Converse, 206 U. S. 516, 529, 51 L. ed. 163, 27 Sup. Ct. 755; Christopher v. Norvell, 201 U. S. 216, 228, 50 L. ed. 732, 26 469 § 284 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — decision that: "It may, therefore, be concluded with much certainty that under the Kansas statute the Uabihty is in con- tract, and is not penal; that the rights of the judgment cred- itor and the reciprocal rights and duties of the stockholder are Sup. Ct. 495; McClaine v. Rankin, 197 U. S. 154 (in dissenting opinion), 166, 49 L. ed. 702, 25 Sup. Ct. 410 (this case holds that although a statutory liability may be contractual, or quasi-contractual, in its nature, an action given by statute is not necessarily to be regarded as brought on simple con- tract, or breach of simple contract); Piatt v. Wilmot, 19,3 U. S. 602, 612, 24 Sup. Ct. 542, 48 L. ed. 809 (holding that although a double liability of a stock- holder of a moneyed corporation may be contractual in its nature, if it is statutory in origin it is a liability created by statute within the meaning of § 394 of the New York Code of Civil Procedure); Evans v. Nellis, 187 U. S. 271, 277, 47 L. ed. 173, 23 Sup. Ct. 74; Ward v. Joslin, 186 U. S. 142, 151, 22 Sup. Ct. 807, 46 L. ed. 1093; McDonald v. Thompson, 184 U. S. 71, 74, 46 L. ed. 437, 22 Sup. Ct. 297; Hancock Nat. Bank v. Farnum, 176 U. S. 640, 641, 44 L. ed. 619, 20 Sup. Ct. 506; Converse v. Mears (U. S. C. C), 162 Fed. 767, 770, 774; Harrison v. Remington Paper Co., 140 Fed. 388, 390; Anglo- Amer. Land, M. & A. Co. v. Lombard, 132 Fed. 729; American Nat. Bank v. Supplee, 115 Fed. 658; Whitman v. Citizens' Bank, 110 Fed. 506. See also the following cases: United States: Wyman v. Bowman, 127 Fed. 257. California: Ferguson v. Sherman, 116 Cal. 169, 47 Pac. 1023, 37 L. R. A. 622 (liability is in contract and not penal, and action to enforce same is transitory). Illinois: Bell v. Farwell, 176 III. 489, 52 N. E. 346, 42 L. R. A. 804. Maryland: Hager v. Cleveland & Bassett, 36 Md. 476 (is in nature of con- tract between company creditor and stockholder) . Michigan: Warren, In re, 52 Mich. 557, 561. Minnesota: Hanson v. Davison, 73 Minn. 454, 44 N. W. 198, 18 Am. St. Rep. 510, 6 L. R. A. 676 (is not penal or statutory but purely contractual). New Hampshire: Crippen v. Laighton, 69 N. H. 540, 44 Atl. 538, 46 L. R. A. 467, citing numerous cases {is statutory and not contractual, and cause of action is local and not transitory). New York: Stoddard v. Lum, 159 N. Y. 265, 53 N. E. 1108, 45 L. R. A. 551 (common-law contractual liability exists to pay for stock; subscription to stock creates a debt); Lowry v. Inman, 46 N. Y. 119; Howarth v. Angle, 57 N. Y. Supp. 187, 39 App. Div. 151, aff'd in 162 N. Y. 179, 30 Civ. Proc. R. 306, 56 N. E. 489, 47 L. R. A. 725 (resident stockholder of foreign corpo- ration; liability contractual). Pennsylvania: Aultman's Appeal, 98 Pa. St. 505, 512, 513 (rests on' con- tract express or implied and not penal). West Virginia: Nimick & Co. v. Mingo Iron Works Co., 25 W. Va. 184 (liability is not in the nature of a penalty or forfeiture but it arises out of the implied promise of the stockholder to assume and discharge the individual liability imposed by the statute under which the corporation was created). 470 RIGHTS, LIABILITIES AND REMEDIES OF § 284 measured by this statute, and that, under the law, the creditor who has obtained judgment in Kansas against a corporation, upon whicli judgment an execution has been issued and re- turned nulla bona, may pursue the stockholder in an action at law wherever jurisdiction of his person may be obtained, and secure judgment against him; that he may sue one or many of the stockliolders; that he may take judgment against them without first having obtained judgment against the corpora- tion in the State in which his action against the stockholders is commenced; and that the measure of the individual stock- holder's Hability is the face value of his shares, together with the amount of his unpaid subscription thereon." ^" Under a Florida decision the statutory liability of a shareholder for the company's debts upon its dissolution and to an amount equal to the par value of the stock held at the time of dissolution, is assumed by the stockholder by the act of subscription for stock, and, therefore, arises ex contractu, and, upon dissolution of the company, a creditor thereof can enforce such liability by suit directly against the shareholder without joining the company in the suit, and without first exhausting his remedy at law against the company.'**^ Under a Minnesota decision a stockholder's liability under its laws is contractual and en- forceable on that basis and not on the ground that it is statu- tory or penal .''^ The nature of the liability imposed on stockholders of a cor- Stockholder's liability is contractual, incepted when debt incurred. Hill v. Graham, 11 Colo. App. 536, 543, 53 Pac. 1060. It is said in Bernheiruer v. Converse, 206 U. S. 516, 529, 51 L. ed. 163, 27 Sup. Ct. 755, per Mr. Justice Day, that: " It may be regarded as settled that upon acquiring stock the stoclvhokler incurred an obhgation arising from the constitutional provision, contractual in its nature and, as such, capable of being enforced in the courts not only of that State, but of another State and of the United States. Whitman, etc., v. Oxford Nat. Bank, 176 U. S. 559, 44 L. ed. 5S7, 20 Sup. Ct. 477; although the obligation is not entirely contractual and springs primarily from the law creating the obligation. Christopher v. Norvell, 201 U. S. 216, 50 L. ed. 732, 26 Sup. Ct. 502." 3» Ferguson v. Sherman, 116 Cal. 169, 176, 47 Pac. 1023, 37 L. R. A. 622, per Henshaw, J. 40 Gibbs v. Davis, 27 Fla. 531, 8 So. 633. « Hanson v. Davison, 73 Minn. 454, 76 N. W. 254. 471 § 285 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — poration by the Constitution of Minnesota, declaring that each stockholder shall be hable to the amount of stock held or owned by him, as to whether such hability is wholly statutory or partially contractual, and therefore transitory, is a matter of general law as to which the Federal Courts sitting in Wis- consin are not bound to follow the decisions of the Wisconsin Supreme Court either as a matter of comity, or under the Revised Statutes,'^ providing that the laws of the several States are to be regarded as rules of decision in trials at com- mon law so far as apphcable.'*^ The liability imposed by the Stock Corporation Law of New York'*^ on account of unpaid stock is held to be wholly statutory, and in the nature of a penalty. The right to en- force such liability is vested in the creditors and not in the corporation, and does not pass to a trustee in bankruptcy."*^ § 285. Right of Action by Stockholder After Receiver Appointed. The appointment of a receiver precludes an action by a stockholder to recover corporate property; such a suit, whether against the officers of the corporation or other persons must be instituted by the receiver, and in case of his refusal to sue application should be made to the court to compel him to do so.^ And after a State Court has appointed a receiver of all the property of a corporation, and while the receivership exists, stockholders of the corporation cannot bring a suit against the officers in a court of the United States for fraudu- lent misappropriation of its property, without making the re- ceiver as well as the corporation a party to the suit; although "2 § 721, U. S. Comp. Stat., 1901, p. 581. « Syllabus in Converse v. Hears (U. S. C. C), 162 Fed. 767. " N. Y. Laws, 1890, chap. 564, § 54, as amended by Laws, 1892, chap. 688, and Laws, 1901, chap. 354, Laws, 1909, chap. 61, § 56, 5 Birdseye's Gum- ming & Gilbert's Gonsol. L. N. Y. Annot., p. 5773. « Rathbone v. Ayer, 82 N. Y. Supp. 235, 84 App. Div. 186. 48 Neun V. Blackstone BIdg. & L. Assoc, 149 Mo. 74, 50 S. W. 4.36. That capacity of corporation to sue is suspended for time being, see Davis v. Ladoga Creamery Co., 128 Ind. 222, 27 N. E. 494; Boston & Montana Consol. Copper & Silver Min. Co., 24 Mont. 142, 60 Pac. 990. 472 RIGHTS, LIABILITIES AND REMEDIES OP § 286 the State Court has denied a petition of the receiver for au- thority to bring the suit, as well as an apphcation of the stock- holders for leave to make him a party to it.'*' An action for the enforcement of the individual liability of the stockholders of a banking corporation must be prosecuted by one creditor for the benefit of all, or by the receiver of the corporation. And a creditor may not intervene in such an action, instituted by the receiver, at least where it is not made to appear that the receiver is not prosecuting the case in good faith for the best interests of the creditors, or in some way has disregarded or violated the duties of his trust in that regard.^* § 286. Liability of Nonresident Stockholder. Where an action is brought wherein the amount due from stockholders and for which they are individually liable is de- termined, although the court has no jurisdiction over a non- resident stockholder, an ancillary action to enforce his lia- bility may be maintained."*^ A stockholder in one State may be sued therein by a creditor where the former holds stock in an insolvent bank in another State, the statute of which makes a stockholder primarily liable to each corporation cred- itor for such proportionate part of the debt as the stock owned by a stockholder sustains to the entire amount of capital stock subscribed; such a statutory provision does not create a pen- alty.5" 47 Porter v. Sabin, 149 U. S. 472, 37 L. ed. 815, 13 Sup. Ct. 1008. 48 Brown v. Brink, 57 Neb. 606, 78 N. W. 280. 49 Hanson v. Dayton, 73 Minn. 454, 76 N. W. 254. 50 Lanigan v. North, 69 Ark. 62, 63 S. W. 62, under Civ. Code Cal., § 362; insolvent bank was in California and suit was brought in Arkansas against an Arkansas stockholder in said bank. Examine in this connection the following cases: United States: Kisseberth v. Prescott, 91 Fed. 611. California: Ferguson v. Sherman, 116 Cal. 169, 47 Pac. 1023, 37 L. R. A. 622. Illinois: Bell v. Farwell, 176 111. 489, 52 N. E. 346, 42 L. R. A. 804. lorm: Latimer v. Citizens' State Bank, 102 Iowa, 162, 71 N. W. 225, 7 Am. & Eng. Corp. Cas. (N. S.) 25. Massachusetts: Hancock Nat. Bank v. Ellis, 172 Mass. 39, 51 N. E. 207, 42 L. R. A. 396, citing a number o£ cases. § 2S7 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — While the Uabihty of nonresident stockholders for taxes on his stock may not be expressed in the charter of the company if it existed in the general laws of the State at the time of the creation of the corporation or the extension of its charter, and the Constitution of the State also contained at such times the reserved right to alter, amend and repeal, those provisions of the Constitution and general laws of the State are as much a part of the charter as if expressly embodied therein.^^ § 287. Liability of Stockholders— Pleading— What Must Be Shown, Generally. A petition, in an action by the creditors of an insolvent cor- poration to enforce the statutory liability of its stockholders, which avers that each of its defendants, except the corpora- tion, is the holder of a specified number of shares of the capital stock of the corporation, contains a sufficient allegation that the defendants are stockholders. It need not be averred, in terms, that the defendants are owners of the stock held by them.^" A complaint in an action brought by a creditor of a corpo- ration against a stockholder whose stock is not fully paid in, is demurrable where the allegation as to the defendant's in- debtedness upon the stock relates to the time when the in- debtedness of the corporation to the plaintiff was contracted, and not to the time when the plaintiff recovered judgment against the corporation upon such indebtedness .^^ To establish a cause of action under the provision of the General Manufactur- Michigan: Western National Bank of N. Y. v. Lawrence, 117 Mich. 669, 76 N. W. 105 (liability is contractual and not penal). New Hampshire: Crippen v. Laighton, 69 N. H. 540, 46 L. R. A. 467, 44 Atl. 538. New York: Stoddard v. Lum, 159 N. Y. 265, 53 N. E. 1108, 45 L. R. A. 551. Rhode Island: Hancock Nat. Bank v. Farnum, 20 R. I. 466, 40 Atl. 34 (liability is statutory and not contractual). 51 Corry v. Mayor & Council of Baltimore, 196 U. S. 466, 49 L. ed. 556, 25 Sup. Ct. 297. 52 Railroad Company v. Smith, 48 Ohio St. 219, 31 N. E. 743. 63 Dyer v. Drucker, 95 N. Y. Supp. 749, 108 App. Div. 238. 474 RIGHTS, LIABILITIES AND REMEDIES OF § 287 ing Act of 1848 of New York,^^ which made the stockholders of a company organized under it individually liable to the cred- itors of the company, to the amount of their stock, for all its debts, until the whole amount of the capital stock had been paid in, all that was required was to show that a valid debt was contracted before the capital stock was paid in, either in cash or in property honestly regarded as a fair equivalent to cash. The liability covered " all debts and contracts made by said company," irrespective of the circumstances under which they were made. There was no exemption from liability, be- cause credit was imprudently given by the creditor, or because he gave credit upon the supposition that the property of the corporation was sufficient to pay its debts. By proof that the stock of the company had been issued as full-paid stock which had not been fully paid, a legal fraud was established; it was not necessary to show otherwise an actual fraudulent intent. So, also, if it were shown that the stock had been issued in payment for property, with knowledge on the part of its trustees that the value of the property was much less than the amount of the stock, no other fraudulent intent than that which is evidenced by the action of the trustees needed to be. shown to authorize a recovery .^'^ The liability imposed by the above mentioned statute ^° upon stockholders of a company organized thereunder, for a failure to file the proper certificate of payment, upon an in- crease of its capital stock, attached only to the increase, and only stockholders holding the increased stock were liable; the provision had no reference to, or effect upon, the original capital and its holders. A creditor of the corporation, who sought by action to enforce such a liability, was required to allege and prove the facts showing that the conditions of the statute were exactly met by his case; no presumptions or in- 54 § 10, chap. 40, Laws of 1848, law repealed by Laws, 1909, Genl. Corp. L. § 330. 55 National Tube Works Co. v. Gilfillan, 124 N. Y. .302, 35 N. Y. St. Rep. 357, 26 N. E. 538, 9 Ry. & Corp. L. J. 270, aff'g 46 Hun, 248, 11 N. Y. St. Rep. 533. 56 § 10, chap. 40, Laws, 1848, law repealed by L. 1909, Genl. Corp. L. § 330. 475 § 288 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — ferences could be indulged in. Unless, therefore, the stock- holder proceeded against was proved to hold some of the in- creased stock, he was not brought within the statute.^' It is decided that it must be shown that there is a willful and fraud- ulent neglect of the corporate interests on the part of the di- rectors or managing agents to enable stockholders to sue or defend in their own names.^* Where it can fairly be gathered from the allegations of a complaint in a stockholder's action that the officers and directors of the corporation have made use of relations of trust and confidence in order to secure or promote some selfish interest, a court of equity will require the defendant stockholders to answer in regard to the facts.^® § 288. Liability of Stockholders to Creditors — Unpaid Subscriptions or Stock. Creditors of a corporation may hold stockholders liable for the amount of their unpaid subscriptions.^" And a new lia- bility is not created by a statute under which creditors may hold stockholders liable for the amount of their unpaid sub- scriptions, but said enactment is merely declaratory of the common law.^^ By the common law the stockholders of an incorporated company are liable to pay their subscriptions, if such payment be necessary, to discharge the debts of the company. A dis- tinction is drawn between one who holds his stock by transfer and an original subscriber. The former may, in the absence of any fraudulent purpose, discharge himself from liability for unpaid installments by due transfer of his shares, while the latter cannot obtain immunity in that way. The subscrip- tion to the stock and the acceptance of a certificate for the shares constitute a contract between the subscriber and the 67 Griffeth V. Green, 129 N. Y. 517, 42 N. Y. St. Rep. 101, 29 N. E. 838. 68 Home Min. Co. v. McKibben, 60 Kan. 387, 56 Pac. 756. 59 Lawrence v. Weber, 65 Misc. (N. Y.) 603. 60 Miller v. Higginbotham, 29 Ky. L. Rep. 547, 93 S. W. 655; Shields v. Hobart, 172 Mo. 491, 72 S. W. 669. 61 Taylor v. Cummings (U. S. C. C), 127 Fed. 108; Hurd's 111. Rev. Stat., 1893, chap. .32, § 23. 476 RIGHTS, LIABILITIES AND REMEDIES OF § 289 company by which the subscriber engages to pay the remain- ing installments on demand by the corporation. From this agreement the subscriber cannot recede without the consent of the company ."^^ So a liability under a constitutional pro- vision making stockholders liable individually for corporate debts in an amount equal to their unpaid subscriptions after exliaustion of the corporate property, is a contractual hability based upon their subscription agreement.^^ Stockholders are also liable to creditors for their subscriptions where they have ratified the same by accepting dividends after compliance by the corporation with statutory conditions precedent to doing business even though they became shareholders before such compliance; it constitutes no ground of exemption from lia- bility that they acquired their stock before the corporation had authority to issue it.^"* So subscribers are chargeable with liability to creditors for corporate debts for the difference be- tween the par value of stock and the percentage thereof of payments made thereon, notwithstanding a decree or specific performance of subscription contracts authorizing the issue to subscribers of certificates on payment of such pro rata per- centage, where the creditors were not parties and did not have any rights involved in the action between the stockholders in which such decree was rendered.^^ § 289. Same Subject. The trust arising in favor of creditors by subscriptions to the stock of a corporation cannot be defeated by a simulated payment of such subscription, nor by any decree short of actual payment in good faith .^'^ Nor does a stockholder's statutory liability for the unpaid amount of his stock depend 82 Hood V. McNaughton, 54 N. J. L. 425, 24 Atl. 497. 63 Wyman v. Bowman (U. S. C. C. A.), 127 Fed. 257, Const. Neb., art. 11&, § 4. See § 282, herein. 64 Murphy v. Wheatley, 102 Md. 501, 6.3 Atl. G2. 65 Bates V. Great Western Teleg. Co., 134 111. 536, 25 N. E. 521. 68 Camden v. Stuart, 144 U. S. 104, 12 Sup. Ct. 585, 36 L. ed. 363. The court affirmed the judgments of the court below against stockholders in these cases whose subscriptions for stock in the corporation were shown to be in part unpaid. 477 § 290 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — upon whether a creditor did or did not, at the time he extended credit to the corporation, have knowledge that the corporate stock was partly unpaid .^^ It is held in a Minnesota case, where the action was by an assignee for creditors of a corpora- tion to recover the amount of a stockholder's unpaid subscrip- tion, that even though his subscription was obtained for the real purpose of enabling the corporation to engage in gambling and selling pools on races, he could not for that reason avoid liability .^^ Creditors cannot, however, hold liable a subscriber to corporate stock where the only purpose of the subscription was to further the incorporation and there was a valid release of such subscriber after the company was incorporated and while it had no debts outstanding and the other subscribers unanimously consented to such release.**^ And where the en- tire authorized corporate stock has been issued to other sub- scribers and the corporation has been paid therefor, a mere subscriber is relieved of liabiHty on his subscription^" § 290. Liability of Stockholders — ^Unpaid Subscriptions — Parties. Under a Colorado decision where stockholders are liable, un- der a State statute, to the extent of their unpaid stock for the corporation's debts, a stockholder and the corporation may be joined as defendants and a separate judgment obtained against the stockholder by the plaintiff in an action on an insurance policy where the corporation has discontinued its business, leaving unpaid debtsJ^ Under a Connecticut decision the stockholders and the administrator of a stockholder of a dis- solved Missouri corporation which is without assets, and di- rectors thereof who might be made plaintiffs but refuse to sue, may be joined as defendants, but the corporation need not be 67 Sprague v. National Bank of America, 172 III. 149, 50 N. E. 19, 42 L. R. A. 606. See Cardwell v. Kelly, 95 Va. 570, 28 S. E. 953, 40 L. R. A. 240. 68 Augir V. Ryan, 63 Minn. 373, 65 N. W. 640. 69 Scottish Security Co.'s Receiver v. Starks, 25 Ky. L. Rep. 1722, 78 S. W. 455. 70 Level Land Co. v. Hayward, 95 Wis. 109, 69 N. W. 567. 71 Tabor v. Goss & P. Mfg. Co., 11 Colo. 419, 18 Pac. 537. - 478 RIGHTS, LIABILITIES AND KKMEDIES OF § 291 made a party, in an action brought in the former State by a creditor to recover the amount of his claim out of unpaid subscriptions.^^ Under a Kentucky decision each stockholder's liability is sev- eral and depends upon the amount of his unpaid subscription. A creditor may, therefore, sue one or more stockholders of an insolvent corporation to recover the amount of his debt, it not being necessary to make the other stockholders parties, nor need an account be taken of the other indebtedness.'^ Again, a successor of a trustee under a trust deed for creditors may, in his own name, bring suit against a stockholder for a call for unpaid subscriptions to pay corporate debts, such call hav- ing been approved by the stockholders.'^'* The statutory liabil- ity of stockholders for debts of the corporation may be enforced through a bill by a receiver, brought in equity.'^^ In the case of stockholders of a foreign corporation, if an action is brought by a creditor to enforce their statutoiy liability it is necessary that the corporation and all the stockholders therein should be made parties. '^'^ § 291. Liability of Stockholders to Creditors Where Stock Received Without Consideration or for Less Than Its Value — " Bonus Stock." If shares of stock are received without payment, the holder thereof may be held liable to creditors for unpaid stock where the corporation becomes insolvent .'' So the assignee and creditors of an insolvent corporation may hold the share- holders liable to the extent of the par value of stock, with in- terest thereon from the time when the stock should have been paid for, where such stock is issued to and received by such stockholders without payment.'* 72 Lewisohn v: Stoddard, 78 Conn. 575, 63 Atl. 621, 73 Williams V. Chamberlain, 29 Ky. L. Rep. 606, 94 S. W. 29- 74 Lewis V. Glenn, 84 Va. 947, 6 S. E. 866. 75 Andrews v. Bacon (U. S. C. C), 38 Fed. 777. 76 Elkhart Nat. Bank v. Converse (U. S. C. C. A.), 87 Fed. 252, 30 C. C, A. 632, 58 U. S. App. 83, aff'g 84 Fed. 76. 77 White V. Hook, 87 Md. 733, 40 Atl. 901. 78 Shaw V. Gilbert, 111 Wis. 65, 86 N. W. 188. 479 § 291 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — If a stockholder in a corporation who assents to an increase in the capital stock of the corporation and its gratuitous dis- tribution among the shareholders, receives such stock as full paid stock, an obligation arises to pay for it in full, when called upon to do so by creditors whose debts are subsequent to the authorization of the increase; but this equity does not exist in favor of a creditor whose debt was contracted prior to such authorization. ''*' The equitable right of creditors of a corporation to compel the holders to pay for "bonus" stock or stock given without consideration, could, under the Minne- sota statute of 1878, be enforced in a sequestration proceeding upon the complaint of any interested creditor who had become a party to the proceeding. But the right of creditors to com- pel such holders to pay, contrary to their actual agreement with the corporation, is held to rest neither upon implied con- tract nor upon any trust fund doctrine but upon the ground of fraud. The fraud in such case consists in the misrepresen- tation as to the actual amount of capital, upon the faith of which persons have dealt with the corporation and given it credit. Therefore, it is only those creditors who have relied, or who can fairly be presumed to have relied on, the stock representing actual capital, in whose favor equity will enforce the payment of such stock; and payment can never be en- forced in favor of one who became a creditor before the " bonus" stock was issued.*" Again, if there are corporate debts and stock has been transferred to stockholders for a nominal value, creditors may hold such stockholders liable therefor to the extent of the par value of the stock if necessary to sat- isfy such debts. *^ Shares of stock, however, in a corporation issued and sold as full paid stock, but for a sum less than its par value, are not void, but the agreement between the holder and the corpora- te Handley v. Stutz, 139 U. S. 417, 35 U. S. 227, 11 Sup. Ct. 530, 9 Ry. & Corp. L. J. 362, case explained in Camden v. Stuart, 144 U. S. 104, 12 Sup. Ct. 585, 36 L. ed. 363. 80 Hospes V. Northwestern Mfg. Car Co., 48 Minn. 174, 50 N. W. 1117, 15 L. R. A. 470, 45 Alb. L. J. 277, 36 Am. & Eng. Corp. Cas. 206. 81 Gogebic Inv. Co. v. Iron Chief Min. Co., 78 Wis. 427, 47 N. W. 726. 480 EIGHTS, LIABILITIES AND llEMEDIES OF § 292 tion that it sliall be considered und treiited as paid in full is voidable as to the creditors of the corporation. ^^ If creditors have no knowledge of an arrangement whereby stock which was issued as full paid was in fact purchased at fifty per cent of the par value to enable the corporation to increase its cap- ital and begin its business, they can hold the purchaser of such stock liable for the balance of the price unpaid up to the value of the stock so issued. ^^ But an active corporation, finding its original capital im- paired by loss or misfortune, may, for the purpose of recuperat- ing itself, and of producing new conditions for the successful prosecution of its business, issue new stock and put it upon the market, and sell it for the best price that can be obtained; and in such case no trust in favor of a creditor arises against the purchaser who, in good faith, buys for less than par.*^ § 292. Same Subject Continued— Stockholders' Rights. Iti a case decided in the Federal Supreme Court in 1890, the principle was reaffirmed that when the interest of the public or of a stranger is to be affected by any transaction between the stockholders owning the corporation, and the corporation itself, such transaction is subject to rigid scrutiny, and if found to be infected with anything unfair towards such third person, calculated to injure him, or designed intentionally and inequitably to screen the stockholder from loss at the ex- pense of the general creditor it will be disregarded or annulled so far as it inequitably affects him. And, therefore, when- ever the interest of creditors requires, those holding shares in a corporation, purporting to be, but which are shown not to have been, paid for to the extent of their face value, should be held liable to pay for such shares unless it appears that they acquired the stock under circumstances that did not give 82 Shaw V. Staight, 107 Minn. 152, 20 L. R. A. 1077, 119 N. W. 951. 83 Rickerson Roller Mill Co. v. Farrell Foundry & M. Co. (U. S. C. C. A.), 75 Fed. 554, 43 U. S. App. 452. 84 Handley v. Stutz, 139 U. S. 417, 35 L. ed. 227, 11 Sup. Ct. 530, 9 Ry. & Corp. L. J. 362, case explained in Camden v. Stuart, 144 U. S. 104, 12 Sup. Ct. 585, 36 L. ed. 363. 31 481 § 292 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — creditors and other stockholders just ground for complaint. In this case a railroad corporation being indebted to a con- struction company in a certain amount, which it was unable to pay in money, had a settlement with the latter, whereby the debt was paid in shares of the stock of the railroad com- pany of a par value equal in amount to five times the debt. The stock was taken at twenty cents on the dollar, but was not at the time worth anything in the market. One Greene, a member of the construction company, received nine hundred and ten shares as his part. Four years after said settlement, the railroad and its appurtenances were sold under a decree foreclosing a mortgage given to secure the bonds of the rail- road company. One Clark, a holder of bonds issued by the railroad company two years after said settlement, obtained judgment for the amount due him, upon which execution was issued and returned six years thereafter, no property. Greene having died Clark brought suit against his administrator in one of the Circuit Courts of Iowa, sitting in probate, to hold his es- tate liable for the difference between what was paid for the stock and its face value, upon the ground that the stock of the corporation was a trust fund for creditors, and that as between creditors and stockholders, the latter was bound to account for its face value. The case was removed to and tried in the Federal Circuit Court where a verdict was given for the de- fendant. In addition to reaffirming the above-stated princi- ple and deciding certain points relating to removal and juris- diction, the Supreme Court held that the estate of Greene was not liable for the face value of the stock by reason of the stat- ute of Iowa providing that nothing therein contained "ex- empts the stockholders of any corporation from individual liability to the amount of the unpaid installments on the stock owned by them or transferred by them for the purpose of de- frauding creditors, and execution against the company may to that extent be levied upon such private property of any individual." ^ It was also decided that whether a stockholder in law or in fact, owed to the corporation any sum on the stock 85 Revision of Iowa, 1860, § 1172; Code, 1.S73. § 1082. 482 lilGilTS, LIAIULITIE.S AND REMEDIES OF § 292 held by him, was left by the statute to be determined in each case, upon its own circumstances, and in accordance with the principles of general law touching the lights and liabilities of creditors and stockholders; and that while the capital stock of a corporation, especially its unpaid subscriptions, is a trust fund sub modo for the benefit of its general creditors, a corpo- ration — no statute forbidding — may in good faith sell or dis- pose of its stock to creditors in discharge of their debts.*^ It is not necessary that a "subsequent" creditor should allege that when he dealt with the corporation he believed that the stock had been paid for, and that he gave credit on the faith of it. If in fact the creditor had knowledge of the arrangement by which the "bonus" stock, or stock given without considera- tion, was issued, that is a matter of defense, to be set up by the defendant stockholder. But where a creditor asks for re- lief against a stockholder, he should show his own equities entitling him to relief. Therefore, when it appears that he is not the original creditor, but had purchased the claims after the corporation had become insolvent, and its affairs had been placed in a receiver's hands, he should state what he paid for the claims, or at least show that he paid a substantial consid- eration for them. Equity will not grant relief for the benefit of those who have bought up claims against an insolvent corporation for a nominal consideration, for the purpose of speculating on the liability of stockholders; the right of action in favor of creditors against the holders of such bonus stock does not accrue until the corporation becomes insolvent.*'^ If stockholders are shown not to have paid the par value of their stock and not to have acted in good faith, a prima facie case is made out in favor of creditors against such stockholders for the corporate debts of an insolvent corporation.^^ The 88 Clark V. Bever, 139 U. S. 96, 35 L. ed. 88, 11 Sup. Ct. 468, 9 Ry. & Corp. L. J. 322. See also Fogg v. Blair, 139 U. S. 118, 35 L. ed. 104, 11 Sup. Ct. 476, case explained in Camden v. Stuart, 144 U. S. 104, 12 Sup. Ct. 585, 36 L. ed. 363. 87 Hospes V. Northwestern Mfg. Car Co., 48 Minn. 174, 50 N. W. 1117, 15 L. R. A. 470, 45 Alb. L. J. 277, 36 Am. & Eng. Corp. Caa. 206. 88 Gogebic Inv. Co. v. Iron Chief Min. Co., 78 Wis. 427, 47 N. W. 726. 483 § 21)3 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — holder of stock issued and sold as full paid, but for a sum less than its par value, may, however, maintain an action to pro- tect such rights as accrue to him as a stockholder.^^ But stock- holders do not sustain any such injury as to constitute a basis for a suit by a sale, made in good faith, of its corporate stock at less than its par value for money and services.^" And although a corporation has issued stock without the payment of the con- sideration in money, labor or property, as required by the New York Stock Corporation Law,^^ one who purchases such stock from the person to whom it was illegally issued cannot recover the face value thereof from his vendor under a complaint not charging him with fraud or deceit, but seeking a recovery solely upon the ground that the stock was void because illegally issued.^^ § 293. Consideration for Issue of Stock — Property, etc.— When Payment in Stock to Contractor Is Not a Stock Sub- scription. Where a corporation under its charter powers, pays for property purchased with its capital stock, such sale cannot be set aside in the absence of fraud, on the ground that the value of the property was not equal to the value of the stock.^^ If the entire capital stock is by agreement fully paid for in land transferred to the corporation and only paid-up stock is to be issued no personal Hability exists against the stockholders for 89 Shaw V. Staight, 107 Minn. 152, 20 L. R. A. 1077, 119 N. W. 951. 90 Potter V. Necedah Lumber Co., 105 Wis. 25, SO N. W. 88, 118. 91 § 42 (former Stock Corp. Law, Laws, 1890, chap. 564, as amended by Laws, 1892, chap. 688, and Laws, 1901, chap. 354), § 55, Laws, 1909, chap. 61, 5 Birdseye's, Camming & Gilbert's Consol. Laws of N. Y., p. 5771. 92 Ersfeld v. Exner, 128 App. Div. (N. Y.) 135. 93 Bickley v. Schlag, 46 N. J. Eq. 533, 8 Ry. & Corp. L. J. 290, 20 Atl. 250, 31 Am. & Eng. Corp. Cas. 523. A case of a bill by a judgment creditor against stockholders to compel them to liquidate, for complainants' benefit, the arrears of their subscriptions to the capital stock of the company; the real question, however, was that as between the stockholders and the corpora- tion the stock had been paid for in full for they had transferred certain prop- erty to the corporation for stock, each share purchased being marked " issued for property purchased," and so long as the contract for sale subsisted they had an indisputable title to the stock. It was further decided in addition to the point in the text, that the proceeding must be by a general creditor's bill. 484 RIGHTS, LIABILITIES AND REMEDIES OF § 293 the unpaid balance of the purchase price of such land by the person who transferred the same to the corporation.®^ Where a corporation purchases the stock of goods and ac- counts receivable, etc., of a copartnership, agreeing to pay therefor a certain portion in cash and the balance by the issue of a certain number of shares of common and preferred stock, and certificates agreed to be delivered to certain members of the copartnership were never delivered under such agreement, and the corporation subsequently became insolvent, it was held that the parties mentioned in the agreements for the purchase of the property acquired by the corporation became entitled to receive the stipulated amounts of stock immediately upon the acceptance by the corporation of the transfer of the prop- erty, and although all the stock had not been issued, it would be treated as "issued and outstanding" within the meaning of the Stock Corporation Law of New York relating to the liability of holders of capital stock not fully paid.®^ But where it appears that the amount of stock agreed to be paid for the property transferred to the corporation greatly exceeded the value of the property, the stock is not "fully paid" within the meaning of the above statute. ^^ A corporation organized un- der the General Manufacturing Act of New York ®' could not, M Mercer v. Park City Mineral Water Co., 18 Ky. L. Rep. 985, 38 S. W. 841. 95 N. Y. Laws, 1890, chap. 564, § 54, as amended by Laws, 1892, chap. 688, and Laws, 1901, chap. 354. "The amendment of 1901 strikes out the pro- vision that stockholders shall, jointly and severally, be personally liable to creditors, to an amount equal to the amount of stock held by them, for every debt of the corporation, until the whole amount of the capital stock issued and outstanding at the time the debt was incurred shall have been fully paid. For this double liability, until all other stockholders shall have paid up, the amendment provides that the holder of capital stock ' not fully paid ' shall be personally liable to an amount ' equal to the amount unpaid on the stock ' held by him for debts of the corporation contracted, while such stock was held by him. See Laws, 1901, chap. 354, which saves rights pending when the amendment of 1901 took effect." 1 Gumming & Gilbert's Genl. Laws of N. Y., p. 884; 5 Birdseye's Gumming & Gilbert's Consol. Laws of N. Y. Annot., p. 5773, Laws, 1909, chap. 61, § 56. 98 Flour City National Bank v. Shire, 84 N. Y. Supp. 410, 88 App. Div. 401, aff'd 179 N. Y. 587. 97 Chap. 40, Laws, 1848, repealed by Laws, 1909, Genl. Corp. L. § 330. 485 § 2!)3 PARTIES CONTIXUED— CREDITORS — STOCKHOLDERS — it seems, issue its stock, as full-})aicl at anything less than its par vahic, in payment for property purchased; and a distinc- tion existed in this respect between manufacturing and rail- road corporations. It seems, however, that a manufacturing corporation had power to issue its bonds at less than par, either for money or in payment for property, and the repeal of the statute of usury, so far as it regarded corporations, op- erated to give validity to corporate bonds negotiated at less than par.^* A contract, however, by a railroad to pay a contractor in bonds and full-paid nonassessable stock of the corporation for his work, labor and materials in constructing and equipping 98 Gamble v. Queen's County Water Co., 12.3 N. Y. 91, 33 N. Y. St. Rep. 88, 25 Abb. N. C. 410, 25 N. E. 201, 8 R. & Corp. L. J. 484, 9 L. R. A. 527, 31 Am. & Eng. Corp. Cas. 313, rev'g 5 N. Y. Supp. 124, 23 N. Y. St. Rep. 409, 52 Hun, 166, distinguishing on the first point Van Cott v. Van Brunt, 82 N. Y. 535, and on the second point, Duncomb v. New York, Housatonic & Northern Rd. Co., 84 N. Y. 190. See second next following paragraph in this note. Consideration for issue of stock and bonds. N. Y. Stat. Laws, 1909, chap. 61, § 55 (Birdseye's Camming & Gilbert's Consol. Laws of N. Y. Annot., p. 5771), provides as follows: "No corporation shall issue either stock or bonds except for money, labor done or property actually received for the use and lawful purposes of such corporation. Any corporation may purchase any property authorized by its certificate of incorporation, or necessary for the use and lawful purposes of such corporation, and may issue stock to the amount of the value thereof in payment therefor, and the stock so issued shall be full paid stock and not liable to any further call, neither shall the holder thereof be liable for any further payment under any of the provisions of this chapter; and in the absence of fraud in the transaction the judgment of the directors as to the value of the property purchased shall be conclusive; and in all statements and reports of the corporation, by law required to be published or filed, this stock shall not be stated or reported as being issued for cash paid to the corporation, but shall be reported as issued for property purchased." The annotators append the following note: "Source — Former Stock Corp. L. (Laws, 1890, chap. 564), § 42, as amended by Laws, 1892, chap. 688, and Laws, 1901, chap. 354. The amendment of 1901 struck out the words ' No stock shall be issued for less than its par value. No such bonds shall l:ie issued for less than the fair market value thereof.' The last sentence added. The amendment authorizes the issue of stock as full paid at less than its par value for property, and thus supersedes Gamble v. Queen's County Water- works Co., 123 N. Y. 91 (1890), and other cases to the contrary." 486 RIGHTS, LIABILITIES A.ND KEMEDIES OF ^ 294 the road is not a stock subscription by the contractor, which makes him Uable for the par value of the stock. Such contract is not a purchase of the stock and bonds to be paid for in work and property, but is a contract to accept full-paid stock and bonds as payment for the building of the road. The receiver appointed on the insolvency of such railroad is not entitled to recover from such contractor the alleged value of the stocks and bonds received as compensation for the construction of the road, when it is not alleged that the cost of constructing the road and the value of the properties acquired from the con- tractor were of less value than the par value of the stock and bonds delivered in payment. In any event, although the pay- ment of the contractor in bonds and stocks were fraudulent, the receiver not being vested with rights personal to the cred- itors and merely standing in the place of the corporation, can maintain no action against the contractor to recover the al- leged value of the stock and bonds, being, like the corporation, bound by an equitable estoppel. ^^ § 294. Stock Issued for Property— Valuation Should Be Fair and Just — Necessity of Good Faith in Transaction. If stock is issued for property the value thereof should be a fair and just equivalent for the value of the stock.^ And where corporate stock is to be paid for in property the agreement therefor should, in order to be valid as against creditors, be of such a character as to evidence an intent on the part of the stockholder to justly and fairly pay for his stock in that man- ner and not to thereby avoid just payment.^ The law presumes, however, when it is shown that the stock in a corporation has been paid for in full by the conveyance of property, and there is no evidence of value of the property, that the consideration was adequate.^ While, in the absence 89 Bostwick V. Young, 103 N. Y. Supp. 607, 118 App. Div. 490, aff'd in (mem.) 194 N. Y. 516, 87 N. E. 1115. 1 Van Cleve v. Berkey, 143 Mo. 109, 44 S. W. 743, 42 L. R. A. 593. 2 Manhattan Trust Co. v. Seattle Coal & Iron Co., 16 Wash. 499, 48 Pac. 333, 737. 3 Lea V. Iron Belt Mercantile Co. 119 Ala. 271, 24 So, 28. ■187 § 295 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — of some constitutional or statutory provision prohibiting such action, paid-up shares of stock may be issued by a corporation for the purchase of property, still it is essential that the cor- poration should act in good faith and that the purchase should be based upon a fair valuation of the property; there should not be such a material or gross overvaluation between the contracting parties as to constitute a fraud upon subsequent creditors, for in such a case the latter can recover, from the persons holding such shares, the difference between the par value of the stock and actual value of the property so pur- chased.^ So where the charter of a corporation authorizes capital stock to be paid for in property, and the shareholders honestly and in good faith pay for their subscriptions to shares in property instead of money, third parties have no ground of complaint.^ And a stockholder in an insolvent corporation, who has paid his stock subscription in full by a transfer of a tract of land, in good faith, at an agreed value, for the use of the company's business, is not liable in equity to a creditor of the corporation who had knowledge of and assented to the transaction at the time when it took place, solely upon the ground that the land turned out to be of less value than was agreed upon.® § 295. Stock Issued for Property — Material Overvalua- tion — Stockholders Not Necessarily Liable to Creditors Therefor— Good Faith. Stockholders of a corporation are not necessarily liable to creditors for the difference between the nominal value of their stock and the real value of property transferred to the corpo- ration even though there was a material overvaluation; and such liability does not exist where a firm was organized into a corporation and the shareholders received their stock as * Hastings Malting Co. v. Iron Range Brew. Co., 65 Minn. 28, 47 N. W. 652. See Wishard v. Hansen, 99 Iowa, 307, 68 N. W. 691, 61 Am. St. Rep. 138, 5 Am. & Eng. Corp. Cas. (N. S.) 437. 5 Coit V. Gold Amalgamating Co., 119 U. S. 343, 30 L. ed. 420, 7 Sup. Ct. 231. « Fort Madison Bank v. Alden, 129 U. S. 372, 9 Sup. Ct. 332, 32 L. ed. 764. 488 RIGHTS, LIABILITIES AND REMEDIES OF § 296 "full paid" for their interest in the firm and the overvaluation of the assets was made without any intent to so overvalue and was adopted in good faiths So where no claim is made that the transaction is fraudulent the fact that stock was received in payment of lands transferred to the corporation at a price which greatly exceeded their real value is immaterial in a suit by one who has paid debts of an insolvent corporation in an amount greater than his share thereof.* So under a Louis- iana decision it is not sufficient to hold shareholders liable as for unpaid subscriptions that the property purchased with stock at its par value is overvalued, but the transaction must first be impeached as fraudulent against the corporation.^ § 296. Stock Issued for Property — Shareholder May Be Liable Where Overvaluation Shows Fraud Upon Creditors Though None Intended. Where, pursuant to an agreement among themselves, part- ners capitalize the partnership property at a valuation greatly in excess of its true value; create a corporation under the laws of the State to continue the former partnership business, fixing its capital stock at a sum equal to the inflated value placed on the partnership property; elect themselves managing officers of the concern; transfer this property, at such inflated value, to the corporation in exchange for its entire capital stock which they cause to be issued, as fully paid up, to each part- ner, or as he directed, in proportion to his interest in the partnership; and the corporation, continuing the business, afterwards becomes insolvent, the transaction will be regarded as a fraud upon the corporate creditors, although none was intended or contemplated by the parties to such transaction. In such case, each partner will be regarded as an original sub- scriber for so much of the stock as was thus issued to him and ^ Taylor v. Cummings (U. S. C. C. A.), 127 Fed. 108. Compare, however, Berry v. Rood, 168 Mo. 316, 67 S. W. 644, under Mo. Const., art. 12, § 8, and Rev. Stat., 1899, § 962. 8 Merrill v. Prescott, 67 Kan. 767, 74 Pac. 250. « Merchants' & Mechanics' Savings Bank v. Belington Coal & Coke Co., 51 W. Va. 60, 41 S. E. 390. 489 § 297 PARTIES CONTINUED — CREDITORS— STOCKHOLDERS — credited on his .subscription for the actual value only of his interest in the partnership property transferred to the corpo- ration in payment of such subscription. The balance left, after applying this credit, will be deemed a debt due from him to the corporation, and therefore corporate assets.^" § 297. Stock Issued for Property — Valueless Property — Material Overvaluation. Although a statute permits stock to be paid for in property still it should not be worthless or valueless, and where stock- holders have paid for their stock by the transfer of property of such character they will still be liable as for unpaid subscrip- tions, upon an insolvent corporation's debt.^^ If an excessive valuation is placed on property given in payment for stock, the shareholders receiving such stock will be held liable to creditors to the extent of the difference between the face value of the stock and the real value of the property .^^ Where a State Constitution and statute so provide, if a subscription for stock in a corporation is made payable in property, the property must be taken at its reasonable money value; and though a margin will be allowed for an honest difference of opinion as to its value, a valuation grossly excessive, know- ingly made, while its acceptance may bind the corporation, is a fraud on creditors, and they may proceed against the stock- holders individually as for an unpaid subscription.^^ A person who actively participated in securing the organization of a corporation with a view of making a sale of property to it, and who in fact accepted benefits in his dealings with it, with full knowledge that the stock subscribed was to be paid for by a conveyance of the property at a grossly excessive valuation, may be estopped from disputing the validity of the transaction, 10 Gates v. Tippecanoe Stone Co., 57 Ohio St. 60, 38 Ohio L. J. 275, 63 Am. St. Rep. 705, 48 N. E. 285. " Salt Lake Hardware Co. v. Tintic Mill Co., 13 Utah, 423, 45 Pac. 200. 12 Stout V. Hubbell, 104 Iowa, 499, 73 N. W. 1060. 13 Elyton Land Co. v. Birmingham Warehouse & Elevator Co., 92 Ala. 407, 9 So. 129, 12 L. R. A. 307, 9 Ry. & Corp. L. J. 488. 490 RIGHTS, LIABILITIES AND REMEDIES OF § 297 or proceeding against the stockholders individually; but the principle cannot be extended to a vendor, who, having agreed to sell a tract of land to a corporation then being organized, executed a bond to one of the projectors as trustee for it, re- citing therein that he had paid five thousand dollars, about one-tenth of the purchase money, that he was to transfer it to the corporation when fully organized, that the corporation should then execute its notes for the balance of the purchase money, and conditioned that a conveyance should be executed to it on payment of the notes; and who, having obtained judg- ment against the corporation on the unpaid notes, seeks to enforce an individual liability against the stockholders, as for an unpaid subscription, because the entire capital stock of the corporation, two hundred thousand dollars, was taken as sat- isfied by their conveyance of the land for which only five thousand dollars had been paid.^'* A purchaser of stock in a corporation, organized under the Stock Corporation Law of New York, and the amendments thereto,^^ before a certificate that the stock has not been fully paid is made and recorded, and when the stock has not been fully paid for because of overvaluation of property which had been taken in payment therefor, is Hable to creditors of the company for an amount equal to the amount of his stock, although he bought the stock without knowing of the over- valuation.^^ Again, a gross and obvious overvaluation of property conveyed to a corporation in consideration of an issue of stock at the valuation, is strong evidence of fraud in an action against a stockholder by a creditor to enforce per- sonal liability for his debt." So the averment that incorporators conveyed to the corpo- " Elyton Land Co. v. Birmingham Warehouse & Elevator Co., 92 Ala. 407, 12 L. R. A. 307, 9 So. 129, 9 Ry. & Corp. L. J. 488. 15 Laws, 1848, chap. 40, Laws, 1890, chap. 564, § 42, Laws, 1909, chap. 61, §55. 18 White, Corbin & Co. v. Jones, 167 N. Y. 158, 60 N. E. 422, rev'g 45 App. Div. 241, 61 N. Y. Siipp. 21. 17 Coit V. Gold Amalgamating Co., 119 U. S. 343, 30 L. ed. 420, 7 Sup. Ct. 231. 491 § 298 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — ration, in full pajnnent of one million, two hundred and fifty thousand dollars of stock, real estate for which they had just paid ninety thousand dollars shows the absence of a bo7ia fide exercise of judgment and discretion in making the valuation, and intentional noncompliance with the requirement that the property shall be taken at its money value, and is a sufficient averment of fraud.^^ The valuation placed by stockholders upon property given for stock does not bind the court so as to relieve the stockholders from their liability for unpaid subscrip- tions.^® The record of incorporation showing that stock subscrip- tions were paid by the conveyance of property does not op- erate as constructive notice to subsequent creditors of the corporation of the real value of the property received in pay- ment of the subscriptions, or that it was grossly overvalued; the creditor is justified in presuming from the record, that the law requiring subscription for stock to be paid in money or in property at its reasonable value had been strictly complied with.2o § 298. Stock Issued for Property Which Subsequently Becomes Valueless or Consideration Fails. A liability for corporate debts, upon the ground that the stock is not fully paid up, is not created against the officers and stockholders of a corporation by the fact that its stock has been issued for property and such property has become worth- less.^^ So where a petition by the receiver of an insolvent cor- poration showed that certain shares of stock of the corporation had been issued by it in pajmnent for property conveyed to it, which conveyance was thereafter judicially void, so that the consideration for the shares of stock issued in payment wholly failed, and that the shares had been transferred to various persons, it was wdthin the court's discretion to grant leave to 18 Lea V. Iron Belt Mercantile Co., 119 Ala. 271, 24 So. 28. 19 Dunlap V. Ranch, 24 Wash. 620, 64 Pac. 807. 20 Lea V. Iron Belt Mercantile Co., 119 Ala. 271, 24 So. 28. 21 Giddings v. Holter, 19 Mont. 263, 48 Pac. 8. 492 RIGHTS, LIABILITIES AND REMEDIES OF §§299,300 file a bill in behalf of the parties interested to determine the rights of such stockholders.^^ § 299. Judgment Creditors — Stockholders' Liability to, for Unpaid Stock — Parties. Stockholders of record are liable for unpaid installments, although in fact they may have parted with their stock, or may have held it for others; and in the absence of fraud they are bound by a decree against their corporation. So a creditor may subject subscriptions to a satisfaction of his judgment by a bill in equity where his legal remedies against a corpora- tion, which has not made an assessment, are exhausted; and where subscriptions to stock are payable as called for, stock- holders cannot object when an assessment to pay debts is made, that the corporate duty in this regard had not been earlier discharged.^^ A judgment creditor cannot proceed by a bill for himself alone to require stockholders to pay in their unpaid installments for stock as required by statute, but the proceeding must be by a bill in behalf of all the other creditors of the company as well as of himself.^'' § 300. Amount of Creditors' Recovery on Stock May Be Limited by His Knowledge of Agreement Under Which Shares Issued. A creditor is bound by his knowledge of the amount, though less than the par value, upon the payment of which shares were to be considered as paid up, and he is, therefore, limited in his recovery against stockholders upon their subscription liability to the sum so agreed upon.^^ 22 McMaster v. Drew, 70 N. J. Eq. 6, 62 AtL 559. " It does not admit of doubt but that such a bill could have been filed by the corporation but for the fact that it had become insolvent. By reason of its insolvency, no proceeding involving this matter could be taken by anyone except the receiver, and by liim only by leave of court." Id. 7, per Magie, Chancellor. 23 Hawkins v. Glenn, 131 U. S. 319, 33 L. ed. 1S4, 9 Sup. Ct. 739. As to unpaid subscriptions see also Hambleton v. Glenn, 85 Va. 991, 13 Va. L. J. 242, 9 S. E. 129. 24 Bickley v. Schlag, 46 N. J. Eq. 533, 8 Ry. & Corp. L. J. 290, 20 Atl. 250, 31 Am. & Eng. Corp. Cas. 523. 25 Miller v. Higginbotham, 29 Ky. L. Rep. 547, 93 S. W. 655. 493 §301 PARTIES CUNTINUED — CREUITOKS — STOCKHOLDERS — §301. Creditor or Stockholder May Sue After Demand Upon and Refusal of Corporate Authorities to Act — Stock- holder May Defend. Although the corporation itself should bring a suit at law against its officers or directors for neglect and mismanage- ment whereby loss is sustained by the corporation, never- theless an action may be maintained in a court of equity by creditors or shareholders in case the corporation wrongfully refuses or is disabled to bring suit, provided proper demand so to do is made.^^ And where proper demand is made upon the corporate authorities to protect rights of or to redress wrongs against the corporation and they fail to act, a stockholder may file a bill on behalf of the corporation.^^ So a stockholder in a corporation may sue both at law and in equity in his own name in behalf of its interest and to vin- dicate a wrong done to it, when the latter cannot or will not do so in its corporate capacity; and under like circumstances a stockholder may defend in his own name an action brought against a corporation.'* A stockliolder may also sue in equity 28 Wallace v. Lincoln Savings Bank, 89 Tenn. 6.30, 15 S. W. 448, 9 Ry. & Corp. L. J. 482, 13 Am. & Eng. Corp. Cas. 253, 4 Bkg. L. J. 249. See also the following cases: Maine: Wells v. Dane, 101 Me. 67, 63 Atl. 324 (may sue when proper officers unable or unwilling) . Michigan: Starr v. Shepard, 145 Mich. 302, 108 N. W. 709, 13 Detroit Leg. N. 528 (may sue after request and neglect of authorities to act). Missouri: Exter v. Sawyer, 146 Mo. 302, 47 S. W. 951 (may sue after re- quest and failure to act) . Nebraska: State v. Holmes, 60 Neb. 39, 82 N. W. 109 (may sue; neglect and refusal to protect property). New Jersey: Groel v. United Electric Co., 70 N. J. Eq. 616, 61 Atl. 1061 (may sue ; after neglect or refusal) . South Dakota: Whitney v. Hazard, 18 S. Dak. 490, 101 N. W. 346 (may sue; after neglect or refusal). Tennessee: Knapp v. Golden Cross Soc., 121 Tenn. 212, 118 S. W. 390 (may sue ; after demand and refusal) . Texas: People's Inv. Co. v. Crawford (Tex. Civ. App., 1898), 45 S. W. 738 (may sue after refusal) . 27 Foster v. Mansfield, Coldwater & Lake Michigan R. Co. (U. S. C. C), 36 Fed. 627, case aff'd in 146 U. S. 88, 36 L. ed. 899, 13 Sup. Ct. 28. 28 Morrill v. Little Falls Manufacturing Co., 46 Minn. 260, 48 N. W. 1124, 10 Ry. & Corp. L. J. 133. The rules by which a stockholder's right to defend 494 R1G11T8, LIABILITIES AND REMEDIES OF § 301 for himself, the corporation, and other ytockholders where the proper corporate authorities are unwilHng or unable to proceed with the measures necessary to protect the interests and prop- erty of the corporation .^'^ Again, in case of a wrong to a corporation, remediable only by judicial interference, and the persons possessing the pri- mary right or its officers to move in that regard fail upon de- mand being made by a stockholder to do so, or without such demand in case the circumstances are such as to indicate that the same would be useless, any stockholder may sue on be- half of all the stockholders to protect the corporate rights, making the wrongdoer and the corporation parties defendant. But whether or not a case falls within the principle stated must be determined by its own peculiar facts. The trial court has considerable discretion in the matter; and its determina- tion that a suit is proper, within the principles justifying its equitable jurisdiction, will not be reversed on appeal unless it clearly appears to be erroneous. Thus, in a stockholder's action against the corporation and its president to vindicate the corporation's right to real estate, the complaint alleged that there had been no meeting of the stockholders or of the directors for many years; that the directors had not for a long time paid any attention to the corporate affairs; that they left the president in full control; that the secretary, a large stockholder, had full knowledge of the president's misdeeds, in behalf of a corporation considered and applied in an action brought by a plaintiff against a corporation of which he claims to be a president, and has caused the summons upon it to be served upon himself as such president and upon another person as its secretary, and where, after the corporation is in default for want of answer, stockholders, also made defendants in such ac- tion, but not served with the summons until long after the corporation has defaulted, make application to defend in its behalf, their proposed answer disclosing a meritorious defense on the part of the corporation, and also alleging that the plaintiff is not the president, and that the person whom he has recognized as secretary is not the secretary of the corporation. In the consideration of such an application, and as against the plaintiff at least, the court must treat the corporation as having been duly served with the sum- mons, and as in default for want of answer, through the inexcusable neglect of its officers. 29 Wells V. Dane, 101 Me. 67, 63 Atl. 324. 495 § oOl PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — acquiesced therein, and was so hostile to stockholders like plaintiff that he suppressed information of the names of other officers of the corporation; that the president suffered and procured real estate of the corporation to be sold for taxes, and by mesne conveyances acquired the tax titles for himself; that a request on the corporation to bring an action to redress the wrong would warn the president and stimulate him to pass the wrongfully acquired titles to innocent parties; that a request was made on the secretary to have an action brought in the name of the corporation, which was refused. It was held that the trial court, in overruling a demurrer to the com- plaint, had reasonable grounds to conclude that efficient de- mand on the corporation to bring an action was impracticable, if not impossible.^** A communication to the president of a corporation presenting the matters complained of and re- questing action by the directors has been held sufficient to enable stockholders to sue in their own names to obtain the relief so demanded and refused .^^ A request to the managing officers of a corporation to in- stitute an action to set aside and cancel a fraudulent issue of corporate stock, and their refusal, is all that is necessary to enable an individual stockholder to maintain the suit. It is not necessary that he go further, and request other stock- holders to commence the action.^^ One or more stockholders may sue in equity, in behalf of himself or themselves and other stockholders to have a merger and union of two corporations declared ultra vires and void and to enjoin such unlawful acts; and such suit may be maintained against the corporation and those participating in the alleged wrongful acts, where demand has first been made upon the corporate authorities to institute the suit and they have refused. The court, per Shields, J., said: "It is well settled that courts of equity have jurisdiction to define and determine the extent and limitations of the powers of corporations, and to declare contracts, or other 30 Donnelly v. Sampson, 135 Wis. 368, 115 N. W. 1089. 31 Ball V. Rutland Rd. Co. (U. S. C. C), 93 Fed. 513. 32 Shaw V. Staight, 107 Minn. 152, 20 L. R. A. 1077, 119 N. W. 951. 496 RIGHTS, LIABILITIES AND REMEDIES OF § 302 corporate action, made or threatened by the corporation or its officers, in excess and violation of those powers, invaUd, and to restrain and prohibit the performance of them. Tlie right of stockholders in proper cases to maintain suits for these purposes is also well settled. ^^ If corporation directors are chargeable with misconduct in their office and the corpo- ration is disabled to sue at law or it neglects through fraud or collusion to seek redress, an individual stockholder may main- tain a suit in equity against such directors where they have been requested to permit suit to be brought by the stockholder in the corporate name and they have refused to do so.^"* § 802. When Demand Upon Corporate Authorities and Their Refusal a Condition Precedent to Suit. Where the cause of action belongs to the corporate entity it is only where the corporation, either actually or virtually, refuses to institute or defend an action that one or all the stockholders can appear in its behalf.^^ In order to enable creditors or shareholders of a corporation, which is not disabled from suing but is a going concern, to sue in equity, a demand should be made upon the directors in office and not on the president alone; and where, after a demand upon the presi- dent to bring suit, no request has been preferred to the di- 33 Knapp V. Golden Cross, 121 Tenn. 212, 118 S. W. 390. 34 Allen V. Curtis, 26 Conn. 456. 35 Miller v. Murphy, 17 Colo. 408, 30 Pac. 46. That demand and refusal conditions precedent unless demand useless, see the following cases : Alabama: Crow v. F'lorence Ice & Coal Co., 143 Ala. 541, 39 So. 401. Georgia: Cornell v. Sims, 111 Ga. 828, 36 S. E. 627. Illinois: Perry County v. Stebbins, 66 111. App. 427. Indiana: Wright v. Floyd (Ind. App., 1909), 86 N. E. 971 ; Supreme Sitting of Order of Iron Hall v. Baker, 134 Ind. 293, 33 N. W. 1128, 20 L. R. A. 210. Iowa: Troutman v. Council Bluffs St. Fair & Carnival Co. (Iowa, 1909), 120 N. W. 730. Massachusetts: Dumphy v. Traveler Newspaper Assoc, 146 Mass. 495, 16 N. E. 426. Pennsylvania: Wolf v. Pennsylvania Rd. Co., 195 Pa. St. 91, 45 Atl. 436. Virginia: Virginia Passenger & Power Co. v. Fisher, 104 Va. 121, 51 S. E. 198. West Virginia: Ward v. Hotel Randolph Co. (W. Va., 1909), 63 S. E. 613. 32 497 § 302 J'AKTIES CONTINUED— CREDITORS — STOCKHOLDERS — rectors, and they have never decHncd to 8ue, the failure to prefer such request would ordinarily be fatal.^^ Stockholders must first apply to the corporate authorities before a court of equity will entertain a bill by them to remedy corporate wrongs committed by officers of the corporation.^'' A stockholder or a majority of the stockholders cannot come into equity to restrain the action of the directors whether de jure or de facto in a matter not ultra vires unless the corpo- ration itself refuses to act, or is incapable of seeking adequate redress.^* A stockholder in a private corporation, or a minor- ity of the stockholders, cannot maintain a bill in equity to prevent illegal action on the part of the majority, without a previous reciuest to the proj^er officers to interfere, and their failure or refusal to do so; unless facts are stated which show that such request would be unavailing and useless .^'' A stockholder's action to set aside a contract made by his corporation upon the ground that it was unconscionable does not lie where he made no demand that the corporation bring the action and the corporation, made defendant, also alleges the invalidity of the contract. And a failure to make a de- mand that the corporation sue is not excused by alleging that the majority of the directors who authorized the contract are still in office, if there be no charge that they were guilty of wrongdoing.^" Again, where it does not appear that any de- mand was made upon the directors to defend a mortgage fore- closure suit against the corporation or that there was any re- fusal to defend it, minority stockholders owning only a small amount of the stock cannot maintain a suit in equity to re- strain the foreclosure where, as the basis for the injunction 38 Wallace v. Lincoln Savings Bank, 89 Tenn. 630. 15 S. W. 448, 9 Ry. & Corp. L. J. 482, 13 Am. & Eng. Corp. Cas. 253, 4 Bkg. L. J. 249. 37 Boyd V. Sims, 87 Tex. 771, 11 S. W. 948; Rathbone v. Parkersburg Gas Co., 31 W. Va. 798, 8 S. E. 570; Taylor v. Holmes, 127 U. S. 489, 32 L. ed. 179, 8 Sup. Ct. 1192. 38 Moses V. Tompkins, 84 Ala. 613, 4 So. 763. 39 Mack V. De Bardeleben Coal & Iron Co., 90 Ala. 396, 8 So. 150, 9 L. R. R. 650, 8 Ry. & Corp. L. J. .394, 31 Am. & Eng. Corp. Cas. 389. « McCoy V. Gas Engine & Power Co., 135 App. Div. (N. Y.) 771. 498 RIGHTS, L1AI5ILIT1ES AXD UIOMEDIKS OF § 303 bill, thei'o Is only a claim of collusion b(!l\vccn the complain- ants in the foreclosure suit and the officials.'*' A stockholder in a building and loan association com[)lain- ing of undue advantage given by the association to holders of paid-up stock, cannot maintain a bill in e(iuity against the corporation to redress the alleged corporate wrongs, until he has done all things in his power to obtain, within the corpo- ration, redress for the wrongs complained of; and a bill filed for such purpose which fails to allege an effort on the complain- ant's part to have the wrongs redressed within the corpora- tion, or else which shows a satisfactory reason for its failure to do so, cannot be maintained and is subject to demurrer .''^ § 303. When Demand Upon and Refusal of Corporate Authorities Not a Condition Precedent to Suit. A demand may be dispensed with in the State Courts under certain circumstances, as where the corporate management is under control of the guilty parties.'*^ So it is not necessary to make a demand upon either the corporation or its directors in order to enable a stockholder to sue to restrain its directors from misappropriating the moneys of the corporation where the persons chargeable with the wrongful acts are those upon whom the demand must be made."*^ And when directors or officers of a corporation are charged with mismanagement of the corporate property a stockholder may be permitted to sue in his own name when it is apparent that an application for redress through corporate action would be useless.'*^ So « Alexander v. Searey, 81 Ga. 536, 8 S. E. 630. *2 Johnson v. National Building & Loan Assoc, 125 Ala. 465, 28 So. 2. « Miller v. Murphy, 17 Colo. 408, 30 Pac. 46. See also Sigwald v. City Bank, 82 S. C. 382, 385, 64 S. E. .398. Demand unnecessary when corporation cannot sue. Stebbins v. Perry County, 167 111. 567, 47 N. E. 1048. Demand unnecessary when there is no proper authority upon whom to make demand and it would be unavailing. Sheridan Brick Works v. Marion Trust Co., 157 Ind. 292, 61 N. E. 666, 87 Am. St. Rep. 207. Refusal, when insufficient, see Hendrickson v. Bradley (U. S. C. C. A.), 85Fed.508, 29C. C. A. .303. « Wickersham v. Crittenden, 93 Cal. 17, 28 Pac. 788. « Sigwald V. City Bank, 82 S. C. 382, 385, 64 S. E. .398. 499 § 30o PARTIES CONTINUED — CREDITORS — STOCKHOLDERS where a corporation is exclusively under the control of its directors and officers whose acts and management are ques- tioned, and a demand by a stockholder that the corporation bring an action against the officers would be idle and fruitless, equity permits the stockholder to bring the action in his own name.^ A stockholder may also sue in equity in his own name to enforce a right of the corporation, without first requesting the directors to sue, when it is made to appear that if such re- quest had been made it would have been refused, or, if granted, that the litigation following would necessarily be subject to the control of persons opposed to its success. Thus, where directors of a corporation are themselves the wrongdoers, or the partisans of the wrongdoer, they are incapacitated from acting as the representatives of the corporation in any liti- gation which may be instituted for the correction of the wrong which it is alleged they have conmiitted or approved .^^ And it would evidently be useless for a stockholder to apply for re- dress through corporate action where the corporation is in the hands of a receiver and no apphcation could successfully be made at a meeting of the stockholders or before the board of directors charged with mismanagement, where the receiver is one of the parties charged with the wrongdoing, as in such case he would not and could not sue himself.'*^ Again, a de- 46 Lawrence v. Weber, 65 Misc. (N. Y.) 603. 47 Knoop V. Bohmrich, 49 N. J. Eq. 82, 23 Atl. 118, 36 Am. & Eng. Corp. Cas. 315. 48 Sigwald V. City Bank, 82 S. C. 382, 385, 64 S. E. 398. The court, per Jones, J., said: "The case is much like Brinckenhoff v. Bostwick, 88 N. Y. 52, wherein demurrer was overruled. Appellants contend, plaintiff's only- remedy was to have the receiver removed and a new one appointed who could be directed by the court to conduct the litigation. But the present suit is before the court which appointed the receiver and the court may not care, at this juncture, to remove the receiver, as no charges are made against him as such, and may consider that the ends of justice would as well be met by permitting the present action to continue with the receiver as a party defendant. " Judge Gage was of the opinion that such leave to maintain the action should now be given to plaintiff, and we see no want of power or impropriety in such determination, if the absence of previous leave is a mere irregu- larity and not jvu'isdictional. " It will be observed that th6 suit is practically against the directors and 500 RIGHTS, LIABILITIES AND REMEDIES OF § 304 mand and refusal upon the corporate authorities is luinecessary to enable a stockholder to maintain an action in equity for relief where a contract is wrongfully taken by the cori)oration's president in his. own name instead of in the company's name and said stockholder, who was a director and owned one-half the stock, had no notice of the meeting at which it was alleged the board of directors approved such action and was not con- sulted in the matter of approving the same.^** So a stock- holder may sue to restrain the unlawful transfer of corporate stock by the directors to a consolidated corporation; nor is it necessary to consult the directors in such case.^" § 304. Effect of Demand and Refusal Dependent Upon Circumstances — Discretion of Directors — Simulated De- mand. It is plain that the question of the right of a stockholder to obtain redress and the necessity of a demand upon and re- fusal of the corporate authorities as a condition precedent must rest upon and be decided with reference to the facts in each particular case.^^ And it does not follow that the mere refusal of a corporation to sue will authorize a stockliolder who is dissatisfied therewith to bring suit, as a very wide discretion is reposed in the directors, and it is not the duty of managers of such corporations to bring suit upon every request based upon alleged wrong or injury; and if the refusal be in good faith the courts will rarely entertain a shareholder's suit for the same cause of action and so override the refusal. To jus- tify the suit the refusal must have been wrongful ; ^^ an honest is not to enforce any liability of the receiver as such. It is not intended to recover or affect assets in the control of the court, but to augment the assets for distribution. Such consideration might well have moved the court to hold that leave to bring the action was unnecessary, if the stockholders' right to sue was complete on the other ground mentioned." 49 Davis V. Gemmel, 70 Md. 356, 17 Atl. 259, 5 Rd. & Corp. L. J. 447. 50 Butts V. Simpsonville & B. C. Turnp. Co., 10 Ky. L. Rep. 669, 10 S. W. 134, 2 L. R. A. 594. 51 Elliott V. Puget Sound Wood Products Co., 52 Wash. 637, 641, 101 Pac. 228. 52 Wallace v. Lincoln Savings Bank, 89 Tenn. 630, 15 S. W. 448, 9 Ry. & Corp. L. J. 482, 13 Am. & Eng. Corp. Cas. 253, 4 Bkg. L. J. 249. aOl § 305 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — and fair refusal precludes suit.^^ So where the request on the directors to sue in the corporation's name is simulated and does not express the actual nature of the action intended to be brought the stockliolders will be denied the relief sought, such as the appointment of a receiver, an accounting, the rescission of an assessment and an injunction to restrain the sale of stock to pay the assessment.^'* It is held that the question of liti- gation is not one for the managers to determine and that the knowledge or consent of the directors is necessary, otherwise the suit will be dismissed when relief in equity is sought by the secretary of a corporation in its behalf .^^ § 305, Demand Upon and Refusal of Corporate Au- thorities — Necessity of Alleging and Showing Same. A stockholder in a corporation which has passed the term of its corporate existence, and has long ceased to exercise its corporate franchises, who desires to obtain equitable relief for it, must in order to maintain an action therefor in his own name, show that he has endeavored in vain to secure action on the part of the directors, if there be any, or to have the stockholders elect a new board of directors, and must disclose when he acquired his interest in the corporation.^^ And where a stockholder of a corporation in order to protect its rights and 53 Kessler v. Ensley Co. (U. S. C. C), 123 Fed. 546. 54 Bacon v. Irvine, 70 Cal. 221, 11 Pac. 646. 55 Weir Furnace Co. v. Aushutz-Bradberry Co., 10 Pa. Dist. Rep. 81, 31 Pitts. Leg. J. (N. S.) 200. 56 Taylor v. Holmes, 127 U. S. 489, 8 Sup. Ct. 1192, 32 L. ed. 179. See also the following cases: United States: Hawes v. Oakland, 104 U. S. 450, 26 L. ed. 827 (must ap- pear that complainant made an earnest effort to obtain redress at the hands of the directors and shareholders of the corporation and that the owTiership of the stock was vested in him at the time of the transactions of which he complains or was thereafter transferred to him by operation of law); Sav- ings & Trust Co. of Cleveland v. Bear Valley Irrig. Co. (U. S. C. C), 112 Fed. 693. Colorado: Miller v. Murphy, 17 Colo. 408, .30 Pac. 46 (or that stockholder cannot obtain redress either through the managing body, or the stockholders, or that effort to do so would be unavailing) ; Smith v. Bulkley, 18 Colo. App. 227, 70 Pac. 958 (must show collusion or refusal). 502 RIGHTS, LIABILITIES AND REMEDIES OF § 305 property against the threatened action of a third i)arty, filed his bill against the latter and the corporation, alleging, inter alia, that the directors, although thereunto requested, had neglected and refused to institute proceedings, it was held, that he must show a clear case of such absolute and unjusti- fiable neglect and refusal of the directors to act as would lead to his irreparable injury should he not be permitted to bring suit;'^'' So it must be shown by a stockholder, who, in his own behalf, seeks an accounting and equitable relief generally, that he has earnestly endeavored to induce the managers, or the body of stockholders to take some remedial action; and the details of his efforts must also be shown. ^* In Alabama where a bill is filed by a stockholder of a corpo- ration, to have redressed alleged corporate wrongs, without having made a request of the managing body of the defendant corporation to have corrected the grievances complained of, the complainant must aver in his bill the facts constituting his excuse for not making such request with particularity and definiteness; the averment of conclusions will not suffice, but the facts upon which these conclusions are based must be averred. And before a stockholder can maintain a suit in his own name against a corporation of which he is a member, to redress alleged corporate wrongs, he must show to the sat- isfaction of the court that he has done all in his power to ob- tain, within the corporation itself, the redress of the wrongs complained of; that he has made an honest effort to get the governing body of the corporation to remedy the wrong, and, Connecticut: Allen v. Curtis, 26 Conn. 456 (or that request has been made and refused). Indiana: Wright v. Floyd (Ind. App., 1909), 86 N. E. 971. Kansas: Home Min. Co. v. McKibben, 60 Kan. 387, 56 Pac. 756 (must show wrongful or fraudulent neglect of interests). Kentucky: Pittsburg, C. C. & St. L. Ry. Co. v. Dodd, 115 Ky. 176, 24 Ky. L. Rep. 2057, 72 S. W. 822 (what showing of facts as to request and refusal sufficient) . Missouri: Loomis v. Missouri Pac. Ry. Co., 165 Mo. 469, 65 S. W. 962 (what is not a sufficient showing). 57 Detroit v. Dean, 106 U. S. 587, 27 L. ed. 300, 1 Sup. Ct. 482, 560. 5!* Robinson v. West Virginia Loan Co. (U. S. C. C), 90 Fed. 770. rm § 3()G PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — failing with them, he then apphed to the stockholders as a body to take action towards redressing the grievances com- plained of.^^ So under another decision in the same State a bill filed against a corporation must show that application was first made to the board of directors or to the stockholders to re- dress the wrongs complained or for authority to prosecute the suit, or facts showing that it could not be done, or that it was not reasonable to require it, or that it would be unavailing.^" If a bill in equity by a stockholder against the corporation shows that a majority of the directors are also stockholders and directors of a rival corporation, which has bought up a majority of the stock of the defendant corporation, and are using their voting power in the interest of said rival corporo- tion, to the detriment of the other, this dispenses with the ne- cessity of a previous request for action by the directors; but if it shows that, of seven directors, only three have been elected by the voting power of the rival corporation, an averment that one of the four old directors in fact has no interest in either corporation, but holds his stock and votes in the interest and at the direction of the president of the rival corporation, does not dispense with the necessity for such previous request.^^ § 306. Same Subject. It is held in Georgia that as a general proposition, stock- holders in a corporation cannot in their own names institute an action against it, nor defend one brought against it, until a request from them to the directors to institute or defend such action has been made and refused, which fact must be alleged in either instance. Such allegation, however, may be omitted when the corporate management is under the control of par- ties who, it is alleged, are guilty of fraud or collusive conduct in refusing to bring or to defend the suit which such stock- 59 Decatur Mineral Land Co. v. Palm, 113 Ala. 531, 21 So. 315, 59 Am. St. Rep. 140. 30 Roman v. Woolfolk, 98 Ala. 219, 13 So. 212. 61 Mack V. De Bardeleben Coal & Iron Co., 90 Ala. 396, 8 So. 150, 9 L. R. A. 650, S Ry. & Corp. I.. .1. 394, 31 Am. & Eng. Corp Cas. 389. 504 RIGHTS, LIABILITIES AXD REMEDIES OF § 306 holders desire shall be histituted or defended. Hut in neither of these events can the stockholders institute or defend an ac- tion in the name of the corporation. On the contrary, the cor- poration must be a party defendant to the action, and sufficient allegations of the failure of the corporate authorities to take action be made, to authorize the stockholders to intervene in their own name.^^ It is also decided in Kentucky that it is well settled that an action to recover corporate property must be brought in the name of the corporation, and that such an action cannot be maintained by one or more stockholders unless it should be shown that the corporation or its directors declined to bring the action, and that the interests of the stockholders make it necessary that one should be instituted. When this state of case is presented, an action to recover corporate property or to protect the interests of the corporation, may be brought by the stockholders.^^ Under a New York decision an avennent of a demand made upon a corporation to sue, and its refusal or unreasonable neg- lect so to do, is essential to enable the plaintiff stockholder to sue in his own name.^'* It is also decided in that State that a stockholder's action being derivative, the plaintiff must show either a demand and a refusal of the corporation to sue, or that a demand would be futile, in that those in control of the corporation are the wrongdoers so that an action by the cor- poration would not be prosecuted in good faith.^^ Under a Washington decision a court of equity will not en- tertain a bill by stockholders to set aside a contract made by officers of the corporation, alleged to be contrary to the in- 82 Cornell v. Sims, 111 Ga. 828, 36 S. E. 627. 63 Reinecke v. Bailey, 33 Ky. L. Rep. 977, 112 S. W. 569, citing Collier v. DeeringCamp Ground Assoc, 23 Ky. Law Rep. 1799; P., C, C. & St. L. R. R. Co. V. Dodd, 24 Ky. Law Rep. 2057; Jones v. Johnson, 10 Bush, 649; 10 Cyc. pp. 963, 967. 64 Flynn v. Brooklyn City R. R. Co., 158 N. Y. 493, 53 N. E. 520, aff'g 41 N. Y. Supp. 566, 9 App. Div. 269. As to what must be shown see Rosen- baum V. Rice, 83 N. Y. Supp. 494, 86 App. Div. 617. 65 McCoy V. Gas Engine & Power Co., 135 App. Div. (N. Y.) 771. 505 § 'A()7 PARTIES CONTINUED — CREDITORS — STOCKHOLDERS — terests of the corporation and made without authority unless it is shown in the complaint that the stockholders have sought redress in the corporation or that it would be fruitless for them to do so.*^ § 307. Enforcing Stockholders' Liability — Exhausting Remedies Against Corporation — When Judgment and Exe- cution Unsatisfied Are Conditions Precedent. Wliere the statutes of the State which creates a corporation, making the stockholders liable for the corporate debts, pro- vide a special remedy, the liability of a stockholder can be en- forced in no other manner in a court of the United States. And where the statutes of a State make the stockholders of a manufacturing corporation liable for its debts until its capital stock has been paid in and a certificate thereof recorded; and originally provided that the property of stockholders might be taken on writ of attachment or execution issued against the corporation, or the creditor might have his remedy against the stockholders by bill in ecjuity; and since modified by enact- ing that all proceedings to enforce the liability of a stockholder for the debts of a corporation shall be either by suit in equity or by action of debt on the judgment obtained against the cor- poration; a creditor of the State enacting such statute, cannot bring an action at law against the executor of a stockholder in 66 Elliott V. Puget Sound Wood Products Co., 52 Wash. 637, 101 Pac. 228. The court, per Dunbar, J., said (at p. 641) as to the general rule: "This may be a technical rule yet it is founded on general principles of justice and of necessity in the transaction of corporate business though the officers of the corporation, in the absence of fraud or oppression, must be allowed to transact their own business and settle their own difficulties; the duty of the stockholder being to bow to the will of the majority as expressed through their agents. " It is said by the appellants in their brief that a corporation has no means of acting except through its agents, and that the acts complained of in this case are the acts of those agents; therefore a court of equity will interfere at the suit of a shareholder without any proof or allegation of a demand upon such agents, for a demand would ordinarily be nugatory under these circumstances. Of course, it is well answered that every grievance in a cor- poration may arise from the acts of its agents or directors, and that if the position of tlie appellants is tenable, the general rule would be destroyed." 50() RIGHTS, LIABILITIES AND REMEDIES OF § 307 the Circuit Court of the Tiiited States in tiiiotlier State, with- out having obtained a judgment against the corporation, even if the corporation has been adjudged bankrupt.*^^ General creditors of a corporation must reduce their cUiims against it to judgment and so exliaust their remedies before they can main- tain a suit against stockholders in a Federal court of equity.®* It is decided in Georgia that even though a corporation has ceased to do business and has made a pro rata distribution of its property among its shareholders, still it is necessary that a claim be reduced to judgment in order to enable a creditor to hold stockholders liable. ^^ In Kansas the return of an execution unsatisfied is held sufficient to enable suit to be brought against a stockholder.'" lender the New York Stock Corporation Law '^ no action can be brought against a stockholder for any debt of the cor- poration until judgment therefor has been recovered against the corporation, and an execution thereon has been returned unsatisfied in whole or in part, and the amount due on such execution, with costs, is the amount recoverable. These pro- visions as to judgment and execution, therefore, constitute conditions precedent to the maintenance of an action by a creditor.''^ And the statute must be complied with; nor does 87 Fourth National Bank v. Francklyn, 120 U. S. 747, 30 L. ed. 825, 7 Sup. Ct. 757. See Swan Land & Cattle Co. v. Frank, US U. S. GO.'}, .37 L. ed. 577, 13Sup. Ct. ()!)1. When judgment and execution unsatisfied condition precedent to suit, see New Hampshire Sav. Bank v. Richey (U. S. C. C. A.), 121 Fed. 956, 58 C. C. A. 294. Action cannot be maintained where corporation itself estopped. Kessler V. Ensley Co. (U. S. C. C), 123 Fed. 546. 88 New Hampshire Sav. Bank v. Richey (U. S. C. C. A.), 121 Fed. 956, 58 C. C. A. 94. fla Lamar v. AIHson, 101 Ga. 270, 28 S. E. 686. 70 Thompson v. Pfeifer, 60 Kan. 409, 56 Pac. 763. 71 N. Y. Laws, 1890, chap. 564, § 55, as amended by Laws, 1892, chap. 688; Laws, 1909, chap. 61. 72 National Bank of Auburn v. Dillingham, 147 N. Y. 603, 611, 71 NY. St. Rep. 253, 42 N. E. 33S; Rocky xMountain Nat. Bank v. Bliss, 89 N. Y. 338. See United States Glass Co. v. Levett, 53 N. Y. Supp. 688, 24 Misc. 424. 507 § 8(VS PARTIES CONTINUED — CREDITORS — STOCKHOLDERS the inability, because of the crowded condition of the calendar, to obtain a j udgment in an action which has been commenced, or the insolvency of the corporation constitute any excuse for noncompliance.'^ An action against a stockholder in a limited liability com- pany organized under the "Business Corporation Act" of New York '■* to recover a debt of the corporation under the provision of the act '^ making such a stockholder liable for the debts of the company to an amount equal to his stock until the whole amount of capital stock has been paid in and cer- tificate filed, could be maintained after a suit had been com- menced against the corporation but before judgment against it. The remedy of the creditor suing, after recovery of judg- ment against the stockholder, was simply suspended until after judgment and execution against the corporation and re- turn thereof unsatisfied.'^^ Under an Ohio decision the statutory liability of stock- holders for corporate debts cannot, however, be enforced by a creditor until after levy and return of execution as unsatis- fied, where the corporation continues its business and has property, even though insufficient to satisfy its debts in full, which may be made subject to levy and sale on execution.'^' § 308. Enforcing Stockholders' Liability — Exhausting Remedies Against Corporation — When Judgment and Exe- cution Unsatisfied Are Not Conditions Precedent. The statutory liability of stockholders may be enforced by creditors or any of them without first proceeding against the corporation after it has become insolvent and assigned its prop- 73 So held in Gause v. Boldt, 99 N. Y. Supp. 442, 49 Misc. 340, 100 N. Y. Supp. 1117. See United Glass Co. v. Vary, 152 N. Y. 121, 46 N. E. .312. 74 Act 1875, chap. 611, Laws of 1875, Business Corp. Laws, Laws, 1909, chap. 12, § 6. 75 Section 37. 76 Walton V. Coe, 110 N. Y. 109, 16 N. Y. St. Rep. 866, 17 N. E. 676, 4 Rd. & Corp. L. J. .377. " Barrick v. Gifford, 47 Ohio St. 180, 23 Ohio L. J. 313, 2 Am. R. & Corp. Rep. 690, 24 N. E. 259, 31 Am. & Eng. Corp. Cas. 484. 508 RIGHTS, LIAHILITIIOS AND HEMEDllOS OF § 308 erty for the benefit of creditors.^* If a corporation has been dissolved and cannot be sued a creditor can proceed to enforce the payment of unpaid subscriptions without first estabhsh- ing his claim/'* And a judgment and unsatisfied execution are not a prerequisite to a suit by a creditor against a stockholder for an unpaid subscription where the corporation has ceased to carry on business, is insolvent and in a receiver's hands.®" Under a Kansas decision, a corporation which ceases to do business for more than one year is deemed to be dissolved, for the purpose of enabhng creditors to enforce the individual lia- bility of stockholders; but such cessation of business does not operate as a legal and complete dissolution of the corporation for any purpose other than the one named. And in that State a creditor of an insolvent corporation may enforce the indi- vidual liability of stockholders, imder the general statutes of that State, ^^ when there is no })roperty subject to be taken on execution, notwithstanding there may at the time be assets of the corporation in the hands of an assignee to be ultimately applied in payment of corporate debts.*^ So under a Washington decision, a judgment is not a pre- requisite in the absence of a statute where the corporation is insolvent and has no assets, the suit by a creditor to enforce unpaid stock subscriptions being in the nature of a creditor's bill.«3 When the performance of a condition becomes impossible by the operation and effect of a statute, that is, becomes il- legal, the performance is excused and the rights of the parties will be preserved. The courts will not require that useless and 78 Barrick v. Gifford, 47 Ohio St. 180, 23 Ohio L. J. .313, 24 N. E. 259, 2 Am. R. & Corp. Rep. 690, 31 Am. & Eng. Corp. Cas. 484. See also Salt Lake Hardware Co. v. Tintic Mills Co., 13 Utah, 423, 45 Pac. 200, 4 Aui. & Eng. Corp. Cas. (N. S.) 224. 79 Lewiston v. Stoddard, 78 Conn. 575, 63 Atl. 621. 80 Williams v. Chamberlain, 29 Ky. L. Rep. 606, 94 S. W. 29. 81 Gen. Stat., 1897, chap. 66, § 50. 82 Sleeper v. Norris, 59 Kan. 555, 53 Pac. 757, 9 Am. & Eng. Corp. Cas. (N. S.) 45. 83 Chilberg v. Siebenbaum, 41 Wash. 663, 84 Pac. 598. 509 § ;;i)8 PARTIES CONTINUED— CREDITORS — STOCKHOLDERS — unwarranted action be taken. Thus in an action brought under the Stock Corporation Law of New York,*^ to recover against stockholders for debts of a corporation to an amount ecjual to the amount unpaid on their stock, it appeared that the claim was proved against the corporation in bankruptcy proceedings and plaintiff received a dividend thereon. It was held that the stockholders are protected by lawful proceed- ings in a court of paramount jurisdiction in the premises as fully as they could have been by full compliance with the State law, and that the failure to obtain a judgment and re- turn of execution unsatisfied, as required by the Stock Corpo- ration Law,*^ was excused by the discharge of the corporation in bankruptcy. Again, any judgment resting on a debt cov- ered by a discharge in bankruptcy must be canceled by the court in which it was rendered, upon application made pur- suant to § 1268 of the Code of Civil Procedure.*^ And in that State an employe of a corporation having recovered judg- ment in a city court against the corporation for services rendered, need not file a transcript of the judgment with the county clerk and exhaust his remedy against the corporation by the execution of a court of record before suing stockholders.*^ It is sufficient if he exhaust his remedy against the personal property of the corporation by the execution of the city court.** An avennent that a judgment has been recovered and an ex- ecution returned unsatisfied against a corporation is unnec- essary in a suit by creditors to enforce stockholders' liability for corporate debts where insolvency, an assignment for cred- itors and financial inability to carry on the corporate business are alleged.*^ 84 Section 54, Laws, 1890, chap. 564, as amended by Laws, 1892, chap. 688; Laws, 1901, chap. 354. See Laws, 1909, chap. 61, § 56, Birdseye's Gumming & Gilbert's Consol. L. of N. Y. Annot., p. 5773. 85 Section 55. 86 Firestone Tire & Rubber Co. v. Agnew, 194 N. Y. 165, 86 N. E. 116, rev'g 112 N. Y. Supp. 907, 128 App. Div. 518. 87 N. Y. Stock Corporation Law, §§ 57, 59, Laws, 1909, chao. 61, 5 Birds- eye's Cumming & Gilbert's Consol. Laws N. Y. Annot. pp. 5775-6. 88 Padros v. Swarzenbach, 134 App. Div. (N. Y.) 811. 89 Morgan v. Lewis, 46 Ohio St. 1, 17 N. E. 558, 20 Ohio L. J. 423. 510 lUOHTS, LIAiUIJTlIOS AM) HIOMKDIKS OF §$ .'^)()*.). 31 § ;>()(). Stockholders' Liability Dissolution as Condition Precedent to Enforcing Same. Where a statute provides that stockholders in a corporation arc liable, upon a dissolution of the C()m{)any, for the debts thereof to an amount equal to the amount of the par value of the stock held by them at the time of such dissolution, then the dissolution is a condition precedent that must ajjpear be- fore the creditor can enforce this statutory liability by suit against the shareholder. Such dissolution need not, however, be first established by legislative enactment or l^y judicial pro- ceedings before the company's creditors can proceed directly against the stockholders to enforce their statutory liability for debts of the corporation. It is sufficient for the declaration to state that the corporation was dissolved on or about a date stated therein. Such a dissolution takes place, in the sense in which the term is used in the statute when the corporation has debts and no assets and has ceased to act and to exercise its corporate functions, or has suffered acts to be done which end the object for which it was created; and the facts and cir- cumstances relied upon as constituting such dissolution are matters of evidence and need not be averred in the pleadings.^" § 310. Effect of Equity Rule 94— When Demand Upon Directors for Relief Is and Is Not Condition Precedent Stockholders — Right to Protect Corporation When Di- rectory Derelict. In the Federal Courts a demand upon the managing board of the corporation is necessary under Rule 94 before a stock- holder can maintain a suit.^^ Equity Rule 94, which is intended to secure the Federal Courts from imposition upon their jurisdiction, recognizes the 80 Gibbs V. Davis, 27 Fla. 531, 8 So. 63.3. The statute which provides an additional summary remedy to creditors is held in this case not to super- sede the statutory remedy set forth in the text. The statute of 1887 changes the liability of stockholders in corporations so as to limit such liability to the amount that remains unpaid upon their subscriptions but does not af- fect rights and liabihties which accrued prior to its enactment, and the above suit was instituted in 1886. 81 Miller v. Murphy, 17 Colo. 408, 30 Pac. 46. 511 § 310 PAIITIKS c;ONTli\UED — CKEUITOKS — STOCKHOLDERS — right of the corporate directory to corporate control, and ex- presses primarily the conditions which must precede the right of the stockholders to protect the corporation in cases where the directory is derelict; but the requirements of the rule may be dispensed with where they do not apply by reason of the antagonism between the directory and the corporate interest. Said rule is intended to have a practical application, and it does not apply where the corporate interests can only be pro- tected by a suit, which, if successful, would be detrimental to all the directors in other capacities. So where stockholders of a lessor corporation sued, for its benefit, the lessee corporation, the directors of the two corporations being almost identical and the lessee corporation also owning, or holding the voting power, of sufficient stock of the lessee corporation to control a stockholder's meeting, the fact that the stockholders bring- ing the suit made no demand for reUef upon the board of di- rectors nor any effort to obtain relief at a stockholders' meet- ing does not prevent them from maintaining the bill.*'^ Nor under said Equity Rule 94 is it necessary to make demand upon the corporate authorities to sue if it is apparent from the bill that such a demand would be useless and it is not a condi- tion precedent to a suit.''^ If the averments of the bill show that the corporation is controlled by defendants. Equity Rule 94 does not require a stockholder complainant to set out, what his efforts were to induce action by the corporation.^^ A stock- 92 Delaware & Hudson Co. v. Albany & Susquehanna Ry. Co., 213 U. S. 435, 53 L. ed. 862, 29 Sup. Ct. 540. Qiuere, and not decided, whether stock- holders have power to compel directors to institute suits to which the latter are opposed. See as to Equity Rule 94; Church v. Citizens' Street Ry. Co. (U. S. C. C), 78 Fed. 526; Excelsior Pebble Phosphate Co. v. Brown (U. S. C. C), 74 Fed. 321, 42 U. S. App. 55, 20 C. C. A. 428. 93 Eldred v. American Palace-Car Co. (U. S. C. C-), 99 Fed. 168. See also Weir V. Bay State Gas Co. (U. S. C. C), 91 Fed. 940. 94 Berwind v. Canadian Pac. Ry. Co. (U. S. C. C), 98 Fed. 158. Equity Rule 94; When demurrer sustained because complainant had not by averments in his bill brought himself within the directions prescribed by Equity Rule 94, 104 U. S. ix-x, respecting suits brought by stockholders in a corporation against the corporation and other parties, founded on rights which might be properly asserted by the corporation. Quincy v. Steele, 120 U. S. 241, 30 L. ed. 624, 7 Sup. Ct. 496, 520. 512 RIGHTS, LIABILITIES AND REMEDIES OF §§31], 312 holder's bill to set aside a sale of property by the corporation based on fraud of the president and directors cannot be main- tained under Equity Rule 94 unless it is shown by the bill that a demand was made upon the stockholders to take ac- tion and the cause of the failure of the efforts made and the nature of such efforts.^^ § 311. Judgment Creditor's Right to Sue— Parties— Con- ditions Precedent. If judgment creditors, who have established a corporation's insolvency by judgment and an unsatisfied execution, sue the stockholders to recover unpaid subscriptions other creditors may join with them in the suit without first establishing their claims by judgments. ^^ Where a corporation as creditor re- covers judgment against another corporation for the purchase price of goods, and an execution is issued and returned unsat- isfied, and the corporation becomes insolvent, such creditor cannot thereafter charge the stockholders of the corporation as partners or its officers or trustees with the debt, there being no fraudulent intent alleged and proved; as the State alone can complain of the violation of its laws; and the fact that judgment was recovered against the corporation affords con- clusive evidence that the trustees in contracting the debt did not exceed their authority. This apphes even though the cap- ital stock of the corporation was not fully subscribed at the time the debt was contracted. ^'^ If a judgment is obtained against a foreign corporation in a State where it has its prin- cipal place of business, creditors can sue stockholders there without first obtaining judgment against the corporation in the State where it was incorporated and in which it has no assets."* § 312. Order of Court Requiring Remedies to Be Ex- hausted — Statute Limitations. An order of the court requiiing all remedies to be exhausted »5 Macon D. & S. R. Co. v. Shailer (U. S. C. C. A.), 141 Fed. 585. 96 Williams v. Chamberlain, 29 Ky. L. Rep. 606, 94 S. W. 29. 97 American Radiator Co. v. Kinnear (Wash,, 1909), 105 Pac. 630. 98 McConey v. Belton Oil & Gas Co., 97 Minn. 190, 106 N. W. 900. 33 513 § 31- rAKriE8 CONTINUED — CKKDITOKS — STOt'KHULDEIiS— against stockholders primarily liable for the debts of a Ijaiik before its reorganization, before enforcing assessment against stockholders secondarily liable to creditors, must receive a reasonable construction and not a technical one. It is not to be construed as requiring the exhaustion of all remedies against stockholders primarily liable in favor of whom the statute of limitations has run.^^ 89 State ex rel. Pope v. Germania Bank of St. Paul, 106 Minn. 446, 453, 119 N. W. 61. This was not an original action to enforce the liability of stockholders, but a proceeding to secure the distribution of a fund paid into court by certain stockholders (appellants) in full of their stock liability upon condition that, if for any reason it should be determined that there was an overpayment the amount should be repaid. The case was one of a petition by a receiver of an insolvent bank for the annulment of an order which restrained the receiver from enforcing an assessment against stock- holders in the bank secondarily liable to creditors and praying that he be ordered to distribute a certain fund to the creditors. Two orders were made, one discharging the restraining order and decreeing that all remedies against the persons primarily liable had been substantially exhausted, and the othef that said fund be distributed according to law by the receiver with other moneys now or which may hereafter come into his hands. From the latter order there was an appeal, affirmed. 514 ACT10N8 AT LAW — LlAblLITV, GENEUALLY ^' .'U3 CHAPTER XVIII ACTIONS AT LAW — LIABILITY, GENERALLY § 313. Form of Action — Effect, of § 317. Liability of Corporations to Code Provisions, Gener- Third Persons for Negli- ally. gent, Willful, Wanton or 314. Actions Under Statutes, Gen- Malicious Acts of Servants. erally. 318. Negligent Acts of Corpora- 315. Ejectment. tions, Generally. 316. Forcible Entry and De- 319. Election — Form of Action — tainer. Contract or Tort; Waiver. § 313. Form of Action — Effect of Code Provisions, Gen- erally. Notwithstanding a provision of a civil code abolishes all distinctions between actions at law and suits in equity and the common-law forms of actions and suits, still the rules of law which govern and control the manner of enforcing a cause of action must of necessity depend upon the nature of the cause of action sought to be enforced, and, until the nature of the cause of action, if any, arising out of a given state of facts pleaded is determined, the rules of law governing the case are impossible of ascertainment and application.^ "While it is true that the Code has abolished the distinctions between actions at law and suits in equity, and has provided that there shall be but one form of action for the enforcement and pro- tection of private rights and the redress and f)revention of private wrongs, yet there still exist certain elements or features pertaining to actions which are unchanged thereby. These do not belong to the action as a judicial instrument for establish- ing a right, but inhere to and belong to the primary and remedial rights themselves. For the enforcement and pro- tection of these rights but one form of action exists, but, as iCarbondale Investment Co. v. Burdick, 67 Kan. 329, 72 Pac. 781. 515 § 314 ACTIONS AT LAW^LIABILITY, GENERALLY to the remedies which he back of all forms of action, the law still recognizes and observes distinctions which are as vital as before the Code. It is just as necessary to-day as it ever was that a suitor should so state his cause of action that the court may determine whether it be ex contractu or ex delicto ^ ' Under the code system of California the court may grant any relief, legal or equitable, to which a party may be entitled, and the mere fact that the plaintiff in framing the complaint pro- ceeded upon a certain theory of his rights affords no ground for sustaining a general demurrer if the complainant allege facts which entitle him to relief upon some other theory.^ § 314. Actions Under Statutes, Generally. A person discriminated against by an express company may hold such company liable in damages for the excess paid by him over that charged to others, where a statute provides that the railroad commissioner may fix rates or charges for certain public service corporations and also obligating such com- panies to fix rates without discrimination and making them liable, for extortionate charges, in a civil or criminal action.^ Charges involuntarily paid to a gas company by a private consumer in excess of the rates prescribed by the ordinance under which the company is operating may be recovered back, although a right of action therefor is not expressly conferred by the ordinance which prescribes the rates .^ If statutory double damages are provided for in case of baggage lost or carelessly or willfully injured by a railroad company such enactment applies to personal baggage and does not authorize a recovery of such damages by a traveling salesman for the loss of his sample case even though it was checked as baggage.^ Again, a transferee of warehouse receipts which designate and 2 Dessert Lumber Co. v. Wadleigh, 103 Wis. 318, 79 N. W. 237, per Bar- deen, J. 3 Bell V. Bank of California (Cal., 1908), 94 Pac. 889, 891. ^ American Express Co. v. Crawley, 88 Miss. 525, 41 So. 261. 5 Pingree v. Mutual Gas Co., 107 Mich. 156, 2 Det. L. N. 639, 65 N. W. 6. Assumpsit to recover overcharges for gas furnished. 6 New Orleans & Northeastern Rd. Co. v. Shackelford, 87 Miss. 610, 40 S. W. 427. 516 ACTIONS AT LAW — LAIBILITY, GENERALLY § 315 guarantee the grade and quantity of wheat stored may, under a statute requiring the dehvcry of the commodity stored to the owner of the receipts on their dehvery, hold the ware- houseman Hable for damages for the refusal to deliver to him the wheat demanded and delivering an inferior grade of wheats § 315. Ejectment/ Ejectment may be maintained by the holder in trust of the legal title to property for a religious corporation against one in possession without a legal or equitable title." And where a railroad has been granted public lands by Congress it may 1 Lawson v. Genesee Farmers' Alliance Joint Stock Co. (Idaho, 1895), 43 Pac. 191. Action brought under the provisions of an act entitled, "An act governing the storage of grain, flour, wool or other produce when received for storing, shipping, grinding or manufacturing," approved January 15, 1891 (1 Sess. Laws, p. 12), to recover damages for an alleged breach of con- tract contained in warehouse receipts issued by defendant on receipt of certain wheat delivered to it for storage by the transferrer of the receipts. 8 See § .313, herein. 9 Church of Christ v. Reorganized Church of Jesus Christ of L. D. S. (U. S. C. C), 71 Fed. 250, 1 C. C. A. 397, 36 U. S. App. 379, aff'd in 70 Fed. 179, 17 C. C. A. 387, 36 U. S. App. 110. What title and possession a sufficient basis of action of ejectment, see the fol- lowing cases: United States: Valcalda v. Silver Peak Mines (U. S. C. C. A.), 86 Fed. 90, 56 U. S. App. 666, 29 C. C. A. 591; Northern Pac. Rd. Co. v. Cannon, 46 Fed. 2.37. Alabama: Jackson Lumber Co. v. McCreary, 136 Ala. 278, 34 So. 850 (on strength of plaintiff's own title); McClendon v. Equitable Mtge. Co., 122 Ala. 384, 25 So. 30. California: Southern Pacific R. Co. v. Burr, 86 Cal. 279, 24 Pac. 1032 (railroad grantee of public lands may maintain ejectment against prior oc- cupant without title). Colorado: Chivington v. Colorado Springs Co., 9 Colo. 597, 14 Pac. 212 (on strength of plaintiff's own title). Indiana: Silver Creek Cement Corp. v. Union Lime Co., 138 Ind. 297, 35 N. E. 125 (on strength of plaintiff's own title). Iowa: Lathrop v. American Emigrant Co., 41 Iowa, 547 (on strength of plaintiff's own title). Michigan: Michigan Cent. R. Co. v. McNaughton, 45 Mich. 87, 7 N. W. 712. Nebraska: Chicago, Burlington & Quincy Rd. Co. v. Schalkopf, 54 Neb. 448, 74 N. W. 826 (on strength of plaintiff's own title). New Mexico: New Mexico Rio Grande & P. R. Co. v. Crouch, 4 N. M. 141, 517 § 315 ACTIONS AT LAW — LIABILITY, GENERALLY maintain ejectment therefor against persons holding under void subsequent patents.^" If land, however, is excepted from a claimed grant of land to a raih'oad company it cannot main- tain ejectment therefor even though defendant has no valid claim thereto." Ejectment cannot be maintained against a railroad com- pany if the landowner, knowing that such company has entered upon his land and is engaged in constructing its road without having complied with the statutes requiring either payment by agreement or proceedings to condemn, remains inactive and permits it to go on and expend large sums in the work; in such case he will be restricted to a suit for damages.^^ So where a railroad company acting under a contract of purchase of land enters thereupon with the owner's consent, part of the purchase price having been paid and promissory notes taken for the balance, and at a great expense places its tracks, etc., thereon, the owner, who has reserved the title in himself until satisfaction of the notes, cannot maintain ejectment therefor notwithstanding the nonpayment of the notes and the bar of 13 Pac. 201 (one expelled from public lands by those without better title may maintain ejectment under statute). Rhode Island: New York, New Haven & Hfd. Rd. Co. v. Horgan, 25 R. I. 408, 56 Atl. 179. Tennessee: Bleidorn v. Pilot Mountain Coal & M. Co., 89 Tenn. 166, 204, 15 S. W. 737. Texa^: Sebastian v. Martin Brown Co., 75 Tex. 291, 12 S. W. 986 (on strength of plaintiff's own title); Parker v. Fort Worth & D. C, R. Co., 71 Tex. 1.32, 8 S. W. 541. Virginia: Sulphur Mines Co. v. Thompson, 93 Va. 293, 25 S, E. 23. West Virginia: Holly River Coal Co. v. Howell, 36 W. Va. 489, 15 S. E. 214. As to requisite title, possession, etc., as basis of action generally, see ar- ticle "Ejectment" by Joseph A. Joyce and Howard C. Joyce. 15 Cyc. pp. 17 et seq. 10 Northern Pacific Rd. Co. v. Miller, 20 Wash. 21, 54 Pac. 603. " De Lacey v. Northern Pac. R. Co. (U. S. C. C. A.), 72 Fed. 726, 19 C. C. A. 157, 44 U. S. App. 257. 12 Donohue v. El Paso & Southwestern Ry. Co., 214 U. S. 499, 53 L. ed. 1060, 29 Sup. Ct. 698, relying upon Northern Pacific Ry. Co. v. Smith, 171 U. S. 260, 43 U. S. 157, 18 Sup. Ct. 794; citing New York, City of, v. Pine, 185 U. S. 93, 46 L. ed. 820, 22 Sup. Ct. 593; Roberts v. Northern Pacific Ry. Co., 158 U. S. 1, 39 L. ed. 873, 15 Sup. Ct. 756. 518 ACTIONS AT LAW — LIABILITY, GENERALLY § 315 the statute of limitations.^'^ The owner of hind may also be pre- cluded by statutory provisions for proceedings for assessment of damages and the charter of a railroad corporation, from main- taining ejectment for a portion of a right of way of a corpora- tion with power to obtain the same by condemnation, gift or purchase and who has acquired it by purchase from a regularly created corporation.^'* And the mere ownership of the shore, where title stops at the water's edge by reason of the public character of such water, does not entitle one to maintain eject- ment to obtain possession of land beyond the water's edge.^^ In a Pennsylvania case a railroad company, holding town lots adjoining their roadbed, ostensibly for a basin to connect with river navigation, having mortgaged the entire road with its corporate privileges and appurtenances, but without specific mention of the lots, became embarrassed, under pro- ceedings thereon by the sheriff; the lots having been sold under execution against the company and bought by the plaintiffs therein, in an ejectment therefor by them against the purchasers under the mortgage, the jury were instructed that if the lots were not appurtenant to the road and essential and indisputably necessary to the enjo3Tiient of its franchises, and as such included in the mortgage, the plaintiffs were en- titled to recover, referring the question of appurtenancy and necessity to them as matters of fact. It was held that the instruction was not error.^^ If telegraph poles are placed on a public highway over plaintiff's land and no compensation therefor has been paid ejectment Hes to compel the removal of such poles.^'^ So a purchaser of land over which a telegraph 13 Atlanta, K. & N. Rd. Co. v. Barker, 105 Ga. 534, .31 S. E. 452. H Saunders v. Memphis & R. S. R. Co., 101 Tenn. 206, 47 S. W. 155. 15 Illinois Steel Co. v. Bilot, 109 Wis. 418, 84 N. W. 855, rehearing denied, 85 N. W. 402. Land covered by the waters, lakes or ponds, or by water partaking of like character as regards public rights, though in form con- veyed by a Federal or State patent, is vested in the State the same after such conveyance as before, such conveyance, as to such land, being abso- lutely void; title to such land to high water mark enjoyed to same extent as were tidal waters by rules of common law. leShamokin Valley Rd. Co. v. Livermore, 47 Pa. 465. 17 Postal Teleg. Cable Co. v. Eaton, 170 111. 513, 49 N. E. 365. 519 ySH) ACTIONS AT LAW — LIABILITY, GENERALLY company has, without right, constructed its lines may bring ejectment, inasmuch as such purchaser succeeds to all the grantor's rights.^* Where a statutory remedy is made ex- clusive of all other remedies and land has been appropriated by a levee board, ejectment therefor and for damages cannot be maintained.^^ Where the plaintiffs' case, as set forth in their complaint in ejectment, merely states a reliance on the Fifth Amendment to the Constitution and on a certain article of a treaty and the Circuit Court decided no question as to the application or construction of the Constitution or the validity or construction of the treaty the Federal Supreme Court is without jurisdiction to review on a writ of error the action of that court. A case may be said to involve the construction or application of the Constitution of the United States when a title, right, privilege or immunity is claimed under that in- strument; but a definite issue in respect to the possession of the right must be distinctly deducible from the record before the judgment below can be raised on the ground of error in the disposal of such a claim by its decision. The same rule is ap- plicable to a treaty.^" § 316. Forcible Entry and Detainer.^i There is nothing in the nature of the possession of a rail- road, or of a section of a railroad, which takes it out of the operation of the language of the statutes of Arkansas against forcibly entry and detainer, or out of the general principle which Hes at the foundation of all suits of forcible entry and detainer, that the law will not sanction or support a possession acquired by violence, but will, when appealed to in this form of action, compel the party who thus gains possession to sur- Whether additional burden on abutting owners imposed by telegraph and telephone and electric railway lines in street, see Joyce on Electric Law (2d ed.), §§ 295-348. 18 Postal Teleg. Cable Co. v. Eaton, 170 lU. 513, 49 N. E. 365, 39 L. R. A. 722. 19 Owens V. Yazoo, Mississippi Delta Levee Rd., 74 Miss. 269, 21 So. 12. 20 Muse V. Arlington Hotel Co., 168 U. S. 430, 42 L. ed. 531, 18 Sup. Ct. 109. 21 See § 313, herein. 520 ACTIONS AT LAW — LIABILITY, GENERALLY § 317 render it to the party whom he dispossessed, without inquiring which party owns tlie property or has the legal right to the possession/^ So where a statute makes one guilty of forcible entry and detainer without regard to the manner of his acquir- ing real property where he unlawfully, by force, menaces and threats of violence, retains possession of and holds such prop- erty, an action of forcible entry and detainer may be main- tained against a corporation where it keeps possession of land for two years after judgment against it for possession, and for damages for unlawful detainer, and after demand made for the possession .^^ § 317. Liability of Corporations to Third Persons for Negligent, Willful, Wanton or Malicious Acts of Servants.^'^ It may be stated here as the basis of remedies against a corporation that the rules as to the liability of a master for the negligence, want of skill, or willful acts of his servant apply equally to corporations as to private individuals.^^ So for the torts of a servant the hability of a railroad company is limited to those done within the scope of the employment in further- ance of its business.^* And under a much cited and rehed upon case in the Federal Supreme Court a master is liable for the tortuous acts of his servant, when done in the course of his employment, although they may be done in disobedience of the master's orders. Thus where a suit was brought against a railroad company, by a person who was injured by a collision, it was correct in the court to instruct the jury, that, if the 22 Iron Mountain & Helena R. R. v. Johnson, 119 U. S. 608, 30 L. ed. 504, 7 Sup. Ct. 339. Degree of force necessary to bring entry within statute, see Smith v. Detroit Loan & B. Assoc, 115 Mich. 340, 4 Det. L. N. 916, 73 N. W. 395, 39 L. R. A. 410. Sufficiency of title or possession as basis of action of forcible entry and de- tainer, see Chicago, P. & St. L. Ry. Co. v. Vaughn, 99 111. App. 386; Roch- ester V. Gate City Mining Co., 86 Mo. App. 447. 23 Eccles V. Union P. Coal Co., 15 Utah, 14, 48 Pac. 148. 24 See § 313, herein. 25 Evansville & Crawfordsville Rd. Co. v. Baum, 26 Ind. 70. See also Central of Georgia Ry. Co. v. Brown, 113 Ga. 414, .38 S. E. 989. 28 Jones V. Seaboard Air Line Ry. Co., 150 N. C. 473, 64 S. E. 205. 521 § 317 ACTIONS AT LAW— LIABILITY, GENERALLY plaintiff was lawfully on the road, at the time of the collision, and the collision and consequent injury to him were caused by the gross negligence of one of the servants of the defendants, then and there employed on the road, he was entitled to re- cover, notwithstanding the circumstances, that the plaintiff was a stockholder of the company, riding by invitation of the president, paying no fare, and not in the usual passenger cars. And, also, that the fact that the engineer having control of the colliding locomotive, was forbidden to run on that track at the time, and had acted in disobedience of such orders, was no defense to the action.^'' Under the Louisiana Civil Code^* the responsibility of masters is confined to damages occasioned by their servants in the " exercise of the functions in which they are employed," and they are not liable for collateral torts com- mitted by servants while attending to the duties of their em- ployment.^^ In Minnesota a master is responsible for the torts of his serv- ant, done in the course of his employment with a view to the furtherance of his master's business, and not for a purpose per- sonal to himself, whether the same be done willfully, but within the scope of his agency, or in excuse of his authority, or con- trary to the express instructions of the master.^'' Under a New York case the rule is declared that for acts of the servant done within the general scope of his employment and while engaged in the master's business, and done with a view to the furtherance of that business and the master's in- terest the latter will be responsible, whether the act be done negligently, wantonly, or even willfully .^^ 27 Philadelphia & Reading R. R. Co. v. Derby, 14 How. (55 U. S.) 468, 14 L. ed. 502. 28 Article 2320. 29 Vara v. R. M. Quigley Construction Co., 114 La. 261, 38 So. 102. 30 Barrett v. Minneapolis, St. Paul & Sault Ste. Marie Ry. Co., 106 Minn. 51, 117 N. W. 1047, 18 L. R. A. (U. S.) 416. 31 Wallace v. John A. Casey Co., 116 N. Y. Supp. 394, 132 App. Div. 35, 41, per Miller, J., citing and quoting from Mott v. Consumers' Ice Co., 73 N. Y. 543. The company, however, in the principal case, was held not liable under the rule that the recipient of charity assumes the risk of negli- gence of the donor's servant. 522 ACTIONS AT LAW — LIABILITY, GENERALLY § 317 Under an Ohio decision the test of the nui;sL{>r's hability is not whether the act of the servant was done during tlie exist- ence of the employment, but whether it was done while engaged in the service of and while acting for the master in the prosecu- tion of his business. If not so employed the master is not liable .^^ 32 Lima Ry. Co. v. Little, 67 Ohio St. 91, 65 N. E. 861. When corporation not liable for acts of servant; injuries to third persons, see the following cases: United States: St. Louis Southwestern Ry. Co. v. Harvey, 144 Fed. 806, 75 C. C. A. 536 (railroad company not liable for servant's acts not done within the scope of employment nor in conducting master's business nor by acts of servant in using master's facilities without his consent) ; Bowen v. Illinois Cent. R. Co., 136 Fed. 306, 69 C. C. A. 444. Alabama: Palos Coal & Coke Co. v. Benson (mem.), 145 Ala. 664, 39 So. 727 (mining company not liable for assault committed by servant when not done within line of duties). Arkansas: St. Louis & San Francisco Rd. Co. v. Wyatt, 84 Ark. 193, 105 S. W. 72 (carrier not liable for assault by servant outside of scope of employ- ment and done when not on duty) . Illinois: Illinois Steel Co. v. Zolnowski, 118 111. App. 209 (not liable un- less done in course of employment, etc.); Belt Railway Co. v. Banicki, 102 111. App. 642 (trespass in case for personal injuries; employment of watch- man to keep trespassers away does not give authority to shoot them; master not responsible for acts of servant done outside of master's business and done to accomplish some end personal to servant). Indiana: Louisville & Nashville Rd. Co. v. Gillen, 166 Ind. 321, 76 N. E. 1058 (master not liable where acts of servant are independent of his em- ployment or duty or of his master's business); Louisville, New Albany & Chicago Ry. Co. v. Palmer, 13 Ind. App. 161, 39 N. E. 881, 41 N. E. 400 (not liable unless done within scope of employment, etc., damage to land by fire). Kansas: Hudson v. Missouri, Kansas & Texas Ry. Co., 16 Kan. 470 (mas- ter not liable unless servant's acts done within scope of employment, etc.; action to recover from railway company for personal injuries). Kentucky: Mace v. Ashland Coal & Iron Ry. Co., 118 Ky. 885, 20 Ky. L. Rep. 865, 82 S. W. 612 (where complaint does not show that alleged malicious or mischievous act of servant was connected with his duty to master or done in the exercise of that duty no cause of action is stated). Louisiana: McDermott v. American Brewing Co., 105 La. 124, 29 So. 498, 83 Am. St. Rep. 225, 52 L. R. A. 684 (assaidt by servant; held to have acted outside of scope of employment and company not liable) . Maine: Moran v. Rockland, Thomaston & Camden St. Ry. Co., 99 Me. 127, 58 Atl. 176 (when servant acting without employer's authority and bej'ond scope of employment master not responsible; action on case for negligence of railroad corporation causing injuries and death). 523 § 318 ACTIONS AT LAW — LIABILITY, GENERALLY § 318. Negligent Acts of Corporations, Generally.^' A passenger on a railroad sued it and its receiver in an ac- tion at law in a State Court to recover for injuries received Massachusetts: Fairbanks v. Boston Storage Warehouse Co., 189 Mass. 419, 75 N. E. 7.37, 109 Am. St. Rep. 646 {assault committed by servant; not within scope of his employment; company not liable); Brown v. Boston Ice Co., 178 Mass. 108, 59 N. E. 644, 86 Am. St. Rep. 469 {injury inflicted on children done outside of scope of employment; master not liable). Michigan: Wiltse v. State Road Bridge Co., 6.3 Mich. 639, 30 N. W. 370 (master's responsibility grows out of, is measured by and begins and ends with his control of his servant; action on case; bridge corporation held not liable); Wood v. Detroit City Ry. Co., 52 Mich. 402, 50 Am. St. Rep. 259, 18 N. W. 124 (corporation not liable if act of servant was willful) ; Chicago & Northwestern Ry. Co. v. Bayfield, 37 Mich. 205 (master not liable for wrong intentionally or recklessly done by servant beyond the scope of his business, that is, for personal trespass or tort of servant). Minnesota: Slater v. Advance Thresher Co., 97 Minn. .305, 107 N. W. 133, 56 R. A. (N. S.) 598 (company not liable for wrongful acts of servant causing injury when done outside of the duty for which employed); Johnson v. Pioneer Fuel Co., 72 Minn. 405, 75 N. W. 719 (corporation not liable for assault by servant not done in scope of or in furtherance of corporation's business) ; Peterson v. Western Union Teleg. Co., 72 Minn. 41, 74 N. W. 1022, 40 L. R. A. 661, 8 Am. & Eng. Corp. Cas. (N. S.) 517 (telegraph company not liable for the transmission by its operator of a libelous message if act law- ful). Mississippi: Canton Cotton Warehouse Co. v. Pool, 78 Miss. 147, 28 So. 823, 84 Am. St. Rep. 620 (acts of servant independent of business or em- ployment company not liable). Missouri: Walker v. Hannibal & St. Joseph Rd. Co., 121 Mo. 575, 26 S. W. 360, 42 Am. St. Rep. 547, 24 L. R. A. 363 (railroad company not lia- ble unless servant's tortious acts done in course of employment) ; Haehl v. Wabash Rd. Co., 119 Mo. 325, 24 G. W. 737 (company not liable for assaidt of servant not done in scope of or to further corporation's business). New Hampshire: Rowell v. Boston & M. R. Co., 68 N. H. 358, 44 Act. 488 (done for own purpose and not to further master's orders or work; master not hable). New Jersey: Kieman v. New Jersey Ice Co., 74 N. J. L. 175, 63 Atl. 998 {assault of boy on ice wagon by driver; company not liable); Hollie v. San- ford Ross, 68 N; J. L. 324, 53 Atl. 472, 59 L. R. A. 943, 96 Am. St. Rep. 546, rev'g 67 N. J. L. 60, 50 Atl. 342 (plaintiff was shot by watchman; nonsuit). New York: Sharp v. Erie Rd. Co., 184 N. Y. 100, 76 N. E. 923. See Id., 85 N. Y. Supp. 553, 90 App. Div. 502 (railroad company not liable for act of detective in killing boy trespasser where act was malicious or to affect his own purpose); Hogle v. H. H. Franklin Mfg. Co., 112 N. Y. Supp. 881, 128 App. Div. 403 (master not liable for malicious acts of servants unless he has 33 See § 313, herein. 524 ACTIONS AT LAW — LIABILITY, GP^NERALLY § 318 wlien traveling on its road while it was in the hands of the re- ceiver. The case was removed to the Federal Circuit Court where a trial was had. The receivership had been terminated knowledge of thereof and fails to use reasonable means to suppress the same); Franklin v. Brooklyn Daily Eagle, 99 N. Y. Supp. 300, 113 App. Div. 443 (newspaper publisher not liable for assault by employ^ not done within scope of employment); P'eneran v. Singer Mfg. Co., 47 N. Y. Supp. 284, 20 App. Div. 574 {ansault by servant committed while doing act con- trary to instructions; company not liable). North Carolina: Daniel v. Atlantic Coast Line Rd. Co., 136 N. C. 517, 48 S. E. 81G, 67 L. R. A. 455 (action for malicious prosecution and false arrest and imprisonment; railroad company not liable for acts of agent in causing arrest there being no proof of previous authority or of ratification) . RJwde Island: Bemton v. James Hill Mfg. Co., 26 R. I. 192, 58 Atl. 664 (company not liable for willfrd assault not done in performance of any duty due master). Soidh Dakota: V^^aaler v. Great Northern Ry. Co., 18 S. Dak. 420, 100 N. W. 1097, 112 Am. St. Rep. 794, 70 L. R. A. 731 (railroad company not liable for assault committed by direction of servant but not done within scope of his authority). Texas: St. Louis Southwestern Ry. Co. of Texas v. Mayfield, 35 Tex. Civ. App. 82 (railroad company not liable for injury to trespasser where servant is doing something master has not ordered done or to exercise discretion concerning; burden of proof on plaintiff to show wrongful act was done in prosecution of master's business); Lytle v. Crescent News & Hotel Co., 27 Tex. Civ. App. 530, 66 S. W. 240 (master not liable where servant's acts in shooting another are independent of employment and not within scope thereof) . Washington: Robinson v. McNeill, 18 Wash. 163, 51 Pac. 355 (where act of servant is not within scope of authority a railroad company is not liable for injuries sustained by a boy falling off a hand car loaned by said servant). When corporation liable for cLcts of servant; injuries to third persons, see the following cases: United States: Pendleton v. Kinsley, 3 Cliff (U. S. C. C), 416, Fed. C^as. No. 10,922 (case to recover damages for injuries resulting to passenger from assault and battery inflicted upon him by steamboat clerk. The prin- cipal in this class of cases is liable for misconduct of employe when it oc- casions injury to the passenger whether (in'singfrom malice or neglect). Alabama: Palos Coal & Coke Co. v. Benson (mem.), 145 Ala. 664, 39 So. 727 (liable for torts of servants done or caused to be done in or about the duties or business assigned to them); City Delivery Co. v. Henry, 139 Ala. 161, 34 So. 389 (master liable for injuries willfully and intentionally inflicted by servant acting within scope or line of employment) . Arkansas: Duggins v. Watson, 15 Ark. 118, 60 Am. Dec. 560 (collision of vessels and loss of cattle). California: Maynard v. Firemen's Fund Ins. Co., 34 Cal. 48, 91 Am. Dec. 672. 525 § 318 ACTIONS AT LAW — LIABILITY, GENERALLY before the commencement of the action, and the property had by ortler of the court been transferred to the company. The company contended that it was not liable, or, if liable, that the claim could only be enforced in equity. The trial resulted in a Geon/ia: Southern Ry. Co. v. James, 118 Ga. 340, 45 S. E. 303, 63 L. R. A. 257 (liable for wanton and reckless act of servant in shooting tramp when act done to further master's business and while acting imder authority to ar- rest persons stealing rides on trains). Illinois: Illinois Cent. Ry. Co. v. King, 179 111. 91, 53 N. E. 552, aff'g 77 111. App. 581 (liable for willful and malicious act of servant done within scope of employment and duty); Chicago, Burlington & Quincy Rd. Co. v. Sykes, 96 111. 162 (action for damages against railroad company for causing death of one about to take a train); Northwestern Rd. Co. v. Hack, 66 111. 238 {boy trespasser injured by wrongful act of servant of railroad company) ; Chicago Rd. Co. v. Dickson, 63 111. 151, 14 Am. St. Rep. 114 {wanton and ma- licious acts of employee of railroad company; company liable); Toledo, Wa- bash & Western Ry. Co. v. Harmon, 47 111. 298, 95 Am. Dec. 489 (injury caused by act of engineer in negligently and maliciously letting steam escape, frightening horses); Ziegenhein v. Smith, 116 111. App. 80 (trespass for as- sault committed by servant to further purpose for wliich employed) ; Alton Ry. & Illuminating Co. v. Cox, 84 111. App. 202 (liable for torts of servant done within scope of employment). Indiana: Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Sullivan, 141 Ind. 83, 40 N. E. 138, 50 Am. St. Rep. 313, 27 L. R. A. 840 (corporation liable for servant's wrongful or willfid act done within scope of general author- ity although indirectly authorized) ; Citizens' Street Rd. Co. of Indianapolis v. Willoeby, 134 Ind. 563, 33 N. E. 627 (master liable when servant acting within scope of employment willfully inflicts injury on another); Indiana, Bloomington & Western Ry. Co. v. Burdge, 94 Ind. 46 (allegation that in- jury to passenger on railroad was caused by acts of company's agent done in a willful, reckless, careless and unlawful manner is good on demurrer, but there must be proof that act was willfid) ; Pittsburg, Cincinnati & St. Louis Rd. Co. v. Theobald, 51 Ind. 246 {injury to passenger); Jeffersonville Rd. Co. v. Rogers, 38 Ind. 116, 10 Am. St. Rep. 103 {ejection of passenger; general rule as to liability of corporation for agent's acts stated). Kentucky: Sherley v. Billings, 71 Ky. (8 Bush) 147, 8 Am. St. Rep. 451 (steamboat owners liable for assault upon passenger by a clerk of the boat) ; Hawkins & Co. v. Riley, 56 Ky. (17 B. Mon.) 101 (proprietors of stage coaches liable for recklessness or negligence of drivers); Illinois Cent. Rd. Co. v. Mar- tin, 33 Ky. L. Rep. 666 (liable whether act of is negligent or ivanton) ; Lick- ing Rolling Mill Co. v. Fischer, 8 Ky. L. Rep. 89 {trespass for loss by fire; corporation liable for servant's wrongful and willfid acts done within scope of employment and in discharging master's business). Louisiana: Keene v. Lizardi, 3 La. 273 [5 La. (O. S.) 431], 25 Am. Dec. 197 (owners of vessels — master liable for inhuman abuse of passenger), Id., 3 La. 505 [6 La. (O. S.) 315, 26 Am. Dec. 478]. 520 ACTIONS AT LAW- LIABILITY, (iENEKALLV §'>]8 verdict and judgment for tlie plaintiff. It was held that the company was hable to the plaintiff in an action at law for the damages found by the jury; that as the railway company had jDrocured, or, at least, acquiesced in the withdrawal of the re- Maine: Goddard v. Grand Trunk R. Co., 57 Me. 202, 2 Am. St. Rep. 39 (common carrier of passengers responsible for willful misconduct of servant towards passenger). Maryland: Baltimore Consol. Ry. Co. v. Pierce, 89 Md. 495, 45 L. R. A. 527, 4.3 Atl. 940 (injuries sustained through alleged negligence of motor- man; rule stated that willful injury done by servant in course of employ- ment renders master liable) . Massachusetts: Aiken v. Holyoke Street Ry. Co., 184 Mass. 269, 68 N. E. 238 (tort against street railway company for personal injuries caused by motorman; reckless or willful acts of servant done in course of employment renders master liable); Krulwitz v. Eastern Rd. Co., 140 Mass. 573, 575, 5 N. E. 500 (tort for assault and false imprisonment, also for malicious pros- ecution; passenger prosecuted by conductor of railroad for fraudulently evading fare; "want of probable cause and malice on the part of the con- ductor, if established may be imputed to corporation) ; Reed v. Home Sav. Bank, 130 Mass. 443, 445, 39 Am. St. Rep. 468; (malicious prosecution; fraud or malice of authorized agents imputed to corporation). Michigan: Chicago & Northwestern Ry. Co. v. Bayfield, 37 Mich. 205 (responsible for acts of servant done in furtherance of master's interests and within scope of his business, but done in excess or even disobedience of his orders). Minnesota: Lesch v. Great Northern Ry. Co., 93 Minn. 435, 101 N. W. 965 (master is responsible for the acts of his servants if committed with a view of the furtherance of the master's business, whether the same be neg- ligently or willfully done; corporation liable on this case for acts of trespass of watchmen employed to watch its property and search for same when taken away); Peterson v. Western Union Teleg. Co., 72 Minn. 41, 74 N. W. 1022, 40 L. R. A. 661, 8 Am. & Eng. Corp. Cas. (N. S.) 517 (telegraph com- pany liable for the transmission by its operator of a libelous message if act wrongful, and this is so irrespective of the question of negligence). Mississippi: Barmore v. Vicksburg, Shreveport & Pacific Ry. Co., 85 Miss. 426, 70 L. R. A. 627, 38 So. 210 (railroad company held liable for servant's gross negligence and wanton injury to trespasser on track; master to escape liahility must prove that servant had abandoned duties of his em- ployment and gone about some purpose of his own not incident to but in- dependent of scope of employment) . Missouri: Ephland v. Missouri Pacific Ry. Co., 137 Mo. 187, 37 S. W. 820, 35 L. R. A. 107, 50 Am. St. Rep. 498, 38 S. W. 926 (railroad company held hable for acts of servant though not done in performance of express duty; master liable for acts of servant committed in course of employment); Haehl v. Wabash Rd. Co., 119 Mo. 325, 24 S. W. 737 (railroad company liable for act of watchman, whose duty was to keep trespassers off defend- 527 § 318 ACTIONS AT LAW — LIABILITY, GENERALLY ceivership and the discharge of the receiver, and the cancella- tion of the bond, and had accepted the restoration of its road, largely increased in value by the betterments, a ground was ant's bridge, in shooting and killing a trespasser; exemplary damages were awarded under code); Malecek v. Tower Grove, etc., R. Co., 57 Mo. 17 {assault and abtise of passenger; admissions of agent when binding) ; Gillett v. Missouri Valley R. Co., 55 Mo. 315, 17 Am. Rep. 653 {malicious prosecution by railroad company; liability for agent's malicious acts). Nebraska: Chicago, Rock Island & Pacific Ry. Co. v. Kerr, 74 Neb. 1, 104 N. W. 49 {personal injuries caused by negligence of railroad company's servant; company liable for servant's negligent, wanton, willful, or malicious acts done within scope of employment and while about his master's business). Nevada: Quigley v. Central Pacific R. Co., 11 Nev. 350, 21 Am. St. Rep. 757 (railroad corporation liable for wanton acts of agents, per Hawley, C. J.). New Jersey: Brokaw v. New Jersey R. Co., 32 N. J. L. 328, 90 Am. Dec. 659 {ejection of plaintiff /rom railroad car by servant of company). New York: Sharp v. Erie Rd. Co., 184 N. Y. 100, 76 N. E. 923, see Id., 85 N. Y. Supp. 553, 90 App. Div. 502 (railroad company liable for act of detective in killing boy trespasser stealing, where act done within scope of employment though servant exceeds his authority or disregards orders) ; Mott V. Consumers' Ice Co., 73 N. Y. 543 (action to recover damages for in- juries alleged to have been sustained through carelessness of driver of ice cart of company) ; Shea v. Sixth Avenue Rd. Co., 62 N. Y. 180, 20 Am. St. Rep. 480 (street car stopped so as to obstruct passage; traveler desiring to cross street attempted to cross over car platform and was thrown off by driver of car); Rose v. Imperial Engine Co., 112 N. Y. Supp. 8, 127 App. Div. 885 (master liable for acts of servant or agent done in course of emplojonent even if wanton or maliciotis, Id., 887) ; Van Sicklen v. Jamaica Electric Light Co., 61 N. Y. Supp. 210, 45 App. Div. 1, aff'd in 168 N. Y. 650, 61 N. E. 1135 (for acts of servant in injuring property where act done within scope of em- ployment) . North Carolina: Pierce v. North Carolina Rd. Co., 124 N. C. 83, 32 S. E. 399, 44 L. R. A. 316 (where act of servant willful and malicious but is done within scope of employment and discharge of duties, master is liable; hoy frightened by brakeman and killed by train; company liable). Ohio: Nelson Business College Co. v. Lloyd, 60 Ohio St. 448, 54 N. E. 471, 46 L. R. A. 314, 71 Am. St. Rep. 729 (employer liable for willfid or maliciov^ acts of his servant done in the course of the servant's employment) ; Stran- ahan Brothers Catering Co. v. Coit, 55 Ohio St. 398, 4 L. R. A. 506, 45 N. E. 634 (master liable for servant's malicious acU whereby others are in- jured when acts done are within scope of employment and in execution of services for which he was engaged by master). Pennsylvania: Pittsburg, Alleghany & Manchester Passgr. Rd. Co. v. Dona- hue, 70 Pa. St. 119 {boy riding on car willfidly and wantonly struck by driver). Wisconsin: Croker v. Chicago & Northwestern Co., 36 Wis. 657, 17 Am. St. Rep. 504 {indecent approach and assault by railroad conductor on female passenger; company liable). 528 ACTIONS AT LAW — LIABILITY, GENERALLY § 319 afforded to charge an assumption of such valid claims against the receiver as were not satisfied by him, or by the court which discharged him.^^ Payment by a fire insurance company of a claim for property destroyed by the negligence of a railroad company, is not voluntary, and may be recovered back, where the insured had previously made a settlement with the railroad company, re- ceiving payment in full, which fact he concealed from the in- surance company, although the latter knew that he was making a claim against the railroad company .^^ Evidence of negligence as a warehouseman does not warrant a recovery for negligence of a carrier in a suit against the latter on bills of lading.^^ §319. Election — Form of Action — Contract or Tort; Waiver.^^ There may be a waiver and a suit brought either in contract or tort where there is a breach of contract and fraud .^^ So it is settled that for negligence by a common carrier in transporting goods intrusted to it suit may be brought either in tort or con- tract for damages ^^ to recover for injuries sustained by a pas- senger through negligence of the carrier; '*" and for ejection of a passenger."*^ Again, a tort may be waived and a suit brought in 34 Texas & Pacific Ry. Co. v. Bloom, 164 U. S. 636, 41 L. ed. 580, 17 Sup. Ct. 216. See also Texas & Pacific Ry. Co. v. Johnson, 151 U. S. 81, 14 Sup. Ct. 250, 38 L. ed. 81, 23 U. S. App. 143, 60 Fed. 979, 9 C. C. A. 300, 85 Tex. 283, 20 S. W. 133. 35 Chickasaw County Farmers' Mut. F. Ins. Co. v. Weller, 98 Iowa, 731, 68 N. W. 443. Action at law to recover money with interest thereon, al- leged to have been fraudulently obtained. 38 Gratiot Street Warehouse Co. v. St. Louis, A. & T. H. R. Co., 221 111. 418, 77 N. E. 675, aff'g 122 111. App. 405. 37 See § 313, herein. 38 Missouri Savings & Loan Co. v. Rice, 84 Fed. 131, 28 C. C. A. 305. 39 Eckert v. Pennsylvania Rd. Co., 211 Pa. St. 267, 107 Am. St. Rep. 57, 60 Atl. 781 (action for trespass). See also Denman v. Chicago, Burlington & Quincy Rd. 6o., 52 Neb. 140, 71 N. W. 967. 40 McMurtry v. Kentucky Central Rd. Co., 84 Ky. 462, 8 Ky. L. Rep. 462, IS.W. 815. 41 Louisville & Nashville Rd. Co. v. Hine, 121 Ala. 234, 25 So. 857; Chi- cago, Burlington & Quincy Rd. Co. v. Spirk, 51 Neb. 167, 70 N. W. 926; 34 529 § 319 ACTIONS AT LAW — LIABILITY, GENERALLY assumpsit;''^ or on special contract;''^ or on an implied prom- ise.^ So a bailor may waive the tort arising out of the duty of a bailee, who has come lawfully into the possession of the former's property, and sue in assumpsit based upon the bailee's implied promise under the bailment.'*^ The tort may also be waived and suit brought in assumpsit, where there is a con- version of property j"^*^ where there is a trespass, and stone is quarried and used beneficially so that it is unreclaimable; "^^ where there has been an embezzlement or misappropriation by a clerk of a bank's money; ^* where there has been a misappli- cation by a bank of moneys to a debt;'*^ where money has been fraudulently obtained from a bank; ^^ where suit is by bank de- positor for amount of altered checks in excess of sum for which actually drawn; ^^ and where goods are taken in trespass; ^^ and where there is a conversion of property ; ^^ or the party may waive the right to recover in trover and sue on implied con- Lovings V. Norfolk & Western Ry. Co., 47 W. Va. 582, 35 S. E. 962 ("civil action for the recovery of money due for damages for a wrong;" held that plaintiff could recover whatever he showed himself entitled to recover in the action either ex contractu or ex delicto). *2 Shober & Carqueville Lithographing Co. v. Schedler, 63 111. App. 48 (conversion of goods). *3 Denman v. Chicago, Burlington & Quincy Rd. Co., 52 Neb. 140, 71 N. W. 967 (transportation of goods by carrier). ^ Hirsch v. Leatherbee Lumber Co., 69 N. J. L. 509, 55 Atl. 645 (con- version of personal property). « De Loach Mill Mfg. Co. v. Standard Sawmill Co., 125 Ga. 377, 54 S. E. 157. 48 Farmers' & Merchants' B;ink v. Bennett & Co., 120 Ga. 1012, 48 S. E. 398. « Phelps v. Church of Our Lady Help of Christians, 99 Fed. 683, 40 C. C. A. 72. 4* Lipscomb v. Citizens' Bank of Galena, 66 Kan. 243, 71 Pac. 583. *9 Winfield National Bank v. Railroad Loan & Savings Assoc, 71 Kan. 58, 81 Pac. 202. 50 Branch Bank at Montgomery v. Parrish, 20 Ala. 433. 51 Critten v. Chemical National Bk., 171 N. Y. 219, 232, 59 L. R. A. 529, modifying 70 N. Y. Supp. 246, 60 App. Div. 241. 52 Florida Central & Pac. Ry. Co. v. Scarlett, 91 Fed. 349, 33 C. C. A. 554, under Ga. Code, § 3811, Code, 1882, § 2955. 53 Tidewater Quarry Co. v. Scott, 105 Va. 160, 164, 52 S. E. 835, 115 Am. St. Rep. 864. 530 ACTIONS AT LAW — LlAinLITY, GENERALLY § 319 tract.^^ Again, a shipper may waive the contract and sue the carrier in tort to recover for injury caused by negHgcncc to property in transit.^^ But tort for a trespass on land cannot be 54 Sage V. Shepard & Morse Lumber Co., 39 N. Y. Supp. 449, 9 App. Div. 290, aff'd in (mem.) 158 N. Y. 672, 52 N. E. 1126. When action ex contractu; carriers: Alabama: Seaboard Air Line Ry. v. Hubbard, 142 Ala. 546, 38 So. 75U (breach of contract for affreightment of goods); Nashville, (Chattanooga & St. Louis Ry. Co. v. Parker, 123 Ala. 683, 27 So. 323 (injuries to horse in transportation and unloading); Louisville & Nashville Rd. Co. v. Brinker- hoff & Co., 119 Ala. 528, 24 So. 885 (failure to deliver goods); Tallassee Falls Mfg. Co. v. Western Ry. of Alabama, 117 Ala. 520, 23 So. 139, 67 A. S. R. 179 (cotton burned). Georgia: Louisville & Nashville Rd. Co. v. Spinks, 104 Ga. 692, 30 S. E. 698 (breach of contract to transport person). Kerducky: Lexington & Eastern Ry. Co. v. Lyons, 104 Ky. 23, 28, 20 Ky. L. Rep. 516, 46 S. W. 209 (ejection of passenger); Chicago & Eastern Rd. Co. V. Chestnut Bros., 28 Ky. L. Rep. 404, 89 S. W. 298 (delay in delivering shipment of poultry); Louisville & Nashville Rd. Co. v. Wathen, 22 Ky. L. Rep. 82, 49 S. W. 185 (live stock); Spink v. Louisville & Nashville Rd. Co., 21 Ky. L. Rep. 778, 52 S. W. 1067 (when on contract for ejection of pas- senger). Maryland: Western Maryland Rd. Co. v. Schawn, 97 Md. 563, 55 Atl. 701 (ejection of passenger). Missouri: Moffatt Commission Co. v. Union Pacific Ry. Co., 113 Mo. App. 544, 88 S. W. 117 (when not liable for breach of contract; destruction of goods; delayed by floods); Gann v. Chicago Great Western Ry. Co., 72 Mo. App. 34 (contract to furnish cars). Nebraska: Denman v. Chicago, Burlington & Quincy Rd. Co., 52 Neb. 140, 71 N. W. 967 (delay in transportation of cattle). New York: Busch v. Interborough Rapid Transit Co., 96 N. Y. Supp. 747, 110 App. Div. 705, aff'd in 187 N. Y. 388, 80 N. E. 197 (action for breach of contract and not for assault and battery, though assault committed); Spencer v. Wabash Rd. Co., 55 N. Y. Supp. 948, 36 App. Div. 446 (failure to safely transport baggage; action on special contract). 56 Waters v. Mobile & Ohio Rd. Co., 74 Miss. 534, 21 So. 240. When action ex delicto; carriers: Alabama: Southern Ry. Co. v. Bunnell, 138 Ala. 247, 254, 36 So. 380 (ejection of passenger). California: Gorman v. Southern Pacific Co., 97 Cal. 1, 31 Pac. 1112 (ejec- tion of passenger). District of Columbia: Chesapeake & Ohio Ry. Co. v. Patton, 23 App. D. C. 113 (injury to United States postal clerk. Examine Martin v. Pittsburg & Lake Erie Rd. Co., 203 U. S. 284, 27 Sup. Ct. 100, 31 L. ed. 184, aff'g 72 Ohio St. 659). Georgia: Seals v. Augusta Southern Rd. Co., 102 Ga. 817, 29 S. E. 116 (carrying passenger past station), 70 Ga. 368 (ejection of passenger). 531 § 319 ACTIONS AT LAW — LIABILITY, GENERALLY waived by the owner and a suit brought against the trespasser on contract for rent or for use and occupancy .^^ Indiana: Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Higgs, 165 Ind. 694, 76 N. E. 299, 4 L. R. A. (N. S.) 1081 (personal injuries); Citizens' Street Rd. Co. of Indianapolis v. Willoeby, 134 Ind. 563, 564, 33 N. E. 627 (injury to passenger by conductor of street railway company throwing him off car) ; Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Call, 37 Ind. App. 232, 76 N. E. 816 (ejection by ticket agent); Pittsburg, Cincinnati, Chicago & St. Louis Ry. Co. v. Street, 26 Ind. App. 224, 233, 237, 59 N. E. 404 (ejection of passenger); Parrill v. Cleveland, Cincinnati, Chicago & St. Louis Ry. Co., 23 Ind. App. 638, 55 N. E. 1026 (Hve stock); Chicago, St. Louis & Pittsburg Rd. Co. v. Graham, 3 Ind. App. 28, 29 N. E. 170 (not ex contractu; injuries; ejection of passenger). Kansas: Atchison, Topeka & Santa Fe Rd. Co. v. Wilkinson, 55 Kan. 83, 39 Pac. 1043 (baggage of passenger injured by, accepted and retained by him); Atchison, Topeka & Santa Fe Rd. Co. v. Long, 5 Kan. App. 644, 47 Pac. 993 (ejection of passenger). Massachusetts: Robinson v. Northampton St. Ry. Co., 157 Mass. 224, 32 N. E. 1 (failure of street car to stop; personal injuries). Montana: Nelson v. Great Northern Ry. Co., 28 Mont. 297, 72 Pac. 642 (delay of live stock). Nebraska: Fremont, Elkhorn & Missouri Valley Rd. Co. v. Hagblad, 72 Neb. 773, 101 N. W. 1033, 1041, 4 L. R. A. (N. S.) 254 (not an action on contract nor an action at common law stated; personal injury). New Jersey: Ferine v. North Jersey Street Ry. Co., 69 N. J. L. 230, 54 Atl. 799 (ejection of passenger; not limited to action on contract but has one in tort). New York: Eddy v. Syracuse Rapid Transit Ry. Co., 63 N. Y. Supp. 645, 50 App. Div. 109 (ejection of passenger). Ohio: Pittsburg, Cincinnati & St. Louis Ry. Co., 55 Ohio St. 370, 13 Ohio Cir. Ct. R. 39, 45 N. E. 712, 60 Am. St. Rep. 706 (ejection of passenger); Toledo & Ohio Central Ry. Co. v. Marsh, 17 Ohio Cir. Ct. R. 379, 9 O. C. D. 548 (ejection of passenger). South Carolina: Pickens v. South Carolina & Georgia Rd. Co., 54 S. C. 498, 32 S. E. 567 (failure to carry person to destination). Texas: San Antonio & Arkansas Pass Ry. Co. v. Graves (Tex. Civ. App., 1899), 49 S. W. 1103 (delay in shipping goods) ; Marchand Central Ry. Co. v. Goodman, 20 Tex. Civ. App. 109, 48 S. W. 778 (ejection of passenger). Wisconsin: McKeon v. Chicago, Milwaukee & St. Paul Ry. Co., 94 Wis. 477, 69 N. W. 175, 35 L. R. A. 252, 59 Am. St. Rep. 910 (personal injuries and maltreatment of passenger occupying berth; failure to awaken and then hurrying out at station; miscarriage). 56 Commonwealth Title Ins. & Trust Co. v. Dokko, 71 Minn. 533, 74 N. W. 891. 532 ACTIONS AT LAW CONTINUED — ACTIONS EX CONTRACTU § 320 CHAPTER XIX ACTIONS AT LAW CONTINUED — ACTIONS EX CONTRACTU § 320. Action Ex Contractu — Con- § 323. Assumpsit By and Against tracts Express and Im- Banks, plied — Instances, Gener- 324. Debt, ally. 325. Covenant. 321. Assumpsit. 326. Book Accoimt. 322. Assumpsit — Account Stated. § 320. Action Ex Contractu — Contracts Express and Im- plied — Instances, Generally.^ The rule is settled in Missouri that an action for damages on an attachment bond, though it requires the commission of a tort to constitute a breach of the contract, nevertheless is an action ex contractu, not ex delicto.^ So an action to recover for the removal of timber from the mortgaged premises by the pur- chaser, pending disaffirmance of the mortgage sale and re- demption thereunder, is ex contractu and not ex delicto.^ And where a company contracted to construct an electric light plant for a city in a workmanlike, safe and skillful manner, according to plans and specifications agreed upon by the defendant and the plaintiff; that in the erection of poles, stringing wires and placing arc lamps, it would use the best material and have perfect insulation in the transmission of the electric current: that each cross-arm should be provided with its full number of pins and insulators, whether required by the number of wires or not; and in consequence of a breach of such agreement the city had suffered damage by being compelled to pay for an in- 1 See § 313, herein. 2 State ex rel. Hinde v. United States Fidelity & Guaranty Co., 135 Mo. App. 160, 115S. W. 1081. 3 Richardson v. McCreary & Co., 158 Ala. 65, 48 So. 341. 533 § 320 ACTIONS AT LAW CONTINUED — jury, and sues to recover from defendant the amount which it had been obHgated to so pay, the action is one for breach of the company's contract and not an action sounding in tort for negU- gence for which the city was the sufferer.^ In a case in the Federal Supreme Court an agreement in writ- ing between a mining company and a machinist stated that while in its employ he was seriously hurt under circumstances which he claimed, and it denied, made it liable to him in dam- ages; that six months after the injury, both parties being desirous of settling his claim for damages, the company agreed to pay him regular wages and to furnish him with certain sup- plies while he was disabled, and carried out that agreement for six months, at the end of which, after he had resumed work, it was agreed that the company should give him such work as he could do, and pay him wages as before his injury, and this agreement was kept by both parties for a year; and then, in lieu of the previous agreements, a new agreement was made that his wages "from this date" should be a certain sum monthly, and he should receive certain supplies, and he on his part released the company from all liability for his injury, and agreed that this should be a full settlement of all his claims against the company. It was held that the last agreement was not termina- ble at the end of any month at the pleasure of the company, but bound it to pay him the wages stipulated, and to furnish him the supplies agreed as long as his disability to do full work con- tinued; and that, if the company discharged him from its serv- ice without cause, he was entitled to elect to treat the contract as absolutely and finally broken by the company, and, in an action against it upon the contract, to introduce evidence of his age, health and expectancy of life, and, if his disability was permanent, to recover the full value of the contract to him at the time of the breach, including all that he would have re- ceived in the future as well as in the past if the contract had been kept, deducting, however, any sum that he might have earned already or might thereafter earn, as well as the amount * Owensboro, City of, v. Westinghouse, Church, Kerr & Co. (U. S. C. C. A.), 165 Fed. 3S5, 91 C. C. A. 335. 534 ACTIONS EX CONTRACTU § 320 of any loss that the defendant sustained by the loss of his serv- ices without its fault.^ In a New York case an action was brought to recover for moneys expended and services rendered by plaintiff at the alleged request of defendant, and for its use and benefit. Plain- tiff was, without fault on his part, denied the claimed contract, although he was able and willing to perform it. In the action to recover for his services and expenses, it was held that by certain acts of the defendant's board of directors, the negoti- ations with the plaintiff might be deemed to have been recog- nized, and, in some sense, treated as having been made on be- half of defendant; that plaintiff had a right to assume that the persons with whom he negotiated legitimately represented de- fendant; that this, together with the fact that the moneys expended were for the benefit of defendant, justified a finding of an agreement between plaintiff and defendant that he should have the contract and that the services were rendered and ex- penses incurred at the request of defendant, and that such find- ings were sufficient to sustain a recovery,^ But in an Iowa case it appeared that the defendant corpora- tion and an improvement company employed the same secre- tary and treasurer, though in no other wise connected. Plain- tiff contracted with the improvement company, and a third person, to construct a tile drain on property belonging to the improvement company. Plaintiff also contracted with the defendant to construct a tile drain on its land, adjoining that of the improvement company. The bills were presented to the secretary of both companies, who, in payment thereof, gave a note signed by the improvement company, for the amount due for the construction of both drains. The order issued by the defendant corporation upon its contract with plaintiff, was in- dorsed by plaintiff, and surrendered to the secretary, as an 5 Pierce v. Tenn. Coal, Iron & R. R. Co., 173 U. S. 1, 43 L. ed. 591, 19 Sup. Ct. 335, 5 Am. Neg. Rep. 747, rev'g 81 Fed. 814, 52 U. S. App. 355, 26 C. C. A. 6.32, 8 Am. & Eng. R. Cas. (N. S.) 742. 8 Wilson V. Kings County Elevated Rd. Co., 114 N. Y. 487, 24 N. V. St. Rep. 81, 21 N. E. 1015. 535 § 321 ACTIONS AT LAW CONTINUED — officer of the improvement company, and was subsequently paid by the treasurer of the defendant to the improvement company. It appeared that in all these transactions the plain- tiff supposed that there was but one company, the defendant, with which it was deahng; but it did not appear that there was any misrepresentation, deceit or fraud, on the part of the de- fendant, or its officers. It was held that a verdict for defend- ant was properly directed.'^ Unless a check drawn upon a bank is accepted or the bank notified no action lies against the drawee.** If a railway company abandons part of its line and ceases to maintain a piece of track which it had contracted to maintain, it has the right to do so, subject to the payment of damages for the violation of the contract; to be recovered, if necessary, in an action at law.^ § 321. Assumpsit.!'* Assumpsit may be maintained by a corporation.^^ And an action on assumpsit may also be maintained against a corpora- tion aggregate founded upon its acts done within the lawful purposes for which it was organized.!^ So whenever a corpo- 7 Scoville Plumbing Co. v. Highland Park Land Co., 99 Iowa, 303, 68 N. W. 684. 8 State ex rel. St. Amand v. Bank of Commerce, 49 La. Ann. 1060, 22 So. 207. 8 Hoard v. Chesapeake & O. Ry., 123 U. S. 222, 31 L. ed. 130, 8 Sup. Ct. 74. 10 See § 313, herein. 11 Beene v. Cahaba & Macon R. Co., 3 Ala. 660 (a corporation may main- tain assumpsit upon a contract to take its stock at a specific price) ; Metho- dist Episcopal Church v. Wood, 5 Ohio (5 Ha.), 283, Id., Wright, 12 ["no reasoning will be required of us, to prove, that one individual corporator may be made liable at law, to the corporation of which he is a member, in the same way that every other individual would be." Id., 288 (side page 287) per Wright, J. A case of assumpsit for money had and received]. 12 United States: Chesapeake & Ohio Canal Co. v. Knapp, 34 U. S. (9 Pet.) 541, 9 L. ed. 222; Bank of Columbia v. Patterson, 11 U. S. (7 Cranch) 299, 3L. ed. .351. Maryland: Cape Sable Company's Case, 3 Bland (Md.), 606. Mussachusetts: Hayden v. Middlesex Turnpike, 10 Mass. 397, 6 Am. Dec. 143. 536 ACTIONS EX CONTRACTU § 321 ration aggregate is acting within the scope of the legitimate purposes of its institution, all parol contracts made by its au- thorized agents are express promises of the corporation; and all duties imposed on them by law, and all benefits conferred at their request, raise implied promises, for the enforcement of which an action lies. So upon a special contract, executed on the part of the plaintiff, indebitatus assumpsit will lie for the price.^^ Assumpsit cannot, however, be sustained unless there is an express contract or the facts are such that the law will imply a contract.^"* Indebitatus assumpsit lies for the recovery of dues which are owing to an association in accordance with its Michigan: Hart Mfg. Co. v. Maim's Boudoir Car Co., 65 Mich. 564, 32 N. W. 820 (assumpsit was brought, but the only question was to whom were the goods sold and credit given) . New Jersey: Antopoeda Baptist Church, Trustees of, v. Mulford, 8 N. J. L. 182. New York: Dunn v. Rector, etc., of St. Andrew's Church, 14 Johns. (N. Y.) 118; Danforth v. Scholarie Turnpike Co., 12 Johns. (N. Y.) 227. Pennsylvania: Chestnut Hill & Spring House Turnpike Co. v. Rutter, 4 Serg. & R. (Pa.) 6, 16, 8 Am. Dec. 675, per Gibson, J., relying upon the lan- guage of Judge Story in Bank of Columbia v. Patterson, 7 Cranch (11 U. S.), 299; Overseers of Poor of North Whitehall Twp. v. Overseers of Poor of South Whitehall Twp., 3 Serg. & R. (Pa.) 117. South Carolina: Waring v. Catawba Co., 2 Bay (S. C), 109 (assumpsit for goods sold and for work and labor, etc.). Texas: San Antonio, City of, v. Lewis, 9 Tex. 69 (all parol contracts made by the authorized agents of a corporation, within the scope of the legiti- mate purposes of its institution are express promises of the corporation ; and all duties imposed upon them by law, and all benefits conferred at their re- quest, raise implied premises for the enforcement of which an action will lie). Vermont: Proctor v. Webler, 1 D. Chip. (Vt.) 371; Id., 456, note; Poultney v. Wills, 1 Aiken (Vt.), 180 (for money had and received lies against a cor- poration, same as against an individual). 13 Bank of Columbia v. Patterson, 7 Cranch (11 U. S.), 299, 3 L. ed. 351. w Reilly v. Crown Petroleum Co., 213 Pa. St. 595, 63 Atl. 253. The court, per Mestrezat, J., said: "It is therefore clear that assumpsit will not lie. This action cannot be sustained unless there was an express contract or the law will imply a contract; Bethlehem Borough v. Perseverance Fire Co., 81 Pa. St. 445; McClosky v. Miller, 72 Pa. St. 151. Here, it is admitted, there was no contractual relation between the parties. It fs also clear that the facts attending the possession of the premises and the taking of the oil by the defendant company are not such that the law will imply a contract on the part of the defendant company to pay for the oil which it look. On the 537 § 321 ACTIONS AT LAW CONTINUED — by-laws. ^^ So a corporation may be liable in assumpsit for work and labor done.^** So a turnpike corporation may be sued for work and labor performed and materials furnished.^' A party to a contract can also sue on a quantum meruit for the value of services performed or can bring an action on the con- tract for damages where the wrongful act of the other party to said contract has prevented its full performance.^^ And where the defendant has prevented the completion of work for which the plaintiff had transported labor and material to per- form and was not in default, an action quantum meruit may be maintained. ^^ An original action may be maintained against a corporation, pubhc or private, upon a claim which its proper auditing board has refused to allow in whole or in part, unless the statute has provided or directed other proceedings to enforce \tP Where the consideration of a contract for the sale and con- veyance of land has wholly failed, assumpsit is the appropriate action to recover back money paid under the contract, al- though the contract be under seal.^^ But a plaintiff who by ejectment has recovered possession of land cannot maintain an action of assumpsit for the value of oil mined upon the land by the defendant while in possession.^^ And a corporation can- contrary, the facts repel any inference of an agreement on the part of the defendant company to pay for the oil taken by it, and conclusively show that the defendant company had the actual adverse possession of the land for oil purposes during the time the oil was taken from it. Under such circumstances, the law will not imply a contract by the occupant to pay for the profits of the land taken during his adverse possession of the property." 15 Elm City Club v. Howes, 92 Me. 211, 42 Atl. 392. IB Underwood v. Newport Lyceum, 1 Fla. 129, 41 Am. Dec. 260. 17 Dunningtons v. Pres. & Dir. N. W. Turnpike Road, 6 Gratt. (Va.) 160. 18 Welston Coal Co. v. Franklin Paper Co., 57 Ohio St. 182, 39 Ohio L. J. 16, 48 N. E. 888. 18 Southern Pacific Co. v. American Well Works, 172 111. 9, 49 N. E. 575, aff'g 67 111. App. 512. 20 Willow Springs Irrigation Dist. v. Wilson, 74 Neb. 269, 104 N. W. 165, a case of an action by a civil engineer to recover from the corporation the value of services rendered under a written contract. 21 Newberry Land Co. v. Newberry, 95 Va. Ill, 3 Va. Law Reg. 584, 27 N. E. 899 22 Reilly v. Crown Petroleum Co., 213 Pa. St. 595, 63 Atl. 253. The court, per Mestrezat, J., said: "This question is settled alike by reason and au- 538 ACTIONS EX CONTRACTU § 321 not sue to recover money paid by others upon a contract, the consideration whereof has wholly failed, where it appears that at the time of the contract the corporation was not in existence, the money was not paid by or for it, or for any of its liabilities, and the contract was not made for its benefit, but wholly for the benefit of the parties to the contract, and there has been no subsequent assignment to it, or acceptance by it, of the Ijencfit of the contract.^^ Where a contract is ultra vires, and a corporation has received money under it which in equity and good conscience belongs to another and which it ought to pay over, it is liable for it in an action for money had and received, with interest after demand.^ Where a building and loan as- thority. A plaintiff cannot maintain an action of ejectment when he is in possession of the premises. In bringing the action of ejectment, there- fore, the plaintiffs admitted the defendant in possession of the land at least for the purpose of mining and producing oil and removing it from the prem- ises. The action resulted in a judgment ousting the defendant company from the possession for oil purposes which must be regarded as having been held adversely to the plaintiffs. During the time defendant company held possession, it drilled the well and took the oil for which this action was brought. It is the profits or proceeds of the land taken by the defendant during its adverse holding of the premises which the plaintiffs have the right to recover. * * * It is well settled by a long line of decisions of this court that after a recovery in ejectment, trespass is the proper remedy to recover mesne profits of land taken by an adverse claimant in possession of the premises." 23 Newberry Land Co. v. Newberry, 95 Va. Ill, 3 Va. Law Reg. 584, 27 S. E. 899. 24 Leigh V. American Brake-Beam Co., 205 111. 147, 68 N. E. 713. The court, per Cartwright, J. (at p. 152), after discussing the ultra vires nature of the contract and stating the law concerning such contracts, said : " That rule of law, however, does not prevent a recovery from the defendant of the moneys of the plaintiff received by him. Although a party is not liable to pay according to a contract which is ultra vires, that fact is not permitted to work injustice where the law can afford a remedy without enforcing the illegal contract, and the courts will give relief where it can be given inde- pendently of the contract. It would be unjust to hold that one who has received money or property under a contract which is ultra vires need not account for it because the contract was illegal, but the law implies a contract to return what has been received. Where a contract is not malum in se or malum -prohibitum, and it has been executed or benefits have been received, the party benefited, whether the corporation or individual, will not be per- mitted to retain the fruits of the transaction without compensation." 531) §§ 322, 323 ACTIONS at law continued — sociation refuses to pay stockholders the withdrawal value of shares of stock assumpsit may properly be brought to recover such value.^ An action by a municipal corporation to recover from a street railroad company the cost of maintaining pave- ments in a street, which the company is by its charter bound to maintain, is an action in assumpsit.^* § 322. Assumpsit — Account Stated.^' A certificate of a road master, who is authorized to issue it, that the bearer is entitled to a specific sum for labor performed, and its acceptance by the laborer, constitute an account stated, on which an action may be maintained by the laborer, or his assignee, against the railroad company, as upon an implied promise to pay it, without reference to the items of the original account.^* § 323. Assumpsit By and Against Banks.^^ Assumpsit may be maintained by a national bank. Thus, where a national bank has unlawfully paid out money for its own stock it may maintain an action of assumpsit to recover back the same ; nor is it necessary in such a case to offer to re- turn the stock or to resort to equity .^"^ But a voluntary pay- ment, with knowledge of the facts, under a mistake as to the law, cannot be recovered back. So where a bank charged a customer's account with the amount of a matured note in- dorsed by him and protested for nonpayment, and subse- quently, with full knowledge of the facts, repaid the amount, no action will lie by the bank for the recovery of the amount so paid.'^ Again, where one who is a stranger to a draft or bill of 25 Prairie State Loan & B. Assoc, v. Gorrie, 167 111. 414, 47 N. E. 739, aff'g 64 111. App. 325. 2« Metropolitan Rd. Co. v. District of Columbia, 132 U. S. 1, 33 L. ed. 231, lOSup. Ct. 19. 27 See § 313, herein. 28 St. Louis, Iron Mountain & Southern Ry. Co. v. Camden Bank, 47 Ark. 541, 1 S. W. 704. 29 See § 313, herein. 30 Burrows v. Niblack (U. S. C. C. A.), 84 Fed. Ill, 53 U. S. App. 712, 28 C. C. A. 130. 31 First National Bank of Winston v. Taylor, 122 N. C. 569, 29 S. E. 831. 510 ACTIONS EX CONTRACTU § 323 exchange goes to a hank with the payee named therein for the purpose of identifying him, and upon the payee asking to have the draft or bill of exchange cashed after having indorsed it, such person, at the instance of the cashier of the bank, indorses the paper, upon its being ascertained that such draft or bill of exchange had been altered and the amount raised by the payee, witu which fraud the accommodation indorser had no com- plicity, the liability arising from such indorsement, if any, is strictly that of an indorser, and an action for money had and received cannot be maintained against such indorser; and the fact that after receiving the money the payee in the draft or bill of exchange paid to such indorser a part of the money in satisfaction of a debt which he owed him, and which the in- dorser at once discharged and surrendered the securities held by him, does not render the indorser liable to the bank in an action for money had and received, or for money paid, to the extent of the amount of the money received by him from the payee.^^ Notwithstanding a want of privity between the plaintiff and a bank the latter may be sued in assumpsit for money had and received where the plaintiff's money which has been remitted to it by mistake is credited upon an indebtedness held by the husband of the plaintiff.^^ And although a contract made by a corporation may be illegal as ultra vires, an impHed contract may exist compelling it to account for the benefits actually re- ceived. So a national bank which guarantees a loan made by another bank in pursuance of an agreement that it be paid the amount due it by the borrower out of the proceeds of the loan, cannot avoid its liability on the guaranty as to the amount actually received by it pursuant to the arrangement 32 Alabama National Bank v. Rivers, 116 Ala. 1, 22 So. 580. "This was an action of assumpsit by a national bank against the appellee to enforce the latter's liability as an accommodation indorser of a cheque or draft, which had been purchased from the apparent payee upon the appellee's indorsement and which had been raised from two dollars to two thousand dollars between the date of its issuance and the purchase by appellant," per Brickell, C. J. 33 First National Bank v. Gatton, 172 111. 625, 50 N. E. 121, aff'g 71 111. App. 323. 541 § 323 ACTIONS AT LAW CONTINUED — on the ground of ultra vires; it is liable for money had and re- ceived.^ Again, when a bank receives a deposit and unconditionally places the same to the general credit of the depositor, it be- comes liable upon an implied contract to pay his checks drawn thereon when presented, and it is against the general policy of the law to permit such bank, in an action by the depositor to recover money thus voluntarily placed to his credit, to claim to be the owner thereof .^^ In a case of assumpsit by a depositor against a bank it ap- peared that a national bank voluntarily acting as the agent of one of its depositors in the sale of certain securities sent the securities to a broker in a distant city, who sold them and sent a check to the bank for the proceeds of the sale. The bank observed due dihgence in forwarding the check for collection, but before it could reach the bank upon which it was drawn, the broker made an assignment and the check proved worth- less. When the bank first received the check it credited the amount of it to the depositor's account and permitted him to draw it out. Subsequently, upon the check being returned as worthless, the bank charged off from the depositor's account the amount previously credited to him. It was held that the bank had no right to charge back the credit, and it could not relieve itself, by so doing, for liabihty for the amount thereof, to the depositor.^^ In an action of assumpsit to recover the value of certain gold coin deposited in a bank for safe- keeping the gold was fraudulently taken out by the cashier of the bank it was held that the bank was not liable to the depositor for the value of the gold.^^ Two incorporated companies may unite in an action of assumpsit to recover a sum of money deposited in a l^ank in their joint names.^* 34 Citizens' Cent. Nat. Bank of New York v. Appleton, 216 U. S. 196, 54 L. ed. , 30 Sup. Ct. — , aff'g 190 N. Y. 417. 35 Martin v. Minnekahta State Bank, 7 S. D. 263, 64 N. W. 127. 36 Pepperday v. Citizens' National Bank, 183 Pa. St. 519, 28 Pitts. L. J. (N. S.) 245, 41 Wkly. N. C. 343, 38 Atl. 10-30, .39 L. R. A. 529. 37 Foster v. Essex Bank, 17 Mass. 479, 9 Am. Dec. 168. 38 New York & Sharon Canal Co. v. Fulton Bank, 7 Wend. (N. Y.) 412. 542 ACTIONS EX CONTRACTU > §§ 324, 325 In an action of assumpsit against a bank, on a contract under the seals of the president and cashier, it was held that the ac- tion was well brought; it makes no difference, in an action of as- sumpsit against a corporation, whether the agent was appointed under the seal or not; nor whether he puts his own seal to a con- tract which he makes in behalf of the corporation.'" §324. Debt.^» In the case of an action for debt against an insurance com- pany to recover a penalty under a statute to prevent unjust discrimination between insurants of the same class, and by life insurance companies, the company will be held chargeable with violation of the law by its agent acting within the scope of his authority, and it is immaterial whether the board of directors or any of its officers having general authority knew of such violation or intended violation, connived at, participated in, or ratified or approved it.^^ § 325. Covenant.^ Wliere an action of covenant was brought it was held that one not a party to a deed inter partes, nor a privy to such party, and not named nor definitely pointed out in it as the beneficiary could not sue thereon either at common law nor under a statute j)roviding that "if a covenant or promise be made for the sole benefit of a person with whom it is not made, or with whom it is made jointly with others, such person may maintain in his own name any action thereon, which it might maintain in case it had been made with him only, and the consideration had moved from him to the party making such covenant or promise." ^^ Tpon covenant of the defendant, made with another corporation "to pay all outstanding debts and habilities" of the latter cor- ])oration, assumpsit will not lie against the defendant by cred- 39 Bank of Metropolis v. Guttschlick, 14 Pet. (39 U. S.) 19, 10 L. ed. 335. 40 See § 313, herein. « Franklin Life Ins. Co. v. People, 200 111. 619, 66 N. E. 379, aff g 103 111. App. 554. « See § 313, herein. « Newberry Land Co. v. Newberry, 95 Va. 119, 3 Va. Law Reg. 597, 27 S. E. 897. 543 § 326 ACTIONS AT LAW CONTINUED — itors of the other corporation, whose debts were outstanding at the time the covenant was made. The beneficiaries' remedy is in equity.'" An action of covenant is not the proper remedy against a corporation wliich has not executed its deed under seal.'^ A covenant against incumbrances runs with the land, and, where a mortgage contains such a covenant, an action upon it may be maintained by a purchaser at a foreclosure sale under the mortgage ."^^ § 326. Book Account.^7 A corporation may maintain an action of book account. Money received to be accounted for, and for which party be- comes debtor upon receipt of the same, may be recovered in that form of action.'** « Harvey v. Maine Condensed Milk Co., 92 Me. 115, 42 Atl. 342. 45 Mitchell V. St. Andrews Bay Land Co., 4 Fla. 200. 46 Security Bank of Minnesota v. Holmes, 68 Minn. 538, 71 N. W. 699. 47 See § 313, herein. 48 Vermont Mutual Fire Ins. Co. v. Cummings, 11 Vt. 503. 544 ACTIONS EX DELICTO § 327 CHAPTER XX ACTIONS AT LAW CONTINUED — ACTIONS EX DELICTO § 327. Actions Ex Delicto, Gener- § 334. Nuisance. ally. 335. Libel and Slander. 328. Trespass. 336. Malicious Prosecution. 329. Trespass for Mesne Profits. 337. Wrongfully Suing Out At- 330. Trespass Quare Clausum Pre- tachment. git. 338. Conspiracy — Instances. 331. False Imprisonment. 339. Fraud and Deceit — Instan- 332. Trespass on the Case. ces. 333. When Action on Case Lies 340. Trover and Conversion. Concurrently With As- 341. Replevin — Claim and De- sumpsit. livery. § 327. Actions Ex Delicto, Generally.^ It is settled that corporations may be charged in actions ex delicto as well as ex contractu? So one may by contract acquire an opportunity for acts and conduct in which third parties other than those witli whom he contracts are interested and for negli- gence in which he is liable to such other parties. Thus while a citizen may have no individual claim against a company con- tracting to supply water to a city for its failure to do anything under the contract, he may have a claim against it, after it has entered upon a contract and is engaged in supplying the city with water, for damages resulting from negligence, and in such a case the action is not for breach of contract but for a tort.^ A cause of action ex delicto and not ex contractu is stated where, in a suit against a railroad company the plaintiff alleges the purchase and possession of a mileage ticket, the possession of a freight train permit, and that defendant disregarding its duties iSee §§ 31.3, 317, herein. 2 McKim v. Odom, 3 Bland's Ch. (Md.) 421, per Bland, Ch. 3 Guardian Trust & Deposit Co. v. Fisher, 200 U. S. 57, 50 L. ed. 367, 26 Sup. Ct. 180. 35 545 § 328 ACTIONS AT LAW CONTINUED — as a common carrier of passengers, wrongfully ejected him from a caboose attached to one of its freight trains but did not allege any contract to carry him as a passenger or any breach thereof.^ So an action against a railroad company for damage to hogs shipped by plaintiff, which damage is alleged to have been caused by the negligent delay in their shipment by the defend- ant, is an action in tort and not an action on a contract.^ § 328. Trespass.^ An action of trespass may be maintained against a corpora- tion.'^ So trespass vi et armis will lie against a corporation for breaking, entering and carrying away personal property; * but it is not the proper form of action for injuries, resulting from the negligence of the servants of a corporation; trespass on the case, is the proper action.** In an action, however, against a railway company to recover damages for personal injuries alleged to have been sustained by the plaintiff by reason of his being run over by one of de- fendant's locomotives drawing a train, a count of the com- plaint which, in stating the negligence complained of, avers "that defendant wantonly or intentionally caused said engine or train to run upon or against plaintiff," or a count which avers that "defendant, through its servant or agent in charge or control of said train, wantonly or intentionally inflicted upon plaintiff injuries and damages * * * by wantonly or inten- tionally causing or allowing said train to run upon or against plaintiff," states a cause of action in trespass, and not in case; 4 Reed v. Chicago, Burlington & Quincy Rd. Co., 84 Neb. 8, 120 N. W. 442. 5 Brown v. St. Louis & San Francisco Ry. Co., 135 Mo. App. 624, 117 S. W. 112. «See §§ 313, 317, herein. 7 Underwood v. Newport Lyceum, 1 Fla. 129, 41 Am. Dec. 260; Crawfords- ville & Wabash Rd. Co., President and Directors of, v. Wright, 5 Ind. 252. "The company contend that the suit cannot be maintained, because tres- pass will not lie against a corporation. Such was once supposed to be the law; but the doctrine was unsound and has been exploded." Brokaw v. New Jersey Rd. & Transp. Co., 32 N. J. L. 328, 90 Am. Dec. 659. 8 Edwards v. Union Bank of Florida, 1 Fla. 136. 8 Illinois Cent. Ry. Co. v. Reedy, 17 111. 580. See § 317, herein. 540 ACTIONS EX DELICTO § 329 and in order to sustain such counts of the conijilaint, the phiin- tiff must prove actual participation on the part of the defend- ant in the damnifying act.^'^ A pipe hne company engaged in the production and trans- portation of natural gas, which has buried its pipe under the provisions of a statute/^ is under no obligation to let it remain indefinitely, but it has a right to abandon the easement which is acquired under the right of eminent domain and remove the pipe when its interests require it. And where a pipe line com- pany removes pipe which it has buried under the land of an- other, by proceedings under the statute, ^^' it is the duty of the company to remove the pipes at the time and in the manner least harmful to the landowner; to fill the trench so as sub- stantially to restore the surface of the land, and to make com- pensation for any actual injury to growing grain or grass, and for any substantial injury to the turf, beyond the mere openizp; and filling of the trench in which the pipe lay.^^ Again, an ac- tion of trespass, for assault and battery, will lie against a corpo- ration.^"* § 329. Trespass for Mesne Profits.i^ Trespass for mesne profits may be maintained against a corporation ; ^^ and it is the appropriate remedy to recover the value of oil mined upon the land of the defendant while in pos- session.^^ 10 Central of Georgia Ry. Co. v. Freeman, 140 Ala. 581, 37 So. 387. " Act May 29, 1885, P. L. Pa. 29. 12 Act May 29, 1885, P. L. Pa. 29. 13 Clements v. Philadelphia Co., 184 Pa. St. 28, 39 L. R. A. 532, 41 Wkly. N. C. 321, 38 Atl. 1090, 28 Pitts. L. J. U. S. 344. A case of trespass for dam- ages alleged to have been caused to plaintiff's property in the removal of its pipe. 14 St. Louis, Alton & Chicago Ry. Co. v. Dalby, 19 111. 353. If the act of a servant is unlawful in itself, trespass will lie. See § 317, herein. Brokaw v. New Jersey Rd. & Transp. Co., .32 N. J. L. 328, 90 Am. Dec. 659. Com- pare Orr V. Bank of United States, 1 Ham. (1 Ohio) 28, 13 Am. Dec. 588. See § 317, herein. 15 See §§ 313, 317, herein. 18 M'Cready v. Thomas, 9 Serg. & R. (Pa.) 94, 11 Am. Dec. 667. 17 Reilly v. Crown Petroleum Co., 213 Pa. St. 595, 63 Atl. 25.3. 547 § 330 ACTIONS AT LAW CONTINUED — § 330. Trespass Quare Clausum Fregit.^^ A corporation may maintain an action of trespass quare clausum fregit}^ Such an action can be maintained against a railroad company or other private corporation/" It will also lie against a railroad corporation for entering upon plaintiff's land for the purpose of constructing a railroad .^^ So trespass will lie against a railroad company for entering upon the plain- tiff's close with men, etc., and digging up and carrying away earth, etc., and where the record of such a cause does not show that the injuries were committed by the company when acting under their charter or in the construction of their road it cannot be presumed that they were so committed; such a defense in order to be availed of must be set up by plea.^^ Again, a com- plaint, alleging that the defendant unlawfully and with force broke and entered on plaintiff's lands and cut down and carried away trees and timber and converted and disposed of the same to his own use, states a cause of action for trespass, and not in trover, and in the absence of all proof connecting him with cutting the timber or entry on the land, a nonsuit should be granted .^^ One who buries his dead in soil to which he has a freehold right, and to the possession of which he is entitled, can maintain an action of trespass quare clausum fregit against anyone who digs or disturbs the grave. And one who buries his dead in a public cemetery, by the express or implied consent of those in proper control of it, though not the owner of the soil by deed 18 See §§ 31.3, 317, herein. 19 Greenville & Columbia Rd. Co. v. Pastlow, 14 Rich. Law (S. C), 237, action of trespass quare clausum fregit to recover damages for injuries done to plaintiff's road. When trespass quare clausum fregit will not lie, see Foote v. City of Cin- cinnati, 9 Ohio (9 Ham.), 31, 34 Am. Dec. 420. 20 Main v. Northeastern Rd. Co., 12 Rich. Law (S. C), 82, 75 Am. Dec. 725. 21 Whiteman v. Wilmington & Susquehanna Rd. Co., 2 Harr. (Del.) 514, 33 Am. Dec. 411. 22 Crawfordsville & Wabash Rd. Co., President & Directi i s of, v. Wright, 5 Ind. 252. 23 Dessert Lumber Co. v. Wadleigh, 103 Wis. 318, 79 N. W. 237. 548 ACTIONS EX DELICTO § 331 properly executed, acquires such a possession of the lot where the bodies are buried as will entitle him to maintain an action of trespass quare clausum fregit against the owners of the fee, or strangers who, without his consent, negligently or wantonly disturb the graves or remains; but this exclusive right of pos- session of land to make interments in the particular lot is limited to the time during which the ground constituting the cemetery continues to be used for burial purposes, and upon its ceasing to be so used his only right is that he should have due notice and an opportunity to remove the bodies to some other place of his own selection, if he so desire, or, on failing to do so, that the remains should be decently removed by others. So in an action of trespass quare clausum fregit it is not necessary that the complaint should describe the premises trespassed upon with definite particularity; it is sufficient if the description gives the defendant such information as will prevent him from being misled or from being uncertain as to the particular premises or close alleged to have been broken or trespassed upon/^ § 331. False Imprisonment.^^ An action for trespass for false imprisonment may be main- tained against a corporation.^*^ A railroad company is not liable for the unauthorized act of one of its employes in causing the arrest of a passenger.^' A telephone and telegraph company is hable in an action for damages for false imprisonment where it, by its servant, caused the plaintiff to be unlawfully arrested for the purpose of putting him out of the way, so that its agents and servants might erect its poles on his land. In such a case the jury may, in addition to compensatory damages, award exemplary, punitive or vindictive damages, sometimes called "smart money," if the defendant has acted wantonly or with criminal indifference to civil obligations, or has been guilty of an 24 Bessemer Land & Improvement Co. v. Jenkins, 111 Ala. 135, IS So. 565. 25 See §§313, 317, herein. 28 Owsley V. Montgomery & West Point Rd. Co., 37 Ala. 508 (avernionts stated). 27 St. Louis & San Francisco Rd. Co. v. Wyatt, 84 Ark. 193, 105 S. W. 72. See § 317, herein. 549 § 332 ACTIONS AT LAW CONTINUED — intentional and willful violation of the plaintiff's rights. An action for damages lies for the malicious abuse of lawful process, civil or criminal, even if such process has been issued for a just cause and is vahd in form, and the proceeding thereon was justified and proper in its inception, but the injury arises in consequence of abuse in subsequent proceedings.^* § 332. Trespass on the Case.^^ Trespass on the case will lie against a corporation for a tort.^" So it is settled that trespass on the case will lie against a corpo- ration for neglect of a corporate duty by which the plaintiff suffers.^^ And if a servant does a lawful act in an unlawful way, case is the proper remedy.^- So case may be sustained against a corporation aggregate to recover for injuries occasioned by a want of ordinary care and foresight.^^ Case for malfeasance also lies against a corporation for negligently and unskillfully constructing public works.''^ An action on the case is also an appropriate remedy for personal injuries sustained by the plain- tiff as a passenger in railroad cars caused by the wrongful acts of a servant of the corporation, even though such acts have been acts of force, and such that trespass would have been the only proper remedy against the servant .^^ And a complaint which alleges that plaintiff's intestate was rightfully at work in defendant's mine as an employe of defendant's independent contractor, and while so engaged was struck by defendant's tram cars and killed through the negligence of defendant's servants, etc., states a good cause of action; and is in case and not in trespass.^^ Again, an action on the case for vexatious 28 Jackson v. American Teleph. & Teleg. Co., 139 N. C. 347, 51 S. E. 1015, 70 L. R. A. 738. 29 See §§ 313, 317, herein. 30 Chestnut Hill & Spring House Tump. Co. v. Rutter, 4 Serg. & R. (Pa.) 6, 8 Am. Dec. 675. 31 Riddle v. Proprietors, 7 Mass. 169, 5 Am. Dec. 35. 32 St. Louis, Alton & Chicago Rd. Co. v. Dalby, 19 111. 353. See § 317, herein. 33 Brown v. South Kennebec Agricultural Soc, 47 Me. 275. 34 Mayor of New York v. Bailey, 2 Denio (N. Y.), 433. 35 Havens v. Hartford & New Haven Rd. Co., 28 Conn. 69. 38 Lookout Mountain Iron Co. v. Lea, 144 Ala. 169, 39 So. 1017. 550 ACTIONS EX DELICTO § 332 suit may be maintained against a corporation aggregate .^^ So case for damages for negligence which is essentially an action ex delicto is the remedy for injury sustained by the rifling of the contents of a trunk which plaintiff, intending to become a passenger on defendant's train, sent to its station and the trunk was so negligently and carelessly kept that it was so rifled be- fore plaintiff's arrival to pay her fare and take her journey.^* And trespass does not lie against a railroad corporation to re- cover damages against it for the loss or injury of animals run over by its engines or cars; case is the proper remedy.^" Tres- pass on the case also lies against a corporation aggregate for a tort for stopping a water course; '*'' and for tort, for damages for having so negligently built and maintained a bridge as to cause damage by preventing easy and safe navigation."*^ Again, case and not trespass quare clausum fregit is the proper form of action for diminution of the value of adjacent property by reason of the construction pi a railroad in the public streets ."^^ So case and not trespass is the proper remedy where a railroad corpo- ration causes an injury to land by its neglect in removing stones 37 Goodspeed v. East Haddam Bk., 22 Conn. 530, 58 Am. Dec. 439, action was against an incorporated bank alleging that defendants without prob- able cause, and with malicious intent, unjustly to vex, harass, embarrass and trouble the plaintiff, commenced by writ of attachment, and pros- ecuted against him a vexatious suit. 38 Corry v. Pennsylvania Rd. Co., 194 Pa. St. 516, 45 Atl. 341. Pennsyl- vania Statute, Act May 25, 1887, only assumes to group together into an action of assumpsit those demands arising ex contractu which were thereto- fore "recoverable in debt, assumpsit or covenant," and all actions of tres- pass, trover and trespass on the case into one action, " to be called an action of trespass." 39 Selma, Rome & Dalton Rd. Co. v. Webb, 49 Ala. 240. The defendant demurred to the complaint on the ground that the proper remedy was case not trespass. 40 Chestnut Hill & Spring House Turnpike Co. v. Rutter, 4 Serg. & R. (Pa.) 6. 41 Town of Harlem v. Emmert, 41 111. 319. 42 Jeffersonville, Madison & Indianapolis Rd. Co. v. Esterle, 13 Bush (76 Ky.), 667. "By the rules of the common law, trespass quare clausum fregit could not be maintained, except by a person having the actual posses- sion of the locus in quo, and even by our statutory modifications of those rules, the party complaining must at least have legal seizin." Id., 672, per Lindsay, C. J. 551 § 333 ACTIONS AT LAW CONTINUED — therefrom even though thrown thereon by blasting in a ijroper manner during its operations in constructing its raih-oad.^^ And case and not assumpsit is the appropriate remedy in an action to recover for the value of property stored in a freight car by a railroad company whether the recovery is sought against them as carriers or as warehousemen or under a stat- ute.^ A special action on the case gives an adequate remedy to recover the value of stock where an incorporated bank undul}' refuses to transfer such stock. '^^ § 333. When Action on Case Lies Concurrently With Assumpsit.^*^ Case will lie concurrently with assumpsit for a breach of duty arising out of an express or implied contract. And in many cases where assumpsit is a concurrent remedy, case will also lie for a violation of the duty which the contractual rela- tions of the parties involve. So although assumpsit will usually lie for breach of a contract, yet an action on the case for a breach of the common-law duty is oftener the better remedy. In an action on the case brought by the plaintiff town against the defendant corporation to recover the value of the town- hall and certain sidewalks and hose, the property of the town, which were destroyed by fire by reason of the alleged negli- gence of the defendant corporation in failing to perform its contract to supply through its pipes water of sufficient current, pressure and volume to extinguish fires within the range of its hydrants, it appeared among other things, from the allegations in the plaintiff's declaration that the defendant corporation entered into a contract with the plaintiff town whereby for the sum of eight hundred dollars per year, it agreed to supply the plaintiff town with sixteen post hydrants and water for the same before the first day of August, 1902; that it also agreed that said hydrants should have two nozzles and should be « Sabin v. Vermont Central Rd. Co., 25 Vt. 363. 44 Welch V. Concord Railroad, 68 N. H. 206, 44 Atl. 304. 45 Shipley, Matter of, v. Mechanics' Bank, 10 Johns. (N. Y.) 484. 48 See §§ 313, 317, herein. 552 ACTIONS EX DELICTO § 334 supplied with pipes at least four inches in diameter; that it also agreed that said hydrants should be so placed that proper protection against fire should be secured; that it also agreed that the waterworks should be supplied by a pump or pumps of a capacity not less than one million gallons per day; also that the defendant corporation engaged and became bound and obliged to furnish through its pipes and hydrants water of sufficient current, pressure and volume to extinguish fire within range of such hydrants, and especially and particularly fires originating in or communicated to the aforesaid building and property of the plaintiff town. Upon demurrer set up to the declaration, with the right to plead anew, it was held: (1) That upon proof of the facts stated in the declaration the defendant corporation would be liable to the plaintiff town in an appropriate action for the damages caused by its negligence in failing to perform a duty arising from its contractual rela- tions with the plaintiff town; (2) That the plaintiff town was legally entitled to bring an action on the case to recover dam- ages for the consequential injuries resulting from the neghgent manner in which the defendant corporation performed a duty created by its express contract with the plaintiff town. With respect to the issue presented in the aforesaid actions for negligence, the defendant corporation was required to use ordinary care to maintain pipes and furnish water of the pressure and volume stipulated in its written contract. It was only required to exercise such prudence, vigilance and precaution as would meet the requirements of ordinary care according to the exigencies of the situation, having due regard to the nature and importance of the contract, the rights and interests of those to be affected by it and the manifest conse- quences of a failure to perform it.'*' § 334. Nuisance.'** In an action at law, damages may be recovered against a person who maintains a nuisance which renders the ordinary « Milford V. Bangor Railway & Electric Co., 104 Me. 233, 71 Atl. 759. «See §§ 313, 317, herein. 5.53 § 334 ACTIONS AT LAW CONTINUED — use and occupation of property physically uncomfortable to its owner, and if the cause of the annoyance and discomfort be continuous, equity will restrain it. And corporations are equally responsible with individuals to respond in damages for injuries caused by nuisances maintained by their servants by the authority of the corporation.^^ And while a corporation has the right to locate and operate its electric light plant on its own property yet in doing so it cannot act arbitrarily and with- out reference to damage to property in the immediate vicinity of such plant.^° Where a railroad embankment was one of the causes of backwater upon plaintiff's land and amounted to a nuisance, knowledge of the fact that it was a nuisance or an obstruction should have been brought home to the party charged with maintaining the same, where the railroad and em- bankment were built by his grantor, before such grantee can be held Uable for such maintenance.-^^ Again, in an action of trespass to recover damages for flooding land by a water com- pany, it was alleged that the plaintiff's business was destroyed and his power to use his property ended; and it was held that if the nuisance was permanent and continuing and the owner elected to so consider it he could recover ih the same action both past and present damages .^^ An allegation in a declaration that the defendant "negli- gently" allowed noxious fumes to escape from its factory to the 49 Baltimore & Potomac R. R. Co. v. Fifth Baptist Church, 108 U. S. 317, 2 Sup. Ct. 719, 27 L. ed. 739. Examine Savannah, F. & W. Ry. Co. v. Parish, 117 Ga. 893, 45 S. E. 280. As to remedies generally in case of nuisances, see Joyce on Nuisances, §§ 359-505. 50 Sherman Gas & Electric Co. v. Belden (Tex. Civ. App., 1909), 115 S. W. 896. There was evidence in this case that the north wall of the power house was less than fifteen feet from plaintiff's residence; that the plant was operated twenty-four hours each day; that the explosion of oil in the en- gines could be heard all night; that it caused the windows to rattle and the house to jar, making it impossible for the appellees to sleep and enjoy their house. A judgment below for the plaintiffs was affirmed. 51 Nicket v. St. Louis, Memphis & Southern Rd. Co., 135 Mo. App. 661, 116S. W. 477. 52 Woodstock Hardwood & Spool Mfg. Co. v. Charlestown Light & Water Co. (S. C. 1909), 63 S. E. 548. 554 ACTIONS EX DELICTO § 335 damage of plaintiff's crops, does not require of plaintiff specific ])roof of the precise negligence which caused or permitted such fumes to escape; for, from proof of the escape of noxious fumes and consequent damage therefrom, negligence will be inferred. The operation of a factory in such manner as to constitute a nuisance may be given in evidence under an allegation that it was "negligently" operated, provided the other allegations of fact make out a rase of nuisance and are supported by the proof.^^ Under a State statute ^'* authorizing one to sue for the benefit of all where the question is one of "common or general interest of many persons," two or more owners in severalty of abutting lots similarly situated may join as plaintiffs in an action to prevent the laying of a street railway, about to be laid upon a street without authority of law, on the ground that it will be a continuing nuisance to the owners of abutting lots, but one can- not sue for the benefit of all ; and a statement in the complaint that he does so sue is mere surplusage.^^ § 335. Libel and Slander.^^ An action for libel can be maintained against a corporation.^^ So a corporation aggregate may compose and publish a libel 53 Hinmon v. Somers Brick Co., 75 N. J. L. 869, 70 Atl. 166. M Wis. Stat., 1898, § 2604. 55 Linden Land Co. v. Milwaukee Electric Ry. & Light Co., 107 Wis. 493, 83 N. W. 851. 56 See § 313, herein. 57 United States: Philadelphia, Wilmington & Bait. Rd. Co. v. Quigley, 21 How. (62 U. S.) 202, 16 L. ed. 73. Michigan: Bacon v. Michigan Cent. Rd. Co., 55 Mich. 224, 21 N. W. 324, 54 Am. St. Rep. 372 (well settled in this State; grounds stated on which con- trary doctrine based, Id., 228). Minnesota: Aldrich v. Press Printing Co., 9 Minn. 133, 86 Am. Dec. 84 (action for libel for publication by corporation defendant of libelous matter in a newspaper) . Missouri: Johnson v. St. Louis Dispatch Co., 2 Mo. App. 565, Id., 65 Mo. 039 (no question whatever that a printing and publishing corporation liable to action for damages for libel). What does and does not constitute libel, see the following cases: United States: American Book Co. v. dates (U. S. C. C), 85 Fed. 729 (when charge that corporation is in combination or trust is not a libel ; when 555 § 335 ACTIONS AT LAW CONTINUED — and by reason thereof become liable to an action for damages by the person concerning whom the words were composed and published.^* If a corporation sanctions the publication of a libel it is the publisher of the libel and liable in hke manner as an individual, not because a corporation may act with mahce, but because it has a capacity for voluntary action and is responsible for such action .^'' And where it appears that one writing a libelous letter in the name of a corporation had general manage- ment and exclusive control of the department of the corporate business, in the management of which the letter is written, the corporation is liable for punitive damages.^" Again, in an action for libel the fact that a letter to a protective trade association, not fairly disclosing the facts, and in consequence of which a charge as to methods of obtaining business is a Ubel); Union Mutual Life Ins. Co. V. Thomas (U. S. C. C. A.), 83 Fed. 803, 28 C. C. A. 96, 48 U. S. App. 575 (when matter in pleading, such as that plaintiff and her attorneys have entered into a conspiracy to defraud defendant, is not privileged). Georgia: Behre v. National Cash Register Co., 100 Ga. 213, 27 S. E. 986 (when newspaper publication tending to hold an agent of a corporation out to the pubUc as an imposter is libelous). Kentucky: Ratcliff v. Louisville Courier Journal Co., 99 Ky. 416, 36 S. W. 177, 18 Ky. L. Rep. 291 (if alleged libelous publication be proven subse- quently true recovery is precluded). Maine: Thompson v. Lewiston Daily Sun Pub. Co., 91 Me. 203, 39 Atl. 556 (publication imputing crime of bigamy held libelous per se). Massachusetts: Haynes v. Clinton Printing Co., 169 Mass. 512, 48 N. E. 275 (publication conveying inference that person is guilty of murder is Hbelous). New York: Gates v. New York Recorder Co., 156 N. Y. 228, 49 N. E. 769, aff'g 83 Hun, 614 (when charge involving unchastity of a woman is libelous per se). Wisconsin: Gillan v. State Journal Printing Co., 96 Wis. 460, 71 N. W. 892 (when charge of moral turpitude not conveyed by publication so as to warrant damages unless special damages are pleaded and proven. 58 Maynard v. Firemen's Fund Ins. Co., 34 Cal. 48, 91 Am. Dec. 672. 59 Vinas v. Merchants' Mutual Ins. Co. of New Orleans, 27 La. Ann. 367. It is as possible for a corporation as for an individual to act mahciously. And it has been held that a corporation aggregate may well, in its corporate capacity, cause the publication of a defamatory statement under such circumstances as might imply malice in law sufficient to support the action ; and there may be circumstances by which express maHce in fact might be proved, such as to make a corporation aggregate liable therefor in its cor- porate capacitj'. Id. 60 Rose V. Imperial Engine Co., 112 N. Y. Supp. 8, 127 App. Div. 885. 556 ACTIONS EX DELICTO § 335 ])lumbcr is placed upon the " cash before delivery list," was sent, not by the defendant personally, but by an under manager of liis business, did not relieve the defendant from liability, as a master is liable for willful injury committed by a servant while engaged in the transaction of the master's business.^^ But a railroad company is not responsible, under the rule of respondeat ouster, for a libel of an employe published by its general super- intendent without authority from the corporation; nor is the superintendent himself responsible, when there is no evidence submitted that the libelous article was dictated, or even in- spired by him.®^ A corporation may be liable for slandering the business of another corporation in the same business/'^ In England a trading corporation may maintain an action for libel calculated to injure their reputation by reflecting on the management of their trade or business without alleging or pi-oving special damage. The words complained of, in order to entitle a corporation to sue for libel or slander, must injuriously affect the corporation as distinguished from the individuals who compose it ; such words must attack the company or corpo- ration in the method of conducting its affairs, such as accusa- tions of fraud or mismanagement or an attack upon its financial position.^^ And a joint-stock company there may maintain an action for hbel against a shareholder of the company .^•'^ ei Trapp v. Du Bois, 78 N. Y. Supp. 505, 76 App. Div. 314. See § 317, herein. 6^ Henry v. Railroad Co., 139 Pa. St. 289, 27 Wkly. Notes, Cas. 322, 21 Atl. 157. Action of trespass. 63 Buffalo Lubricating Oil Co. v. Standard Oil Co., 42 Hun (49 N. Y. Sup. Ct.), 153, 3 N. Y. St. Rep. 450, aff'd in 106 N. Y. 669, 8 N. Y. St. Rep. 876. Also what facts show this to have been done; pleadings should allege that acts complained of were done by the corporation and not by its agents; there was also a charge of conspiracy against defendants. 64 South Hetton Coal Co., Ltd., v. Northeastern News Assoc, Ltd., 63 L. J. (N. S.) Q. B. 293, 297. 65 Metropolitan Saloon Omnibus Co. v. Hawkins, 4 Hurl & Norm. 87. Company incorporated under 19 & 20 Vict., c. 47. Pollock, C. B., said: "That a corporation at common law can sue in respect to libel there is no doubt. It would be monstrous if a corporation could maintain no action for slander of title through which they lost a great deal of money. * * * It would be very odd if a corporation had no means of protecting itself 557 § 336 ACTIONS AT LAW CONTINUED — § 336. Malicious Prosecution.^^ An action for malicious prosecution may be maintained against a corporation.^^ So railroad companies are liable in an action for damages for malicious and groundless prosecutions instituted through the malice of their ofl&cers.^* "The old doc- trine was that a corporation was not so liable, because mahce is the gist of the action, and it was said, that mahce could not be imputed to a mere legal entity, which having no mind could have no motive, and, therefore, no malice, and this narrow view still prevails to some extent. But the steady process of judicial evolution has led to the establishment, in some of the courts, of the just doctrine of the civil responsibility of a corporation for the acts of the sentient persons who represent it, and through whom it acts, and of the Hability of a corporation for the acts of its agents under the conditions that attach to individuals." ^^ against wrong; and if its property is injured by slander, it has no means of redress except by action. Therefore it appears to me clear that a corpora- tion at common law may maintain an action for a libel by which its prop- erty is injured." 66 See §§ 313, 317, herem. 67 United States: Copley v. Grover & Baker Sewing Machine Co., 2 Woods (U. S. C. C), 494, Fed. Cas. No. 3,213. Alabama: Jordan v. Alabama Great Southern Rd. Co., 74 Ala. 85, 49 Am. Rep. 800. Illinois: Springfield Engine & Threshing Co. v. Green, 25 111. App. 106 (so, although corporation can only act through its agents). Indiana: Pennsylvania Co. v. Waddle, 100 Ind. 138 (arrest by agent em- ployed by corporation to detect offenders against its property and arrest them) . Maryland: Carter v. Howe Machine Co., 51 Md. 290, 34 Am. Rep. 311 (action lies against a corporation aggregate for maHcious prosecution). Massachusetts: Reed v. Home Savings Bank, 130 Mass. 443, 39 Am. Rep. 468 (such an action lies against a savings bank, citing numerous cases to the general point that such an action lies against a corporation). Mississippi: Williams v. Planters' Ins. Co., 57 Miss. 759, 34 Am. Rep. 494 (liable to such action like a natural person). New Jersey: Vance v. Erie Ry. Co., 32 N. J. L. 334, 90 Am. Dec. 665. New York: Morton v. Metropolitan Life Ins. Co., 34 Hun (N. Y.), 366. Compare Owsley v. Montgomery & West Point Rd. Co., 37 Ala. 560. 68 Gillett v. Missouri Valley Rd. Co., 55 Mo. 315, 17 .\m. Rep. 653. 69 Williams v. Planters' Ins. Co., 57 Miss. 759, 34 Am. Rep. 494, per Camp- bell, J. See § 317, herein. "It was contended at the argument, that an action for malicious pros- 558 ACTIONS EX DELICTO § 337 To support a judgment for the malicious i)rosecutioii of a civil action, it must be alleged and proved that sueh action was prosecuted without probable cause, with malice, its termination in favor of defendant, and damages to defendant over and above the taxable costs in the case.''" § 337. Wrongfully Suing Out Attachment.'^ An action may be maintained against a corporation to re- cover damages for wrongfully, and without just or probable cause obtaining and levying an order of attachment upon per- sonal property.''^ And in an action on the case against a corpo- ration for suing out an attachment without sufficient cause and maliciously the corporation is to be held liable in all cases where an individual would be responsible under similar circum- stances.'^ So a corporation may be held liable for exemplary ecution so dift'ers from other actions that it cannot be maintained against a corporation. But although, in order to maintain such an action, both maUce and want of probable cause must be found, yet proof of want of probable cause, will warrant the jury in inferring malice. Mitchell v. Jen- kins, 5 B. & Ad. 588; s. c, 2 Nev. & Man. 301; Stewart v. Sonneborn, 98 U. S. 187, 25 L. ed. 116; Stone v. Crocker, 24 Pick. 81; Ripley v. McBarron, 125 Mass. 272. And, by the great weight of modem authority, a corpora- tion may be liable even when a fraudulent or malicious intent in fact is necessary to be proved, the fraud or malice of its authorized agents being imputable to the corporation; as in actions for fraudulent representations: National Exchange Co. v. Drew, 2 Macq. 103; New Brunswick & Canada Ry. V. Conybeare, 9 H. L. Cas. 711, 738, 740; Barwick v. English Joint- Stock Bank, L. R. 2 Ex. 259, for hbel: Philadelphia, Wilmington & Balti- more Rd. Co. V. Quigley, 21 How. (62 U. S.) 202, 16 L. ed. 73; Whitfield V. Southeastern Ry., E. B. & E. 115; or for malicious prosecution: Vance v. Erie Ry., 32 N. J. L. 334; Copley v. Grover & Baker Co., 2 Woods (U. S. C. C), 494; Goodspeed v. East Haddam Bank, 22 Conn. 530; Carter v. Howe Machine Co., 51 Md. 290; Wheless v. Second Nat. Bank, 1 Baxter (Tenn.), 469; WiUiams v. Planters' Ins. Co., 57 Miss. 759; Iron Mountain Bank v. Mercantile Bank, 4 Mo. App. 505; Walker v. Southeastern Railway, L. R. 5 C. P. 640; Edwards v. Midland Ry., 6 Q. B. D. 287," per Lord, J., in Reed v. Home Savings Bank, 130 Mass. 443, 39 Am. Rep. 468. 70 Carbondale Investment Co. v. Burdick, 67 Kan. 329, 72 Pac. 781. 71 See §§ 313, 317, herein. 72 Western News Co. v. Wilmarth, 33 Kan. 510, 6 Pac. 786, evidence as to exemplary damages also considered. 73 Wheless v. Second National Bk., 60 Tenn. 469, 25 Am. Rep. 783. 550 § 338 ACTIONS AT LAW CONTINUED — damages in suing out an attachment wrongfully and maii- ciouslyJ^ § 338. Conspiracy — Instances. Where a railroad company is sued with others for a con- spiracy to expel plaintiff from a brotherhood of locomotive engineers and the railroad did not and could not actually par- ticipate in the act of expelling him from the order, its liabiHty must rest upon the ground alone of the conspiracy; and where the jury distinctly found for the defendants other than the rail- road company and thereby acquitted all other defendants from having entered into the conspiracy with the railroad company, and the latter is found the only guilty party, it follows that an acquittal of all other defendants acquitted said railroad com- pany, as a conspiracy cannot be formed by one person.^^ A corporation owning the principal theaters giving burlesque shows in the chief cities of the country, by requiring the owners of such shows to agree not to play in any theaters not owned or controlled by it as a condition of booking such shows for its own theaters, is exercising a legal right where the number of com- panies with which such agreement is made is not greater than is reasonably necessary to supply its own theaters with suitable attractions. The fact that such an agreement caused some of the companies to rescind prior bookings made with another theater not controlled by the syndicate does not render it liable to the owner of the theater so injured, even though it caused financial loss and practically prevented the other manager from obtaining suitable attractions. This is true, although it appears that the sjmdicate bore an ill will to the theater owner so ruined and desired to eliminate competition. If the means employed to do an act are lawful, it is of no consequence that the motive which induced the act was mahcious.'^ 74 Jefferson County Savings Bk. v. Ebom, 84 Ala. 529, 4 So. 386, suit was one on an attachment bond claiming damages both actual and exemplary. 75 St. Louis Southwestern Ry. Co. of Texas v. Thompson, 102 Tex. 89, 113 S. W. 144, rev'g 108 S. W. 453. 78 Roseneau v. Empire Circuit Co., 115 N. Y. Supp. 511, 131 App. Div. 429 (action for alleged unlawful conspiracy maliciously formed to ruin the 560 ACTIONS EX DELICTO § 339 § 339. Fraud and Deceit — Instances.^ The essential elements necessary to constitute a cause of action for deceit are (a) representations; (b) falsity; (c) scienter; (d) deception; (e) injury. To these elements, however, should be added another qualification, and that is that the representa- tion should have been intended to influence the action of the person injured by them, that is, to influence the action of the particular person defrauded or the action of a class of which he is a constituent member. If addressed to the public generally or to a class, then any person belonging to the class may sue; if addressed to a limited class only as the persons intended to be influenced, then as a rule persons outside that class with whom the persons making the statement have no dealings but who may have been injured by reliance upon such statements independently coming to their knowledge cannot maintain an action upon them for fraudulent deceit.'^* business of a theater of which plaintiff was the receiver with authority by order of court to continue the action). 77 See § 313, herein. 78 Greene v. Mercantile Trust Co., Ill N. Y. Supp. 802 [aff'd in (mem.) 128 App. Div. 914, 112 N. Y. Supp. 1131], per Wheeler, J., a case of pro- spectus to invite subscriptions to "bonds" and "stocks" of a company. What must appear or be sJiown in order to sustain action for fraud or de- ceit; essentials; prerequisites, see the following cases: United States: Farwell v. Colonial Trust Co. (U. S. C. C. A.), 147 Fed. 480, 78 C. C. A. 22; Stratton's Independence v. Dines, 135 Fed. 449, 68 C. C. A. 161, aff'g 126 Fed. 968. Alabama: Hartford Fire Ins. Co. v. Kirkpatrick, 111 Ala. 456, 20 So. 651; Clark V. Dunham Lumber Co., 86 Ala. 220, 5 So. 560. Arkansas: Binghamton Trust Co. v. Auten, 68 Ark. 299, 82 Am. St. Rep. 295, 57 S.W. 1105. Georgia: Lewis v. Equitable Mtge. Co., 94 Ga. 572, 21 S. E. 224. Illinois: Educational Co. v. Taggart, 121 111. App. 567. Iowa: King v. Sioux City Loan & Im. Co., 76 Iowa, 11, 39 N. W, 919. Maine: Atlas Shoe Co. v. Rechard, — Me. 206, 66 Atl. 390; Skowhegan First Nat. Bk. v. Maxfield, 83 Me. 576, 22 Atl. 479. Marxjland: Donnelly v. Baltimore Trust & Guarantee Co., 102 Md. 1, 61 Atl. 301. Massachusetts: Nash v. Minnesota Title Ins. & T. Co., 163 Mass. 574, 40 N. E. 1039, 28 L. R. A, 753; Dawe v. Morris, 149 Mass. 188, 4 L. R. A. 102, 21 N. E. 313; Deming v. Darling, 148 Mass. 504, 20 N. E. 107, 2 L. R. A. 743. Missouri: Remmers v. Remmers, 217 Mo. 541, 117 S. W. 1117. 36 5G1 § 339 ACTIONS AT LAW CONTINUED — Statements in a prospectus issued by a trust company, offer- ing for sale the entire capital stock of a mining corporation capitalized at fifty thousand dollars; that the corporation had been operated for two years at a large profit ; that the net earn- ings, after deducting all royalties and expenses for the six months preceding the issuing of the prospectus, were twelve thousand, one hundred and thirty-four dollars and twenty cents, all of which was applicable to dividends; that it was the intention to pay one or one and a half per cent dividends semi- monthly and extra dividends in addition thereto as often as should be deemed prudent, reserving at all times sufficient cash on hand to cover any contingency that might arise, amount to something more than a mere expression of an intention to pay dividends, and the falsity of such representations will furnish the basis of an action of fraud against the trust company by persons who purchase stock of the mining company in reliance thereon. The measure of damages recoverable in such an ac- tion is. the difference between what would have been the value of the stock if the representations had been true and the actual value of the stock^^ Nebraska: American Bldg. & L. Assoc, v. Bear, 48 Neb. 455, 67 N. W. 500. New York: Rothmiller v. Stein, 143 N. Y. 581, 62 N. Y. St. Rep. 788, 38 N. E. 718, 26 L. R. A. 148; Scarsdale Pub. Co. Colonial Press v. Carter, 116 N. Y. Supp. 731, 735, 63 Misc. 271; Albany Hardware & Iron Co. v. Day, 42 N. Y. Supp. 971, 11 App. Div. 230. Tennessee: Barnard v. Roane Iron Co., 85 Tenn. 139, 2 S. W. 21. Texas: Cohen Brothers v. Missouri, Kansas & T. Ry. Co. of Tex. (Tex. Civ. App., 1906), 98 S. W. 437. Wisconsin: Hurlbert v. T. D. Kellogg Lumber & Mfg. Co., 115 Wis. 225, 91 N. W. 673; Montreal River Lumber Co. v. Mihills, 80 Wis. 540, 50 N. W. 507. 79 Benedict v. Guardian Trust Co., 86 N. Y. Supp. 376, 91 App. Div. 103, aff'd in (mem.) 180 N. Y. 558, 73 N. E. 1120. When prospectus issued to obtain increase of capital is fraudulent as to overvaluation of assets, see Bartol v. Walton & W. Co. (U. S. C. C), 92 Fed. 13. When prospectus issued by corporation to obtain increase of capital stock is not fraudulent as to estimate, see Bartol v. Walton & W. Co. (U. S. C. C), 92 Fed. 13. When prospectus of promoter as to value of land to be transferred to 562 ACTIONS EX DELICTO § 339 The failuro of an agent, employed by a corporation to solicit subscriptions to a syndicate agreement, to communicate to his principal the withdrawal of a subscribei- to the syndicate agree- ment, does not render such agent liable to the withdrawing subscriber, as whatever duty was incumbent upon the agent in this respect it was due to his principal and not to the withdraw- ing subscriber. ''If any cause of action could be based upon the action of the defendants in informing plaintiff that his subscription was in process of cancellation it would be only an action at law for damages, and no such action would lie, if at all, unless it appeared that the statement was false, that plain- tiff believed it and in reliance upon it did or refrained from doing something, and that he thereby suffered damage." *° Where by fraud of its agent, an express company induces one to deliver it money to be carried and delivered to a fictitious person, and the money is delivered by the company to such agent, and is embezzled by him, the shipper can recover of the company therefor in an action for money had and received.*^ Fraud does not exist as a matter of law merely because the corporate name is similar to that of a copartnership under which business had theretofore been done by the charter mem- bers.*^ A complaint alleged in substance that the stock of the H. V. Manufacturing Company was one hundred and twenty thousand dollars, of which the plaintiff's husband owned sixty thousand dollars, and his brothers, the defendants, C. V. & W. v., the rest; that the plaintiff's husband died, and she suc- ceeded to the ownership of his stock; that her said two brothers- in-law, and their lawyer, defendant W., represented to the l)laintiff that the company was insolvent, and thereby induced her to unite with them in a petition for dissolution of the com- pany, she believing the same; that the representation was corporation is not fraudulent, see Milwaukee Cold Storage Co. v. Dexter, 99 Wis. 414, 74 N. W. 976, 40 L. R. A. 837. 80 Eames v. Brunswick Construction Co., 94 N. Y. Supp. 24, 104 App. Div. 566. 81 Southern Express Co. v. Bank of Tupelo, 108 Ala. 517, 18 So. 664. 82 Bristol Bank & T. Co. v. Jonesboro B. & T. Co., 101 Tenn. 545, 48 S. W. 228. 563 § 339 ACTIONS AT LAW CONTINUED — false, and known by them to be false, and was made to induce the plaintiff to join in a dissolution of the company, so as to enable the said defendants C. V. & W. V. to acquire and suc- ceed to the business of the company after such dissolution; that they did organize a new company with another one of the defendants, J. V., and acquire and continue the said business; and that the plaintiff's stock was thereby made valueless. No fraud was alleged against J. V. It was held that the foregoing stated a good cause of action for fraud against all the defend- ants except J. V.^^ The New York Code of Civil Procedure ^ does not operate to preclude parties who purchased stock in rehance upon false representations from assigning their claims to some of their number, for the purpose of enabling the latter to bring an ac- tion to recover the entire damages resulting from the fraud. *^ If the plaintiff's officers were negligent in not discovering a fraud, that fact would not afford a defense. When one party has been guilty of an intentional and deliberate fraud by which to his knowledge another party has been misled or influenced in his action, he cannot escape the legal consequences of his fraudulent conduct by showing that the fraud might have been discovered had the party whom he deceived exercised reason- able dihgence and care.*^ One who has been induced to convey his property by fraud or deceit has an election of remedies, either to bring an action to set aside the conveyance, unless the property has passed into ownership of a purchaser for value without notice, or, allowing the conveyance to stand, he may sue to recover dam- age for the pecuniary injury inflicted upon him by the fraud. Retaining the purchase price is not, in the latter case, a ratifi- cation of the deed.*^ 83 Vogt V. Vogt, 104 N. Y. Supp. 164, 119 App. Div. 518. 84 N. Y. Code of Civil Proc, §§ 73, 77. 85 Benedict v. Guardian Trust Co., 86 N. Y. Supp. 376, 91 App. Div. 103, aff'd in (mem.), 180 N. Y. 558, 73 N. E. 1120. 80 Eastern Trust & Banking Co. v. Cunningham, 103 Me. 455, 70 Atl. 17. 87 Modlin V. Roanoke Ry. & Navigation Co., 145 N. C. 218, 58 S. E. 1075 (civil action to recover damages for fraud and deceit). 564 ACTIONS EX DELICTO § 339 To support an action for deceit, the plaintiff must show that the defendant intentionally made false representations to him, with the intent that he should act upon them, or in such manner as would naturally induce him to act upon them, that the repre- sentations were material, and that they were known to the de- fendant to be false, or being of matters susceptible of knowl- edge, were made as of a fact of his own knowledge, that the plaintiff was thereby induced to give credit or part with prop- erty, that he was deceived, and that he was injured.*^ Pending a valid option to purchase land, the party holding the option is the only one who can make a sale of it or fix a price. A representation, therefore, by the holder of the option that he owns the land, and that it cannot be bought for less than a stated sum is not such a fraud upon a purchaser from him as will entitle such purchaser to recover damages for de- ceit. The question of ownership was immaterial, and the price was under his control. The mere fact that an option is taken for the purpose of speculation does not constitute fraud or un- fair dealing on the part of the person taking the option.*^ Under a Maine decision it appeared that the corporation of which the defendant was treasurer had an account in the plain- tiff bank in Bangor, and another in a bank in Gardiner, in both of which places it was engaged in business. For many months prior to the drawing of the checks which were the basis of the action, the defendant had practiced what is known as "Kiting" checks between the plaintiff bank and the bank in Gardiner. He deposited daily in each bank checks, drawn on the other bank to meet which the defendant knew were no available funds in the drawee bank, and which he knew could only be met by the deposit of other similar checks. The bank at Gardmer discovered the practice, and finally refused payment of a check drawn upon itself, which the defendant had de- posited in the plaintiff bank, and which had been forwarded for collection, and caused it to be protested. Before the plaintiff 88 Eastern Trust & Banking Co. v. Cunningham, 103 Me. 455, 70 Atl. 17. 89 Saxby v. Southern Land Co., 109 Va. 196, 63 S. E. 423 (error in judg- ment in action of trespass on the case). 5G5 § 340 ACTIONS AT LAW CONTINUED — bank had notice of the nonpayment and protest, it had ac- cepted two other similar checks, credited them on the ac- comit of the defendant's corporation, and forwarded them for collection. Payment of these checks was refused, and they were in their turn protested. The result was that the plaintiff bank lost the amount of the three checks, less a small balance which was to the credit of the corporation when notice of non- jjayment was first received. The court was of opinion that the evidence did not warrant a finding that the officers of the plain- tiff bank knew of the "Kiting" practice. On the contrary, it was considered that the plaintiff was induced to give credit to the defendant's corporation by his implied representation, which was false, and that it was deceived thereby. Upon these facts, it was held that the defendant was liable in an action for deceit.^" § 340. Trover and Conversion.^* Trover may be maintained against a corporation aggregate. ^^ But a corporation has neither a general or special right to the property upon which to maintain an action of trover, where, prior to the alleged conversion of the property, it has trans- ferred the notes therefor, retaining title to the property in ques- tion to another. ^^ Trover lies for the wrongful conversion of shares of stock by a corporation, and any act of dominion wrongfully exercised over the property of another inconsistent with his rights or constituting a denial thereof may be treated as a conversion. This is as applicable to shares of stock as to 90 Eastern Trust & Banking Co. v. Cunningham, 103 Me. 455, 70 Atl. 17. 91 See § 313, herein. 92 Beach v. Fulton Bank, 7 Cow. (N. Y.) 485. When action is for trover and not for breach of contract of baihnent, in case of wheat stored by owner under agreement for storage, also for purchase by warehouseman, and refusal, see Kramer v. Northwestern Elevator Co., 91 Minn. 346, 98 N. W. 96. Conversion of wheat; measure of damages, see Dows v. National Exchange Bank, 91 U. S. 618, 23 L. ed. 214. 93 Union Iron Works Co. v. Union Naval Stores Co., 157 Ala. 645, 47 So. 652. 666 ACTIONS EX DELICTO § 340 other property. Such conversion may be by the corporation or by a third party. If the corporation's by-laws or a statute require that transfers of stock be made on its books, a wrongful refusal by the corporation to make such transfer constitutes a conversion of the stock.'*'' If a bank receives the proceeds it is liable for the conversion of bonds left with its president for exchange.^^ But an action to recover damages for conversion of corporate stock cannot be maintained against a corporation by one who has not the legal title thereto.^^ The rule, that one who comes lawfully into possession of the property of another cannot be charged with the conversion thereof until after de- mand and refusal, has no application wlicre the lawful custo- dian commits an overt and possible act of conversion by an un- lawful sale or disposition of the property. So where negotiable bonds of a corporation, issued for corporate purposes only, and lawfully in the custody of a trust company, designated as trus- tee of the mortgage executed to secure the bonds, were wrong- fully pledged to the company by the secretary of the corpora- tion as security for loans to himself, personally, the apparent participation of the company in the wrongful act of the secre- tary, with full knowledge thereof, by its acceptance of the bonds as a pledge, did not, in the absence of a demand and a refusal, constitute a conversion; for it might still have elected to hold the bonds as trustee. But where, in consideration of the payment of its loan to said secretary by a certain bank, the trust company transferred the bonds to such bank, it assumed to treat them as its own and from that moment was guilty of a conversion of the bonds, and no demand therefor by the true owner thereof was necessary. Although, at the time the bonds in question were transferred by the trust company to said bank, in consideration of the payment by the latter of the secretary's indebtedness to the company, the bonds had been 94 Herrick v. Humphrey Hardware Co., 73 Neb. 809, 103 N. W. 685, 119 Am. St. Rep. 917. 95 Van Leuven v. First Nat. Bank of Kingston, 54 N. Y. 651, aff'g 6 Laws, 373. 96 Morrison v. Gold Mountain Gold Min. Co., 52 Cal. 306. What does not amount to such a conversion also decided. 567 § 340 ACTIONS AT LAW CONTINUED — attached in an action brought by said bank against the secre- tary, that fact does not reheve the trust company from the charge of conversion arising from the transfer of the bonds; where the attachment was invahd because the action was brought against the secretary and not against the corporation which owned the bonds, and where the trust company instead of notifying the owner of the bonds, or resisting the attach- ment action, assumed to hold the bonds as pledgee, and, upon the discontinuance of the action and the falling of the attach- ment, voluntarily turned them over to the bank in considera- tion of the payment of the secretary's indebtedness for which the bonds were pledged.^' When the manager of a life assurance society appoints an agent to canvass for applications and collect premiums on all policies obtained by him, which premiums so collected are to be paid by the agent to the manager of the society, then as between the manager and agent the manager has a special property in the premiums collected by the agent and is en- titled to receive them, and this right gives him a remedy against the agent upon his refusal to pay over the same as directed. Legal currency may be the subject of an action of trover as there is nothing in the nature of money making it an improper subject of this form of action so long as it is capable of being identified, as when delivered at one time, by one act and in one mass, or when the deposit is special and the identical money is to be kept for the party making the deposit, or when wrongful possession of such property is obtained. So where the relation of a plaintiff and defendant is tliat of principal and agent, it is necessary in determining whether trover or assumpsit is the proper remedy for money collected by the agent but not turned over, to consider the distinctive quality of money as differing from other kinds of property, and the character and conduct of the agent in receiving and retaining the money collected by him. From its nature the title to money passes by delivery, and its identity is lost by being 97 McDonnell v. Buffalo Loan, Trust & Safe Deposit Co., 19.3 N. Y. 92, '85 N. E. 801, aff'g 104 N. Y. Supp. 625, 119 App. Div. 243. 568 ACTIONS EX DELICTO § 341 changed into other money or its equivalent in the methods ordinarily used in business for its safe-keeping and transmis- sion, and an agent unless restricted by his contract would violate no duty assumed by him by adopting these methods in dealing with the money of his principal. Mere failure to deliver such property in specie on demand would not be tech- nical conversion. Nor would the refusal to pay over its equiv- alent be conclusive evidence of its conversion in the sense of the law of trover, but might be the ground for an action of assumpsit. When the defendant is the agent of the plaintiff for the collection and paying over not of a single premium of insurance but such as are payable for all policies affected by him and he is entitled to receive as commission a certain per- centage of such premiums when paid over, an action of trover by the principal might be unjust to the agent by depriving him of his right of set-off and other legal defenses. In a case where the relation of principal and agent existed between the plaintiff and the defendant and the principal brought an action of trover against the agent for money alleged to have been collected by the agent and converted to his own use it was held, that under all the circumstances of the case the action could not be maintained.''^ If a person wrongfully works a mine, takes out ores therefrom, removes them, and converts them to his own use he is not entitled, in an action to recover their value, to be credited with the cost of mining the ores.^® § 341. Replevin — Claim and Delivery.^ A certificate of stock is tangible personal property which may be recovered in an action of replevin.^ So an action of replevin by the owner of personal property will lie against the 88 Hazelton v. Locke, 104 Me. 164, 71 Atl. 661, 20 L. R. A. (N. S.) 35. oa Benson Mining & S. Co. v. Alta Mining & S. Co., 145 U. S. 428, 36 L. ed. 962, 12 Sup. Ct. 877. ' See § 313, herein. 2 Opperman v. Citizens' Bank of Michigan City (Ind. App., 1908), 85 N. E. 991, 992, citing Smith v. Downey, 8 Ind. App. 179, 34 N. E. 823, 35 N. E. 568, .52 Am. St. Rep. 467; Read v. Brayton, 143 N. Y. 342, 38 N. E. 261; Cook on Corp. (4th ed.), § 577. 569 § 341 ACTIONS AT LAW CONTINUED — person who has such personal property in his possession and who has no right to retain it as against the owner.^ A boom company that acquires possession of logs by the maintenance of a boom in violation of a decree of court is a trespasser and wrongdoer and cannot maintain replevin on the theory that defendant unlawfully opened plaintiff's boom; since in replevin the plaintiff must succeed, if at all, upon the strength of his own title."* Replevin cannot be maintained against a freight agent of a railroad company, where he has no possession or control of the property except as agent of the company.^ Where property is pledged to secure specific indebtedness, the pledgee has no right to hold it as security for any other obligation.^ If the pledgee wrongfully parts with the property, or, upon tender of the secured debt, refuses to return it, the pledgor may maintain an action at law for damages, or, where such relief is appropriate, to regain the property itself by claim and dehvery. Or he may, if there are circumstances authorizing a demand for equitable relief, and redemption is possible, bring a suit to establish and enforce his right of re- demption. Shares of corporate stock, however, being intan- gible property cannot be recovered in an action of claim and delivery.' 3 Opperman v. CStizens' Bank of Michigan City (Ind. App., 1909), 85 N. E. 990, 992, citing McFadden v. Ross, 108 Ind. 512, 8 N. E. 161; Ault- man v. Forgery, 10 Ind. App. 397, 34 N. E. 829; Fruits v. Elmore, 8 Ind. App. 278, 34 N. E. 829; Ferguson v. Day, 6 Ind. App. 1.38, 33 N. E. 213; Rose V. Cash, 58 Ind. 278; Walpole v. Smith, 4 Blackf. (Ind.) 304; Bradley v. Michael, 1 Ind. 551; Read v. Brayton, 143 N. Y. 342, 38 N. E. 261. * North Shore Boom & Driving Co. v. Nicomen Boom Co., 52 Wash. 564, 101 Pac. 48. 6 McDougall V. Travis, 24 Hun (N. Y.), 590. 8 Cal. Civ. Code, § 2891; Reynes v. Dumont, 130 U. S. 354, 9 Sup. Ct. 486, 32 L. ed. 934. 7 BeU V. Bank of CaUfornia (Cal., 1908), 94 Pac. 889, 891. 570 ACTIONS AT LAW CONTINUED — MANDAMUS CHAPTER XXI ACTIONS AT LAW CONTINUED — MANDAMUS 342. Mandamus Defined. § 356. 343. Nature of Mandamus. 344. Nature of Mandamus Con- tinued — Is a Discretionary 357. Writ. 345. When Mandamus Lies, Gen- erally. 358. 346. Mandamus to Control Ju- dicial Discretion. 347. Mandamus Will Not Be Granted When Fruitless and Unavailing. 359. 348. Mandamus Does Not Lie Where There Is a Plain and 360. Adequate Remedy. 349. Statutory Remedies — When and When Not Exclusive 36L of Mandamus. 350. When Mandamus Is the 362. Proper Remedy Although There Is Another Remedy — Action for Damage — 363. Equity. 35 L When Remedy Is by Action at Law and Not by Man- 364. damns. 352. When Proper Remedy Is Quo Warranto and Not 365. Mandamus. 353. When Remedy to Forfeit Franchise, and Not Man- 366. damns, Is Proper. 354. When Remedy in Equity and 367. Not by Mandamus — In- junction — Mandatory In- junction. 355. Mandamus — Enforcement of 368. Private or Personal Rights — Contractual Relations. When Writ Lies to Enforce Discretionary or Ministe- rial Duties. When Writ Does Not Lie to Enforce Discretionary Du- ties. When Mandamus Lies and Does Not Lie to Compel Filing Articles of Incorpo- ration and Certificates — Issuance of Certificates. When Mandamus Lies — Elec- tion of Corporate Officers. When Mandamus Lies to Compel Order Revoking Charter to Be Vacated. When Mandamus Lies to Re- instate Member. Mandamus Lies to Enforce Right of Inspection of Books of Corporation. Mandamus Lies to Compel Surrender of Corporation's Books, Seal and Papers. Mandamus to Compel Trans- fer of Certificates of Stock — Lost Certificates. Mandamus to Control Rates, Charges and Fares — Dis- crimination. When Mandamus Lies Against Common Carrier, Generally. Mandamus — Limitation of Remedy Under Act to Regu- late Commerce — Interstate Commerce Commission. When Mandamus Lies and Does Not Lie Against Rail- road Company. r)7i §§ 342, 343 ACTIONS at law continued — mandamus § 369. When Mandamus Lies and § 374. Jurisdiction of Mandamus Does Not Lie Against Proceedings. Street Railroad Company. 375. Proper or Necessary Parties, 370. When Street Railway Com- Generally. pany Is and Is Not En- 376. Parties Plaintiff — Private titled to Mandamus. Persons. 371. When Mandamus Lies and 377. Parties — Attorney-General. Does Not Lie Against Tele- 378. Parties — Defendants. phone Companies. 379. Necessity of Demand Upon 372. When Mandamus Lies and or Notice to Party Before Does Not Lie Against Tel- Bringing Mandamus, egraph Companies. 380. Defenses Available, Generally. 373. When Mandamus Lies and 381. Pleadings — Sufficiency of Does Not Lie Against Wa- Showing — Demurrer — ter Companies. Judgment — Appeal. § 342. Mandamus Defined. Mandamus, as defined by the Kentucky Code ^ and the courts, is a writ commanding the performance of some duty, in which performance the apphcant for the writ is interested, or by the nonperformance of which he is aggrieved or injured.^ § 343. Nature of Mandamus. The remedy by mandamus is not one which is accorded ex dehito justiticp. The court is a prerogative one, and unless the right, which the relator seeks to enforce, is clear and un- equivocal, a mandamus will not be granted.^ It is declared, however, that "mandamus, even in the common-law view of it, long ago ceased to be a jDrerogative writ, and became gradually, both in the English and American courts, to be regarded as a writ of right. Since the breaking down by the codes of so many of the formal barriers between equity and law, the remedy by mandamus, however different its legal history from the writ of injunction, is none the less elastic and adaptable within its 1 Ky. Civ. Code Pract., § 477. 2 Louisville Home Telephone Co. v. City of Louisville, 130 Ky. 611, 113 S. W. 855. See McCoy v. State, 2 Marv. (Del.) 543, 36 Atl. 81; Sears v. Kincaid, 33 Ore. 215, 53 Pac. .303. Writ of mandamus is either alternative or peremptory under New York Code of Civ. Proc, § 2067. 3 State ex rel. v. Latrobe, 81 Md. 222, 31 Atl. 788. 572 ACTIONS AT LAW CONTINUED — MANDAMUS §§ 344, 345 proper sphere, as the latter is within its sphere. The function of each is by summary legal intervention to prevent wrong- doing. The one sets the law in motion to compel the doing of what should be done; the other prevents or checks threatened or actual wrongdoing." "* § 344. Nature of Mandamus Continued — Is a Discretion- ary Writ. Mandamus is a discretionary writ.^ An application for a per- emptory writ of mandamus is addressed to the sound discre- tion of the court, and where it appears that the facts are such as to justify the court in refusing the writ as a matter of dis- cretion, a Court of Appeals will not interfere unless it affirma- tively appears in the order denying the writ that the court did not refuse the writ in the exercise of its discretion; and where it does not appear from an order denying an application for such writ that the court below refused to grant the writ for want of power, or upon any other question of law, the proceeding is not reviewable in a Court of Appeals.^ § 345. When Mandamus Lies, Generally. The writ of mandamus can only be used to enforce duties and obligations clearly imposed upon a corporation by the charter or general law, and not to enforce and establish those of doubtful expediency and propriety.^ And the writ cannot be maintained, unless there is a legal right in the applicant for the * State ex rel. Great Falls Water Works v. Great Falls City Council, 19 Mont. 518, 537, 538, 49 Pac. 15, per Buck, J. 5 Citizens' Life Ins. Co. v. Commissioner of Ins., 128 Mich. 85, 87 N. W. 126, 30 Ins. L. J. 919; Lamphere v. Grand Lodge Ancient Order U. W., 47 Mich. 429. 6 People ex rel. Lekmaier v. Interurban Ry. Co., 117 N. Y. 296, 69 N. E. 596, dismissing appeal from 83 N. Y. Supp. 622, 85 App. Div. 407. 7 Sherwood v. Atlantic & Danville Ry. Co., 94 Va. 291, 306, 26 S. E. 943, 6 Am. & Eng. R. Cas. (N. S.) 670, citing or quoting from Northern Pac. Rd. Co. V. Dustin, 142 U. S. 492, 498, 499, 12 Sup. Ct. 283, 285, 35 L. ed. 1092; Union Pacific Rd. Co. v. Hall, 91 U. S. 343, 23 L. ed. 428; Commonwealth v. Fitchburg- Rd. Co., 12 Gray (Mass.), 180; State v. Sioux City & P. Rd. Co., 7 Neb. 357, 374; People v. Rome, W. & O. Rd. Co., 103 N. Y. 106, 8 N. E. 369. 573 § 346 ACTIONS AT LAW CONTINUED — MANDAMUS writ and a corresponding duty imposed on the respondent.^ Mandamus is a proper proceeding to compel obedience to a city's orders, made in the legal exercise of its police powers, as where it is sought to compel the removal of poles in the course of street improvements.^ § 346. Mandamus to Control Judicial Discretion. A writ of mandamus cannot be issued to compel the court below to decide a matter before it in a particular way, or to re- view its judicial action had in the exercise of legitimate juris- diction.^" So the rule that mandamus will not lie to control the judicial discretion of an inferior court does not apply to an attempt of that court to exercise its discretion on subject-matter not within its jurisdiction.^^ And the writ will not lie at the instance of a corporation to compel the court to vacate an order appointing a trustee. ^^ Again,' the fact that, in the administra- tion of the assets of an insolvent corporation in the custody of receivers, summary proceedings are resorted to, does not, in it- self, affect the jurisdiction of the Circuit Court, as having pro- ceeded in excess of its powers, and, where notice has been given and hearing had, the result cannot properly be interfered with by mandamus.^' Where the bankruptcy court in adjudicating a corporation bankrupt is called upon to decide, and does decide, a question of fact, or of mixed law and fact, that adjudication cannot be reviewed by proceedings in mandamus. Mandamus to the 8 Louisville Home Telephone Co. v. City of Louisville, 1.30 Ky. 611, 113 S. W. 855: State ex rel. Patterson v. Wenzel, 55 Neb. 210, 75 N. W. 579. See State ex rel. v. Latrobe, 81 Md. 222, 31 Atl. 788, noted under § 343, herein. « Monongahela City v. Monongahela Elec. L. Co., 12 Pa. Co. Ct. Rep. 529, 4 Am. Elec. Cas. 53. 10 Rice, In re, 155 U. S. .396, 39 L. ed. 198, 15 Sup. Ct. 194. 11 Winn, In re, 213 U. S. 458, .53 L. ed. 873, 29 Sup. Ct. 515. Distinguish- ing Pollitz, In re, 206 U. S. .323, 51 L. ed. 1081, 27 Sup. Ct. 729; Nebraska, Ex parte, 209 U. S. 436, 52 L. ed. 876, 28 Sup. Ct. .581. 12 Electric Park Amusement Co. v. Wayne, Circuit Judge, 155 Mich. 640, 15 Det. L. N. 1083, 119 N. W. 1095. 13 Rice, In re, 155 U. S. 396, 39 L. ed. 198, 15 Sup. Ct. 194. 574 ACTIONS AT LAW CONTINUED— MANDAMUS §§ o47, 348 bankruptcy court to dismiss proceedings in bankruptcy against a corporation because the petition failed to show that the prin- cipal business of the bankrupt was trading, printing, publish- ing, mining, manufacturing or a mercantile pursuit, will be re- fused." § 347. Mandamus Will Not Be Granted When Fruitless and Unavailing. A mandamus will not be awarded when the court is power- less to make it effectual and where it would be fruitless and un- availing to grant the order. Thus mandamus will be refused where it appears that if ord<^red to make the desired extension of its railroad it would be financially unable to obey and the writ would on that account prove ineffectual. The company's road in this case was in the hands of another corporation, which was in the hands of receivers of the Federal Circuit Court, who are amenable only to the court of their appointment, and no traffic arrangements could be compelled with another in- dependent road and the writ would, if awarded, be wholly un- availing.^^ So the writ will not issue to compel the Secretary of State to file the articles of association of a foreign corporation a tontine investment company, where, subsequent to the filing of the petition, a statute has become operative under which the rights claimed by relator have been abrogated.^® But such writ may be the proper remedy in a case where an injunction could not be maintained because the wrong complained of had been accomplished.^^ § 348. Mandamus Does Not Lie Where There Is a Plain and Adequate Remedy. The writ of mandamus may not be issued in any case where there is a plain and adequate remedy in the ordinary course of 14 Riggs, Matter of, 214 U. S. 9, 53 L. ed. 887, 29 Sup. Ct. 598. 15 Town of Strasburg v. Winchester & Strasburg R. Co., 94 Va. 647, 27 N. E. 49.3. 18 Preferred Tontine Mercantile Co. v. Secretary of State, 133 Mich. 395, 95 N. W. 117. 17 Golden Star Lodge No. 1 v. Watterson, 158 Mich. 696. 575 § 348 ACTIONS AT LAW CONTINUED — MANDAMUS the law.^* So in Indiana such a writ is not proper if there is an- other adequate remedy, and the rule does not obtain that such writ is not proper unless there is no other remedy .^^ And the writ cannot be used to perform the office of a writ of error or an appeal even if no appeal or writ of error is given by law.^" The "adequate remedy" which will bar mandamus must be such as reaches the end intended, and actually compels the performance of the duty in question. It must be equally as convenient, beneficial and effective, as the proceeding by man- damus. The remedy by repeated actions at law to recover dam- ages for a constantly recurring and continued violation of duty is not adequate.^^ This writ is, however, the duly sufficient rem- edy where the legal remedy is uncertain, indefinite and inad- equate.^^ And the general rule is that mandamus will be granted whenever there is a legal as distinguishable from an equitable right, without a specific legal remedy. And this principle has been applied to the collection of a tax, where there was no other adequate remedy for collecting the tax, and a mandamus was issued. ^^ 18 Horton v. State, 60 Neb. 701, 84 N. W. 87. See also Atlantic City Rd., In re, 164 U. S. 633, 41 L. ed. 579, 17 Sup. Ct. 208; State ex rel. Norcross v. Board of Medical Examiners, 10 Mont. 162, 25 Pac. 440; State ex rel. Jones V. Williams, 54 Neb. 154, 74 N. W. 396; Fraternal Mystic Circle v. State, 39 Ohio L. J. 43, 48 N. E. 940. 19 State ex rel. Morgan, Assessor, v. Real Estate Bldg. & Loan Assoc, 151 Ind. 502, 51 N. E. 1061, a case of mandamus to permit county assessor to inspect corporation books. 20 Rice, In re, 155 U. S. 396, 39 L. ed. 198, 15 Sup. Ct. 194. See Riggs, Matter of, 214 U. S. 9, 53 L. ed. 887, 29 Sup. Ct. 598; Hudson Oil & Supply Co., Matter of, 214 U. S. 487 (same principle; prohibition); Huguley Mfg. Co., In re, 184 U. S. 297, 46 L. ed. 549, 22 Sup. Ct. 455. 21 Richmond Ry. & Electric Co. v. Brown, 97 Va. 26, 1 Va. S. C. Rep. 213, 32 S. E. 775. 22 Golden Star Lodge No. 1 v. Watterson, 158 Mich. 696. 23 Duryee v. United States Credit System Co., 55 N. J. Eq. 311, 312, 313, 37 Atl. 155. The court, per Emery, V. C, said: "But this statutory lien for taxes is strictly legal rather than equitable in its nature, and if there be no other method expressly provided of enforcing the lien by legal process, it is not at all clear that the Supreme Court cannot enforce the appropria- tion of the property subject to the lien, either by mandamus or by the is- suing of process of execution for sale to pay the lien, analogous to the process of levari facias for this purpose, out of the exchequer (2 Tidd, Pr. 1042) ; or 576 ACTIONS AT LAW CONTINUED — MANDAMUS § 348 Mandamus will lie from the Federal Supreme Court to compel the Circuit Court to remand a case to the State Court where it is apparent from the record that the Circuit Court has no jurisdic- tion whatever, and the writ will lie even though the party ag- grieved may also be entitled to appeal or writ of error; and while mandamus never lies where the party praying therefor has another adequate remedy, and appeal or writ of error at the end of a litigation, which must go for nought, is not an adequate remedy for a plaintiff whose case has been wrongfully removed from a State Court to the Circuit Court, and held there against his protest.^^ So mandamus may be granted where an action of damages for breach of a contract would be an inadequate remedy .^^ The writ will also lie to compel the observance of a regulation made by the railroad commissioners under the powers con- ferred by the Florida Constitution,'^ requiring a terminal com- })any to admit a railroad company to the privileges and benefits of its common passenger station or terminal, notwithstanding an action for damages or proceedings to enforce the penalty provided by the statute for failure to comply with the regula- tion might be maintained, as such remedies are inadequate and neither of them is adapted to secure the performance of the duty to the public imposed by such regulation.'^ But mandamus is not a proper remedy for the collection of the amount of a bond, there being an adequate remedy at law in which defendant can properly make defense.^* Nor does the writ lie to compel an irrigation company to deliver water to a landowner pursuant to a private contract for water to irrigate the plaintiff's lands, perhaps the Hen might be enforced by scire facias, the assessment of taxes being in the nature of a record or judgment." Id. 314. 24 Winn, In re, 218 U. S. 45S, 53 L. ed. 873, 29 Sup. Ct. 515. The peti- tioner in this case for mandamus, as assignee of the right of action of the shipper, brought in the State Court an action against an express company for the neghgent transportation of a boar whereby the animal was killed. 25 Baltimore University v. Colton, 98 Md. 623, 57 Atl. 14, 64 L. R. A. 108. 28 Chap. 4700, Laws, 1899. 27 State V. Jacksonville Terminal Co., 41 Fla. 377, 27 So. 225. 28 Barber Asphalt Paving Co. v. Village of Highland Park, 156 Mich. 178, 16 Det. L. N. 76, 120 N. W. 621. 37 577 § 349 ACTIONS AT LAW CONTINUED — MANDAMUS since there is an adequate remedy at law in an action for dam- ages.^" § 349. Statutory Remedies— When and When Not Ex- clusive of Mandamus. A litigant will not be permitted to invoke the extraordinary remedy of mandamus where an express statute affords him an adequate remedy for the redress of the grievance of which he complains.'''" But the remedy provided by statute for the en- forcement of orders of the railroad commissioners by action of mandamus is not exclusive.^^ 2» state ex rel. Krutz v. Washington Irrigation Co., 41 Wash. 283, 111 Am. St. Rep. 1019, 83 Pac. 308. The court, per Hadley, J., said: "In support of her contention that mandamus is the proper remedy here, she cites Price v. Riverside Lanil & Irr. C'o., 5G Cal. 431, and McCrary v. Beaudry, 67' Cal. 120, 7 Pac. 264. An examination of those cases, however, discloses that each was based squarely upon the theory that there was a refusal to discharge a public duty. It does not appear that a private contract between the par- ties existed in either case. Our statute provides that the writ of mandate will issue 'where there is not a plain, speedy, and adequate remedy in the ordinary course of law.' Bal. Code, § 5756. This is the general rule, and the courts hold that mandamus is a remedy to compel the performance of a duty required by law where the party seeking relief has no other adequate remedy, and where the duty sought to be enforced is clear and indisputable. Board of Com'rs v. Aspinwall, 24 How. 376, 16 L. ed. 184; Bayard v. United States ex rel. White, 127 U. S. 246, 8 Sup. Ct. 1223, 32 L. ed. 116; United States ex rel. Redfield v. Windom, 137 U. S. 636, 11 Sup. Ct. 197, 34 L. ed. 811; Territory ex rel. Crosby v. Crum, 13 Okl. 9, 73 Pac. 297; State v. Pater- son, etc., R. Co., 43 N. J. L. 505. In Florida, etc., R. Co. v. State ex rel. Tavares, 31 Fla. 482, 13 So. 103, 34 Am. St. Rep. 30, 20 L. R. A. 419, it was said that mandamus will not lie to enforce the performance of private con- tracts; see also State ex rel. Payser v. Trustee of Salem Church, 114 Ind. 389, 16 N. E. 808; Parrott v. Bridgeport, 44 Conn. 180, 26 Am. St. Rep. 439; Merrill, Mandamus, § 16; High, Extr. Legal Reins. (3d ed.), § 25. We think appellant has an adequate remedy upon her contract, and that man- damus does not lie." 30 Nebraska Telephone Co. v. State ex rel. Yeiser, 55 Neb. 627, 45 L. R. A. 113, 76 N. W. 171. 31 State v. Mason City & Fort Dodge Ry. Co., 85 Iowa, 516, 52 N. W. 490. The court, per Granger, J., said: "We are further cited to the constitutional provision that ' the district court shall be a court of law and equity, which shall be distinct and separate jurisdictions, and shall have jurisdiction in civil and criminal matters arising in their respective districts in such manner as shall be prescribed by law.' It is claimed that the remedy in such a case is by mandamus, under the decisions of this court which is said to be a law 578 ACTIONS AT LAW COXTINUED— MANDAMUS § 349 A city charter gave its common council supervision over all bridges crossing a railroad in said city, with authority to order the building and repairing of such bridges in such manner and within such time as in its judgment public convenience might require; and provided that if any railroad should neglect to obey such order the city might do the work and recover the expense thereof from the delinquent railroad company. It was held that this remedy was not exclusive, and that mandamus by the State was an appropriate means of enforcing an order of the common council directing the defendant to build a bridge, where such order had been appealed from by the latter and affirmed by a judge of the Superior Court.^^ In California it does not rest in the discretion of the trial court or judge to refuse a commission to take depositions of witnesses in the cases defined by the Code, and although the order denying the application is appealable, that does not con- stitute a sufficient reason for holding that remedy exclusive, especially where it would be entirely inadequate; so mandamus would be the only remedy for the refusal of a commission in a proper case before judgment, and pending an appeal from the judgment. This applies to a case where the alleged negligence of a gas company has caused an explosion of gas, and it is sued proceeding, and that, the law having prescribed such a proceeding, it is exclusive. It was held in Boggs v. Railway Co., ,54 Iowa, 435, 6 N. W. Rep. 744, that mandamus was a proper remedy to enforce such right, and other cases have been prosecuted by such a proceeding; but it is not held that such a remedy is exclusive. It should not be claimed that but a single remedy can be available to a party. The doctrine of the 'election of remedies' is old and familiar. It may further be said that the statute giving the courts jurisdiction to enforce orders of the commissioners was enacted after the case of Boggs v. Railway Co. was decided. It has not been held that an action to enforce the orders of the commissioners must be by proceedings by mandamus, nor by ordinary proceedings. It is provided by the act giving the courts jurisdiction in such cases that they shall be 'by equitable actions in the name of the State.' The law thus creates a new action, and defines dip jurisdiction of the court having cognizance of it. If, indeed, there was error as to the kind of proceeding, it was waived by a failure to move for its correction 'at the time and in the manner prescribed. Code, § 2519.' " 32 State V. New York, New Haven & Hartford Ry. Co., 71 Conn. 43, 40 Atl. 925. 579 § 350 ACTIONS AT LAW CONTINUED— MANDAMUS to recover damages claimed to have been caused thereby and the company seeks to obtain a commission to take the deposi- tion of a witness to perpetuate his testimony, such witness being the only one on the material point of the cause of the explosion and being also at the time under sentence of death expecting shortly to be executed, although his sentence was commuted.^^ Where, under a State Constitution:^ "The legislature is in- vested with full power to pass laws for the correction of abuses and to prevent unjust discrimination and excessive charges by persons and corporations engaged as common carriers in transporting persons and property, or performing other serv- ices of a public nature; and shall provide for enforcing such laws by adequate penalties or forfeitures; " said last claust^: "and shall provide for enforcing such laws by adequate penal- ties and forfeitures," does not by implication forbid the use of mandamus and other remedies for enforcing duties imposed by laws passed to accomplish the purposes specified in the first clause of the section. The clause quoted is a command to the legislature, leaving it no discretion upon that subject, but being silent as to other remedies for enforcing duties growing out of laws passed to accomplish the purposes specified in the first clause of the section, it rests in the legislative discretion to pro- vide such as it may see fit, and the courts may apply such of the ordinary remedies as may be applicable.^^ § 350. When Mandamus Is the Proper Remedy Although There Is Another Remedy — Action for Damage — Equity. Mandamus will lie where an action for damages would be in- adequate; and the existence of an equitable remedy is no bar to the issuance of the writ, although it may influence the court in the exercise of its discretion .^^ So mandamus and not a bill 33 San Francisco Gas & Electric Co. v. Superior Court, 155 Cal. 30, 99 Pac. 359. 34 Const. Fla., 1885, Art. XVI, § 30. 35 State V. .Jacksonville Terminal Co., 41 Fla. 377, 27 So. 225. 36 People ex rel. Frost v. New York Central* Hudson River Rd. Co., 168 N. Y. 187, 61 N. E. 172, rev'g 61 A pp. Div. 494, a case relating to the main- 580 ACTIONS AT LAW CONTINUED — MANDAMUS § 351 in equity is the proper remedy to test the vahdity of the title of usurping officers of a rehgious corporation.^^ And the fact that a petitioner for such a writ has a remedy in equity by bill for specific performance is not a reason for refusing the writ.^^ So mandamus and not a bill in equity is the proper remedy to obtain the restoration to membership in a religious society and to test the validity of the expulsion of said member.^^ The remedy is also by mandamus and not by mandatory injunction where an executive officer refuses to perform a plain duty un- mixed with discretion, and this applies in a case of refusal of the proper officer to receive a fee and issue a Hcense to a com- pany to establish an agency for selHng its products. Such writ of mandamus is issued after a trial by the court and never in vacation."*" And where there is a question as to the election and acceptance of membership in a religious corporation manda- mus and not a bill in equity is the proper remedy .^^ Again, the proper remedy to compel compliance with a statutory require- ment to post the by-laws of a corporation in its principal place of business, is by mandamus and not by an injunction suit."*^ § 351. When Remedy Is by Action at Law and Not by Mandamus. Mandamus is not a proper remedy to compel the issuance of warrants to pay for lighting a city's streets, since an action at law should be brought to recover the same where the city claims an offset or counterclaim for breach of contract."*^ So redress for injuries received from private corporations organ- tenance of culverts in a railway embankment and the issue of necessity of opening additional culverts on a motion for peremptory mandamus to re- store certain culverts. 37 Saltman v. Nesson, 201 Mass. 5-34, 88 N. E. 3. 38 Baltimore University v. Colton, 98 Md. 628, 57 Atl. 14, 64 L. R. A. 108. 39 Saltman v. Nesson, 201 Mass. 534, 88 N. E. 3. ^ Hager, Auditor, v. New South Brewing Co., 28 Ky. L. Rep. 895, 90 S. W. 608. 41 Saltman v. Nesson, 201 Mass. 534, 88 N. E. 3. 42 Boardman v. Marshalltown Grocery Co., 105 Iowa, 445, 75 N. W. 343. « Kensington Elec. Co. v. Philadelphia, 187 Pa. St. 446, 43 Wkly. N. C. 186, 41 Atl. 509. 581 §§ 352, 353 ACTIONS at law continued— mandamus ized for joint or partnership undertakings, should be sought at common law, not through mandamus proceedings.^ § 352. When Proper Remedy Is Quo Warranto and Not Mandamus. Mandamus will not lie to compel a foreign corporation to per- form an act which is a prerequisite to its right to do business in the State. The proper remedy is quo imrranto, or the imposi- tion of the penalty for doing business without complying with the law.'*^ § 353. When Remedy to Forfeit Franchise, and Not Mandamus, Is Proper. In an action by the State for a writ of mandamus to compel a street railway company to resume operation of a portion of its line, which it had abandoned, it was held that no such obli- gation as could be enforced by mandamus by the State was imposed by the acceptance and construction of its line, under an ordinance of a city giving such company permission to con- struct and operate said lines; but that the reniedy would be to forfeit the franchise to operate a branch in controversy where the operation of a part thereof was abandoned.''^ 44 Lamphere v. Grand Lodge Ancient Order of U. W., 47 Mich. 429. 45 Secretary of State v. National Salt Co., 126 Mich. 644, 8 Det. L. N. 168, 86 N. W. 124. 46 San Antonio St. Ry. Co. v. State, Elmendorf, 90 Tex. 520, 39 S. W. 926, 35 L. R. A. 662, 6 Am. & Eng. R. Cas. (N. S.) 658, rev'g 38 S. W. 54. The court, per Gaines, C. J., said: "It is a well-settled doctrine that a corpora- tion may be compelled by the writ of mandamus to perform a duty imposed by statute. The duty need not be express; it may be implied. Clearly, when it appears by fair implication from the terms of its charter, it is as imperative as if the obligation were expressed. But as to corporations quasi public in character — such, for example, as those chartered for the carriage of passengers and freight — there are decisions which hold that they owe certain duties to the public which they may be compelled to per- form, although not enjoined by their charters, either in express terms or by specific implication. But we have been unable to discover that any well- defined rule has been laid down by the authorities by which we may deter- mine in every case what implied duties are assumed by such a corporation by the acceptance of its charter. It has been held that in the absence of some tlirect statutory requirement a railroad company cannot be compelled 582 ACTIONS AT LAW C(JXTINUED — MANDAMUS § 354 § 354. When Remedy in Equity and Not by Mandamus — Injunction — Mandatory Injunction. Mandamus will not be granted to compel the secretary of a private corporation to record the transfer of certificates of stock to establish and maintain a station at a particular point on its line, although it may be shown that the convenience of the public demands it. Northern Pac. R. Co. V. Washington Territory, 142 U. S. 492, 12 Sup. Ct. 283; People V. New York, L. E. & W. R. Co., 104 N. Y. 58, 9 N. E. 8.56. A contrary doctrine seems to have been acted upon in State v. Republican Val. R. Co., 17 Neb. 647, 24 N. W. 329, and in People v. Chicago & A. R. Co., 130 111. 175, 22 N. E. 857. It is one thing to hold that a company which has accepted a charter authorizing it to construct a line of railroad, with power to con- demn property, and has constructed and is maintaining its line, may be compelled to so operate its Une as reasonably to meet the necessities of the public ; and, we think, it is quite a different one that a railroad company, by the acceptance of its charter, which simply makes it lawful to construct and maintain a railroad, assumes an obligation to construct." The court then considered a number of decisions upon this point and continued as follows: "The legislature, in creating a corporation, has the power to give it an option to do or not to do the acts which it is authorized to perform. On the other hand, it may impose upon the corporation, as the law of its creation, the obligation to exercise to their fullest extent the powers which are granted. In either case the proposed corporators may accept or not; and, in the latter, if they do accept, they may be compelled by mandamus to perform the duties so imposed. But to say that in granting a charter to do a public service there is no difference between making it lawful to do an act, and imposing it as an obligation to perform it, is to say that by reason of the pubUc interest involved language is to have a different construction and effect from what it would have in statutes in general or in private con- tracts. Expressions may be found in the opinions of courts which coun- tenance that doctrine, but we think there it is based upon an assumption that cannot be maintained upon sound principle. In legislating, the law- making power undertakes to determine what is to the interest of the pub- lic, and under the limitations of the constitution it is the sole judge of what will promote the public utility, and must be presumed to be capable of ex- pressing its will in intelligible words. When, therefore, a corporation, whether quasi public or purely private, is granted the privilege of doing an act, and there are in its charter no express terms which make it obligatory to do the act, or other words from which by fair construction that inten- tion can be gleaned, we do not see upon what sound principle the duty can be imposed. * * * Wg are of opinion also that the fact that the road has been constructed and operated, and that a part is now operated, makes no difference. Under the grant of a privilege to construct and maintain, if after acceptance it is permissive only to construct, it is not obligatory to maintain. But we do not hold that the company can against the will of the city, operate a Dart of its lint , and not the whole. A privilege to estabUsh 583 § 354 ACTIONS AT LAW CONTINUED — MANDAMUS on the books of the company, as ecjuity has jurisdiction to de- cree transfers, if an action at law does not afford an adequate remedy.'*^ And where, owing to physical or other conditions existing at a point where a cross-over switch is located, the annoyance caused to the adjoining proprietor is peculiar and exceptional; and so injurious to the quiet enjoyment of his home, as to constitute an invasion of his property rights, ho may then be entitled to equitable relief, but not to a writ of mandamus. Such private right could not be enforced, how- ever, without establishing the absolute illegality of the struc- ture at the point in question.^* So where a complaint in manda- mus charges that relator by a written contract with a natural gas company permitted such company to lay pipes over and upon his lands in consideration of such company's agreement to furnish the relator natural gas for domestic use, and asks the court to compel such company "to cease taking up and re- moving its pipe-line on the relator's farm, and to replace any part of the line taken up at the commencement of this suit, and to continue to furnish natural gas to the relator's farm dwelling according to the terms of a written contract granting appellee a right of way for its pipe-line across said farm," such complaint is not sufficient, since mandamus is not the proper remedy to compel such company "to cease taking up and re- moving its pipes," the proper remedy being injunction.''^ Again, where a Code^° provides that a mandatory injunction may affirmatively direct the doing of the act required to be done, injunction, and not mandamus, is the proper remedy to compel a telephone company to install an instrument .^^ an entire line of street railway may be granted when the privilege of con- structing and operating a part only would not be, and for a failure to op- erate a part it would seem that the whole might be forfeited." 47 Clarke v. HiU, 1.32 Mich. 434, 9 Det. L. N. 671, 9.3 N. W. 1044. 48 State ex rel. Howard v. Hartford St. Ry. Co., 76 Conn. 174, 56 Atl. 506. 49 State ex rel. Thiebaud v. Connersville Natural Gas Company, 163 Ind. 563, 71 N. E. 483. 50 Ky. Civ. Code Prac, § 271. 51 Williams v. Maysville Telephone Co., 119 Ky. 33, 26 Ky. L. Rep. 945. In this case the fact that defendant telephone company furnished plaintiff's neighbors in the same square with telephones for three dollars per quarter, 584 ACTIONS AT LAW CONTINUED — MANDAMUS § 355 § 355. Mandamus — Enforcement of Private or Personal Rights — Contractual Relations. As mandamus is a discretionary writ it will not usually lie to settle the controversies of private corporations where the facts are not important on public grounds, or would not justify the interference of the court if corporate authority did not exist.^^ Nor does this writ lie to enforce merely private or personal rights, or contractual duties. Its proper function is to enforce duties growing out of public relations, or imposed b}^ without requiring them to contract to keep the phones a year, did not en- title plaintiff to compel defendant to furnish him a phone for the same price without a yearly contract, without showing that the conditions were the same. In this case the court, per Nunn, J., said: "It is conceded by appellee's counsel that appellee is a common carrier, a public service cor- poration, and, as such, is subject to the laws governing and controlling such corporations. It is self-evident that a corporation engaged in a business affected by a public interest may prescribe reasonable rules and charges for conducting its business. And when the charges are not fixed by legis- lative enactment (as in the case at bar) the charges may be fixed by the corporation, and the only limitations are that the charges must be reason- able, and be the same to all persons rnider the same or like circumstances and conditions. There must not be, in the service or charge, any discrimi- nation or partiaUty. Tested by these principles, we are of the opinion that the petition did not state a cause for action. Especially it did not author- ize the court to grant a mandamus to compel appellee to place a telephone in appellant's residence. Mandamus was not the proper remedy. This writ is defined by § 477 of the Civil Code of Practice, as follows: 'The writ of mandamus, as treated of in this chapter, is an order of a court of compe- tent and original jurisdiction, commanding an executive or ministerial officer to perform an act, or omit to do an act, the performance or omission of which is enjoined by law; and it is granted on the motion of the part}- aggrieved, or of the commonwealth when the public interest is affected.' The agents and servants in charge of appellee's telephone business were and are not ' executive or ministerial officers ' in the sense and meaning of this section of the Code. If appellant's petition had been otherwise sufficient under his prayer ' for all proper and general relief, ' the court should have granted him a mandatory injunction, as provided in § 271, Civ. Code Prac, which provides: 'When a mandatory injunction shall be granted, the or- der or judgment may affirmatively direct the party enjoined to do the act or thing required to be done.' This, however, is a harsh and extreme rem- edy, and should never be resorted to or granted except it be made to appear clearly that the party demanding the remedy has the legal right to have the act done, and that he has no other adequate remedy at law to obtain redress." o2 Lamphere v. Grand Lodge Ancient Order of U. W., 47 Mich. 429. 585 § 'A55 ACi'IONS AT LAW CONTINUED — MANDAMUS statute, or in some respect involving a trust or official duty.^^ Again, duties imposed on a corporation, not by virtue of ex- press law, nor by the conditions of its charter, but arising wholly out of contract relations, will not be enforced by manda- mus, since the use of such writ is limited to the enforcement of obligations imposed by law. Where the duties of a corporation, or of its trustees, grow out of or result from matters of contract, writs of mandate will not lie against the corporation or its trustees, either in their corporate capacity or as individuals, to compel the performance of the contract, but the party aggrieved will be left to the ordinary remedies, either at law or in equity.^'' So the writ will not lie to annul a contract for public printing.^-"^ The doctrine that mandamus will not lie to compel a private corporation to perform its obligations resting solely on con- tract with an individual has been applied to the contract of a medical college to grant its diploma to one completing the course of instruction and complying with certain conditions.^^ 53 Richmond Ry. & Electric Co. v. Brown, 97 Va. 26, 1 Va. S. C. Rep. 213, 32 S. E. 775. 54 Poyser v. The Trustees of Salem Church, 114 Ind. 389, 396, 16 N. E. 808, citing State ex rel. v. Zanesville, etc., T. P. Co., 16 Ohio St. 308; State ex rel. v. Patterson, etc., R. R. Co., 43 N. J. L. 505; State v. Republican River Bridge Co., 20 Kans. 404; People ex rel. v. Dulaney, 96 111. 503; High on Ex, Leg. Rem., § 321. In the principal case the trustees of a Methodist Church corporation solicited subscriptions to a building fund. To induce persons who were not members of the religious denomination represented by them to subscribe to such fund, it was stipulated in the subscription papers, with the consent of the corporation, that the house to be erected should be free to all orthodox denominations when not occupied by the Methodists. Relying upon this stipulation, members of other denomina- tions subscribed and paid various sums of money. Some time after the completion of the building, the Methodist corporation refused to permit other denominations to use the house. Complaint was by subscribers to the building fund, asking that a writ of mandate may issue to compel the t rustees of the Methodist Church to designate a time when another denomi- nation may occupy the building. It was held, that the duty, the perform- ance of which is sought to be compelled, is not one "resulting from an office, trust, or station," and that, under § 1168, R. St. 1881, mandate would not he. 55 Capital Printing Co. v. Hoey, 124 N. C. 767, 33 S. E. 160. 58 State ex rel. Burg v. Milwaukee Medical College, 128 Wis. 7, 116 Am. St. Rep. 21, 106 N. W. 116. 580 ACTIONS AT LAW CONTINUED — MANDAMUS § 355 So in a late Michigan case mandamus was brought to compel a college to receive relators as students; an order was made granting the writ and certiorari was brought by the respondent and it was held that mandamus would not be granted to com- pel a private corporation to perform its obligations resting in contract with an individual .^^ But in a Maryland case it is decided that mandamus lies to compel a university which has a law school to reinstate a stu- dent which it has wrongfully dismissed from said school, with- out notice and in violation of the contract between the parties .^'' Again, where a corporation undertakes to operate a railroad franchise it assumes all the duties and obligations which spring by law from the character of its business and from the customs 57 Booker v. Grand Rapids Medical College, 156 Mich. 95, 16 Det. L. N. 56, 120 N. W. 589. The court, per Ostrander, J., said: "There is no good reason why the law should not recognize, as growing out of these relations, a right of relators resting in contract to be continued as students by the respondent. It is the general rule that mandamus does not lie to compel a private corporation to perform its obligations resting in contract with an individual. We are referred to no decision of this court recognizing any other rule. A case in which the rule was enforced by denying the writ to one who had completed a course in an incorporated college and had been refused a diploma is State ex rel. Burg v. Milwaukee Medical College, 128 Wis. 7, 106 N. W. 116, 116 Am. St. Rep. 21. In the opinion in that case and in the motion for a rehearing many authorities are cited, among them Clarke v. Hill, 132 Mich. 434, 93 N. W. 1044. The writ was held to be the only adequate remedy in Baltimore University v. Colton, 98 Md. 623, 57 Atl. 14, 64 L. R. A. 108, and in People ex rel. Cecil v. Bellevue Hospital Medical College, 60 Ilun, 107, 14 N. Y. Supp. 490; Id., 128 N. Y. 621, 28 N. E. 253. It cannot be said that relators are members of an incorporated society, and have been wrongfully deprived of the privileges of members, which is the ground of decision in Baltimore University v. Colton, supra. It may be said, perhaps, that the New York decision is rested upon the notion that relator had acquired a status, evidence of which, in the form of a degree, was arbitrarily refused. The Court of Appeals delivered no opin- ion. If mere expedition in securing some remedy is to be made the test, it may be said there is no other adequate remedy for relators. And, if enforce- ment of the obligations of private corporations by mandamus is to be en- tered upon bj^ the courts, we know of no rule by which it can be determined in what cases the writ should be refused. The apparent hardship of a par- ticular situation is not a good reason for departing from the rule." 58 Baltimore University v. Colton, 98 Md. 623, 57 Atl. 14, 64 L. R. A. 108. 587 § 355 ACTIONS AT LAW CONTINUED — MANDAMUS incidental to it. It tenders a continuing offer to the general public that it will perform these duties for the benefit of each and every one of them when demanded at its hands. When any member of the public makes a demand upon it under such general offer there immediately results a civil obligation on the part of the company in favor of the party making the demand, enforceable in the name of such party through the usual remedies by which contracts are enforced. The party seeking the enforcement of the obligation by mandamus cannot be driven by the corporation to an action for damages, nor can it by the payment of money, leave unperformed its specific affirmative legal duty.^^ Where a Code ®" provides that manda- mus may issue to compel the performance of an act which the law specially enjoins as a duty resulting from an office, trust oi' station; and also^^ that the writ must be issued in all cases where there is not a plain, speedy and adequate remedy at law, it is held that mandamus is the proper remedy to compel a city to levy a special tax to pay ascertained water rentals due under a valid contract for a water supply, which the city had repudi- ated. And where a city repudiates a contract with a water company providing for payment of hydrant rentals semi- annually, but still uses the water furnished by the company, and insists that the supply be continued regardless of the con- tract, a command in a writ of mandamus, that the city levy sufficient taxes to pay, not only the six months' water rentals already due, but also those that will become due for the re- maining six months of the year, is proper.®^ In a Louisiana case the relator applied for a writ of manda- mus to compel the city engineer to furnish its lines and levels for the construction of its railroad through neutral ground of a certain named avenue between certain named streets. The relator claimed that it owned a railroad franchise and that sub- 59 Cumberland Teleph. & Teleg. Co. v. Morgan's L. & T. Ry. Co., 51 La. Ann. 29, 72 Am. St. Rep. 442, 24 So. 803. 60 Mont. Code Civ. Proc, 1895, § 1961. «i Id., § 1962. 62 Syllabus in State ex rel. Great Falls Water Works v. Great Falls City Council, 19 Mont. 518, 49 Pac. 15. 588 ACTIONS AT LAW f'ONTINlTED — MANDAMUS § S'lo seqiiently the city council passed an ordinance, under which certain changes were made in the matter of the hne of the rail- road; the relator claimed that the whole road had been com- pleted except that portion to which the writ of mandamus related, and relator was anxious to connect its line so as to operate from terminus to terminus. The respondent's answer to the preliminary order issued on application for the manda- mus, was that it was not his duty to deliver to relator lines and levels, because the amending ordinance under which the re- lator claimed a franchise had been repealed by the city council, and that if it had not been repealed relator's allegations were vague and indefinite and did not indicate upon what neutral grounds to establish the lines and levels and did not designate upon what part of the neutral ground the tracks were to be laid; and also, that the relator had no contract with the city and held no franchise from it, and that the alleged contract was void. It was not disputed, as a fact, that the relator had con- structed its hne of road as alleged in its petition. It was also a fact that relator had accepted the terms and conditions of the ordinance under which it had accepted its franchise; that ordinance was, however, repealed. It was held that there was an existing contract between the city and the corporation re- lator; that it was no longer within the power of the city, after compliance by relator with its terms, to treat said contract as a nullity by repealing the prior ordinance, as by its execution the contract acquired a validity to which effect should be given until it should be regularly annulled contradictorily with the party in interest; that it was incumbent upon the surveyor, under the terms of the contract between the relator and the city, to furnish the lines and levels of the contemplated road; that he could not in law decHne to act before he was stopped by the legal action of the constituted authorities; and that mandamus would lie to compel the performance by an officer of duties purely ministerial.^^ 63 State ex rel. Crescent City Rd. Co. v. City Engineer, 49 La. Ann. 076, 21 So. 724, McEnery, J., dissenting. See also on last point State ex rel. Baltimore, Canton & P. B. Ry. Co. v. Latrobe, 81 Md. 222, 233, 31 Atl. 788. 589 § 356 ACTIONS AT LAW CONTINUED — MANDAMUS § 356. When Writ Lies to Enforce Discretionary or Ministerial Duties. When the duty imposed is strictly a ministerial one, is abso- lute and imperative, and in its discharge requires the exercise of neither official discretion nor judgment, mandamus will lie to enforce its performance.^^ And such a writ may issue to compel public officers to exercise discretion.^^ But though the discretion of a Secretary of State may extend to matters of foiTn, still it does not extend to a question of merits in an ap- plication to him to file and record articles of incorporation showing compliance with the laws, the proper fees being ten- dered.^^ Where a franchise was granted to a telephone com- pany to extend its lines upon the condition that the location of the poles should be designated by the commissioner of public works, it was decided that though the commissioner refused and his refusal was purely arbitrary and unjustified, the com- pany was not justified in taking matters into its own hands, even though conforming to the recognized method of erecting such poles, but that the legal course was open to the appellant to compel the commissioner's action and that mandamus would lie to compel the commissioner to act, as that was the proper remedy to compel the exercise of official discretion or judg- ment.^'^ If county commissioners have improj^x^-ly assessed for 84 State ex rel. Baltimore, Canton & P. B. Ry. Co. v. Latrobe, 81 Md. 222, 31 Atl. 788. Examine the following cases: Alabama: Ramagnano v. Crook, 85 Ala. 226, 3 So. 845. Kentucky: Shine v. Kentucky C. R. Co., 85 Ky. 177, 3 S. W. 18. Louisiana: State ex rel. Johnson v. Rightor, 40 La. Ann. 852, 5 So. 416. Missouri: State ex rel. Hathaway v. Board of Health, 103 Mo. 22, 15 S. W. 322; State v. Cramer, 96 Mo. 75, 8 S. W. 788. Nebraska: State ex rel. Hershisher v. Kincaid, 23 Neb. 641, 37 N. W. 612. Pennsylvania: Commonwealth v. McLaughlin, 120 Pa. St. 518, 21 W. N. C. 478, 14 Atl. 377. West Virginia: Satterlee v. Strider, 31 W. Va. 781, 8 S. E. 552. 65 Croasman v. Kincaid, 31 Ore. 445, 49 Pac. 764. 66 State ex rel. Steuben ville Gas & Elec. Co. v. Taylor, 55 Ohio St. 61, 35 Ohio L. J. .384, 44 N. E. 513, 4 Am. & Eng. Corp. Cas. (N. S.) 470. 67 St. Paul, City of, v. Freedy, 86 Minn. 350, 90 N. W. 781, 8 Am. Elec. Cas. 29, citing State v. Teal, 72 Minn. 37, 74 N. W. 1024. 590 ACTIONS AT LAW CONTINUED — MANDAMUS §§ 357, 358 taxation machinery as being part of tlu; rc^al estate of a corpo- ration, a writ of mandamus is the projx-r remedy to cause them to strike from their books the illegal assessment. ^^ § 357. When Writ Does Not Lie to Enforce Discretionary Duties. Mandamus will not lie to compel the exercise of discretion in a particular manner .^^ Whenever the performance of a duty is dependent upon the exercise of judgment and discretion on the part of the person to whom the performance of that duty is exclusively assigned, that judgment will not be interfered with or controlled by mandamus.''" Mandamus cannot be sustained against a street commissioner to compel him to issue a permit to excavate the city streets for a subway, where the relator corporation has no vested right so to place its wires.'^'^ Nor does such a writ lie to compel a board of aldermen to designate lo- cations for electric light fixtures in streets where such board has in such matters discretionary powers under the statute.''^ § 358. When Mandamus Lies and Does Not Lie to Compel «8 Anne Arundel County (County Commissioners of Anne Arundel County) V. Baltimore Sugar Ref. Co., i-ry, bridge, or road, so near it as to create a conipetition injunous to such franchise, is, in respect to such franchise, a nuisance; and the court will grant a per])etual injunction to secure the enjoyment of the statute franchise, and prevent the use of the rival establishment.^^ In a suit for the abatement of a nuisance, a court of equity confining its inquiries within the limits of its local jurisdiction, must be governed by the same rules which a court of law would act upon in trying an indictment for the same nuisance, and the rule of law is that where a bridge over a navi- gable stream is erected for public purposes, and produces a pub- lic benefit, and leaves a reasonable space for the passage of vessels, it is not indictable. Another rule of law is that the bridge must appear plainly to be a nuisance before it can be so decreed; since a court of equity proceeding by bill, like a criminal court trying an indictment, must give the benefit of all reasonable doubts to the defendant.'* § 432. Injunction— Nuisances— Parties— State or At- torney-General — Corporations — Joinder. When the States by their union made the forcible abatement of outside nuisances impossible to each, they did not thereby agree to submit to whatever might be done. They retained the right to make reasonable demands on the grounds of their still remaining quasi sovereign interests, and the alternative to force a suit in the Federal Supreme Court. So that court has jurisdic- tion to, and at the suit of a State will, enjoin a corporation, citizen of another State, from discharging over its territory noxious fumes from works in another State where it appears that those fumes cause and threaten damage on a considerable scale to the forests and vegetable life, if not to health, within the plaintiff's State. A suit brought by a State to enjoin a cor- poration having its works in another State from discharging noxious gases over its territory is not, however, the same as one " Newburgh Turnpike Co. v. Miller, 5 Johns. Ch. 101, 9 Am. Dec. 274. 78 Mississippi & Missouri Rd. Co. v. Ward, 2 Black (67 U. S.), 485, 17 L. ed. 311. 691 § 432 EQUITABLE REMEDIES between private parties, and although the elements which would form the l^asis of relief between private parties are wanting, the State can maintain the suit for injury in a capacity as quasi sovereign, in which capacity it has an interest independent of and behind its citizens in all the earth and air within its do- main; and whether insisting upon bringing such a suit results in more harm than good to its citizens, many of whom may profit through the ^maintenance of the works causing the nui- sance, is for the State itself to determine/^ In an Oklahoma case the county attorney, acting under the provisions of a statute providing that an injunction could be granted to enjoin and suppress the keeping of a common nui- sance, began certain suits of the character stated below, securing injunctive relief without bond, upon a petition verified upon in- formation and belief. The position taken by him was that a monopoly or combination in restraint of trade was a public or common nuisance, and as such that courts of equity at the instance of the public prosecutor had the power to suppress the same. So where it was alleged that certain parties in violation of such act of the territorial legislature had entered into and be- come members of a pool, trust, agreement, combination and understanding with each other to create a monopoly in the business of buying and selling lumber, coal and grain, and that, acting thereunder, they were enabled to and were charging the public unjust, unreasonable and exorbitant prices for such commodities, and preventing others from engaging in such business, such acts constitute a public, common nuisance, and the parties thereto may be restrained as provided for by stat- ute*" at the suit of the county attorney.*^ But a railroad cor- 79 Georgia v. Tennessee Copper Co., 206 U. S. 230, 51 L. ed. 1038, 27 Sup. Ct. 618. 80 Wilson's Rev. & Am. St. Okla., 1903, § 4440. 81 Territory v. Long Bell Lumber Co., 22 Okla. 890, 99 Pac. 911. The court, per Dunn, J., said: "It will be noted that the petitions allege that the defendants have become members of a pool, trust, agreement, combination, and understanding with each other to regulate and fix the price of lumber, coal and grain and to prevent and restrict competition in the sale thereof, and that by virtue of being thus federated together, have so controlled all the business of buying and selling such commodities in the town of King- 692 EQUITABLE REMEDIES § 432 poration cannot by the general principles of equity jurispru- dence, maintain a suit for an injunction, as for a nuisance, against the keepers of saloons near the line of its road, at which workmen buy intoxicating liquors and get so drunk as fisher as to create a monopoly for their benefit and, by charging unjust, iin- reasonable, exorbitant prices for these commodities, their acts have Ik'cd and are greatly to the injury of the people of the county of Kingfisher and the territory of Oklahoma; that, by means of said confederation, combina- tion and monopoly, they are enabled to and do keep other persons desiring to enter said business from doing so, and arbitrarily fix the price which shall be paid for such commodities, and also the price at which they shall be sold to consumers, and that they have thereby completely excluded competition in these lines. * * * Forestalling and engrossing in the purchase of commodities in common use were at an early date condemned by the I^ng- lish Parliament, being made punishable by fine and imprisonment, and courts have uniformly denied to parties to contracts in restraint of trade their remedies and relief. Nearly all of the States of the Union, as well as the Federal Government, have provisions either in their constitutions or statutes making them illegal and bringing them under the ban of prosecu- tion on the part of the State. Where corporations are shown to havi' been involved, they have been proceeded against by quo warranto, People v. North River Sugar Refining Co., 22 Abb. N. C. 164, 3 N. Y. Supp. 401; State ex rel. Snyder v. Portland Natural Gas & Oil Co., 153 Md. 483, 53 N. E. 1089, 53 L. R. A. 413, 74 Am. St. Rep. 314; State ex rel. v. Standard Oil Co., 49 Ohio St. 137, 30 N. E. 279, 15 L. R. A. 145, 34 Am. St. Rep. 541; National Cotton Oil Co. v. Texas, 197 U. S. 115, 25 Sup. Ct. 379, 49 L. ed. 689, or they have been prosecuted under the criminal provisions of the stat- ute. Smiley v. Kansas, 196 U. S. 447, 25 Sup. Ct. 289, 49 L. ed. 546, or the State has proceeded against them by injunction to prevent a continuation of their illegal practices. Gulf, Colorado & Santa Fe Ry. Co. et al. v. State of Texas, 72 Tex. 404, 10 S. W. 81, 1 L. R. A. 849, 13 Am. St. Rep. 815, or the parties thereto have been indicted and prosecuted for conspiracy, People V. Sheldon et al., 139 N. Y. 251, 34 N. E. 785, 23 L. R. A. 221, 36 Am. St. Rep. 690; People v. Duke, 19 Misc. Rep. 292, 44 N. Y. Supp. 336; State ex rel. Burner v. Huegin, 110 Wis. 189, 85 N. W. 1046, 62 L. R. A. 700; State v. Eastern Coal Co. et al. (R. I.), 70 Atl. 1. The State of Con- necticut proceeded by mandamus in one instance against a railroad com- pany compelling it to reinstate train service which it had ceased under con- tract made with a competing carrier. State v. Hartford & New Haven Ry. Co., 29 Conn. 538. The foregoing cases exemplify some of the ditTerent remedies which have heretofore been applied to relieve the public of the effect of unlawful combinations restrictive of free competition, and now we are called on to say whether or not combinations such as are delineated in the petitions herein may be proceeded against in yet an additional way, as for a nuisance; the question being: Do their acts produce such a condition as to bring them within the terms of our statute, to the end that their con- 093 § 433 EQUITABLE REMEDIES to be unfit for work.^^ Where a nuisance has been erected, and is maintained by several persons or corporations, those who are not within the jurisdiction of the court need not be joined as parties defendants in a bill in equity to abate such nuisance.*^ § 433. Injunction to Restrain Enforcement of Orders of Interstate Commerce Commission.^^ In an action in the Federal Supreme Court a bill was brought to restrain the enforcement of an order of the Interstate Com- merce Commission. A preliminary injunction was granted on the ground that the commission had exceeded its powers and the case was taken to the Supreme Court by appeal. The order was made in a proceeding instituted by the commission upon its own motion, and required the establishment of through routes and joint rates, for passengers and their baggage, east and west, from and to certain points on three different railroads. The joint rates were to be the same as certain existing rates be- tween the same points on one of said railroads and its connec- tinuance may be restrained at the instance of a county attorney on a peti- tion supported by his oath or affirmation, upon information and behef and without a bond? The Hght in which they are held by the courts is manifest from expressions contained in all of the cases where they have been before them. A few of the list and which might easily be extended are as follows: Butchers' Union Co. v. Cresent City Co., Ill U. S. 746, 4 Sup. Ct. 652, 28 L. ed. 585; Richardson v. Buhl. 77 Mich. 632, 43 N. W. 1102, 6 L. R. A. 457; Craft et al. v. McConoughy, 79 111. 346, 22 Am. St. Rep. 171; Morris Run Coal Co. V. Barclay Coal Co., 68 Pa. St. 173, 8 Am. St. Rep. 159; Charles River Bridge Co. v. Warren Bridge et al., 11 Pet. 420, 9 L. ed. 773; Tuscaloosa Ice Mfg. Co. V. Williams, 127 Ala. 110, 28 So. 669, 50 L. R. A. 175, 85 Am. St. Rep. 125." 82 Northern Pac. R. Co. v. Whalen, 149 U. S. 157, 13 Sup. Ct. 822, 37 L. ed. 686. 83 Mississippi & Missouri Rd. Co. v. Ward, 2 Black (67 U. S.), 485, 17 L. ed. 311. The nuisance complained of here was a bridge across the Mississippi River where that river divides the States of Illinois and Iowa, the State line being in the middle of the river, and it was held that as the river was a boundary line between States throughout nearly its whole length, judicial difficulties existed in dealing with nuisances between its shores which could only be removed by legislation; the court also refused to decree a partial removal. 8* See §§ 131-137, herein. 694 EQUITABLE REMEDIES § 433 tions. The order in question concerned passenger travel in one direction only, and did not affect round trips and did not deal with freight. It was held by the Supreme Court that under the act of Congress ^^ giving the Interstate Commerce Commission power to establish through routes and joint rates where no reasonable or satisfactory through route exists, the existence of such route may be inquired into by the courts, notwithstand- ing a finding by the commission. It was also held that when one through route exists which is reasonable and satisfactory, the fact that the public would prefer a second which is no shorter or better cannot overcome the natural interpretation of a pro- vision in the statute to the effect that jurisdiction exclusively depends upon the fact that no reasonable or satisfactory route exists. It was further determined that as the Northei'n Pacific route from the points named to points between Portland and Seattle is reasonable and satisfactory, the fact that there are certain advantages in the Union Pacific or Southern route does not give the Interstate Commerce Commission jurisdiction to establish the latter as a through route against the objection of the Northern Pacific Railway Company.*^ In another case where a bill in equity was brought to prevent the enforcement of an order made by the Interstate Commerce Commission requiring the plaintiff to establish a switch connec- tion with a branch railroad, a preliminary injunction was issued on the ground that said commission had exceeded its powers, and an appeal was taken directly to the Federal Supreme Court which affirmed said decree, holding that where a statute creates a new right and a commission is given power to extend relief in regard thereto at the instance of a specified class, its power is limited thereto, and that said Interstate Commerce Commission had power to compel such connections with lateral branch roads under the act of Congress,*^ only at the instance, as stated 85 Section 4, act of June 29, 1906, chap. 3591, 34 Stat. 589. 86 Interstate Commerce Commission v. Northern Pacific Ry. Co., 216 U. S. 538, 54 L. ed. , 30 Sup. Ct. . 87 Section 1 of the act of March 4, 1887, chap. 104, 24 Stat. 379, as amended by § 1 of the act of June 29, 1906, chap. 3591, 34 Stat., 584. cm §§ 434, 435 EQUITABLE REMEDIES therein, of shippers, and that it had no power to do so on the apphcation of a branch raih-oad.** § 434. Bill Lies in Equity to Revise Ruling of Railroad Commissioners.*^'* Where railroad commissioners approve an extension of the location of the tracks of a street railway company it will be assumed that a bill in equity may be maintained to the extent of revising the rulings of such commissioners somewhat as a bill in equity may be maintained to revise the action of the insolvency courts. Where, however, such a bill discloses nothing of which the plaintiffs are entitled to complain, such extension of location approved by said board will not be declared void.^" § 435. Equity— Cancellation and Rescission. Equity will rescind a contract which has been induced by a false representation concerning a material fact, upon which the party had a right to rely, even though the representing party was ignorant of its truth or falsity.^^ But where the representa- tions made to induce giving a release to a railroad company for personal injuries did not constitute an inducement to execute the release it will not be set aside in equity.^^ Equity also has jurisdiction to entertain a bill seeking not only a cancellation for fraud of a note and mortgage of a corporation but also of a bill to restrain their collection where such remedy constitutes merely a claim for relief ancillary to that of cancellation.'*''' Al- though there may be a cancellation or rescission of a contract in equity, still the power of the court does not authorize it to substitute therefor a new and different contract from that which the parties intended.**^ 88 Interstate Commerce Commission v. Delaware, Lackawamia & Western Ry. Co., 216 U. S. 531, 54 L. ed. , 30 Sup. Ct. , aff 'g 166 Fed. 498. 8» See §§ 139 ei seq., herein. 90 Daniels v. Commonwealth Ave. St. Ry. Co., 175 Mass. 518, 56 N. E. 715. 91 Grosh V. Ivanhoe Land & I. Co., 95 Va. 161, 27 S. E. 841. 92 Kane v. Chester Traction Co., 186 Pa. St. 145, 40 Atl. 320. 93Hodson V. Eugene Glass Co., 156 111. 397, 40 N. E. 971, aff'g 54 111. App. 248. 94 Pittsburg & L. A. Iron Co. v. Lake Superior Iron Co., 118 Mich. 109, 5 Det. L. N. 457, 76 N. W. 395. 090 EQUITABLE REMEDIES § 435 Again, although equity has power to order the dehvery up and cancellation of a policy of insurance obtained on fraudulent representations and suppression of facts, yet it will not gener- ally do so, when these representations and suppressions can be l)erfcctly well used as a defense at law in a suit upon the policy. So a bill for such a delivery up and cancellation has been held properly "dismissed without prejudice," even though the evi- dences of the fraud were considerable, there being no allegation that the holder of the policy meant to assign it; and suit on the policy having, after the bill was filed, been begun at law."^ But where a national bank commenced a suit in a Federal Circuit Court to have an assessment of the shares of its capital stock, made by State officers, canceled, declared invalid, or modified, and the defendants demurred upon the ground that the remedy was in equity, it was held that although in the State Courts there existed no distinction between legal and equitable remedies and the proceeding might have been in ac- cordance with the practice in the State Courts, still the plain- tiff's remedy must be brought in the form of a suit in equity according to the practice in the Federal Courts and that the demurrer should be sustained. ^'^ If there has been no newly discovered evidence, a bill in equity will not lie to cancel a contract or enjoin a judgment thereon, where the complainant, against whom it was rendered, sets up as grounds of relief matters which he had full oppor- tunity to plead in the action at law.^^ Equity will not at the instance of the seller, rescind a contract of sale of personal property to a corporation upon the ground that at that time the corporation was insolvent unless the officers knew that there was no reasonable probability of meeting the obligation thus incurred when it matured.^* 9'i Insurance Co. v. Bailey, 13 Wall. (80 U. S.) 616. See also Security Trust Co. V. Tarpey, 66 III. App. 589; John Hancock Mut. L. Ins. Co. v. Dick, 114 Mich. 337, 43 L. R. A. 566, 4 Det. L. N. 607, 72 N. W. 179. »« Lindsay v. First Nat. Bank, Shreveport, 156 U. S. 485, 39 L. ed. 505, 15 Sup. Ct. 472. 97 Life Insurance Co. v. Bangs, 103 U. S. 780, 26 L. ed. 608. 88 Edelhoff V. Homer-Miller Straw Goods Mfg. Co., 86 Md. 595, 39 Atl. 314. 697 § 435 EQUITABLE REMEDIES In a case in the Federal Supreme Court the following facts appeared : The city of Galesburg, Illinois, by an ordinance, granted to one Shelton, and his assigns, in May, 1883, a franchise for thirty years, to construct and maintain watei-works for supplying the city and its inhabitants with water for public and private uses, the city to pay a specified rent, for five hydrants, and a tariff being fixed for charges for water to consumers. In Decem- ber, 1883, the waterworks were completed by a water company to which Shelton had assigned the franchise, and a test required by the ordinance was satisfactorily made, and the city, by a resolution, accepted the works. The water furnished by the company for nine months was unfit for domestic purposes. After November, 1884, the supply of water was inadequate for the protection of the city from fire, and its quality was no better than before. During eighteen months after December, 1883, the company had ample time to com})ly with the contract. The city, by a resolution passed June 1, 1885, repealed the ordinance, and then gave notice to the company that it claimed title to certain old water mains which it had conditionally agreed to sell to Shelton, and of which the company had taken posses- sion. The city then took possession of the old mains, and, in June, 1885, filed a bill in equity against the water company to set aside the contract contained in the ordinance and the agreement for the sale of the old mains. In August, 1883, the company executed a mortgage to a trustee on the franchise and works, to secure sundry bonds which were sold to various pur- chasers in 1884 and 1885. The interest on them being in de- fault, the trustee foreclosed the mortgage by a suit brought in November, 1885, and the property was bought by a committee of the bondholders, in November, 1886. In February, 1886, the trustee had been made a party to the suit of the city. After their purchase, the members of the committee were also made parties and they filed a cross bill, praying for a decree for the amount due by the city for water rents, and for the restoration to them of the old mains, and for an injunorion against the city from interfering with the operation of the works. After issue, ()98 EQUITABLE REMEDIES § 436 proofs were taken. It was held: tliat the supply of water was not in compHance with the contract, in quantity or (luality; that the taking possession by the city of tlie old mains was necessai-y for the protection of the city from fires; that the con- tract of the city for the sale of the old mains was conditional and was not executed; that the city was not estopped, as against the bondholders, from refusing to pay the rent for the hydrants, which, by the mortgage, was to be applied to pay the interest on the bonds, or from having the contract canceled; that the obligation of Shelton and his assigns was a continuing one, and their right to the continued enjoyment of the consideration for it, was dependent on their continuing to perform it; that the bondholders were bound to take notice of the contents of the ordinance before purchasing their bonds, and purchased and held them subject to the continuing compliance of the company with the terms of the ordinance. In regard to the old mains, the lien of the mortgage was held subject to the conditions of the agreement for the sale of them by the city to Shelton; and a suit by the city for a specific performance of the contract, or one to recover damages for its nonperformance, would be a wholly inadequate remedy in the case; and a decree was held proper annulling the ordinance and the agreement; dismissing the cross bill ; directing the city to pay into court, for the use of the cross plaintiffs, three thousand dollars, as the value of the use of the water by the city from December, 1883, to June, 1885; and dividing the costs of the suit equally between the city and the cross plaintiffs.^^ § 436. Cancellation, Rescission or Setting Aside Sale of Corporate Stock — Contracts to Prevent Competition — Pre- tended Purchase of Stock. If a stock subscription is obtained through fraud, equity may decree a cancellation.^ Such a suit may be maintained by a 89 Farmers' Loan & T. Co. v. Galesburg, 133 U. S. 156, 34 L. ed. 573, 10 Sup. Ct. 316. 1 Negley v. Hagerstown Mfg. M. & L. Imp. Co., 88 Md. 692, 39 Atl. 506. See also Ryan v. Seaboard & Rd. Co. (U. S. C. C), 89 Fed. 397; Bosley v. National Machine Co., 123 N. Y. 550, 34 N. Y. St. Rep. 277, 25 N. E. 990; 699 § 436 EQUITABLE REMEDIES stockholder in his own behalf and in that of others who may join.- Where a bill is brought in a court of equity by minority stockholders to cancel and set aside a sale of corporate stock purchased by a corporation to obtain a controlling interest in another corporation and to thus stifle competition the court will give substantial and permanent relief by requiring the surrender of the stock to the rightful owners upon equitable terms and the court should not Umit the relief to be granted to an injunction against said purchaser corporation exercising the rights of a stockholder and from receiving any dividends upon the stock in question. In such a case where the bill prayed also for an injunction and for other relief upon the ground that the pretended purchase, in its necessary operation at the time it was made, tended and tends to materially sup- press competition and creates a monopoly in the rendering of telephone service throughout the United States and that it was illegal and void because contrary to the public policy of the State, it was held that a violation of the Antitrust Act of the State ^ was not necessary to be proven to maintain the action or defense, and also that it was not necessary that the proof should exclude every reasonable doubt of the averments of the bill to justify a decree in complainant's favor. Such violation, how- ever, was not charged in the pleadings. As a general proposi- tion, all contracts and agreements, of every kind and character, made and entered into by those engaged in an employment or business impressed with a public character, which tend to pre- vent competition between those engaged in like employment, are opposed to the public policy of the State and are therefore un- lawful. All agreements and contracts tending to create mo- Pennsylvania Co. for Ins. on Lives, etc., v. Franklin F. Ins. Co., LSI Pa. St. 40, 40 Wkly. N. C. 145, 37 L. R. A. 780, 37 Atl. 191. 2 Stebbins v. Perry County, 167 111. 567, 47 N. E. 1048, rev'g 66 111. App. 427. 3 Sections 1-4 of Antitrust Act of 1891 and §§ 1-6 of the Antitrust Act of 1893, chap. 38, §§ 269a to 269i; Kurd's Rev. Stat, of 1905 (the Law of 1893 was held unconstitutional by the Supreme Court of the L^nited States in Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 46 L. ed. 679, 22 Sup. Ct. 431). 700 EQUITABLE REMEDIES § 437 nopolies and prevent proper competition are by the common law illegal and void, and a State Constitution which provides that the general assembly shall pass no local or special law for "granting to any corporation, association or individual any special or exclusive privilege or franchise whatever,"'* is a clear declaration that the public policy of such State is opposed to all exclusive and monopolistic franchises and powers, of whatso- ever kind or character. And this applies to contracts entered into, of the character above stated, whereby one corporation attempts to acquire the control of another corporation, coupled with a pretended purchase of the stock of the latter, and such contracts are mere nullities and the title to such stock never passed from the sellers.-'^ If data upon which representations claimed to have induced the purchase of stock are equally accessible to the purchaser as to the seller and are believed by the latter although not based upon his own knowledge but upon statements made by others the purchaser is not entitled to a rescission of the contract upon the ground of fraud even though such representations concern a contemplated consolidation of corporations and tend to en- hance the value of the stock as an investment.'' A right to rescind a purchase of stock fraudulently induced by false repre- sentations may be waived by acts of the purchaser in continu- ing, after knowledge of the fraud, to serve as a director and claiming a salary as superintendent, under the contract of sale.'^ § 437. Specific Performance. The specific performance of a conditional contract will not be decreed, unless the condition has been performed.* And a plaintiff will not be required to perform his contract if it is not a condition precedent before he can call on the defendant to 4 Section 22, Art. 4, Const. 1870 of III. 6 Dunbar v. American Teleph. & Teleg. Co., 238 III. 456, 486, 487, 87 N. E. 521. 6 Stevenson v. Marble (U. S. C. C), 84 Fed. 23. 7 Lear v. S. K. Paige Lumber & M. Co. (Tenn. Ch. App.), 42 S. W. 808. 8 Deitz V. Stephenson, 51 Ore. 596, 95 Pac. 803. 701 § 437 EQUITABLE REMEDIES perform liis, which alone can secure the plaintiff in the rights he acquired under the contract.*^ Nor will an illegal contract for the division of profits based upon obtaining a franchise for a certain company by preventing competition with a rival com- pany be specifically enforced.^" Nor will specific performance be decreed whereby a street railway would be obligated to work its road for all future time, as where it has agreed to run cars over the entire line during the whole of each year; " nor will specific performance be decreed of a contract made with a rail- road company for through transportation of freight at terminal rates where it is too indefinite and uncertain as to said service and the parties, even though based upon the consideration of a free right of way through a city.^^ If a village corporation has made a contract for the purchase of the plant of a water company, and such contract was ultra vires at the time it was made, and afterwards by a legislative act said corporation has been authorized to "vote to purchase the entire works and rights" of the water company "for such sums of money as may be adjudged payable according to the terms" of the contract, such authority may have a retrospective action and make valid the contract, but when the corporation at- tempts to avail itself of the granted power, it must proceed ac- cording to the terms of the act, and first "vote to purchase," etc., "for such sums of money as may be adjudged pa3^able," etc., before it can maintain a bill in equity for the specific per- formance of the contract. ^^ A contract to convey land for a railroad right of way is not too uncertain and indefinite to be specifically performed where complainant has taken possession with the express assent of defendants and constructed its road thereon and the consideration to be paid can be ascer- tained by a computation of the acreage used and the amount 9 Tidewater Ry. Co. v. Hurt, 109 Va. 204, 63 S. E. 421. 10 Hyer v. Richmond Traction Co. (U. S. C. C. A.), 80 Fed. 839, 42 U. S. App. 522. 11 Kingston v. Kingston, P. & C. E. R. Co., 28 Ont. Rep. .399. 12 Clark V. Great Northern R. Co. (U. S. C. C), 81 Fed. 2S2. laPhilhps Village Corporation v. Phillips Water Co., 104 Me. 103, 71 Atl. 474. 702 EQUITABLE REMEDIES § 437 per acre paid therefor by defendant, including interest and taxes.^'' If a written contract of sale contains within itself a descrip- tion of the thing sold, by which it can be known or identified, of the price to be paid for it, of the party who sells it and the party who buys, it contains all the requisites of a valid written contract of sale. And a contract between a railroad company and a landowner for the purchase of a right of way, and which, by way of preamble and inducement, recites the purpose of the railroad company to build a road between two designated points, or sections, is not a contract or covenant on the part of the railroad company to build a railroad, but if the land is sufficiently designated and the price fixed, is a valid and en- forceable contract for the sale of the land described. And when a statute requires an effort to make such a contract before the company can condemn, it would be a useless ceremony if the contract, when made, could not be enforced.^^ Again, unless equity can decree specific performance of the whole contract, it will not interfere to enforce any part of it, and specific performance will not be enforced unless the remedy is mutual. ^^ A court of equity will decree the specific performance of a written contract for the sale of real estate at the instance of a purchaser who has partly performed the contract under circum- stances which affect the conscience of the vendor, and where a failure on his part to carry out the contract would operate as a fraud on the purchaser's rights.^' If a village corporation has made a contract which is ultra vires, a bill in etiuity brought by itself for the specific perform- ance of the same cannot be maintained. And when a village corporation is only invested with power "to raise such sums of money as may be sufficient for the support of a reasonable !■* Chicago, Kalamazoo & Saginaw Ry. Co. v. Lane, 150 Mich. 162, 113 N. W. 22, 14 Det. L. N. 532. 15 Tidewater Ry. Co. v. Hurt, 109 Va. 204, 63 S. E. 421. 16 Deitz V. Stephenson, 51 Ore. 596, 95 Pac. 803. 17 Tidewater Ry. Co. v. Hurt, 109 Va. 204, 63 S. E. 421. 703 I 438 EQUITABLE REMEDIES number of hydrants, in case water is brought into its hniits in a suitable manner and sufficient quantity, and suitable fire engines, engine houses, hose, buckets, hooks and ladders, and provide a sufficient quantity of water in the different parts of said corporation for the extinguishment of fire and for organiz- ing and maintaining within its limits an efficient fire depart- ment," and has no power to raise money for any other purpose, such corporation has no authority to enter into a contract with a water company providing that at expiration of a term of years the corporation should have the right to purchase the water company's entire plant, at an appraised value to be fixed by three appraisers, chosen, one by the corporation, one by the water company, the third by these two, and on payment of the price so determined, that the water company should trans- fer to the corporation its entire plant, and if such corporation does enter into such a contract it is ultra vires}^ A bill in equity to compel specific performance of a contract between an in- dividual and a State cannot, against the objection of the State, be maintained in the Federal Courts.^^ § 438. Specific Performance— Discretion of Court. All applications for specific performance are addressed to the sound discretion of the court, regulated by estabhshed principles. The contract must not only be distinctly proved, but must be clearly and distinctly ascertained. It must be reasonable, cer- tain, legal and mutual, and upon a valuable or least meritorious consideration, and the party seeking performance must not have been backward, but ready, desirous, prompt and eager. ^^ But specific performance though a matter of grace rather than of right, will not be denied where complainant, a railroad com- pany, would be compelled either to abandon its road or take proceedings for condemnation, with its consequent risks, and 18 Phillips Village Corporation v. Phillips Water Co., 104 Me. 103, 71 Atl. 474. 19 Murray v. Wilson Distilling Co., 213 U. S. 151, 29 Sup. Ct. 458, 53 L. ed. 458. 20 Colonna Dry Dock Co. v. Colonna, 108 Va. 230, 61 S. E. 770. 704 EQUITABLE REMEDIES § 439 specific performance will give each party what was contracted for without injustice to either.^' The recital, in a contract between a railroad company and a landowner for the purchase of a right of way, that the comj)any proposes to build a railroad "from the West Virginia line, at or near New River through Southern Virginia to tide water," constitutes only an inducement to the contract, the truth or falsity of which would exert i)roper influence with the court in exercising its discretion in granting or refusing specific per- formance, but does not impair the force or effect of the contract where the recital is made in good faith and is true.^^ § 439. Specific Performance — Contract to Sell Corporate Stock. Ecpiity may compel specific performance of a contract to sell corporate stock, where the value of the stock is not easily ascertainable, or where the stock is not readily obtainable else- where, or where there is some reasonable cause for the buyer requiring a delivery of the stock contracted for; but where the stock contracted for is easily obtained in the market, and thei'e are no particular reasons why the buyer should have the par- ticular stock, he is left to his action for damages. And before specific performance of an agreement to take or deliver cori)o- rate stock may be decreed, it is necessary that the agreement should not involve any breach of trust, nor include the |)er- formance by either party of obligations the performance of which equity cannot practically enforce. And while a conti'act for the sale of corporate stock, which binds the buyer to furnish to the seller the personal services of himself and wife, involves a correlative duty on the part of the seller to employ the buyer and his wife, so that there is a mutuality of obligations; still where such contract obhgates the buyer of the stock to furnish to the seller such personal services and the seller to employ said parties, it cannot be specifically enforced at the suit of the buyer 21 Chicago, Kalamazoo & Saginaw Ry. Co. v. Lano, 150 Mich. 162, 113 N. W. 22, 14 Det. L. N. 532. 22 Tidewater Ry. Co. v. Hurt, 109 Va. 204, 63 S. E. 421. 45 705 § 439 EQUITABLE REMEDIES to compel the delivery of such stock, where the seller cannot maintain a suit to compel the specific performance of the buyer's agreement to render the personal services of himself and wife.^^ An oral contract between two persons to purchase shares of stock of a corporation does not lack mutuality, where by its terms it provides that the purchase is to be made by either of the parties as opportunity might offer, for their mutual benefit, and that after the shares were purchased they were to be equally divided between the parties, each paying one-half of the pur- chase price. In such a case either party has the right in the exercise of good faith to pay what he deems proper for the stock, and the other party must pay one-half of the money ex- pended. If it appears that the stock is not procurable in the market, and that its pecuniary value is not readily ascertain- able, the contract may be specifically enforced. The person purchasing the stock and refusing to share it with the other party, is a trustee ex maleficio of the other party, and equity will enforce the trust.^^ Where one corporation agrees with an- other to issue to each of its stockholders new stock, share for share, upon surrender of the old stock, in consideration of the transfer by the latter to the former of all its assets and business, an action lies for specific performance of such contract, and a stockholder of the old company may properly institute such suit for his own benefit without joining the company or the other stockholders, and an averment that it is for the benefit of such of them as may come in and defend is not necessary.^ Where the original subscribers to the stock of a corporation agree that in case any of them might desire to sell their stock, they shall first offer it to the remaining subscribers, and it ap- pears that of the remaining three original subscribers two had sold their stock to other parties in violation of the agreement, such an agreement cannot be set up against the other one of the three original subscribers when he attempts to compel a third 23 Deitz V. Stephenson, 51 Ore. 596, 95 Pac. 803. 24 Sherman v. Herr, 220 Pa. St. 420, 69 .\tl. 899. 25 Fletcher v. Newark Teleph. Co., 55 N. J. Eq. 47, 35 Atl. 903. 706 EQUITABLE REMEDIES § 439 party to deliver to him stock which such third party had con- tracted to deliver.^^ In another case a contract for the^ purchase of stock in a corporation owning a hotel stipulated that the buyer should be employed as the manager of the hotel at a fixed salary, and that in case the hotel made a profit he should be entitled to have one-fourth thereof credited on the balance due on the stock contracted for. He was removed from his position as manager, and brought a suit to specifically enforce the contract by rec|uiring his restoration to the position of manager and for the transfer and delivery to him of the corporate stock. There was no allegation that any profits had accrued or were due, nor was there any claim made for damages, and he made no tender of performance by alleging his willingness and ability to pay any balance that might be found due after applying profits to the liquidation of the debt. It was held that the court was without authority to enter a decree providing for the appointment of a referee to take an accounting of damages and of the earnings and profits of the hotel, and for the application of the same on the stock purchased, and the payment of the balance, if any, to the buyer. Said contract also recited that plaintiff had agreed to purchase from defendant a fourth interest in hotel property for a specified sum, and bound defendant to procure for plaintiff the position of manager of the hotel at a specified compensation, provided defendant obtained control of all the stock of the corporation owning the hotel, and, should he fail to get control, a new corporation should be formed, of which plaintiff should have a fourth of the stock and defendant three- fourths. It was held that the contract did not create a partner- ship in the hotel business and created only a personal obligation on the part of defendant to sell a fourth interest, and i)laintiff, on being removed from the position of manager, could not, in a suit for the specific performance of the contract, compel his restoration to such position. Said contract also gave the buyer an option to purchase, within a specified time, corporate stock for a fixed price on payment of a part of the price in cash and on • 26 Sherman v. Herr, 220 Pa. St. 420, 69 Atl. 8hring, 146 Ind. 189, 45 N. E. 64, 6 Am. Elec. Cas. 694; § 5529, Rev. Stat, of Ind., 1894 (§ 2, p. 151, Acts of 1885); Rev. Stat, of 1881, § 115; Rev. Stat, of 1894, § 115; Acts of 1885, p. 151, § 2 (Rev. Stat, of 1894, § 5529). See Horner's Annot. Stat., Ind., 1901, §§ 4192a-4192c. 713 I 443 PENALTIES — OFFENSES — rule requiring such payment against a certain number of other patrons "who were in hke situation with the plaintiff" is a mere conclusion and is insufficient to show discrimination, it not being shown that delinquent patrons had refused to pay.^*^ § 443. Offenses Against United States. There are no common-law offenses against the United States." In a case where a criminal information was brought by the United States/^ against a bridge company, its president and managers, a verdict of guilty was found, and the defendant was adjudged to pay to the United States a fine of one thousand dollars and the cost of prosecution. From that judgment the case was taken directly to the Federal Supreme Court, where the judgment was affirmed. The information charged the bridge company with having willfully failed, refused and neg- lected to comply with an oixler of the Secretary of War re- quiring certain alterations in the bridge by reason of its being an unreasonable obstruction to the free navigation of one of the navigable waterways of the United States. Certain constitu- tional questions were raised and it was held that: (1) Congress may, in order to enforce its enactments, clothe an executive officer with power to ascertain whether certain specified con- ditions exist and thereupon to act in a prescribed manner, with- out delegating, in a constitutional sense, legislative or judicial power to such officer; (2) under its paramount power to regulate commerce, Congress can require navigable waters within a State to be freed from unreasonable obstructions, and it is not a dele- gation of legislative or judicial power to charge the Secretary of War with the duty of ascertaining, under a general rule applica- ble to all navigable waters and upon notice to the parties in interest, whether obstructions are unreasonable; (3) an act of Congress which invests the Secretary of War with power to re- quire the removal of obstructions to navigation after notice to parties in interest and opportunity to be heard and reasonable w Irvin v. Rushville Co-operative Teleph. Co., 161 Ind. 524, 69 N. E. 258. 17 United States v. Eaton, 144 U. S. 677, 36 L. ed. 591, 12 Sup. Ct. 764. 18 Under § 18 of the River & Harbor Act of March 3, 1899. 714 CRIMINAL LIABILITY OF CORPORATIONS § 443 time to make alterations in the obstruction,''-* does not invest the Secretary with arbitrary power beyond constitutional hinita- tions; (4) to require, after notice and hearing, alterations to be made within a reasonable time and in a bridge over navigable waters so as to prevent its being an obstruction to navigation, is not taking of private property for public use which, under the Constitution, must be preceded by compensation to the owners of the bridge; (5) the erection of a bridge over navigable waters within a State by authority of the State is subject to the [para- mount authority of Congress to regulate commerce among the States and its right to remove unreasonable obstructions to navi- gation; (()) the mere silence of Congress, and its failure to inter- fere to prevent the construction under State authority of an obstruction to navigation does not prevent it from subsequently re(iuiring the removal of the obstruction or impose upon the United States a constitutional obligation to make compensation therefor; (7) it is for Congress, under the Constitution, to regu- late the right of navigation and to declare what must be done to clear navigation from obstructions; and where this has been done in the manner required by Congress it is not the province of the jury, on the trial of one refusing to remove obstructions, to determine whether the removal was necessary; (S) an act will not be declared unconstitutional merely because an executive officer might, in another case, act arbitrarily or recklessly under it. If such a case arises the courts can protect the rights of the government or persons which are based on fundamental princi- ))les for the protection of rights of property."" Where a Federal law is applicable requiring consent of the Federal Govern- ment there is concurrent or joint jurisdiction of the State and National governments over the erection of structures obstructing navigation of a navigable stream wholly within a State.2i »9 Section IS of the River & Harbor Act of March 3, 1899, 30 Stat. IIT)!. 20 Monongahela Bridge Co. v. United States, 210 U. S. 177, 30 Sup. Ct. , 54 L. ed. . Mr. Justice Brewer dissented. See § 56, herein. 21 North Shore Boom Co. v. Nicomen Boom Co., 212 U. S. 400 (Cummings V. Chicago, 188 U. S. 410; Montgomery v. Portland, 190 U. S. 89); writ of error, 40 Wash. 315, dismissed. 715 § 444 PENALTIES — OFFENSES — § 444. Power of Congress— To What Extent Corporation Can Be Charged Criminally for Agents' Acts— Common Carriers — Rates. Congress can impute to a corporation the commission of certain criminal offenses and subject it to criminal prosecution therefor. While corporations cannot commit some crimes, they can commit crimes which consist in purposely doing things pro- hibited by statute, and in such case they can be charged with knowledge of acts of their agents who act within the authority conferred upon them.'^ So under the laws of a State a corpora- 22 New York Cent. & Hudson River Ry. Co. v. United States, 212 U. S. 481, 29 Sup. Ct. 304, 53 L. ed. 613 (a case of indictment and conviction in Circuit Court of railroad company and its assistant traffic manager for pay- ment of rebates; imposition of fines and writ of error). The court, per Mr. Justice Day, said: "It is contended that these provisions of the law are un- constitutional because Congress has no authority to impute to a corporation the commission of criminal offenses, or to subject a corporation to a criminal prosecution by reason of the things charged. The argument is that to thus punish the corporation is in reality to punish the innocent stockholders, and to deprive them of their property without opportunity to be heard, conse- quently without due process of law. And it is further contended that these provisions of the statute deprive the corporation of the presumption of inno- cence, — a presumption which is part of due process in criminal prosecutions. It is urged that, as there is no authority shown by the board of directors or the stockholders for the criminal acts of the agents of the company in con- tracting for and giving rebates, they could not be lawfully charged against the corporation. As no action of the board of directors could legally au- thorize a crime, and as, indeed, the stockholders could not do so, the ar- guments come to this: that, owing to the nature and character of its organ- ization and the extent of its power and authority, a corporation cannot commit a crime of the nature charged in this case. Some of the earlier writers on common law held the law to be that a corporation could not com- mit a crime. It is said to have been held by Lord Chief Justice Holt (Anony- mous, 12 Mod. 559) that 'a corporation is not indictable, although the par- ticular members of it are.' In Blackstone's Commentaries, chap. 18, § 12, we find it stated: 'A corporation cannot commit treason, or felony, or other' crime in its corporate capacity, though its members may, in their distinct individual capacities.' The modern authority, universally, so far as we know, is the other way. In considering the subject, Bishop's New Criminal Law, § 417, devotes a chapter to the capacity of corporations to commit crime, and states the law to be: 'Since a corporation acts by its officers and agents, their purposes, motives, and intent are just as much those of the corporation as are the things done. If, for example, the invisible, intangi- ble essence or air which we term a corporation can level mountains, fill up valleys, lay down iron tracks, and run railroad cars on them, it can intend 716 CRIMINAL LIABILITY OF CORPORATIONS § 444 tion may in many instances be charged criminally with the un- lawful purposes and motives of agents through whom it con- ducts its business, while they are acting in its belialf, so long as they act within the scope of their authority, real or apparent.^^ to do it, und can act therein as well viciously as virtuously.' Without cit- ing the State cases holding the same view, we may note Telegram Newspaper Co. V. Commonwealth, 172 Mass. 294, 44 L. R. A. lr>9, 70 Am. 8t. Rep. 280, 52 N. E. 445, in which it was hekl that a corporation was subject to punish- ment for criminal contempt; and the court, speaking by Mr. Chief Justice Field, said: 'We think that a corporation may be liable criminally for cer- tain offenses of which a specific intent may be a necessary element. There is no more difficulty in imputing to a corporation a specific intent in criminal proceedings than in civil. A corporation can be arrested and imprisoned in either civil or criminal proceedings, but its property may he taken either as compensation for a private wrong or as punishment for a public wrong.' It is held in England that corporations may be criminally prosecuted for acts of misfeasance as well as nonfeasance. R. v. Great North of England R. Co., 9 L. B. 315. * * * It is true that there are some crimes which, in their nature, cannot be committed by corporations. But there is a large class of offenses, of which rebating under the Federal statutes is one, wherein the crime consists in purposely doing the things prohibited by statute. In that class of crimes we see no good reason why corporations may not be held responsible for and charged with the knowledge and purposes of their agents, acting within the authority conferred upon them. 2 Morawitz, Priv. Corp., § 733; Green's Brice, Ultra Vires, 366. If it were not so, many offenses might go unpunished and acts be committed in violation of law where, as in the present case, the statute requires all persons, corporate or private, to refrain from certain practices, forbidden in the interest of public policy." That corporation must suffer for agents' acts, see State ex inf. Firemen's Fund Ins. Co., 152 Mo. 1, 45 L. R. A. 363, 52 S. W. 595. See § 317, herein 23 People V. Rochester Ry. & Light Co., 195 N. Y. 102, 88 N. E. 22, aff'g 114 N. Y. Supp. 755, 129 App. Div. 843, which aff'd 112 N. Y. Supp. 362, 59 Misc. 347 (a case of indictment for crime of manslaughter in the second degree, held that corporation cannot be guilty of manslaughter). The court, per Hiscock, J., said: "The respondent has been indicted for the crime of manslaughter in the second degree, because, as alleged, it installed certain apparatus in a residence in Rochester in such a grossly improper, unskillful, and negligent manner that gases escaped and caused the death of an inmate. The demurrer to the indictment has presented the question whether a cor- poration may be thus indicted for manslaughter under § 193 of the Penal Code. Befoi'e proceeding to the interpretation of this specific provision, we shall consider very briefly the general question discussed by the parties, whether a corporation is capable of committing in any form such a crime as that of manslaughter. Of the correctness of the proposition urgecl in behalf of the people that it may do so, subject to various limitations, we entertain no doubt. Some of the earlier writers on the common law held that a cor- 717 § 444 PENALTIES — OFFENSES — In actions for tort a corporation may be held responsible for damages for the acts of its agent within the scope of his employ- ment, even if done wantonly, recklessly or against the express orders of the principal.''* A corporation is responsible for acts not within its agent's powers strictly construed, but assumed to be done by him when employing authorized powers, and in such case no written authority under seal is necessary. So the poration could not commit a crime. Blackstone in his Commentaries, chap. 18, § 12, stated: 'A corporation cannot commit treason or felony or other crime in its corporate capacity, though its members may in their dis- tinct individual capacities.' And Lord Chief Justice Holt (Anonymous, 12 Modern, 555) is said to have held that 'a corporation is not indictable, al- though the particular members of it are.' In modern times, however, the courts and text-writers quite universally have reached an opposite conclu- sion. A corporation may be indicted either for nonfeasance or misfeasance, the obvious and general Umitations upon this liability being in the former case that it shall be capable of doing the act for nonperformance of which it is charged, and that in the second case the act for the performance of which it is charged shall not be one of which performance is clearly and totally beyond its authorized powers. Bishop's New Criminal Law, §§ 421, 422. The instances in which it has been held that a corporation might be liable criminally simply because it did or did not perform some act, and where no element of intent was supposed to be involved, are so familiar that any extended reference to them is (iitirely unnecessary. The latest author- ity in this State upholding such liabiHty is found in the case of People v. Woodbury Dermatological Institute, 192 N. Y. 455, 85 N. E. 697, where it was held that a corporation might be punished criminally for disobeying the statute providing that ' any person not a registered physician who shall ad- vertise to practice medicine, shall be guilty of a misdemeanor.' There was involved no question of intent, but simply that of disobedience of a statutory provision against doing certain acts. At times courts have halted somewhat at the suggestion that a corporation could commit a crime where the ele- ment of intent was an essential ingredient. But thhs doctrine, again with certain limitations, may now be regarded as established, and there is nothing therein which is either unjust or illogical. Of course, it has been fully recog- nized that there are many crimes so involving personal, malicious intent and acts so ultra vires that a corporation manifestly could not commit them. Wharton's Criminal Law (9th ed.), § 91; Morawitz on Private Corporations (2d ed.), §§ 7.32 et seq. But a corporation, generally speaking, is liable in civil proceedings for the conduct of the agents through whom it conducts its business so long as they act within the scope of their authority, real or ap- parent, and it is but a step further in the same direction to hold that in many instances it may be charged criminally with the unlawful purposes and mo- tives of such agents while so acting in its behalf." ^ See § 317, herein. 718 CRIMINAL LIABILITY OF CORPORATIONS §§ 445, 446 act of an agent exercising the authority of a corporation which is a common carrier to make rates for transportation may be controlled, in the interest of public policy, by imputing his act to the carrier itself and imposing penalties therefor upon the carrier.^^ § 445. Police Power of States— Crimes and Penalties- Combinations in Restraint of Trade— Extent of Judicial Interference by Federal Courts. The fixing of punishment for crime and penalties for unlawful acts is within the police power of the State, and the Federal Supreme Court cannot interfere with State legislation in fixing fines, or judicial action in imposing them, unless so grossly ex- cessive as to amount to deprivation of property without due process of law. And as States have power to prevent unlawful combinations in restraint of trade they may provide the pro- cedure for enforcing the same, subject only to the qualification that such procedure must not deny or conflict with fundamental or constitutional rights.^^ A State, in the absence of any statute by Congress, has plenary power in regard to navigable streams wholly within its boundaries, and obstructions in such streams, in the absence of statute, constitute no offense against the United States, and whether obstructions are unlawful under State law is not a Federal question.^' § 446. Corporation Criminally Liable — May Be Indicted. A corporation may be indicted for a misfeasance as well as for 25 New York Cent. & Hudson River Ry. Co. v. United States, 212 U. S. 481, 493, 500, 29 Sup. Ct. 304, 309, 53 L. ed. 613, 624 (a case of indictment, and conviction in Circuit Court of railroad company and its assistant traffic manager for payment oi rebates; imposition of fines; writ of error). See also Lake Shore & Michigan Southern R. R. v. Prentice, 147 U. S. 101, 37 L. ed. 97, 13 Sup. Ct. 261; Washington Gas Light Co. v. Lansden, 172 U. S. 534, 43 L. ed. 543, 19 Sup. Ct. 296. 2« Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 29 Sup. Ct. 220, 53 L. ed. 417, aff'g 106 S. W. 918. Action to forfeit permit of foreign corporation to do business in State and to assess penalties for violation of antitrust laws of State. As to excessive penalties, see Young, Ex parte, 209 U. S. 123. 27 North Shore Boom Co. v. Nicomen Boom Co., 212 U. S. 406, 53 L. ed. 574, 29 Sup. Ct. 355; Willamette Iron Bridge Co. v. Hatch, 125 U. S. 131, — L. ed. 629, 8 Sup. Ct. 811. Writ of error, 40 Wash. 315, dismissed. 719 § 446 PENALTIES — OFFENSES — a nonfeasance.^^ So railroad corporations are liable to an in- dictment for the act of their officers and agents.''' So a corpora- 28 Commonwealth v. Proprietors of New Bedford Bridge, 2 Gray (68 Mass.), 336. The court, per Bigelow; J. (at pp. 345, 346), said: "The in- dictment in the present case is for a nuisance. The defendants contend that it cannot be maintained against them, on the ground, that a corporation though liable to indictment for nonfeasance, or an omission to perform a legal duty or obligation, are not amenalile in this form of prosecution for a misfeasance, or the doing of any act unlawful in itself and injurious to the rights of others. There are dicta in some of the early cases which sanction this broad doctrine, and it has been thence copied into text-writers, and adopted to its full extent in a few modern decisions. But if it ever had any foundation it had its origin at a time when corporations were few in number, and limited in their powers, and in the purposes for which they were created. Experience has shown the necessity of essentially modifying it; and the tend- ency of the more recent cases in courts of the highest authority has been to extend the application of all legal remedies to corporations, and assimilate them, as far as possible, in their legal duties and responsibilities, to individ- uals. To a certain extent, the rule contended for is founded in good sense and sound principle. Corporations cannot be indicted for offenses which de- rive their criminality from evil intention, or which consist in a violation of those social duties which appertain to men and subjects. They cannot be guilty of treason or felony; of perjury or offenses against the person. But beyond this, there is no good reason for their exemption from the conse- quences of unlawful and wrongful acts committed by their agents in pur- suance of authority derived from them. Such a rule would, in many cases, preclude all adequate remedy, and render reparation for an injury, com- mitted by a corporation, impossible; because it would leave the only means of redress to be sought against irresponsible servants, instead of against those who truly committed the wrongful act liy commanding it to be done. There is no principle of law which would thus furnish immunity to a corporation. If they commit a trespass on private property, or obstruct a way to the special injury and damage of an individual, no one can doubt their liability therefor. In like manner, and for the same reason, if they do similar acts to the inconvenience and annoyance of the public, they are responsible in the form and mode appropriate to the prosecution and punishment of such offenses." " There is no doubt whatever in my mind of the soundness of the conten- tion of counsel for the defendant that the peculiar form of the statute cov- ering this case makes the offense a felony; but I am equally well satisfied that, because it makes such offense a felony, it is no answer to the charge, and that a corporation may be punished upon indictment for a felony as it may for a misdemeanor. It is urged in argument that, if the crime stated in the indictment is a felony, then the corporation could not be punished, and that, therefore, the charge by the grand jury is without force or effect. It is true 29 state v. Vermgnt Central Rd. Co., 27 Vt. 103. 720 CRIMINAL LIABILITY OF CORPORATIONS § 446 tion may be punished criminally for peddling through the medium of an unlicensed agent.^" So the general manager of a corporation in active charge of its affairs and with knowledge of the illicit business may be held criminally liable for such offense.^i A corporation may also be charged with an offense which only involves an intention to do a prohibited act, and it may be property convicted when, in its corporate capacity, and by direction of those controlling its corporate action it does the prohibited act, as in case of the violation of an eight-hour law.^^ A corporation is not, merely because it is a creature of the law without physical existence, immune from indictment and criminal prosecution for nonfeasance in neglecting to perform duties which it owes to the public.^^ But while corporations in accepting their charters, impliedly agree, upon condition of - forfeiture, to conduct their business conformably to the laws of the State, and not to commit crimes, still they are indictable only where a statute so provides; but their charters may be forfeited at the suit of the State .^'^ In case a statute imposes a fine or penalty for a person or unincorporated association or that a corporation cannot be imprisoned or hanged, but a corporation can be fined just as a natural person can, when it does any act in the hne of its business resulting in a violation of the law. If, in the course of its business, it kill a person, then if the law fix a fine or damages for such unlawful killing, even though it were a felony, the law could be enforced for the payment of such fine, and the property of the corporation made to answer; and where life is taken by a corporation in pursuing its business, and it is compelled to answer civilly because of such wrongful death, there is no good reason why it may not be required to answer criminally for the same act done in the hne of its business, if the law so provides. Indeed, it seems from a very slight investigation of the question that this has practically been the law always. There are a few old cases that go to the effect that a corporation cannot be punished for a felony, but all the more modern cases are the other way." United States v. Alaska Packers' Assn., 1 Alaska R. 217, per Brow, Dist. J. 30 Crall & Ostrander's Case, 103 Va. 855, 49 S. E. 638. See also Standard Oil Co. V. Commonwealth, 107 Ky. 606, 21 Ky. L. Rep. 1339, 55 S. W. 8. 31 Crall's Case, 103 Va. 862, 49 S. E. 1038. 32 United States v. John Kelso Co. (U. S. C. C), 86 Fed. 305. 33 Southern Railway Co. v. State, 125 Ga. 287, 114 Am. St. Rep. 203, 54 S. E. 160. 34 State ex rel. v. French Lick Springs Hotel, 42 Ind. App. 282, 82 N. E. 801, 85 N. E. 724. 46 721 X 447 PENALTIES — OFFENSES — company to assume a corporate name in order to solicit business, such statute is not violated by merely using a corporate name without any fraudulent intent or injurious consequences to others.^^ § 447. Indictment of Corporations for Nuisances. A corporation and its officers may be indicted for carrying on a business which constitutes a nuisance; ^^ or for its negligent acts whereby a nuisance arises, as in the case where water is permitted to escape and form stagnant pools; ^^ or where it un- lawfully obstructs a pubhc highway or navigable stream ;3» or where a railroad corporation unlawfully constructs its road across a public highway; ^^ or where it permits its engines and cars to remain thereon for a period longer than is reasonably necessary for a safe crossing; '^'^ or where they build their sta- tion houses in highways, which they merely cross with their railroad, and the location of which they do not change.''^ Again, if a railroad company habitually runs its trains over a highway crossing at an unreasonable and unsafe rate of speed without giving reasonable and proper signals of their approach for the protection of life and property, it may be indicted for committing a pubHc nuisance; but all the matters necessary to show the illegaUty of the company's action must be stated in the indictment. A bill of particulars cannot take the place of what must affirmatively appear on the face of the indictment. An indictment, however, charging a railroad company with the frequent and rapid passing and repassing of its trains over a highway, whereby the same was obstructed and rendered 36 People V. Rose, 219 lU. 46, 76 N. E. 42. 38 People V. Detroit White Lead Works, 82 Mich. 471, 46 N. W. 735, 9 L. R. A. 722. 37 Delaware Division Canal Co. v. Commonwealth, 60 Pa. St. 367, 100 Am. Dec. 570. 38 State V. Baltimore, Ohio & Chicago Rd. Co., 120 Ind. 298, 22 N. E. 307; Commonwealth v. Massachusetts Rd. Corp., 4 Gray (70 Mass.), 22; State v. White, 96 Mo. App. 34, 69 S. W. 684. 39 Commonwealth v. Massachusetts Rd. Corp., 4 Gray (70 Mass.), 22. «o State V. Western North Carolina Rd. Co., 95 N. C. 602. « State V. Vermont Central Rd. Co., 27 Vt. 103. 722 CRIMINAL LIABILITY OP" CUUI'OIIATIONS §§ 448, 449 dangerous, charges no offense either under the statute law of Pennsylvania, or at common law. With the statutory permis- sion given to railroad companies to cross public highways with their tracks, there necessarily goes the right to fretjuently cross them, if the needs of the public for whom railroad companies are incorporated require the frequent movement of trains; and this is so of their speed. "^^ § 448. Insurance Companies — Combinations — Conspira- cies — Insurance as "Commodity" — When and When Not Indictable Offenses. Insurance is a commodity within the meaning of the Iowa Code ^ prohibiting the formation of combinations between in- dividuals or corporations to regulate or fix the price of "oil, lum- ber, coal * * * or any other commodity," and a compact between local agents in a city to fix rates upon all risks therein, imposing certain penalties for taking of risks at less rates than those fixed by the association is within the inhibition of said Code so forbidding the formation of combinations or confeder- ations to regulate the price of any commodity.^ Under a Kentucky decision it is not an indictable offense to conspire to fix insurance rates, either by virtue of the statute '^ against conspiracies to regulate the prices of "merchandise, manufactured articles or property of any kind," or by the com- mon law as it existed prior to the fourth year of King James I.''^ § 449. Criminal Offenses by Corporations— Employment of Children Under Certain Age— Penalties. A State statute prohibiting the employment of children,'*' under the age of fourteen years in mills and factories, and })ro- « Commonwealth v. Baltimore & Ohio Ry. Co., 223 Pa. St. 23, 72 Atl. 78. « Iowa Code, § 5454. i* Beechley v. Mulville, 102 Iowa, 602, 63 Am. St. Rep. 470, 70 N. W. 107, 71 N. W. 428. Examine State ex inf. Firemen's P'und Ins. Co., 152 Mo. 1, 45 L. R. A. 363, 52 S. W. 595. «5 Section 3915, Ky. Stat. 48 ifltna Ins. Co. v. Commonwealth, 106 Ky. 864, 25 Ky. L. Rep. 503, 45 L. R. A 355. « Mills' Ann. Stats., Colo., § 413. 723 § 450 PENALTIES — OFFENSES — viding a penalty therefor, applies to corporations as well as to natural persons, and the fact that the statute provides for imprisonment if the fine imposed is not paid docs not exempt a corporation from the penalty, but the fine may be collected by means provided for the collection of money judgments. So where a corporation, through its agent having general authority to hire and discharge employes, employed a child under the age of fourteen years to work in a cotton mill, the corporation is guilty and subject to the penalty therefor, not- withstanding instructions had been given by the company to such agent not to employ children under that age."^^ § 450. Indictment— While a Corporation Might Be Liable for Misfeasance Under Certain Definitions of Manslaughter It Cannot Be Guilty of Latter Under New York Penal Code. A definition of certain forms of manslaughter might be foraiu- lated which would be applicable to a corporation and make it criminally liable for various acts of misfeasance and non- feasance when causing death. The Penal Code of New York, however,'^^ defines homicide as "the killing of one human being by the act, procurement or omission of another," meaning an- other human being, and said Code^*^ also makes "such homi- cide " manslaughter in the second degree under certain circum- stances. Under these definitions a corporation cannot be guilty of manslaughter.^^ 48 Overland Cotton Mill Co. v. People, 32 Colo. 263, 105 Am. St. Rep. 74, 75 Pac. 924. 49 Section 179. 50 Subd. 3, § 193. 51 People V. Rochester Ry. & Light Co., 195 N. Y. 102, 88 N. E. 22, aff'g 114 N. Y. Supp. 755, 129 App. Div. 843, which aff'd 112 N. Y. Supp. 362, 59 Misc. 347 (a case of an indictment for crime of manslaughter in the second degree). The court, per Hiscock, J., said: "Within the principles thus and elsewhere declared, we have no doubt that a definition of certain forms of manslaughter might have been formulated which would be applicable to a corporation, and make it criminally liable for various acts of misfeasance and nonfeasance when resulting in homicide, and amongst which very probably might be inchided conduct in its substance similar to that here charged against the respondent. But this being so, the question still confronts us whether corporations have been so made liable for the crime of manslaughter 724 CRIMINAL LIABILITY OF CORPORATIONS § 451 § 451. Construction of Antitrust Act —What Prohibitions of Embrace— Intent of —What Are and Are Not Illegal Com- binations Within. The prohibitions of the Sherman Antitrust Law -^^ do not ex- tend to acts done in foreign countries even though done by citizens of the United States and injuriously affecting other citizens of the United States. And a conspiracy in this country to do acts in another jurisdiction does not draw to itself those acts and make them unlawful if they are permitted by the as now expressly defined, in the section alone relied on by the people, and this question we think must be decisively answered in the negative. The New York Penal Code, § 179, defines homicide as 'the killing of one human being by the act, procurement or omission of another.' We think that this final word 'another,' naturally and clearly means a second or additional member of the same kind or class alone referred to by the preceding words, namely, another human being, and that we should not interpret it as appel- lant asks us to, as meaning another ' person,' which might then include corpo- rations. It seems to us that it would be a violent strain upon a criminal statute to construe this word as meaning an agency of some kind other than that already mentioned or referred to and as bridging over a radical transi- tion from human beings to corporations. Therefore we construe this defini- tion of homicide as meaning the killing of one human being by another human being. Section 180 says that: 'homicide is either: (1) murder; (2) man- slaughter,' etc. Section 193 says that: 'Such homicide,'— that is, 'the killing of one human being * * * by another, — is manslaughter in the second degree when committed ' without a design to effect death; * * * (3) by any act, procurement or culpable negligence of any person, which * * * does not constitute the crime of murder in the first or second de- gree, nor manslaughter in the first degree.' Thus we have the underlying and fundamental definition of homicide as the killing of one human being by another human being, and out of this basic act thus defined and accord- ing to the circumstances which accompany it are established crimes of vary- ing degree including that of manslaughter for which the respondent has been indicted. In the definition of these crimes as contained in the sections under consideration (§§ 183-193), we do not discover any evidence of an in- tent on the part of the legislature to abandon the limitation of its enact- ments to human beings or to include a corporation as a criminal. Many of these sections could not by any possibility apply to a corporation and in our opinion subd. 3 of § 193, relating to manslaughter manifestlj' does not. It is true that the term ' person ' used therein may at times include corpora- tions, but that is not the case here. The surrounding and related sections are not calculated to induce the belief that it has any sucli meaning, and the classification of manslaughter as a form of homicide and the definition of homicide already quoted forbid it." 52 Act of July 2, 1890, chap. 647, 26 Stat. 209, 210. 725 § 451 PENALTIES — OFFENSES — local law. So a statute will, as a general rule, be construed as intended to be confined in its operation and effect to the terri- torial limits within the jurisdiction of the lawmaker, and words of universal scope will be construed as meaning only those sub- ject to the legislation; and while a country may treat some re- lations between its own citizens as governed by its own law in regions subject to no sovereign, like the high seas, or to no law recognized as adequate, the general rule is that the character of an act as lawful or unlawful must be determined wholly by the law of the country where it is done. These principles were ai^jjlied in a case in the Federal Supreme Court in an action which had been brought by an Alabama corporation against a New Jersey corporation to recover threefold damages, under the above-mentioned act to protect trade against monopolies; the acts complained of being done with the intent to prevent trade and competition and to enable defendant to monopolize and restrain the trade and to maintain unreasonable prices. As a result of the defendant's acts done in a foreign country the plaintiff was deprived of his property in the same country and his supplies injured, and defendant had also compelled pro- ducers to come to his terms and had prevented the plaintiff from buying for export and sale. The Circuit Court dismissed the complaint, upon motion, as not setting forth a cause of ac- tion, and that judgment was affirmed in the Circuit Court of Ap- peals and also by the Supreme Court.^^ Where a number of manufacturers situated in different States engaged in manufacturing an article sold in different States, organize a selling company through which their entire output is sold, in accordance with an agreement between them- selves, to such persons only as enter into a purchasing agree- ment by which their sales are restricted, the effect is to restrain and monopolize interstate and foreign trade and commerce and is illegal under the Antitrust Act; ^"^ and it has so held in regard 53 American Banana Co. v. United Fruit Co., 213 U. S. 347, 53 L. ed. 826, 29 Sup. Ct. 511. 54 .\ct of July 2, 1890, chap. 647, 26 Stat. 209; U. S. Comp. Stat., 1901, pp. 3200 H tieq. See next followuig note. 72G CRIMINAL LIABILITY OF CORPORATIONS § 452 to a combination of wall paper manufacturers.'^^ Under the In- terstate Commerce Act where a shipper pays the ley;al rate on numerous shipments and at intervals receives a rebate from the carrier there is a separate and complete offense on each payment and not one continuous offense, although all the pay- ments were made under one agreement .^^ § 452. Construction of Elkins Act— Criminal Intent— Ac- cepting Rebates— When Carrier Liable as Party to Joint Rate. While intent is to some extent essential in the commission of crime, and without determining whether a shipper honestly paying a reduced rate in the belief that it is the published rate is liable under the statute, it is held that shippers who pay such a rate with full knowledge of the published rates, and contend that they have a right so to do, commit the offense prohibited in the Elkins Act, and are subject to the penalties provided therein, even though their construction be a mis- take of law.^^ While criminal statutes are not to be enlarged by construction, and a crime must be clearly defined in its terms, they are to be reasonably construed with a view to effecting the purpose of their enactment, and this applies to that provision of the Elkins Act ^* which relates to published rates and the conclusiveness of such rate as a legal rate in any prosecution under said enactment; said provision not being narrowly construed as one relating to evidence but as bringing 55 Continental Wall Paper Co. v. Voight & Sons Co., 212 U. S. 227, 29 Sup. Ct. 280, 53 L. ed. 486, aff'g 148 Fed. 939. The remedies given by the Antitrust Act of 1890 are three in number: First, a criminal prosecution; second, a forfeiture of property; and, third, an action by any person injured to recover threefold damages. The defendant sought none of these remedies. 56 NeviT York Cent. & Hudson River Ry. Co. v. United States, 212 U. S. 481, 500, 29 Sup. Ct. 304, 309, 53 L. ed. 613, 624 (a case of indictment and conviction in Circuit Court of railroad company and its assistant traffic man- ager for payment of rebates; imposition of fines; writ of error). 57 Armour Packing Co. v. United States, 209 U. S. 56, 52 L. ed. 681, 28 Sup. Ct. 428, afi'g 153 Fed. 1 (a case of conviction for rebates). Criminal intent, see State ex inf. v. Firemen's Fund Ins. Co., 152 Mo. 1, 45 L. R. A. 363, 52 S. W. 595. 5s Act of Feb. 19, 1903, chap. 708, 32 Stat. 847, § 1; U. S. Comp. Stat. Supp., 1903, p. 363; U. S. Comp. Stat. Supp., 1907, p. 880; U. S. Comp. Stat. Supp., 1909, p. 1138. 727 §§ 453, 454 PENALTIES — OFFENSES — all carriers who have participated in any rate filed or pub- lished within the terms of the act, as much so as if the tarif!" had been actually published and filed by such participating carriers. A carrier, therefore, under said Elkins law can be prosecuted for the offense of rebating where it is a party to a joint rate although it has not filed or pubhshed the same.^^ § 453. Construction of Elkins Act—" Device " to Obtain Rebates. A device to obtain rebates to be within the prohibition of the Interstate Commerce Act,^° and the Elkins Act ^^ need not necessarily be fraudulent. The term "device" as used in those statutes includes any plan or contrivance whereby merchandise is transported for less than the published rate, or any other advantage is given to, or discrimination practiced in favor of the shipper.*'^ § 454. Penal Statute— Retroactive Effect— Liability Un- der, of Party Carrying Out Illegal Agreement Executed Prior to Its Passage. Even though it would be giving a penal statute a retroactive effect to make it apply to an unlawful agreement executed 59 United States v. New York Central & Hudson River Rd. Co., 212 U. S. 509, 29 Sup. Ct. 313, 53 L. ed. 629. A proceeding in the Federal Supreme Court under the act of March 2, 1907, chap. 2564, 34 Stat. 1246; U. S. Comp. Stat. Supp., 1909, p. 220 ("an act providing for writs of error in certain in- stances in criminal cases") permitting the government to bring to said Supreme Court a case where the court below sustains an indictment, in which the judgment involves the construction of a Federal statute upon which the indictment is founded. The effect of the charges in the indict- ment was that defendant did unlawfully and willfully give a rebate and concession in violation of the act to regulate commerce, whereby the prop- erty was transported by the corporation charged at a less rate than that named in the tariffs published and filed by said common carrier as required l)y the act to regulate commerce and the acts amendatory thereof and sup- plemental thereto. 60 Act of March 2, 1889, 25 Stat. 857; U. S. Comp. Stat., p. 3161. 61 Act of Feb. 19, 1903, chap. 708, 32 Stat. 847; U. S. Comp. Stat. Supp., 1903, pp. 363-366; U. S. Comp. Stat. Supp., 1907, pp. 880 et seq.; U. S. Comp. Stat. Supp., 1909, pp. 1138 et seq. 62 Armour Packing Co. v. United States, 209 U. S. 56, 52 L. ed. 681, 28 Sup. Ct. 428, aff'g 153 Fed. 1, a case of conviction for rebates. 728 CRIMINAL LIABILITY OF CORPORATIONS § 455 prior to the passage of the act by defendant's predecessor in interest, such defendant is subject to conviction for violating the act after its enactment by making itself a party to and carrying out its illegal provisions.'^^ § 455. State Jurisdiction Over Violation of Antitrust Law Where Agreement Made Out of State— Extraterritorial Ef- fect of Conspiracy, etc., Statute. Although an agreement to violate the antitrust law of a State may be made outside of the State, if the parties thereto or their agents execute it or attempt so to do, within the State, they are under the jurisdiction of the State and their con- viction for such acts is not without due process of law.*^ The Antitrust Act of Arkansas which provides that any corpora- tion organized under the laws of this or any other State, or country, and transacting or conducting any kind of business in said State, or any partnership or individual who shall create, enter into, become a member of, or a party to, any pool, trust, agreement, combination, confederation or understanding to fix or limit the price or premium to be paid for insuring prop- erty against loss or damage by fire shall be deemed and ad- judged guilty of a conspiracy to defraud, etc.,^ does not apply to pools or combinations formed outside of the State, and not intended to affect and which do not affect, persons or property or prices of insurance in that State.®** 93 Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 29 Sup. Ct. 220, 53 L. ed. 417, aff'g 106 S. W. 918, an action to forfeit permit of foreign corporation to do business in State, and to assess penalties for violation of Antitrust laws of State. Anti-monopoly Act; when action by attorney-general against combination formed prior to passage of act of N. Y., 1899, chap. 690, is not too late, see Matter of Davies, 168 N. Y. 89, 61 N. E. 118, 56 L. R. A. 855, 67 N. Y. Supp. 492, 55 App. Div. 245, rev'g 66 N. Y. Supp. 129, 32 Misc. 1. 64 Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 29 Sup. Ct. 220, 53 L. ed. 417, aff'g 106 S. W. 918. Action to forfeit permit of foreign corporal ion to do business in the State and to assess penalties for violation of antitrust laws of State. 65 Acts Ark., 1899, p. 50. 68 state V. Lancashire Fire Ins. Co., 66 Ark. 466, 45 L. R. A. 348, 51 S. W. 633. 729 § 456 PENALTIES — OFFENSES — § 456. Constitutional Law— Elkins Act— Liquor Laws — Regulation of Carriers — Excessive Fines. Congress has power to so regulate interstate commerce as to secure equal rights to all engaged therein, and the Elkins Act^^ is not unconstitutional because it imputes to the cor- poration, and makes it criminally responsible for acts violative of the Interstate Commerce Act done by its agent. So the court will recognize that the greater part of interstate com- merce is conducted by corporations, and it will not reHeve them from punishment because at one time there was a doc- trine that corporations could not commit crime. And even if a statute relating both to individuals and corporations de- prives an individual of the presumption of innocence and makes him responsible for the acts of another, the question of the constitutionality of such statute on that ground cannot be raised by a corporation; and where, as in the case of the Elkins Act,^* there is no doubt that Congress could have enacted the statute as to corporations, even if it could not as to individuals, it is valid as to corporations.^^ A statute of Kentucky, making penal all shipments of liquor "to be paid for on delivery, commonly called C. O. D. shipments," and further providing that the place where the money is paid or the goods delivered shall be described to be the place of sale and that the carrier and his agents delivering the goods shall be jointly liable with the vendor, is as applied to shipments from one State to another an attempt to regulate interstate commerce and beyond the power of the State.''" 67 Act of Feb. 19, 1903, chap. 708, 32 Stat. 847; U. S. Comp. Stat. Supp., 1903, pp. 363-366; U. S. Comp. Stat. Supp., 1907, pp. 880 et seq.; U. S. Comp. Stat. Supp., 1909, pp. 1138 etseq. 68 Act of Feb. 19, 1903, chap. 708, 32 Stat. 847; U. S. Comp. Stat. Supp., 1903, pp. 363-366; U. S. Comp. Stat. Supp., 1907, pp. 880 et seq.; U. S. Comp. Stat. Supp., 1909, pp. 1138 et seq. 69 New York Cent. & Hud.son River Ry. Co. v. United States, 212 U. S. 481, 500, 29 Sup. Ct. 304, 309, 53 L. ed. 613, 624 (a case of indictment and conviction in Circuit Court of raihoad company and its assistant traffic man- ager for payment of rebates; imposition of fines, writ of error), citing Berea College V. Kentucky, 211 U. S. 45, 29 Sup. Ct. 33, .53 L. ed. 81. 70 Adams Exp. Co. v. Kentucky, 206 U. S. 129, 51 L. ed. 987, 27 Sup. Ct. 606. 730 CRIMINAL LIABILITY OF CORPORATIONS § 457 It is within the constitutional power of the General Assembly of a State to impose upon a railway company the duty of pro- viding an adequate supply of pure drinking water for its passengers while journeying upon its cars, and to provide that the corporation shall be indicted, prosecuted and fined for a neglect of this public duty. In so far as the legislature has undertaken to inflict upon violators of a Penal Code,'^ punishment other than fine, the punitive clause thereof is inoperative, because incapable of enforcement. Such section is not, however, violative of the constitutional requirement that all general laws shall have uniform operation; since all violators convicted thereunder must necessarily be punished in the same way, by fine and not otherwise. '^ But where a State antitrust law fixed penalties at five thousand dollars a day, and after verdict of guilty for three hundred days, a defendant corporation was fined over one million six hundred thousand dollars, the Federal Supreme Court will not hold that the fine is so excessive as to amount to deprivation of property without due process of law, where it appears that the business was extensive and profitable during the period of violation, and that the corporation has over forty million dollars of assets and has declared dividends amounting to several hundred per cent.'^^ § 457. Sufficiency of Indictment. In Nebraska, in order to charge a criminal violation of the statute of that State ^"^ "to protect trade and commerce against unlawful restraints and monopoHes" known as the "Anti- Trust Law" or the "Junkin Act," the indictment or informa- tion must allege that the facts complained of were in restraint 71 Ga. Penal Code, § 522. 72 Southern Railway Co. v. State, 125 Ga. 287, 114 Am. St. Rep. 20?,, 54 S. E. 160. 73 Waters-Pierce Oil Co. v. Texas, 212 U. S. 86, 29 Sup. Ct. 220, 53 L. ed. 417, aff'd 106 S. W. 918. Action to forfeit permit of for.'ifin r<)ii)ora- tion to do business and to assess penalties for violation of antitrust laws of State. Examine Young, Ex parte, 209 U. S. 123. 74Comp. Stat., 1907, § 1, Art. II, chap. 91a. 731 § 457 PENALTIES — OFFENSES — of trade within that State.'^ An indictment which clearly and distinctly charges each and every element of the offense in- tended to be charged, and which distinctly advises the de- 75 Howell V. State, 83 Neb. 44S, 120 N. W. 139. In this case, plaintiff in error, with more than fifty other persons was indicted by the grand jury for a violation of that part of Art. II, chap. 91a, Comp. Stat., 1907, relating to "Restraints, monopolies, rebates," commonly known as the "Antitrust Law," or the " Junkin Act." The prosecution grew out of the creation and existence of an organization, or alleged combination of dealers in coal and wood, under the name of the "Omaha Stock Exchange" for the purpose, as alleged, of fixing and establishing the price of fuels to be sold at retail. Plaintiff in error was found " guilty of restraint of trade as he stood charged in the information." A motion for a new trial was overruled and a judg- ment for conviction was entered and on error the judgment was reversed. The court, per Reese, C. J., after stating what we have above given in sub- stance, says: "The first count charges the persons indicted with having 'unlawfully and feloniously joined themselves together and formed a trust and combination, the purpose and effect of which trust and combination is to restrain trade, to increase prices of coal and other fuels, to prevent competition in the sale of coal and other fuels, to fix the price of coal and other fuels, and to agree not to sell any coal and other fuels below a certain fixed figure, and that said defendants, naming them, are unlawfully aiding, advising, abetting, counseling and acting in pursuance to an agreement entered into by the members of said trust and combination, which trust and combination has unlawfully prevented, and does unlawfully prevent, com- petition in the sale of coal and other fuels, and have unlawfully agreed not to sell coal and other fuels below a certain figure, and have unlawfully pre- vented the sale of coal and other fuels below a certain fixed figure deter- mined by said trust and combination with the intent then and there and thereby unlawfully, feloniously and arbitrarily to prevent competition and fix an established price at which said coals and other fuels are sold.' This count is attacked upon the ground that it is nowhere charged that the al- leged trust, combination, or monopoly was with the intent and for the pui-pose of fixing and controlling prices of coal and other fuels in this State. The language cf the stat\ite under which the indictment was drawn pro- vides: 'Every contract, combination in the form of a trust or otherwise, or conspiracy in restraint of trade or commerce within this State, is hereby declared to be illegal,' etc. It is evident that the object of the legislation was and is to make criminal the formation of such conspiracies within this State for the purpose of restraining or controlling trade or commerce within its borders, as there is no authority making such acts criminal when interstate commerce is to be thereby affected. It follows that that count of the in- dictment must be held incomplete and does not charge the commission of an offense. * * * In the construction of this statute and the article of the constitution copied, we are cited to the decision of the Supreme Court of the United States, in the case of Hopkins v. United States, 171 U. S. 578, 19 Sup. Ct. 40, 43 L. ed. 290, and by some it is thought to be decisive of this 732 CRIMINAL LIABILITY OF CORPORATIONS § 457 fendant of what he is to meet at the trial j« .sulhciciit, and it has been so held in a case as to an indictment for acccjjting rebates prohibited by the Elkins Act, although the details of the device by which the rebates were received were not set out/' An indictment is sufficient if it specifically states the ele- ments of the offense charged with sufficient particularity to fully advise the defendant thereof and so as to l)e pleaded in bar of any subsequent prosecution for the same offense.'^' question. In that case the members of the Kansas City Live Stock Exchange, a voluntary incorporated association, had agreed upon certain rules govern- ing the transaction of their business, the truth of which prohibited the em- ployment of any agent, solicitor, or employ6 except upon a stipulated salary, not contingent upon the commission earned, and that not more than three solicitors should be employed at one time by a commission, firm, or corporation, resident or nonresident of Kansas City. The eleventh rule prohibited the members from sending or causing to be sent a jjrcpaid tele- gram or telephone message, quoting markets or giving infonnation as to the condition of the same under the penalty of a fine. The ground upon which that case was decided was that the business of the Kan.sas City Live Stock Exchange was not interstate business, and therefore was not subject to control by act of Congress under which the suit had been instituted. What the decision would have been had that question been decided other- wise is subject to conjecture. It is true that the court holds that the rules referred to are not violative of the law of Congress, but this is based solely upon the fact that the business to which they refer is not interstate commerce. In Addyston Pipe & Steel Co. v. United States, 175 U. S. 211, 243, 20 Sup. Ct. 96, 108, 44 L. ed. 136, the same judge who wrote the opinion in the Hopkins Case says: 'The cases of Hopkins v. United States, 171 U. S. 578, 19 Sup. Ct. 40, 43 L. ed. 290, and Anderson v. United States, 171 U. S. 604, 19 Sup. Ct. 50, 43 L. ed. 300, are not relevant. In the Hopkins case it w-as held that the business of the members of the Kansas City Live Stock Ex- change was not interstate commerce and hence the act of Congress did not affect them.' The same is stated in substance, in Montague & Co. v. Lowry, 193 U. S. 39, 48, 24 Sup. Ct. 307, 48 L. ed. 608; Swift & Co. v. United States, 196 U. S. 375, 397, 25 Sup. Ct. 276, 49 L. ed. 518; and Loewe v. Lawlor, 208 U. S. 274, 297, 28 Sup. Ct. 301, 52 L. ed. 488. We thus refer to the Hop- kins case at some length because it is insisted by some to be decisive of this case, which it clearly is not." Indictment held sufficient; false entry in corporation's books by officer, see Commonwealth v. Dewhirst, 190 Mass. 293, 76 N. E. 1052. Requisites of indictment; averment of corporate name necessary, see Stand- ard Oil Co. V. Commonwealth, 29 Ky. L. Rep. 5, 91 S. W. 1128. 76 Armour Packing Co. v. United States, 209 U. S. 56, 62 L. ed. 681, 28 Sup. Ct. 428, aff'g 153 Fed. 1 (a case of conviction for rebates). " is-ew York Cent. & Hudson River Ry. Co. v. United States, 212 U. S. 733 § 458 ■ PENALTIES — OFFENSES — When, in a prosecution of an express company for a viola- tion of such a statute by an interstate shipment, it is averred in the indictment or stipulated by the prosecution that the shipment and delivery were made and done by the express company in the usual course of its business as a carrier, testi- mony that the consignee did not order the goods or that the goods were held by the agent of the comi)any at the place of delivery for a few days to accommodate the consignee is im- material.^* § 458. Discrimination in Rates— Rebates— Elkins Act — Criminal Law— Place of Trial— Single Continuous Offense. Transi)ortation of merchandise by a carrier for less than the published rate is, under the Elkins Act,^** a single continuing offense, continuously committed in each district through which the transportation is conducted at the prohibited rate, and is not a series of separate offenses, and the provision in the law making such an offense triable in any of those districts, confers jurisdiction on the court therein, and does not violate the Sixth Amendment to the Federal Constitution,*" providing that the accused shall be tried in the State and district where the crime was committed.*^ 481, 29 Sup. Ct. 403, 53 L. ed. 613 (a case of conviction of railroad company in Circuit Court for payment of rebate and writ of error). 78 Adams Express Co. v. Kentucky, 206 U. S. 129, 51 L. ed. 987, 27 Sup. Ct. 606. 79 Act of Feb. 19, 1903, chap. 708, 32 Stat. 847; U. S. Comp. Stat. Supp., 1903, pp. 363-366; U. S. Comp. Stat. Supp., 1907, pp. 880 el seq.; U. S. Comp. Stat. Supp., 1909, pp. 1138 ct seq. 80 Art. Ill, § 2. 81 Armour Packing Co. v. United States, 209 U. S. 56, 52 L. ed. 681, 28 Sup. Ct. 428, aff'g 153 Fed. 1 (a case of conviction for rebate). 734 INDEX INDEX A ABATEMENT, plea in; sufficient averment as to jurisdiction § 82 of nuisance; suit for; parties & 22!J ABUTTING OWNER, right of action by, for railway or electric line in street § 242 and attorney -general; parlies to restrain construction street railway § j-,! suit by, to enjoin street railway company from accepting fran- chise § 2-)S ejectment by; when does and does not lie; telegraph poles, etc. . . § 315 whether additional burden imposed on, by telegraph, telephone and electric railway lines note, § 315 ACCOUNTING, action against trustees for; parties § 261 suit by corporations against officers or directors for § 262 stockholders may sue corporation officers for § 203 and receivership ; suit by policy holder against insurance company for § 27(5 suit by stockholders for; parties § -104 equity § 4 1 3 proceeds of sale on foreclosure of mortgage §417 ACCOUNT STATED, assumpsit § 322 ACTION, commencement of; jurisdiction § S3 precipe filed ; commencement of action § S3 when insurance policy limitation as to time of bringing suit is not a bar § S3 under statutes ; generally § 314 on the case lies concurrently with assumpsit § 333 when special or statutory actions or proceedings exclusive § 384 See Actions Ex Contractu: Actions Ex Delicto: Conditions prec- edent; Criminal or Penal Offenses; Equity; Law, Actions at; Parties. 47 737 738 INDEX ACTIONS AT LAW, must be brought to recover excessive charges by carriers § 150 See names of the various actions. See Criminal m- Penal Offenses; Law, Actions at. ACTIONS EX CONTRACTU, election of remedy § 819 to recover on agreement for services § 320 to recover for services rendered and money expended § 320 to recover agair,'.t contractor corporation for unskillfuUy doing work § 320 to recover for removal of timber § 320 for damages on attachment bond § 320 contracts express and implied; instances, generally § 320 assumpsit ; § 321 assumpsit; account stated § 322 assumpsit by and against banks § 323 debt § 324 covenant 8 325 book account § 326 ACTIONS EX DELICTO, election of remedy § 319 by passenger against railroad for ejection from train, generally. . § 327 action against water company for damages resulting from negli- gence § 327 trespass § 328 trespass for mesne profits § 329 trespass quare daiisum fregit § 330 false imprisonment § 331 trespass on case § 332 when action on case lies concurrently with assumpsit § 333 nuisance § 334 libel and slander § 335 malicious prosecution § 336 wrongfully suing out attachment § 337 conspiracy; instances § 338 fraud and deceit ; instances § 339 trover and conversion § 340 replevin; claim and delivery § 341 ACTIONS IN EQUITY, see names of various actions. See Equity. ADEQUATE REMEDY, at law; equity jurisdiction §§ 163, 164 at law; waiver of defense of § 165 See Equity; Mandamuy; Prohibition. INDEX 739 ADJUSTMENT, of damage claims; time for, limited by statute § 30 See Claims. ADMINISTRATIVE DUTIES, and legislative power; distinctions § 92 ADMINISTRATOR, selection of, to obtain citizenship for jurisdiction note, § I'M ADMIRALTY, consignee may sue in court of § 244 enforcement of new rights of action given by State statute; action by Federal Courts § 402 ADMIRALTY COURT, prohibition to § 400 ADULTERATION, of articles; regulation and control of § 18 AGENCIES, of Federal Government §§ 65, 6(i of P^ederal Government; taxation §§ 65-79 See Agents. AGENTS, for service of process; foreign corporations may be put on same footing as domestic corporations § 14 and officers of l)anks; criminal offenses; power of State as to. . . . § 66 action against, by corporation; effect of dissolution note, § 240 personal liability of § 261 when replevin does not lie against § 34 1 See Embezzlement; Principal and Agent. AGREEMENT, to pay corporate debts; enforcement of § 239 See Contract; Subscription. AGRICULTURE. See Secretary of Agriculture. ALDERMAN, power to fix water rates § 95 ALIEN IMMIGRATION ACT, contagious diseases; penalties against corporations § 100 ALLEGATIONS. See Pleading. 740 INDEX AMENDMENTS. See Constitution. AMOUNT, jurisdistional. See Jurisdiction. ANCILLARY ACTION, to enforce liability of nonresident stockholder § 286 ANSWER. See Pleading. ANTI-TRUST ACT, liberty to contract §11 when corporation and not stockholders should sue under § 273 equity cannot adjudge forfeiture under § 403 construction of; intent of § 451 what prohibitions of embrace § 451 State jurisdiction over violation of, where agreement made out of State '.... § 455 APPEAL, right of, given to court or judge when municipal authorities fail to exercise power does not make such exercise a judicial function § 5 from railroad commissioners' action when statute or method as to elimination of grade crossings is unconstitutional § 24 defense of res adjudicata not available on motion to dismiss § 83 from decision of State board of control adjudicating water rights § 93 from action of railroad commissioners or municipal board § 139 from rulings and orders of corporation commission §§ 140, 141 from railway commissioners lies in England to Superior Court on questions of law § 141 on question of railroad rates, to State Supreme Court before suing in Federal Court § 152 by Public Service Commission; rights of § 154 Federal Supreme Court; fundamental question, jurisdiction § 157 taken after 1891 to Federal Supreme Court § 159 in mandamus § 381 APPEALS, courts of. See Courts. APPEARANCE, voluntary or service of process as essential to jurisdiction § 88 as waiver of objection to jurisdiction § 201 effect of; jurisdiction note, § 201 APPROVAL, goods sent on; negligence; action by consignor note, § 243 ARBITRATE, pi)wer to sue and be sued includes power to § 231 INDEX 741 ARTICLES OF INCORPORATION, have effect of charter note, § 223 mandamus to compel filing § 358 See Certificates. ASSAULT, and battery by company's servant; jurisdiction of New York municipal court ncjte, § 89 on passenger; jurisdiction over action of New York municipal court note, § 89 liability of corporation for acts of servant note, § 317 and battery; trespass lies against corporation for § 328 ASSESSMENT, legislative contract of immunity from; power to transfer § 23 of special franchise tax; certiorari to review § 124 See Taxation. ASSESSMENT BOARDS, duty as to valuation; valuation of railroad property § 94 jurisdiction or powers of § 94 See Taxation. ASSETS, right of stockholders to sue in equity in a Federal Court for surplus assets after a decree of forfeiture of franchises § 269 when unpaid subscriptions or unpaid stock are and are not as- sets § 280 etc., overvalued in prospectus; fraud and deceit § 339 and note ASSIGNEE, of savings bank book; action against bank; jurisdiction of New York municipal court note, § 89 claiming lien for storage; jurisdiction of New York municipal court note, § 89 of chose in action; suit by; when Federal Courts no jurisdiction. . § 189 of chose in action; suit by; jurisdiction of Federal Courts; inquiry relates to time when suit is l)rought § 190 of promissory note or chose in action; suits by ; jurisdiction Federal Court; exceptions to; statutory prohibition § 191 when Federal Courts have jurisdiction of suits by § 192 of contract to convey land; when Federal Court no jurisdiction § 193 suit by; assignment collusive or fraudulent to give jurisdiction §§ 194, 195 subject to defense of failure of foreign corporation to pay license fee note, § 236 for creditors; action by for unpaid subscriptions § 289 742 INDEX ASSIGNEE— Continued : of purchaser of stock induced to purchase same by false state- ments ; right of assignee to sue § 339 of bankrupt; reformation of contract of pledge may be decreed against § 404 of interest of assured ; parties to suit for reformation of insurance policy § 404 ASSIGNMENT, acemption of immunity from exercise of governmental power not assignable; unless § 23 of claim for damages not connected with corporation's purposes note, §223 See Assignee. ASSUMPSIT, to recover on fire insurance policy; jurisdiction § 83 money had and received; suit against promoters § 259 when does not lie to recover value of oil mined § 321 when does not lie to recover money on contract where considera- tion has wholly failed § 321 for money had and received; ultra vires contract § 321 to recover withdrawal value of stock § 321 quantum meruit § 221 corporation liable in, for work and labor done and materials furnished § 321 to recover back money paid § 321 against corporation § 321 account stated § 322 account stated ; when railroad company liable § 322 by and against banks § 323 when action on case lies concurrently with § 333 ATTACHMENT, suit and claim for damages; jurisdiction § 81 action lies against corporation for wrongfully suing out attachment § 337 ATTACHMENT BOND, action when ex contractu § 320 ATTACHMENT LIEN. See Liens. ATl^ORNEY, as party to suit to establish railroad lease § 250 fees of; statutes providing for recovery of, against railroads § 30 ATTORNEY-GENERAL, pendency of proceedings to dissolve as bar to action by; exclusive jurisdiction § 81 INDEX 743 ATTORNEY-GENERAI Continued: State has no power to impart to its officer immunity from responsi- bility to supreme authority of United States § 155 suit against not suit against State note, § 155 of State is proper party defendant to suit to prevent enforcement of unconstitutional statute § l-'J-'^ and abutting owners; parties to restrain construction street rail- way § 251 intent of Congress in authorizing suit in equity in name of United States against Union Pacific Railroad Co § 252 action by, against directors for misconduct; New York Code Civil Procedure § 261 party to mandamus § 377 as party ; quo warranto § 390 as party; injunction; nuisances § 432 AUCTION, sale at, of corporate property; no suit by single stockholder to set aside § 268 AUDITOR, as attorney in fact to accept process § 14 See State Auditor. AUTOMATIC COUPLERS, requirement for use of, to protect employes § 27 AVERMENTS. See Pleading. AWARD, in condemnation proceedings; waiver § 127 B BAGGAGE, loss of, jurisdiction of suit § 81 statutory double damages for loss of § 314 BAILEE, a consignor may sue corporation § 243 BAILMENT, when action is for trover and not for breach of contract of . . note, § 340 BANKING CORPORATION, effect of proceedings to wind up; judgment against § 239 no power to contract after charter forfeited § 239 BANK NOTES, securities, etc.; stock for loans to United States; taxation § 73 744 INDEX BANKRUPT, reformation of contract of pledge may be decreed against § 404 BANKRUPTCY, whether corporation subject to adjudication as bankrupt, not jurisdictional question § 82 BANKS, charter may limit amount of tax § CS dissolution of; definition of; jurisdiction over funds applied § 81 noncompliance with State laws; effect of Federal jurisdiction note, § 198 going into voluntary liquidation; effect of § 240 borrower from, estopped to deny legal corporate existence § 248 United States party plaintiff in suit against; pension check; forgery § 252 right of United States to recover from; forgery of payee's name on pension check § 252 United States may bring action against to recover taxes § 252 as parties generally § 257 who should sue to enforce individual liability of stockholders of . . § 285 nonresident stockholder of; suit against § 286 assumpsit by and against § 323 when liable for conversion of bonds § 340 See National Banks; Savings Banks. BAR, when limitation in insurance policy as to time of bringing suit is not a § 83 See Judgment. BATTERY. See Assault. BILL. See Equity. BILLS OF EXCEPTIONS, jurisdiction of Circuit Court of Appeals by writs of error on, note, § 198 BILLS OF LADING, foreign commerce carried on through, not exempt from Interstate Commerce Act § 44 BOARD OF ALDERMEN. See Alderman. BOARD OF EQUALIZATION, cannot assess franchises granted by United States § 75 of taxes; jurisdiction §81 action against to enjoin certification of assessed value of property; jurisdiction § 81 INDEX 745 BOARD OF EQUALTZATION—Continued: piococdings before are quasi judicial § 123 when order by cannot be; resisted in action at law § 123 when order by not open to dispute in Federal Supreme Court § 123 conclusiveness of decisions of; review by courts § 123 when overvaluation by no defense at law § 123 BOARD OF ESTIMATE AND APPORTIONMENT, control of borough president; discretion as to repaying streets. . § 96 BOARD OF EXAMINERS, examination of employes as to colors; railroads § 27 examination and licensing locomotive engineers; statute may provide for § 27 BOARD OF TRUSTEES, not a corporation for jurisdictional purposes § 177 BOARDS, administrative power of court to restrain unlawful exercise of authority § 5 See name of. BONDHOLDERS, under mortgage as party plaintiflf to bill in equity where railroad sought to be taxed § S3 suit by, to compel delivery of bonds of reorganized corporation . . § 2a5 See Junior Bondholders. BONDS, of United States; savings banks; taxation §§ 72, 73 and stocks; issue of; jurisdiction of Public Service Commission. . § 117 equity jurisdiction to cancel guaranty of § 162 consideration for i.ssue of ; New York statute note, § 293 when bank liable for conversion of § 340 with trust company; demand and refusal necessary to charge conversion § 340 " BONUS " STOCK, liability of stockholders §§ 291, 292 BOOK ACCOUNT, action of § 326 BOOKS, mandamus to compel inspection of; jurisdiction defined and ap- plied § S3 production of, u.'^e of procp.ss of Federal Court in aiil of inquiries before comniiKsion § 137 746 INDEX BOOKS— Continued: outside of State; notice to corporation to produce, before grand jury; contempt § 138 production of, by corporation, before grand jury; power to compel ; notice; courts; contempt § 138 mandamus to compel inspection § 362 mandamus to compel surrender of § 303 right to inspect; penalties for refusal to allow § 442 BOOM, inspection of logs running out of § 59 surveyor general may be required to survey all logs running out of booms § 93 BOROUGH COUNCIL, authority to consent to location of street railway is legislative not judicial § 93 BOROUGH PRESIDENT, power of, as to repaving street § 96 BORROWER, from bank estopped to deny legal corporate existence § 248 BRAKEMAN, action by, for personal injuries; review by Federal Supreme Court of judgment note, § 208 BRIDGE, over navigable waters; power of State over until Congress acts note, § 2 railroad; over natural water course; power of State to renew bridge in order to drain lands § 24 when State has power to regulate and fix tolls § 33 power of Secretary of War as to § 56 as unreasonable obstructions to navigation ; removal of same .... § 56 interstate bridges; power of Congress and of State with relation to § 56 across navigable rivers; may be taxed by either State § 04 and bridge companies; taxation of; interstate commerce § 04 taxation of bridge company operating over navigable waters .... § 78 destroyed by fire; suit for damages; parties defendant note, § 228 as nuisance; jurisdiction of Federal Supreme Court § 402 structure, right of State to sue in equity for jurisdiction to remove as obstruction to navigation § 404 BRIDGE TOLLS, defense to suit for, that period of assent to exerci.se franchise has expired § 247 INDEX 747 BURIAL, freehold right in soil where dead buried; trespass lies against per- son disturbing grave x 33y See Cemetery. BUSINESS, slander of, l)y corporation; is liable & 335 BY-LAWS, increasing powers of officers and directors; stockholders have remedy in equity x 4Q2 c CAB SERVICE, maintaineil by railroad is not interstate commerce § 47 CANCELLATION AND RESCISSION, suit by stockholder to set aside lease; parties § 404 See Equitable Remedies. CAPITAL STOCK, taxation of § § 61 , 02 07 of interstate bridges; taxation of § (14 and shares in stockholders' hands may Itoth be taxed § 77 taxation of franchises based upon § 77 increase of ; jurisdiction of Railroad and Warehouse Commission as to §110 prospectus to obtain increase of; fraud and deceit note, § 339 prospectus to induce subscriptions to or sale of; fraud and deceit note, § 33vator company when not an interference with power of Congress to regulate conimcrcc § 1 1 liberty to ; interstate commerce §11 766 INDEX CONTRACT— Continued : liberty to; constitutional law §§11.12 liberty to; insurance § 12 liberty to; limitation of liability § 12 liberty to; mechanifs' liens § 12 liberty to; sales on margins § 12 impairment of obligation of; exemption from change of rates and transfer thereof by consolidation of companies § 39 an element of exists in the coming shareholder of National Banks § 66 impairment of obligation of; taxation § 68 impairment of obligation of where charter of bank limits amount of tax § 68 exemptions under charter inviolate § 79 impairment of obligation of; enforcement against street railway company of resolution of city council § 126 to convey land; suit by assignee of; when Federal Court no juris- diction § 193 impairment of obligation of ; Federal question ; jurisdiction . . note, § 208 within apparent scope of powers note, § 223 bank no power to alter; charter forfeited § 239 of predecessor, railroad company not liable for § 254 made by promoters not binding on corporation before incorpora- tion § 259 whether stockholders' liability on of § 284 assumpsit § 321 to deliver stock for property; when equity may enforce same. ... § 402 for corporation in procuring municipal franchise; validity of; public poUcy; equity; when remedy at law adequate § 407 reformation of or relief from § 412 to prevent competition ; remedy in equity § 436 to sell corporate stock; specific performance § 439 liability of party carrying out illegal agreement executed prior to passage of statute ; retroactive effect § 454 See Actions Ex Contractu; Consideration; Insurance; Pledge; Reinsurance. CONTRACT OR TORT, form of action; election of remedy § 319 CONTRACTOR, payment to in stock; not a stock subscription § 293 CONVERSION, of timber; pleading; trespass § 330 See Trover and Conversion. CONVEYANCE, suit to set aside severable; removal to Circuit Court : § 213 INDEX 767 "CORPORATE FRANCHISE," tax on §78 CORPORATION, is subject to reasonable regulations by legislature § 6 as instrumentalities, under power of Congress to regulate com- merce « g2 when is and is not a citizen; pleadings 8 173 powers of, generally; parties s 223 as an entity s 224 as entity; equity § 225 may sue and be sued s 227 de facto may sue and be sued § 245 de facto, what const itutes, generally § 246 de facto; legislative power to cure defective organization § 246 de facto; collateral attack § 247 estoppel to deny legal corporate existence §§ 247, 248 has remedy at law to redress wrongs of promoters § 259 internal management of; general rule § 260 and not stockholders should sue under Sherman Anti-trust Act. • § 273 should sue or be made party to suit by stockholder § 274 liability of, for negligence; willful or malicious acts of serv- ants § 317 regulation of internal affairs of , § 402 internal management of, general rule § 260 citizenship of. See Citizenship. jurisdiction of courts over. See Courts; Jurisdiction of Courts. CORPORATION BOOKS, mandamus to compel inspection § 362 See Books. CORPORATION COMMISSION, jurisdiction of; delivery of cars § 119 of North Carolina no power to enforce its orders by final process § 140 See State Corporation Commission. CORPORATION SUPERVISORY BODIES. See names of the various commissions. See Jurisdiction of Corporation Super- visory Bodies. COUNTERCLAIM, suits by stockholders against trustee of funds for dividends; defenses « § 270 COUNTIES, power of legislative bodies of, to fix water rates § 95 COUPLERS. See Automatic Couplers. 768 INDEX COURT OF ADMIRALTY, consignee may sue in § 244 COURT OF VISITATION, jurisdiction of 98 COURTS, jurisdiction is to see that no right secured by supreme law is impaired by legislation § 4 statute for production of books and papers includes court . . . note, § 4 cannot make form and substance test of power of Congress to enact statute in matter over which Congress has absolute control § ^ presumption is that legislature never intends to interfere with action of § ■* regulation of location, maintenance, etc., follows within limits of judicial department, when § ''^ power to regulate cannot be secured by, when not delegated .... § 5 proceedings legislative are not proceedings within meaning of the Revised Statutes, § 720 § 5 may restrain unlawful exercise of legislative or administrative powers by executive officers, municipal councils, boards § 5 statute cannot compel courts or judges when acting judicially to exercise legislative powers, when § 5 duty of, to guard vigilantly against any needless intrusion on powers of Congress § 10 interference of; pohce power; legislative discretion § 10 interference of; exercise of police power § 10 jurisdiction of Federal is limited § 82 authority of to punish summarily; contempt; definition of jurisdic- tion applied § 82 of general jurisdiction; when jurisdiction acquired over subject- matter § 83 jurisdiction of municipal courts § 89 jurisdiction of New York municipal courts note, § 89 what judgment rendered on report of "special commission" appointed; compulsory sale of gas or electric light plant to city. § 102 special tribunal; "special commission" to hear and adjudicate not a "court" §10" appointment of "special commission" to hear, adjudicate and report; purchase of gas or electric plant by city § 102 Interstate Commerce Commission not a "court" ' § 103 interference by injunction with Interstate Commerce Commis- sion note, § 106 cannot fix maximum rates note, § 106 railroad commission not a court § 112 notice to corporation to produce books before grand jury; con- tempt § 138 INDEX 769 COURTS— Continued: essentials or prerequisites of jurisdiction over corporations § l^O equity jurisdiction; adequate remedy at law § 1G;j equity jurisdiction; adequate remedy at law; collection of taxes; injunction c ,,- , equity jurisdiction; waiver of defense of remedy at law § 105 when equity has no jurisdiction of bill to recover lands of railroad company § j-tq jurisdiction of court of claims of New York; negligence causing death; nonresidents as parties; State as common carrier § 171 when corporation is and is not a citizen; pleadings § 173 presumption as to citizenship of members of corporation; presi- dent and stockholders 5 1 74 joint-stock company not a corporation for jurisdictional pur- poses § 175 limited partnership not a corporation for jurisdictional purposes. § 176 board of trustees not a corporation for jurisdictional purposes. . . § 177 jurisdiction of; consolidated corporations § 180 obtaining jurisdiction of foreign corporation § 181 jurisdiction; where territory divided into two States § 181 jurisdiction; citizenship of guardian in suit against corporation . . § 185 jurisdiction; where "found"; suit to restrain enforcement unrea- sonable rates by railroad corporation § 187 jurisdiction; transitory action of trespass; parties residents of other States than that of suit § 188 power of State to limit jurisdiction of its courts; power to ad- minister common law § 199 consent of parties as conferring jurisdiction § 200 jurisdiction; appearance; consent; waiver § 201 effect of appearance on jurisdiction of § 201 waiver of jurisdictional defect as to particular district § 202 where case goes more than once to highest State Court; final judgment; writ of error § 204 no cause removable unless it is one of which Circuit Courts given original jurisdiction § 207 effect upon jurisdiction of State Court of removal of cause § 220 equity jurisdiction of Federal Courts; generally § lt)2 refusal of to permit stockholders to defend § 27.5 may make stockholder party defendant § 275 order of requiring remedies to be exhausted; statute hmitations. . § .'j12 Federal Courts are not inferior courts § 82 jurisdiction of Federal Courts is limited § 82 Federal; absence from records of, of all jurisdictional facts is immaterial § 82 when jurisdiction of Federal Courts exists; essentials of § 83 equity jurisdiction of Federal Courts; parties § lOG when Federal court has jurisdiction; corporation; doing business; process; service • • • • § 1^1 49 770 INDEX COURTS— Continued: when Federal Court has no jurisdiction; corporation; doing business § 182 where Federal Courts no jurisdiction of suit by assignee of chose in action; assignment of judgment § 189 jurisdiction of Federal Courts; suits by assignors; inquiry relates to time when suit is brought § 190 jurisdiction of Federal Courts; suits by assignee of promissory note or chose in action; exceptions to statutory prohibition § 191 when Federal Courts have jurisdiction of suits by assignee § 192 when Federal Court has no jurisdiction of suits by assignee; con- tract to convey land § 193 nature of jurisdiction of national courts; extent of resort to com- mon law § 197 Federal jurisdiction; effect of state statutes; rights and remedies. § 198 Federal question or right; when court has jurisdiction; instances. § 20S Federal question or right; when court has no jurisdiction; in- stances § 209 presentment of Federal question; record. .. §210 jurisdiction of Federal Supreme Court over orders of Interstate Commerce Commission; what court will consider § 131 Federal Supreme Court not controlled by decisions of State Court note § 219 right of stockholders to sue in equity in a Federal Court for sur- plus assets after forfeiture of franchises § 269 Federal, in law trial, cannot exercise equity powers § 402 Federal; may enforce new rights of action given by State statute § 402 Federal Supreme Court will not limit legislative power by declar- ing its judgment unwise § 4 on writ of error and appeal; fundamental question in Federal Supreme Court is jurisdiction. § 157 jurisdiction of Federal Supreme Court; question of arising on face of record § 157 findings of facts by State Court conclusive in Federal Supreme Court § 158 jurisdiction of Federal Supreme Court; Federal question; present- ment by record; special allegation § 158 appeals taken after 1891 to Federal Supreme Court § 159 jurisdiction of Federal Supreme Court; suit by State for injunc- tion § 618 Federal Supreme Court power to review judgment of State Court §§ 208, 209 jurisdiction of Federal Supreme Court after removal ordered by Circuit Court § 221 jurisdiction of Federal Supreme Court, to proceed against bridge as nuisance. § 402 jurisdiction of Federal Supreme Court, to what extent follows English High Court of Chancery § 402 INDEX 771 COURTS— Continued : jurisdiction of Federal Circuit Court of Appeals; when invoked; diverse citizenship S IfiO jurisdiction of Federal Circuit Courts over orders of Interstate Commerce Commission li I'.il original jurisdiction of Federal Circuit Courts under Judiciary Act of 1888 § J,;, jurisdiction of Federal Circuit Court to remove incumhrance or lien or cloud upon title to property within district; absent defendants; process; service; publication § 168 equity jurisdiction of Federal Circuit Courts; probate matters; diverse citizenship x j^rj what constitutes controversy or dispute between parties; juris- diction of Federal Circuit Court; citizenship § 172 citizenship of corporation of two or more States; ancillary or per- missive charters or license § 175 removal of causes to Federal Courts; corporation of two or more States , §170 jurisdiction; plaintiffs citizens of different States § 183 jurisdiction of Federal Circuit Court; citizenship of guardian in suit against corporation § 18f, jurisdiction; State not a citizen; diverse citizenship. § 18G motive for bringing suit or in obtaining citizenship as affecting jurisdiction §§ 194, 19.5 jurisdiction; rearrangement of parties; diverse citizenship § 196 subsequent change in conditions after jurisdiction of Circuit Court has attached § 203 jurisdiction of Federal Circuit Courts under Judiciary Act of 1888; removal of suits § 205 removal of suits; what record must show § 206 no cause removable to Federal Circuit Court unless one in which Circuit Courts given original jurisdiction § 207 removal of suits; corporations created by Congress; Constitution and laws of United States; separable controversy § 211 removal of suits; corporations created by Congress; national banks § 212 removal of suits; separable controversy; joint action § 213 removal of suits; separable controversy; joint action; torl«; diversity of citizenship § 212 removal of suits; separable controversy; joint action; fraudulent joinder § 215 removal of suits; separable controversy; joint action; what record must show § 216 denial of petition for removal; petitioner's right to elect remedy . . § 217 removal of suit denied in State Court; filing answer and record; asserting affirmative remedy and denial of jurisdiction § 218 Federal Circuit Court may determine removability of cause and protect such jurisdiction injunction § 219 772 INDEX COURTS— Continued : prohibition to Admiralty Court § 400 injunction from Federal to State Court § 423 See Equity Jurisdiction; Jurisdiction. COURTS OF RECORD, railroad commission of North Carolina is a § 140 COVENANT, action of § 325 CREDITOR, as party plaintiff to bill in equity where railroad sought to be taxed § ^"^ suit by; when judgment by default will not protect garnishee § 88 of corporation; suit by to set aside conveyance of real estate and mortgage of personal property § 168 of dissolved corporations; equity jurisdiction in behalf of; prin- ciple upon which exercised § 170 rights of before dissolution and action taken by court § 239 " term creditors " as used in an act held not to include directors . . § 261 suit in equity by against directors § 265 individual liability of officers and trustees to, where capital stock not subscribed; suit in equity by creditors against directors .... § 265 taking stock as collateral not a shareholder § 277 remedy of not affected by repeal of charter § 278 suits by; parties, generally § 2<8 liability of stockholder to, on dissolution § 278 merger in decree for receiver of right to sue stockholder § 278 unpaid subscriptions to stock a trust fund for § 279 liability of stockholders to; generally §§281, 282 suits by; subscribers to capital stock; defense of illegality of corpo- rate scheme § ^83 right to intervene in suit by receiver § 285 right to sue nonresident stockholder § 286 action against stockholder; what pleading should show § 287 liability of stockholders to; unpaid subscriptions or stock. §§ 288, 289 liabihty to, of stockholders where stock received without con- sideration or for less than value; "Bonus stock" §§ 291, 292 liability of stockholders to; stock issued for property; material overvaluation §§ 295, 297 stock issued for property a fraud on ; stockholder Uable to § 296 stockholders' liability to judgment creditors for unpaid stock- par- ties • §299 amount of creditor's recovery on stock may be limited by his knowledge of agreement under which shares issued § 300 amount of recovery on stock may be limited by his knowledge of agreement under which shares sold ■ § 300 INDEX 773 CREDITOR— Continued : conditions precedent to suits; demand and refusal; exhausting remedies §§ I^Ul :^2 or stockholder may sue after demand upon and refusal of corpo- rate authorities to act; stockholder may defend § lUJl may sue after demand upon and refusal of corporate authorities to act; stockholder may defend § Ijoi when demand upon and refusal of corporate authorities t(j act con- dition precedent to suit §§ :j(j2 :uy,i See Equity; Foreclosure. CRIMES, jurisdiction of Federal Courts over note, § 197 See Embeazleaaent. CRIMINAL ACTION, liability for extortionate rates § 314 CRIMINAL INTENT §§ 451, 452 "CRIMINAL" JURISDICTION, defined; "Further civil and criminal jurisdiction" defined § 89 CRIMINAL AND PENAL OFFENSES, act of Congress as to discharge of employe because member of labor organization § 20 by officers and agents of banks; power of State as to § (id penalty for bringing in aliens afflicted with contagious diseases is civil, not criminal oi'i'enso § lOH penalties; suit by consignee to recover § 440 right to inspect books of corporation; penalties for refusal to allow § 441 telegraph and telephone companies; discrimination; penalties. ... § 442 offenses against United States § 443 power of C'ongress; to what extent corporation can be charged criminally for agent's acts; common carriers; rates § 444 police power of States; crimes and penalties; combinations in re- . straint of trade; extent of judicial interference by Federal Courts § 445 corporation criminally liable; may be indicted § 446 indictment of corporations for nuisances § 447 insurance companies; combinations; conspiracies; insurance as " commodity " ; when and when not indictable offenses § 448 criminal offenses by corporations; employment of children under certain age; penalties § 449 indictment; while a corporation might be liable for misfeasance under certain definitions of manslaughter it cannot be guilty of latter under New York Penal Code § 450 construction of Anti-trust Act; what prohibitions of embrace; in- tent of; what are and are not illegal combinations within § 451 774 INDEX CRIMINAL AND PENAL OFFENSES— Continued : construction of Elkins Act; criminal intent; accepting rebates; when carrier liable as party to joint rate § 452 construction of Elkins Act; " device " to obtain rebates § 453 penal statute; retroactive effect; liability under, of party carrying out illegal agreement executed prior to its passage § 454 State jurisdiction over violation of Antitrust Law where agree- ment made out of State; extraterritorial effect of conspiracy, etc. ; statute § 455 constitutional law; Elkins Act; liquor laws; regulation of carriers; excessive fines § 456 sufficiency of indictment § 457 discrimination in rates; rebates; Elkins Act; criminal law; place of trial; single continuous offense § 458 CRIMINAL LAW, proceedings against resident owners; civil proce.vlings against non- residents constitutes discrimination § 14 CURRENCY, as subject of action of trover § 340 D DAMAGES, on fire policies. State may regulate measure of § 17 when Congress may provide for recovery of § 30 for loss by fire from locomotive engines; State may provide for re- covery . 30 State may provide for recovery of, for killing live stock § 30 claims for; time limited by statute for adjustment of § 30 suit for; jurisdiction § 81 action for, to recover for destruction of parish bridge; parties note, § 228 action by consignor against corporation § 243 in suit by corporations against officers or directors § 262 suit for, by corporation; ultra vires act of officer § 262 minority stockholder's interest injured; corporation necessary party § 274 statutory double damages for loss of baggage § 314 warehouseman, liability of for damages for refusal to deliver wheat demanded to transferee of warehouse receipt § 314 action for and not ejectment; when lies against railroad § 315 measure of, in action for fraud; false statements in prospectus. . . § 339 DEATH, action for damagp:^ for negligently causing; definition of jurisdic- tion applied § 82 INDEX 775 DEATH— Continued : action for loss sustained from drowning in interstate river; juris- diction note, § 90 State statute as to action for wrongful death occurring in another State § ]i)i) caused by acts of servant note, § :{ 1 7 DEBT § 324 statute limiting time for carrier to adjust claims; penalty for is not a debt note, § 30 action for right by United States against bank to recover taxes . . § 2 ')2 action for against insurance company to recover penalty § 324 DECEIT, prospectus to induce subscriptions to or sale of stock, etc. ; deceit note, § 339 See Fraud and Deceit. DECLARATION. See Pleading, DEED, cloud on title; equity jurisdiction to cancel § 167 suit by owners of railroad stock to cancel § 168 reformation of or relief from | 412 DE FACTO, corporation may sue and be sued § 24 '> what constitutes; legislative power to cure defective organization § 240 when corporation not one note, § 246 when corporation is one note, § 240 collateral attack; estoppel to deny legal corporate existence §§247, 24 S collateral attack; State or public officials as parties § 249 new corporation organized to cure defects in; liability § 255 See Corporation. DEFAULT, judgment by when will not protect garnishee § 88 DEFECT, in proceedings for incorporation as affecting suits against corpora- tion §246 DEFENDANT. See Parties. DEFENSES, to injunction and mandamus; transportation of coal; commodi- ties clause of Hepburn Act H^ of unconstitutionality of charter stipulation that railroad pay State percentage of gross leceipts § 't> of res adjudicata not available on motion to dismiss appeal § 83 776 INDEX DEFENSES— Continued : judgment based on void insurance contract § 88 of payment of part of money due upon fire loss made under for- eign judgment; when judgment rendered without jurisdiction. § 88 when judgment by default will not protect garnishee § 88 in action for infection of cattle; act of governmental officers in fix- ing quarantine line unconstitutional note, § 99 overvaluation by board of equalization not a ground of defense at law § 123 that suit nominally against railroad, etc., commission in suit against State is defense to merits to be raised by demurrer or other proper pleading § 155 of illegality of tax open; no injunction § 164 to transitory action of trespass § 188 matters of, not ground for removal of suit; action of tort § 206 denied in State Court; removal of suit; what should be shown in statement of case § 206 alone bringing out matters of a Federal nature; removal of suit. . § 206 judgment State Court denying; review by Federal Supreme Court § 208 suit by foreign corporation; waiver of, by failure to object. §§ 233, 236 failure of foreign manufacturing corporation to obtain certificate; action on fire insurance policy § 236 suit by foreign corporation; pleading failure to pay license fee note, § 236 of real title in bailor; suit by consignor who was bailee § 243 to suit for bridge polls § 247 forfeiture of franchise as § 247 of want of legal corporate existence §§ 247, 248 collateral attack; de facto corporation §§ 247, 248 collateral attack; State of public officers as parties; de facto corpo- tion; instances § 249 ratification of act by majority stockholders not where act illegal . . § 267 to suit by stockholder against trustee of fund for dividends § 270 suit by stockholders against trustee of funds for dividends; counterclaim § 270 of illegality of corporate scheme; subscribers to capital stock; suits by creditors § 283 that acts of trespass were done under charter must be pleaded .... § 330 none, in action for fraud, that plaintiff's officers were negligent in not discovering fraud § 339 when not a defense that fraud might have been discovered § 339 available, generally §§ 380, 394 available, generally; to mandamus § 380 available, generally; in quo warranto § 394 DEFINITIONS, "civil" and "criminal" jurisdiction; "further civil and criminal jurisdiction " § 89 INDEX 777 DEFINITIONS— Continued : of concurrent juriscUction j j^g of " full jurisdiction in all matters of equity" § 85 " further civil and criminal jurisdiction " § 89 "general jurisdiction in law and equity" § 84 of jurisdiction §§ 80, SI of jurisdiction continued; nature of corporation cases in which given or applied; instances §§ SI, 82 83 of jurisdiction in " special cases " § 87 of jurisdiction as applied to State, or to city council § no mandamus x 342 police power 57 of subject-matter and jurisdiction over it § 88 of venue x 91 DEGREE, of forfeiture of franchises; right of stockholders to sue in equity in Federal Court for surplus assets after § 269 See Judgment. DELEGATION OF POWERS, police power may be delegated to municipal corporations or other agencies § 10 corporations may be controlled through administrative bodies .... § 21 to corporate supervisory bodies § 02 distinction between power to make laws and employing agency to exercise discretion in enforcing same, etc § 92 to municipality, to regulate charges of common carriers § 93 to city council to apportion burden of repairs for railroad viaduct . § 93 when legislative; when judicial; instances § 93 to railroad and like commissions §§ 107, 109 See Jurisdiction. DEMAND, upon corporate authorities and their refusal, a condition precedent to suit § 302 upon and refusal of corporate authorities; necessity of alleging and showing same §§ 30.5, 30G See Conditions Precedent. DEMAND AND REFUSAL, as condition:^ precedent to suit §§ 301-312 DEMURRAGE, shippers' indebtedness; jurisdiction of Federal Courts to determine same in first instance § 1!^0 DEMURRER, defense that suit against commission is suit against State, raised by § 155 778 INDEX DEMURRER— Continued : sustained; suit by stockholders; Equity Rule 94 note, § 311 in mandamus § 381 DENIAL, of petition for removal; right of petitioner to elect remedy § 217 DEPARTMENTAL OFFICERS. control and supervision of by courts; mandamus; injunction § 129 or executive department; injunction § 428 See Officers. DEPARTMENTAL ORDERS, fixing quarantine line; action for infection of cattle note, § 99 when not divisible as to intrastate and interstate commerce . note, § 99 DEPOSITS, of savings societies invested in United States securities; taxation of § 74 in bank in joint names of two corporations; may join in assumpsit § 323 DEPOTS. See Railroad Stations. DETAINER. See Forcible Entry and Detainer. "DEVICE," to obtain rebates; construction of Elkins Act § 453 cloud on title; equity jurisdiction as to § 167 DIRECTORS, of one corporation directors of another does not prevent suit by or against; merger § 226 equitable suits to redress wrongs of, must be instituted by corpo- tion § 259 of corporations; duties and liabilities of generally; parties § 261 duties and liabilities of, generally; parties § 261 not liable for mere error of judgment § 261 action against under New York Code Civil Procedure for miscon- duct § 261 not included by term " creditors " as used in an act § 261 or officers; suit by corporations against; damages; accounting. ... § 262 suit against by corporation for accounting § 262 suits against, by stockholders; corporation as party § 263 suit by stockholders against; negligence; maladministration; aver- ments necessary ; what must be shown § 264 suit against by stockholders for negligence or maladministration ; necessary averments § 264 suit against for mismanagement should l)e by corporation § 274 INDEX 779 DIRECTORS—Continued : suit in e(|uity by creditors against 5 2(io and olhcorK, individual liability of, to creditors wliere capital stock not .subscribed; suit in ecjuity by creditors against direct- 0'"« §2G/i demand upon and refusal of, as conditions precedent; discretion of directois t ^^^^ when demand upon for relief is and is not condition precedent; Equity Rule 94; stockholder's rifj;ht to protect corporation when directory derelict 5 310 by-laws increasing power of; stockholders entitled to protection in equity § .|„2 election of; jurisdiction of equity to inquire into § W2 injunction against 5 424 DISCRIMINATION, criminal proceedings against residents and civil against non- residents; statute held constitutional § 1 1 power of State to impose burden upon Public Service Corpora- tion § 21 when definition of express companies does not constitute § L'l or classification; fellow servants and tlilTerent classes of employes no(<>, § 2() common carriers cannot unreasonably discriminate; rates § 32 as to rates prohibited by Elkins Act § 32 power of State to prevent, in rates, is subject to constitutional limitations § 33 connecting carriers; terminal charges § 3") joint through rate; connecting carriers' duty; liability § 3") terminal charges; railroads note, § l!( as to rates; jurisdiction of Interstate Commerce Commission §§ 103, lOt discriminatory regulations of carriers within jurisdiction of Inter- state Commerce Commission § UXla in rates may be prevented § 14(» mandamus to control rates, charges and fares § 3(i.'j in rates; rebates; Elkins Act; criminal law; place of trial; single continuous offense § 4 ')S telegraph and telephone companies; penalties § 4 12 See Classification; Statutes. DISEASES. See Contagious Diseases. DISMISSAL, of bill in chancery for want of proper parties § 229 DISPENSARY SYSTEM, State may control sale of liquors by; but if it does so it engages in ordinary private business § ^4 780 INDEX DISSOLUTION, of bank; definition of jurisdiction over funds applied § 81 right of corporation to sue as afl'ected by §§ 238, 239, 240 of corporation ; transactions after are void § 240 stockholder's liability on is ex contractu § 284 as condition precedent to enforcing stockholder's liability § 309 DISTRICT OF COLUMBIA, Employers' Liability Act of Congress; constitutionality of with re- lation to § 26 regulation of commerce in; power of Congress § 45 DIVERSE CITIZENSHIP, as ground of jurisdiction of Circuit Court of Appeals § 160 equity jurisdiction of Federal Circuit Courts; probate matters. ... § 169 citizenship of State § 186 See Citizenship; Jurisdiction. DIVIDENDS, elements in fixing rates § 36 suit by stockholder against trustee of funds for; defense; counter- claim § 270 suits by stockholders against trustee of funds for; defenses; counterclaim § 270 false statements in prospectus as to; action for fraud § 339 DOING BUSINESS, in State; foreign corporation; jurisdiction §§ 181, 182 See Foreign Corporations. DRAINAGE. See Farm Drainage Act. DUE PROCESS OF LAW. See Constitutional Law. E EARNINGS, of corporation; false statements in prospectus as to; action for fraud § 339 EJECTMENT, telegraph poles and lines § 315 when does not lie for land beyond water's edge § 315 by holder in trust of legal title to property for religious corpora- tion § 315 against one in possession without legal or equitable title § 315 what title and possession a sufficient basis of action of note, § 315 action for, against railroad § 315 INDEX 781 EJECTMENT— Continued: when lailroaci can and cannot maintain i'M') land appropriated l)y levee hoard 4 .Jlo when pcrsor in possjession of premises note § 321 ELECTION, of corporate oflieers; mandamus j ;}5<) of corporation directors; power of equity to inquire into § 402 ELECTION OF REMEDIES, by petitioner on denial of petition for removal § 217 form of action; contract or tort; waiver § "ll!) by person induced by fraud to sell his property § 33- construction of; "device" to obtain rebates § 453 782 INDEX ELKINS ACT— Continued: constitutional law; liquor laws; regulation of carriers; excessive fines § 456 discrimination in rates; rebates; criminal law; place of trial; single continuous offense § 438 EMBEZZLEMENT, by agent; when express company liable § 339 EMINENT DOMAIN, defect in constitutional provision as to compensation cannot be cured by judgment § 51 condemnation of land necessary for construction of bridges; act of Congress § 56 See Condemnation. EMPLOYES. See Master and Servant. EMPLOYERS. See Master and Servant. EMPLOYERS' LIABILITY ACT. See Master and Servant. EMPLOYERS' LIABILITY CASES § 26 See Statutes. ENGINEERS. See Locomotive Engineers. ENGLISH HIGH COURT OF CHANCERY, to what extent jurisdiction Federal Supreme Court follows. ... § 402 ENTITY, corporation as § 224 corporation as; equity • • • § 225 EQUAL PROTECTION UNDER THE LAW. See Constitutional Law. EQUIPMENT, of interstate railroad subject to control of Interstate Commerce Commission § 106a EQUITY, generally § 402 remedies, generally § 402 bill for divisional reUef where corporations consolidate; obligation of contract; exemption from change of rates § 39 bill in, to decree exemption of railroad company from taxation. . § S3 to prevent multiplicity of suits will restrain board from enforcing schedule of rates, when § 150 INDEX 783 EQUITY— Continued: appeal to State Supreme Court before suit in Federal Court on question of rate regulation 5 1,52 bill lies in, to restrain continuance of nuisance § .334 action to redeem leased premises; jurisdiction of New York municipal court n^^^.^ j ^y corporation as entity t 295 corporations as necessary or indispensable parties in suit in. . , . § 22'J suit in, by foreign corporation; comity § 2:irt relief in, to surety « 2;i(j when State an indispensable party in proceeding in § 250 rule of pleading in t oi^-j remedy in, against promoters § 259 suits in, to redress wrongs of directors or promoters must i)e in- stituted by corporation § 25!) joinder of suit in, with action at law against directors § 2H2 suit in, against director, for accounting § 2(i2 suit in, by creditors, against directors § 265 bill in, by minority stockholders, to set aside lease § 266 grant of relief by, to minority stockholders § 266 power to order corporate dividends § 266 appointment by, of receiver, at suit of minority § 2()6 when stockholder may and may not sue in § 268 right of stockholder to sue in, in a Federal Court for surplus assets after a decree of forfeiture of franchises § 269 right of stockholder to sue in, after demand upon and refusal of corporate authorities to act § ;301 equitable remedies; when pledgor has § 3U enforcement of new rights and new remedies conferred by statutes of State or Territory, by Federal Courts § 402 jurisdiction over bridge as nuisance § 402 powers of court of, cannot be exercised by Federal Court in law- trial § 402 when may retain case and grant full relief § 402 may protect attachment liens § 402 subscription for stock paid for in land which subsequently proved to be of less value § 402 stockholder not liable to creditor in suit in, where he has paid in full for stock by transfer of property § 402 when may compel delivery of certificates of shares of stock § 402 may prevent violation of exclusive right to exercise ferry fran- chise § 102 may determine riparian rights § 402 cannot adjudge forfeiture of property under Anti-trust Act § 403 when, will not compel railroad company to own and operate pui)lic warehouse . . . _ § 103 when party no sufficient interest to have aid of, as to ct)mpliancc with rates fixed in lease § 404 784 INDEX EQUITY— Continued : stockholder suing in, sues for own benefit and that of other stock- holders § 404 suit by stockholder to set aside lease, accounting, etc § 404 what is not a condition precedent to suit to quiet title § 405 equity; adequate remedy at law § 406 contract for co-operation in procuring municipal franchise; va- lidity of; public policy; equity; when remedy at law adequate; illustration § 407 adequate statutory remedy; application to municipal body as condition precedent to equity suit; rate regulation § 408 irreparable injury § 409 multiplicity of suits § 410 fraud and trusts §411 reformation of, or relief from, written instnmients or contracts. . § 412 accounting § 413 corporation mortgages; enforcement of; foreclosure; rights and remedies of parties; general instances § 414 corporation liens and mortgages; equity jurisdiction of fore- closure; conflicting claims to possession § 415 corporation liens and mortgages; enforcement of; foreclosure; parties § 416 right of parties upon foreclosure of mortgages; junior bondholder; judgment creditor; priorities; proceeds of sale; adjustment on claim; accounting; instances § 417 foreclosure and sale of railroad mortgage; distribution of proceeds; unsecured creditors; bank as general creditor; prior mortgagee. § 418 foreclosure of railroad mortgage; rights of purchaser; title and obligations § 419 foreclosure and sale; reorganization agreements by purchasers; exceptions to sale; constitutional law § 420 injunction; generally; instances § 421 injunction; jurisdiction § 422 jurisdiction to enjoin prosecuting action in another State; juris- diction of Federal Court; injunction from, to State Court. ... § 423 injunction against officers, directors or stockholders § 424 injunction; rate regulation § 425 injunction; by and against railroads and street railroads § 426 injunction by and against telegraph and telephone companies. . § 427 injunction; interference with departmental officers or executive department; postmaster § 428 injunction to protect franchises of corporation or to prevent their forfeiture § 429 injunction; criminal proceedings; when equity cannot and can enjoin § 430 injunction; nuisance; bill in equity to abate § 431 injunction; nuisance; parties; State or attorney-general; corpora- tions; joinders § 432 INDEX 785 EQUITY— Continued: injunction to restrain enforcement of orders of Interstate Com- merce CominiLssion * ^-y^ bill lies in etjuity to revise ruling? of railroad commissioners § 4;i4 cancellation and rescission s .};jr, cancellation, rescission or setting aside sale of corporate; stock; contracts to prevent competition; pretended purchase of stock. § 436 specific performance 5 437 specific performance; discretion of court § 4;{S specific performance; contract to sell corporate stock § 439 See the different forms of actions; Injunction; Jurisdiction; Parties; Stockholders; Title. EQUITY JURISDICTION, "general jurisdiction in law and equity" defined § 84 "full jurisdiction in all matters of equity" defined § 85 powers of courts; injunction against collection of taxes. . . . note, § 123 cannot establish railroad rates § 14ti railroads, etc., rates; impairment of obligation of contracts § 14(1 of Federal Courts, generally § lf)2 none to restore money or property to corporations § 102 to cancel ; guaranty of corporate bonds § 1 02 in cases of fraud § 1(33 of Federal Courts vested by Judiciary Act of 1789 § 163 adequate remedy at law § 1 63 to restrain enforcement of ordinance § 164 adequate remedy at law; collection of taxes; injunction § 164 of Federal Courts; parties § 166 to remove cloud upon or to quiet title § 167 of Federal Circuit Courts; probate matters; diverse citizenship. . § 1(>9 when none, of bill to recover lands of railroad company § 170 in behalf of creditors of dissolved corporation; principle upon which exercised § 170 suit by assignee of mortgage to set aside tax deeds; Federal Courts § 192 to protect real estate from trespass § 236 suit by policy holder against insurance company for accounting and receivership § 276 of Federal Courts to compel obedience to orders of Interstate Commerce Commission as to rates § 132 of Federal Circuit Court where State statute has enlarged equi- table action § 102 when without jurisdiction; generally § 403 parties ; generally § •IM See Jurisdiction. EQUITY RULE 94, allegation of compliance with ; jurisdiction § S3 50 786 INDEX EQUITY RULE 94— Continued: when demand upon directors for relief is and is not condition precedent; stockholders; right to protect corporation when directory dereUct § 310 ERROR. See Writ of Error. ESSENTIALS, generally, of jurisdiction of courts § 156 ESTOPPEL, judgments of Federal Courts possess every attribute of pertain- ing to courts of general jurisdiction § 82 to deny legal corporate existence §§ 247, 248 to deny legal corporate existence; de facto corporation. . . §§ 247, 248 creditor's knowledge and assent to transaction; transfer of stock for land § 402 EVIDENCE, as to reasonableness of rental or similar charges against tele- graph, etc., companies § 31 elements in fixing rates § 36 opinion as to value of property in fixing rates § 36 burden of proof upon question whether rate is confiscatory .... § 36 admission of incompetence, not a ground for reversal of order of railroad commission requiring maintenance of depot, etc. ... § 120 Public Service Commission may rehear and redetermine on new evidence § 121 court may take further, on certiorari to review assessment of special franchise tax § 124 prima facie; findings of Interstate Commerce Commission are §§ 131, 132 burden of proof on carrier to show court that order of Interstate Commerce Commission is invalid § 132 not before Interstate Commerce Commission may be submitted in inquiry by court as to orders of said commission § 132 use of process of Federal Circuit Court in aid of inquiries before Interstate Commerce Commission § 137 presumption as to citizenship of members of corporations; presi- dent and stockholders § 174 judicial notice corporation incorporated by act of Congress, note, § 211 waiver of failure to prove capacity of foreign corporation to sue . § 233 presumption as to compliance by foreign corporation with State law § 237 presumption as to ownership of goods shipped § 243 to show corporation de facto; may be necessary §§ 247, 248 suit by stockholders against directors; negligence; maladminis- tration § 264 INDEX 787 EVIDENCE— (\)ntinued : necessity of showing demand and refusal; conditions precedent *o suit. 55 305^ 3(,g presumption as to consideration for stock given in payment of property 5 2;)4 of negligence as warehouseman; when docs not warrant recovery for negligence of carrier § .'HH proof of alleged trespass should connect defendant with act, or nonsuit will be ordered 5 3;j(j that factory operated as nuisance § 334 what must be shown to sustain action for fraud and deceit § [ili'J sufficiency of showing, in mandamus 5 :iHl sufficiency of showing; quo warranto, § ;3<)3 EX CONTRACTU, whether stockholders' Hability arises § 284 See Actions Ex Contractu; Election of Remedy. EX DELICTO. See Actions Ex Delicto; Election of Remedy. EXECUTION, Railroad Commission of North Carolina cannot issue 5 140 returned unsatisfied when and when not condition precedent to suit; stockholders' liability §§ 307, 308 EXECUTIVE DEPARTMENT, interference with; injunction § 428 EXECUTIVE OFFICERS, may be empowered by Congress to enforce prescril)ed penalties. § 100 See Officers; Public Officers. EXEMPLARY DAMAGES, against corporation for false imprisonment § 331 EXEMPTIONS, contract of, from exercising State's authority not transferable. . § 23 of agencies of Federal Government from taxation §§ 65-7!) from taxation, effect of § fi8 of State agencies from taxation § iV.) of savings banks; taxation (§ 340S, Rev. Stat. U. S.) note, § 72 tax on franchises or privileges conferred by United States § 75 from taxation; power of State as to; effect of consolidation, etc. § 7!) from taxation does not pass to purchaser § 79 under charter, inviolate § 7!) from taxation; effect of consolidation § 79 bill in equity to decree railroad exempt from taxation § 83 under charter; construction rule that what not expressly granted is reserved § 79 See Taxation. 788 INDEX EXHAUSTING REMEDIES. See Conditions Precedent. EXPENSES, elements in fixing; rates § 36 of railroad commission; taxation of railroads to pay .same § 76 EXPRESS COMPANIES, when definition of, does not discriminate . § 21 rate regulations § 32 within Hepburn Act as to publishing rates § 32 not allowed by exception in Hepburn Act to issue passes for free transportation of merchandise § 32 statute requiring delivery to consignee free of delivery charges in cities of certain population § 4e required § 16 right of State to prohibit doing business within its limits or to impose conditions § 10 conditions precedent imposed upon § 19 rule stated as to regulation and control of § 19 regulation and control; rule as to power of State, and limitations thereon § 20 lawfully doing business in State not bound by unconstitutional statute § 20 State tax may be imposed on § 3 1 not bound by unconstitutional law where citizen of State not bound § 39 jurisdiction; suit for damages, etc., against § SI jurisdiction of New York Municipal Court note, § S9 injunction lies to restrain revoking license of § 128 when State auditor cannot be compelled to issue certificate to do business note, § 129 obtaining jurisdiction of § 181 doing business or having agent or office in State; service of process note, § 181 right to sue note, § 227 waiver of failure to allege and prove capacity to sue § 233 parties § -36 suit by, in Federal Court in State in which statute not complied with § '--^O presumption of, compliance by, with State law § 237 FOREIGN JUDGMENT, based on void insurance contract; no defense 5 88 FORFEITURE. State Corporation Commission acts judicially in determining lia- bility of corporation to fine or § 1 1- 79^ INDEX FORFEITURE— Continued : of charter; effect of on right to sue or be sued §§ 239, 240 of franchise as defense § 247 of franchises, right of stockholders to sue in equity in Federal Court for surplus assets after decree of § 269 of charter; quo warranto to forfeit; ouster § 3S6 of property under Anti-trust Act; equity cannot decree § 403 of franchises; injunction to prevent § 429 FORGERY, of name on pension check; United States as party plaintiff in suit against bank § 252 of payee's name on pension checks; right of United States to re- cover from bank § 252 FORM OF ACTION, effect of Code provisions, generally .-. § 313 contract or tort; election of remedy § 319 FOURTEENTH AMENDMENT. See Constitutional Law. FRANCHISES, tax on; power of State to impose as conditions precedent on foreign corporations . § 16 as element in fixing rates § 36 value of, at time of capitalization; elements in fixing rates § 36 of corporation when to be exercised in subordination of power of Congress to regulate interstate commerce § 42 of corporations, when not derived from United States are subject to State taxation § 60 taxation of; interstate commerce § 61 annual tax on railroads for privilege of operating § 62 State may tax at different rate from tangible property § 67 cover large proportion of valuable property and subject to tax- ation § 67 franchise tax in name, levied on bank property ; power of State to levy § 71 tax on, of corporation for right to do business § 74 when tax on savings societies constitutes tax on § 74 or privileges conferred by Congress; taxation § 75 taxation of, based upon capital stock § 77 tax on when not contravention of commerce clause and Four- teenth Amendment § 78 tax on " corporate franchise " § 78 special franchise tax; certiorari to review § 124 in hands of receivers; equity jurisdiction to protect § 167 effect of abandonment of in suit l>y stockholders § 240 forfeiture of as a defense § 247 INDEX 793 FRANCHISES— Continued : suit by abutting owner to enjoin a street railway company from accepting j 258 right of stockholders to sue in equity in a Federal Court for sur- plus assets after decree of forfeiture of § 2()!> unlawfully exercised quo warranto lies § iiS') quo warranto to forfeit or annul or test § :is(i quo warranto to forfeit only unused franchise and leave corpora- tion intact J 3ji57 right to exercise ferry; equity may prevent violation of right § 402 contract for co-operation in procuring; validity of; public policy; equity; when remedy at law adequate § 407 injunction to protect or to prevent forfeiture § 429 FRANKING. See Hepburn Act. FRAUD, equity jurisdiction in cases of § 103 in assignment to give jurisdiction §§ 194^ i<)5 in joinder of parties; removal of cause § 215 on public; consolidation to prevent competition; injunction re- fused § 234 when not proper remedy; subscription agreement; promoters § 259 subscription to stock; promoters, fraud, actual or constructive not shown § 259 on creditors; stock issued for property; stockholders liable § 29fi new right of action ; enf oiccment of, by Federal Courts § 4U2 See Equity; Fraud and Deceit. FRAUD AND DECEIT, prospectus to induce subscriptions to or sale of stock, etc. . .note, § 339 who and who not entitled to sue § 339 instances of J 339 action for ; instances § 339 essential elements of § 339 statements in prospectus for sale of stock, etc § 339 what must appear or be shown to sustain action for note, § 339 FRAUDULENT, act of majority stockholders; relief in equity to minority. . note, § 266 See Damages; Equity; Fraud; Pleadings; Evidence. FREIGHT, rates; when statute as to, in conflict with Interstate Commerce Act § 32 Hepburn Act does not allow express companies to issue passes for free transportation of merchandi.se § 32 business of landing and receiving is incid-'ut to transportation, tax_ upon same 5 •"' 1 794 INDEX FREIGHT— Continued : taxation of capital stock of corporations engaged in transportation of § 62 what is not a pooling of; agreement between initial and connecting carriers § 104 FREIGHT AGENT, of railroad company not in possession of property, except as agent; replevin does not lie against § 341 FUNDS, power " to receive, hold and manage " implies power to sue for . . . § 227 misappropriation of. by directors; parties to action for § 263 for dividends; suits by stockholders against trustees of; defenses; counterclaim § 270 "FURTHER CIVIL AND CRIMINAL JURISDICTION," defined § 89 G GARNISHEE, when judgment by default will not protect § 88 duty of to notify absent creditor of pendency of attachment pro- ceedings § 88 GARNISHEE PROCESS, judgment by default when will not protect garnishee § 88 GARNISHMENT, effect of assignee under invalid assignment § 106 GAS, rate statute establishing one rate for city and another for indi- vidual consumers not unreasonable; classification § 14 rates, elements in fixing § 36 rates, regulation of § 38 plants; special commission hear and adjudicate when city pur- chases § 102 company; excessive rates may be recovered back § 314 GOODS, in possession of carrier; action against by consignor § 243 "GOOD WILL," when excluded as element in fixing rates § 36 GOVERNMENT, powers of Federal and State distinguished § 3 INDEX 7gi5 GOVERNMENTAL AGENCIES. See Congrese; Federal Agencies; Powers. GOVERNOR, as party to suit to establish railroad lease § 250 GRADE CROSSINGS, jurisdiction of railroad commissioners; apportionment of expense ^^ §121 See Railroads. GRAIN, regulation for warehousing and inspection 5 57 See Warehouses. GRAND JURY, statute for production of books and papers includes note, § 4 production of books by corporation before; power to compi-i; courts; contempt 5 J3g GRANT, State cannot grant away its right to regulate rates § 32 of power to railroad to fix rates does not preclude State from there- after fixing rates 1 § 32 right of State to bargain away right to fix water rates § 37 GRAVE, disturbance of; trespass quare clausum fregit § 330 freehold right in soil; trespass for disturbing grave § 330 See Cemetery. GUARDIAN, citizenship of in suit against corporation § 185 H HARBOR COMMISSIONERS, jurisdiction of board of, and of courts over them § 125 HEALTH, State may establish quarantine laws for protection of § 58 HEARING AND NOTICE, enforcement by Secretary of Commerce and Labor, without judicial trial; of penalty on transportation comi)any §100 HEPBURN ACT, exception in does not allow express companies to issue passes for free transportation of merchandise § 3 796 INDEX HEPBURN ACT— Continued: express companies required by, to publish rates § 32 relates to all charges made by carrier; proceedings against con- necting carriers § 3*5 construction of commodities clause of § 49 object or purpose of § 49 moving commodities in interstate commerce, when not prohibited § 49 commodities clause is regulation of commerce within power of Congress to enact § 49 HEWITT ACT, when does not create irrevocable contract; impairment of obliga- tion of contract note, § 68 HIDES, State law as to inspection of § 58 HIGHWAYS, State may impose entire expense of change of grade at crossing . . § 21 See Grade Crossings. HORSES, frightened; liability for acts of servant note, § 317 ILLEGALITY, of tax as a defense; no injunction : § 164 See Taxation. IMMIGRANT, penalty against transportation company for bringing in aliens with contagious diseases § 1^0 IMPLIED CONTRACT, assumpsit § ''•^^ IMPLIED POWERS, what are note, § 223 of corporation include right to sue and be sued § 227 to arbitrate from power to sue and be sued § 231 IMPRISONMENT, contempt; power of Interstate Commerce Commission § 137 INCIDENTAL POWER, of corjioration, nature and extent of § 223 of corporation includes right to sue and be sued § 227 INDEX 797 INCOME, as element in fixing rates § og INCORPORATION, of company; estoi)pcl to deny |k 247 248 INCUMBRANCE, upon property within district; jurisdiction of Federal Circuit Court to remove e jgo INDEBITATUS ASSUMPSIT ' § 32i INDICTMENT, corporation may be indicted § 44^5 of corporations for nuisances § 447 combinations and conspiracies § 44^ corporation cannot be guilty of manslaughter under New York Penal Code § 4f5Q sufficiency of. s 457 INFECTION, of cattle; action for damages for note, § 99 INFRINGEMENT, of patents; in what district suits for should be brought- note, § 161 INJUNCTION, to restrain maintenance of telegraph line; State statute granting exclusive right to, must not conflict with Post Road Act § 2 authorized by Elkins Act for departure from published rates .... § .32 against enforcing order of Interstate Commerce Commission as to terminal charges note, § 35 dismissed where suit brought before rate regulation took effect . . § 3(3 to restrain transportation of coal ; commodities clause of Hepburn Act §19 suit when maintainable under Hepburn Act although penalty provision exists which is alleged to be unconstitutional § 49 to restrain depositing tailings from mine, in river bed; definition of jurisdiction appHed § 81 suit to enjoin certification of assessed value of property; jurisdic- tion § 81 to restrain railroad commission from approving and certifying assessment for taxes § 83 to restrain revenue agent from bringing or advisir;" suit to be brought against railroiixl company § 83 against Interstate Commerce Commission note, § 106 Interstate Commerce Commission denied power of injunction note, § 106 to restrain railroad commission from enforcing order to erect and maintain railroad station § 120 against collection of taxes note, § 123 798 INDEX IN JU NCTION— Continued : resolution of city council requiring street railway to replace tracks, etc § 126 may be had to prevent superintendent of insurance from re- voking license of foreign insurance company § 128 does not lie against officer of land department § 129 to restrain enforcement of order of Interstate Commerce Com- mission; terminal changes note, § 132 to restrain railroad companies from putting into effect unlawful rate § 134 against railroad commission not within Federal statutes against injunctions to stay proceedings in State Court . . § 140 to prevent running street railway cars at intervals of time less than schedules § 141 when equity will enjoin enforcement of ordinance reducing fares on street railroads § 146 to restrain enforcement of schedule of rates published by railroad commissioners § 150 lies to prevent railroad commission from proceeding to fix rates . . § 151 should not be sought until rate has been fixed by body having last word § 151 court cannot restrain in advance the action of railroad commis- sion as to rates § 151 to restrain enforcement of maximum rates by commission; when constitutional question not decided § 153 relief by should not be sought until rate has been fixed by body having last word § 155 against attorney-general not suit against State note, § 155 none to restrain illegal tax § 164 to restrain collection of taxes; generally § 164 suit by State; jurisdiction of Federal Supreme Court § 186 restraining collection of illegal tax; State statute as to does not govern Federal Courts note, § 198 taxation of railroad property Federal question; jurisdiction. note, § 208 to restrain railroad company putting tariff schedule into effect; jurisdiction of Circuit Court § 209 not granted by Federal Courts to stay proceedings in State Courts note, § 219 by Circuit Court forbidding further proceedings in State Court . . § 219 suit for; corporation as necessary parties § 229 to restrain furnishing electric light; consolidation to prevent com- petition; fraud on public § 234 against railway or electric line in street; right of abutting owner to §242 to restrain corporation from doing business in State; should be brought by attorney-general § 251 to restrain construction street railway; abutting owners and attorney-general as plaintiffs § 251 INDEX 709 INJUNCTION— Continued : restraining corporation from actinp; as such; State proper party. § 'ifjl against street railway to restrain acceptance of franchise . § '2')H against trolley company illegally constructing road; suit by tax- payer § 258 against breaking up of street pavement; corporation may sue. . . § 258 against creation of new corporation; suit by minority Btockholdens § 207 suit of stockholder to prevent ultra vires act § 2(> of corporation does not affect its corporate existence § 23'.> of corporation; effect of §§ 2.39, 240 insolvent foreign corporation; corporation necessary party in suit against stockholders § 228 INSPECTION, of corporation books; mandamus; jurisdiction defined and ap- plied § 83 of logs by surveyor general § 93 of corporation books ; mandamus to compel § 3H2 right of, of corporation books; penalties for refusal to allow. ... § 441 INSPECTION REGULATIONS, inspection of logs by surveyor general § 93 interstate commerce; police power as to § 58 when liquors have ceased to be articles of interstate commerce § 59 as applied to oil; interstate commerce § 59 INSTRUMENTALITIES OF FEDERAL GOVERNMENT, Federal and State control; national banks §§ 65, 66 INSURANCE, State may prohibit combinations to fix rates § 16 800 INDEX INSURANCE— Continue: 1 : returns to proper State officers may be required § 16 companies; regulation and control § 16 statute cutting off defense of false and fraudulent statements in applications; is valid § 17 measure of damages on fire policies may be regulated by State . . § 17 contract of; effect with relation to statutory liability to em- ployes § 26 business is not commerce § 55 stocks may be taxed on income instead of value § 71 police power; requiring returns from § 78 action on policy of; jurisdiction § 83 action to recover amount of fire loss; jurisdiction over subject- matter defined § 88 contract void; judgment based on, wlicn no defense § 88 delegation of power to commission to draft standard form of fire policy; unconstitutional § 97 trust fund in hands of State auditor; jurisdiction of courts § 128 company; action for debt for penalty § 324 INSURANCE COMPANIES, franchise subject to regulation by State; conditions precedent. . § 16 foreign corporation; obtaining jurisdiction of § 181 State statute as to removal of suit by to Federal Court, effect of § 198 combinations; conspiracies; insurance as "commodity"; when and when not indictable offenses § 448 INTERNAL MANAGEMENT, of corporations; general rule as to court interfering with § 260 of corporations; general rule; stockholders suit § 260 INTERNAL REVENUE. See Taxes. INTERNAL REVENUE TAXES, United States as party plaintiff in suit to recover § 252 INTERSTATE BRIDGES. See Bridges. INTERSTATE COMMERCE. See various names by which stat- utes relating to are designated. See Constitutional Basis of Actions and Defenses; Stock; Taxation. INTERSTATE COMMERCE ACT, joint through rate; duty and liability of connecting carrier § 35 embraces whole field of interstate commerce § 44 protects cars not delivered to consignee, though standing on track §47 supersedes State legislation on same subject § 48 INDEX 801 INTERSTATE COMMERCE COMMISSION, order of, as to terminal charges; injunction r per- sons or property beyond § 1 of taxing officers not taken away by lack of provision in tax law for notice i^'67 804 INDEX JURISDICTION— Continued : averment as to "jurisdiction of the case" held sufficient § 82 commencement of action § 83 of person acquired if actually served with summons, though service irregular. § 83 suit against State though nominally against individual § 83 acquired though writ defective, or ser\'ice of summons defective. . § 83 may be acquired though pleading defective § 83 over person when not essential to action at law § 83 of subject-matter; when acquired § 83 over person or subject-matter; essentials § 83 of action for loss by death from drowning in interstate river. note, § 90 as applied to a State or to City Council § 90 See Jurisdiction of Courts. JURISDICTION AND VENUE; DEFINITIONS, definition of jurisdiction § 80 definition of jurisdiction continued; nature of corporation cases in which given or applied; instances §§ 81, 82, 83 "general jurisdiction in law and equity" defined § 84 "full jurisdiction in all matters of equity" defined § 85 concurrent jurisdiction defined §§ 82, 86 jurisdiction in "special cases" defined and construed § 87 subject-matter and jurisdiction over it defined § 88 definitions; "civil" and "criminal" jurisdiction; "further civil and criminal jurisdiction." § 89 jurisdiction as applied to a State or to city council § 90 venue defined § 91 JURISDICTION OF COURTS OVER CORPORATIONS, essential or prerequisites of: § 156 action on fire insurance pohcy § 83 when acquired; action for penalty for failure to signal at railroad crossing § 83 in "special cases" defined and construed § 87 of New York Municipal Court note, § 89 jurisdiction of Court of Claims of New York; negligence causing death; nonresidents as parties; State as common carrier § 171 subject-matter of fixed character in different districts of same State note, § 168 of mandamus proceedings § 374 of quo warranto proceedings § 389 prohibition to court without jurisdiction or where it exceeds JHrisdiction § 399 of State over violation of antitrust law; where agreement made out of State; extraterritorial effect of conspiracy, etc § 455 equity jurisdiction; generally § 162 equity jurisdiction; adequate remedy at law § 163 INDEX 805 JURISDICTION OF COURTS OVER CORPORATIONS-Con- tinned: equity jurisdiction; adequate remedy at law; collection of taxes; injunction n ,^.. equity jurisdiction; waiver of defense of remedy at law § lOf) equity jurisdiction to remove cloud upon or to quiet title § |(i7 when equity has no jurisdiction of bill to recover IudcIh of railroiwl company § ,-,, of equity; election of corporation directors § 402 when equity without; ^(.ru'rally s 4();{ in equity; generally; parties § 404 of equity to protect property rights of corporation at suit of member of mutual insurance comijany § 404 injunction § 422 of Federal Courts a delicate matter to deal with note, § I')') of Federal Courts limited s ,s2 Federal Courts are not inferior courts § S2 essentials of, of Federal Courts § s;j jurisdictional amount; Feileral Courts § 83 Federal Courts; absence from records of jurisdictional facts is immaterial § S2 whether corporation subject to adjuilication as bankrupt not jurisdictional question § S2 failure to allege compliance with Equity Rule 94 § S3 equity jurisdiction of Federal Courts; generally § UV2 equity jurisdiction of Federal Courts; parties § Kii) to enjoin prosecuting action in another State; jurisdiction of Federal Court; injunction from to State C'ourt § 423 of Federal Court; right of corporation to proceed against bridge as nuisance § 402 Federal Supreme Court; questions arising under Federal Con- stitution and laws § 83 Federal Supreme Court; appeal and error; fundamental question is jurisdiction § lo7 Federal Supreme Court; question of arising on face of record .... § 157 jurisdiction of Federal Supreme Court; Federal question; pre- sentment by record; special allegation § 158 findings of fact of State Court conclusi\e in Federal Supreme Court §158 jurisdiction; appeals taken after 1891 to Federal Supreme Court. § 159 original, of Federal Supreme Court to grant injunction in case of bridge constituting obstruction to navigat ion § 404 jurisdiction of Federal Circuit Court of Appeals; when invoked; diverse citizenship § lt)0 in what district suits for infringement of patents should be brought note, § IGl original jurisdiction of Federal Circuit Courts under Judiciary Act of 1888 § 1*J1 806 INDEX JURISDICTION OF COURTS OVER CORPORATIONS— Con- tinued: jurisdiction of Federal Circuit Court to remove incumbrance or lien or cloud upon title to property within district; absent de- fendants; process; service; publication § 168 of Federal Circuit Court over bill to quiet title and remove cloud § 402 equity jurisdiction of Federal Circuit Courts; probate matters; diverse citizenship § 169 what constitutes controversy or dispute between parties; juris- diction of Federal Circuit Court; citizenship § 172 when corporation is and is not a citizen; pleadings § 173 prosamption as to citizenship of members of corporation; presi- dent and stockholders § 174 citizenship; joint-stock company not a corporation for jurisdic- tional purposes § 175 citizenship; limited partnership not a corporation for jurisdictional purposes § 176 citizenship; board of trustees not a corporation for jurisdictional purposes § 177 citizenship of corporation of two or more States; ancillary or permissive charters or license § 178 removal of causes to Federal Courts; corporation of two or more States § 179 citizenship; consolidated corporations § 180 when Federal Court has jurisdiction; corporation; doing business; process; service § 181 over foreign corporation; doing business or having agent or office in State; service of process note, § 181 obtaining jurisdiction over foreign corporations § 181 jurisdiction of justice of the peace; condemnation proceedings. . § 81 when Federal Court no jurisdiction; corporation; doing business. § 182 where plaintiffs citizens of different States § 183 citizenship; territory divided into two States § 184 jurisdiction of Circuit Court; citizenship of guardian in suit against corporation § 185 citizenship of State; diverse citizenship § 186 suit by State for injunction § 186 jurisdiction; where "found"; suit to restrain enforcement un- reasonable rates by railroad corporation § 187 jurisdiction; transitory action of trespass; parties residents of other States than that of suit § 188 when Federal Courts no jurisdiction of suit by assignee of chose in action; assignment of jutlgment § 189 jurisdiction of Federal Courts; suit by assignee; inquiry relates to time when suit is brought § 190 jurisdiction of Federal Courts; suits by assignee of promissory note or chose in action; exception to statutory prohibition, . § 191 INDEX 807 JURISDICTION OF COURTS OVER CORPORATIONS-Con- tinued: when Federal Courts have jurisdiction of suits by assignee § 192 when Federal Court no jurisdiction of suit by assignee; contract to convey land 6 19.'} selection of administrator to olitain n(jto § 194 when transfer by partnership not a sham to oust court of. . ncjte, § 194 when purpose of corporation to invoke note, § 194 motive for bringing suit or in obtaining citizenship; collusive assignment or transfer or fraud to give jurisdiction § 194 same subject; when jurisdiction defeated § 195 jurisdiction; rearrangement of i)arties; diverse citizenship §196 of Federal Courts over crimes note, § 197 nature of jurisdiction of national courts; extent of resort to common law 5 197 Federal jurisdiction; effect of State statutes; rights and remedies. § 198 power of State to limit jurisdiction of its courts; power to ad- minister common law § 199 of Circuit Court of Appeals by writs of error on bills of excep- tions note, § 198 of Federal Courts as affected by noncompliance with State Jaws note, § 198 of Federal Courts as affected by State laws note, § 198 Federal Courts where a maritime lien exists note, § 198 power of State to hmit jurisdiction of its courts; power to ad- minister common law § 199 juri.s(iiction; consent of parties § 200 jurisdiction; appearance; consent; waiver § 201 effect on, of appearance note, § 201 waiver of jurisdictional defect as to particular district § 202 subsequent change in conditions after juri.sdiction of Circuit Court has attached § 203 where case goes more than once to highest State Court; final judgment; writ of error § 204 jurisdiction of Federal Circuit Courts under Judiciary Act of 1888; removal of suits § 205 removal of suits; what record must show § 206 no cause removable unless it is one of which Circuit Courts given original juri.sdiction § 207 Federal question or right; when court has jurisdiction; instances. § 208 Federal question or riglit; when court no jurisdiction; instances. . § 209 presentment of Federal question; record § 210 removal of suits; corporation created by Congress; Constitution and laws of United States; separable controversy § 21 1 removal of suits; corporations created by Congress; national banks. § 212 removal of suits; separable controversy; joint action § 213 removal of suits; separable controversy; joint action; torts; diversity of citizenship § 214 808 INDEX JURISDICTION OF COURTS OVER CORPORATIONS— Con- tinued : removal of suits; separable controversy; joint action; fraudulent joinder § 215 removal of suits; separable controversy; joint action; what record must show § 2 1 n denial of petition for removal; petitioners' right to elect remedy. § 217 removal of suit denied in State Court; filing answer and record; asserting affirmative remedy and denial of jurisdiction § 21S Federal Circuit Court may determine removability of cause and protect such jurisdiction; injunction § 219 effect upon jurisdiction of State Court of removal of cause § 220 jurisdiction of Federal Supreme Court after removal ordered by Circuit Court § 221 See Equity Jurisdiction. JURISDICTION OF COURTS OVER CORPORATION SUPER- VISORY COMMISSIONS OR BODIES, jurisdiction of boards of equalization; conclusiveness of decisions of; review by courts § 123 jurisdiction of courts; certiorari to review assessment; special franchise tax; requirements as to return by tax commissioners. § 124 board of harbor commissioners; jurisdiction of courts § 125 resolution of city council and direction to city solicitor to enforce same against street railway; obligation of contract; jurisdic- tion of Federal Circuit Court; injunction § 12t) condemnation proceedings; commissioners; State crossing board; jurisdiction of courts; waiver § 127 jurisdiction of courts; insurance; State auditor; superintendent of insurance § 128 jurisdiction of officers of Land Department; control and super- vision of, by courts; mandamus; injunction § 129 same subject; railroads; right of way § 130 jurisdiction of courts in respect to Interstate Commerce Com- mission; generally § 131 jurisdiction of Federal Courts in respect to Interstate Commerce Commission; rates §§ 132, 133 same subject; injunction; where redress must first be sought. . . § 134 same subject; compensation of carrier; services rendered at shipper's request; practice and procedure; remanding case. ... § 135 jurisdiction of Federal Courts in respect to Interstate Commerce Commission; regulation of carriers as to cars; where redress must first be sought § 135a jurisdiction of Federal Courts in respect to Interstate Commerce Commission; shipper's indebtedness for demurrage; refusal of carriers to receive goods § 130 use of process of Federal Circuit Court in aid of inquiries before Interstate Commerce Commission; testimony; production of INDEX 809 JURISDICTION OF COURTS OVER CORPORATION SUPER- VISORY COMMISSIONS OR BODIES— Coiitinuc1 of nonresident stockholder § ->''> of stockholders; pleading; what must be shown; generally § 2S7 of stockholders to creditors; unpaid subscriptions or stock.. .§§ 2SS, 2S<) of stockholders; unpaid subscriptions; parties § 2!H) of stockholders to creditors where stock received without con- sideration or for less than its value; "bonus stock." § 291 of corporations to third persons for negligent, willful, wanton, or malicious acts of servants § 317 814 INDEX LIBEL, liability for acts of servant note, § 317 and slander § 335 action for lies against corporation § 335 what does not constitute note, § 335 LIBERTY TO CONTRACT. See Contract. LICENSE, of foreign insurance company; injunction to prevent revoking. . § 128 LICENSE FEE, charge for filing articles of consolidation of corporations § 60 of foreign corporation; waiver of objection of failure to pay. ... § 233 of foreign corporation ; pleading defense of failure to pay . . note, § 230 LICENSE TAX, power of State to impose on foreign corporations § 16 LIEN, for wages of corporation employes may be given by statute .... § 27 in maritime cases; State statute declaring, does not oust Federal jurisdiction of maritime liens note, § 198 attachment, may be protected in equity § 402 enforcement of; foreclosure; parties §§ 415, 416 See Foreclosure; Mechanic's Lien. LIFE INSURANCE. See Insurance. LIFE INSURANCE COMPANY, suit against, effect of dissolution on § 239 suit by policy holder against, for accounting and receivership . . § 276 LIMITATION OF LIABILITY, of carriers; right of State to augment or limit § 29 injury; interstate transportation; effect of § 47 LIMITATIONS, on police power; general princi])les as to extent of § 8 of time for adjustment of claims against them by railroads § 30 as to reasonableness of rates § 34 as to rates; terminal charges by carrier; proceedings against connecting carrier; discrimination; joint through rate §35 insurance policy limitation as to time Cif bringing suit; when not a bar § 83 of remedy under act to regulate commerce; Interstate Commerce Commission; mandamus § 367 See Liability; Statute Limitations. INDEX 815 LIMITED PARTNEI^.SHIP, not a corporation for jurisdictional iHU-po.scH § 176 LIQUOR LAWS, regulation of carriers; Elkins Act; constitutional law; excessive fines § 456 See Intoxicating Licjuors LIVE STOCK, Federal statute to insure humane treatment of, by carriers § 28 State may provide for damages against railroads for killing. . . § 30 killed by train ; action for § 242 LOAN, to de facto corporation ; action to recover § 245 LOCOMOTIVE ENGINEERS, examination and licensing of § 27 LOGS, illegally obtained cannot be replevied by boom company § 341 inspection of, running out of boom § 59 inspection of, by survej'or general § 93 LONG AND SHORT HAULS, rate regulation §§40, 41 application to railroad commission note, § 115 Federal Circuit Court may review findings of Interstate Com- merce Commission § 132 relief in "special cases" by railroad commissioners; refusal not reviewable by courts § 150 M MACHINE SHOP, corporation organized to operate may sue for work done § 227 MALADMINISTRATION, negligence; suit by stockholders against directors; averments necessary; what must be shown § 264 of directors. See Directors. MALICE, corporation may act maliciously notf. § 335 corporation liable for malicious acts § 36 MALICIOUS ABUSE OF PROCESS, civil or criminal; action for damages lies § 331 816 INDEX MALICIOUS PROSECUTION, jurisdiction of New York municipal court note, § 89 liability for acts of servant note, § 317 action for, lies against corporation § 33tj MANDAMUS, transportation of coal; commodities clause of Hepburn Act. ... § 49 to inspect corporation books; jurisdiction defined and applied. . §83 when does not lie to control discretion of commissioner of water- works as to "lowest and best" bidder § 95 to railroad commission; increase of capital stock note, § 116 does not lie against officer of Land Department § 129 defense by railroad company that rates are unreasonable § 139 when properly brought in name of State § 251 defined § 342 nature of mandamus § 343 nature of, continued ; is a discretionary writ § 344 when mandamus lies, generally § 345 to control judicial discretion § 346 will not be granted when fruitless and unavailing § 347 does not lie where there is a plain and adequate remedy § 348 statutory remedies; when and when not exclusive of mandamus. § 349 when is the proper remedy although there is another remedy; action for damage; equity § 350 when remedy is by action at law and not by mandamus § 351 when proper remedy is qrio warranto and not mandamus § 352 when remedy to forfeit franchise, and not mandamus, is proper. § 353 when remedy in equity and not by mandamus; injunction; manda- tory injunction § 354 enforcement of private or personal rights; contractual relations. . § 355 when writ lies to enforce discretionary or ministerial duties § 356 when writ does not lie to enforce discretionary duties § 357 when lies and does not lie to compel filing articles of incorporation and certification; issuance of certificates § 358 when lies; election of corporate officers § 359 when lies to compel order revoking charter to be vacated § 360 when lies to reinstate member § 361 lies to enforce right of inspection of books of corporation § 362 lies to compel surrender of corporation's books, seal and papers. § 363 to compel transfer of certificates of stock; lost certificates § 364 to control rates, charges and fares; discrimination § 365 when lies against common carrier, generally § 366 limitation of remedy under act to regulate commerce; Interstate Commerce Commission § 367 when lies and does not lie against railroad company § 368 when lies and does not lie against street railroad company § 369 when street railway company is and is not entitled to mandamus. § 370 when Ues and does not lie against telephone companies § 371 INDEX 817 MANDAMUS— Continued : when lies and docs not lie against telegraph companies § :i7-> where hes and does not lie against water companiea § ;i73 jurisdiction of mandamus proceedings * 374 proper or necessary parties, generally ........../ ^ 37.-) parties plaintiff; private persons [[/ § g-j^ parties; attorney-general ^ 'o-,^ parties; defendants e i.yu necessity of demand upon or notice to party before bringing mandamus g ..-.f, defenses available, generally « -.^q pleadings; sufficiency of showing; demurrer; judgment; appeal. . § 381 MANSLAUGHTER, hability of corporation for acts of servant note, § 317 corporation cannot be guilty of, under New York Penal Code. .' § 450 MARGINS. See Sales. MARITIME LAW, where lien under exists; jurisdiction of Federal Courts note, § 198 State legislature cannot change or modify note, § 198 MARITIME LIEN, jurisdiction of Federal Courts as to note, § 198 MASTER AND SERVANT, State has power to change or modify relations of § 26 Federal and State regulations as to § 26 acts of Congress relating to employes of carriers, as to hability of latter and hours of labor § 2() Employers' Liability Act of Congress § 26 statute making railway companies hable for ncghgence of fellow servants § 26 contracts of insurance or for relief of employ^; effect of statute making corporation liable for negligence § 26 discrimination; fellow servants and different classes of employes note, § 26 criminal offense; discharge of cmploy6 when member of labor organization ; act of Congress § 26 State may provide for protection of railroad employes § 27 State regulation as to payment monthly of employes § 27 right of recovery by employes of railroad § 29 liability of corporation for negligent, willful and malicious acts of servant §317 trespass on case and not trespass is the proper form of action for injuries by negligence of servant of corjxtration § 328 See Locomotive Engineers. 52 818 INDEX MEASURE OF DAMAGES. See Damages. MECHANICS. See Labor; Master and Servant. MECHANICS' LIENS, liberty of contract when not interfered with § 12 action to enforce; jurisdiction § 81 subject-matter of jurisdiction held not the particular mining lode but the lien upon that lode § 88 action to enforce; subject-matter and jurisdiction over it defined. § 88 MEMBERS, of corporation; presumption as to citizenship of § 174 mandamus to reinstate § 360 of mutual insurance company; when may invoke cquitj' jurisdic- tion to redress or prevent wrongs affecting corporation § 404 MERGER, not by fact of stockholders in different corporations being same. § 226 MILEAGE TICKETS, powers of railroad commission as to note, § 113 MINES AND MINING, regulation and control of § 18 regulation of hours of labor of miners § 27 when corporation chartered principally for, is a railroad company under Hepburn Act § 49 action to enforce mechanic's lion against; jurisdiction § 81 injunction to restrain depositing tailings, etc., in river bed; definition of jurisdiction applied § 81 action to enforce mechanic's lien; subject-matter and jurisdiction over it defined § 88 petition to enforce lien when insufficient to be subject of order or decree § 88 when assumpsit does and does not lie to recover value of oil mined § 321 trespass for mesne profits lies to recover value of oil mined § 329 false statements in prospectus; when action for fraud lies § 339 person liable for conversion of ores, not to be credited with cost of mining said ores § 340 right of person in possession of surface of mining claim to sue in equity to quiet title § 404 MINING CLAIM, quieting title to; Federal question; jurisdiction note, § 208 MINING CORPORATION, suit to remove cloud on shares to; parties; Federal Circuit Court. § 168 INDEX 819 MINORITY STOCKHOLDER, See Stockholder. MINORS, employment of children under certain age; ofTcnscw; penalties. . . § 449 MISREPRESENTATIONS, defense by life insurance companies as to cutting ofT statute; valid. § 1 7 in prospectus e ...„. action for fraud and deceit r yyg MONEY, belonging to charitable institutions; taxation; banks § 71 no equity jurisdiction to restore to corporations §162 received by directors; liability for after dissolution § 261 as subject of action of trover k 34Q had and received. See Assumpsit. MONOPOLIES, act of Congress of 1890 against note, § 11 MORTGAGEE, prior mortgagee, rights of. See Foreclosure, remedy where plant on which mortgage is, is sold by order of court to city § 102 MORTGAGES, held by foreign corporations; State cannot preclude foreclosure for noncompliance with tax laws as to doing business § 20 bondholder as party plaintiff in ecjuity where railroad sought to be taxed § 83 sale of gas and electric plant to city subject to; city's obligation as to the bonds and interest § 102 jurisdiction of Federal Courts of by assignee of § 15)2 enforcement of; foreclosure; rights and remedies; parties. . §414,415 foreclosure and sale of railroad mortgage; distribution of pro- ceeds; unsecured creditors; bank as general creditor; prior mortgagee §418 See Foreclosure. MOTION, to dismiss appeal; defense of res adjudicata not available on . . § 83 to dismiss for want of jurisdiction; "special cases" § 87 to quash certiorari to review determination of commission may be made in Appellate Division of New York Supreme Court § 1.")! to dismiss not proper to raise defense that suit against comniLs- sion is suit against State § 1 •^•"> for bringing suit or in obtaining citizenship; jurisdiction. . .§§ 194, 195 MULTIFARIOUSNESS, what necessary to sustain objection of § 229 820 INDEX MULTIPJJCITY OF SUITS, as result of enforcement illegal tax; equity jurisdiction § 167 See Equity. MUNICIPAL COUNCILS, courts may restrain unlawful exercise of legislative or administra- tive powers § 5 See City Council. MUNICIPAL COURTS. See Courts. MUNICIPALITIES, may make reasonable regulations as to use of street by street railroad companies § 21 legislation by, void if it impairs obligation of contract § 22 agreements between; and railroad companies as to viaducts over crossings; power of State to supervise and control § 24 apportionment by State of expense of grade crossings may be made through § 24 power of to compel city to repair viaduct § 25 power of to compel railroad companies to remove or lower tunnels under navigable river at company's expense § 25 delegation to of power to regulate charges of common carriers ... § 93 joint control with railroad commissions as to use of streets by street railways; when may act alone § 96 purchase of gas or electric light plant by; "special commission" to hear and adjudicate § 102 jurisdiction of Circuit Court; vahdity of contract between water company an( I § 208 as party to suit; obstruction in street § 251 suit by in respect to acts of § 258 N NATIONAL BANKS, Federal agencies; State control of § 65 usury by ; effect of § 66 as agencies of Federal Government §§ 65, 66 State statutes as to preferences by insolvents; when does not conflict with Federal statutes § 66 taxation § 71 investments by; taxation § 71 difference in methods of assessment of and of State banks; when not discrimination § 71 limitation of doctrine governing taxation of, applies to tax on shares of stock § 77 residence of note, § 181 statute assessing shares of; judgment as to; Federal Supreme Court no power to review § 200 INDEX 821 NATIONAL BANKS— Continued: removal of suit by 5 212 State bank converted into; right to sue in former name § '2.i2 liability of for promise of promoter § 259 holder of shares of as shareholder § 277 liability of stockholders of conditional § 282 may maintain assumpsit § ;i23 NATIONAL COURTS. See Courts. NATIONAL GOVERNMENT. See Federal Government; Consti- tutional Law; States. NAVIGABLE WATERS, power of State over bridges over note, § 2 when State cannot tax ferry franchise § 78 taxation of railroad bridge company operating bridge over § 7S NAVIGATION, ordinance requiring construction of tunnels under river; when does not amount to a contract under constitution § 22 right of railroad" companies to maintain tuiuiels under navigable river subject to right of public § 25 control of navigable waters by Congress § 56 what navigable waters of ITnited States include § 56 bridge as nuisance; jurisdiction § 402 See Navigable Waters. NEGLIGENCE, of fellow servants; statute making railway companies liable for. . § 26 causing death; action for; definition of jurisdiction applied § 82 joint action for; removal of suit § 214 joint action; .separable controversy; removal of suits § 214 action for injury caused by; effect of dissolution of corporation. . § 240 action by consignor for. § 244 maladministration; suit by stockholders against directors; aver- ments necessary; what must be shown § 264 liability of corporations for, generally § 318 liability of corporation to third persons for negligent, willful or malicious acts of servants § 317 as warehouseman, when does not warrant recovery for negligence of carrier. § 318 action against water company for damages resulting from § 327 NEW YORK CODE CIVIL PROCEDURE, parties defendant under to suits in -equity § 229 provision of as to action against directors of corporation con- strued § 261 action under against directors for negligent waste; pleading § 204 822 INDEX NONRESIDENT STOCKHOLDER, liability of § 286 NONRESIDENTS, owners of corporate stock ; tax on transfers of stock § 68 as parties in Court of Claims in New York § 171 NONSUIT, when granted; trespass for injury, etc., to trees and timber § 330 NOTES, bank notes, obligations, securities, etc., of United States; savings banks; taxation §§ 72, 73 NOTICE, lack of provision in tax law as to does not take away jurisdiction of taxing officer § 67 of proposed assessment of property § 68 duty of garnishee to notify absent defendant of pendency of attachment proceedings § 88 and hearing; enforcement by Secretary of Commerce and Labor of penalty, without judicial trial, on trans^iortation company. . § 100 to corporation produce books before grand jury; contempt § 138 statute directing manner of service of notice upon carrier when proceeded against by railroad commission is not unconstitu- tional ' § 139 necessity of to jiarty before bringing mandamus § 379 NUISANCES, corporations liable in damages for maintenance of § 334 action at law for damages for maintaining; lies § 334 action to prevent or abate when not "special case" within jurisdiction of such cases § 87 party to suit to abate § 229 by electric line in street; right of abutting owner § 242 maintained by servants of corporation; latter liable in damages. . § 334 bridge as; jurisdiction of Federal Supreme Court § 402 injunction §§ 431, 432 injunction; parties; State or attorney -general; corporations; joinders § 432 indictment of corporations for § 447 See Bridges. o OBLIGATION OF CONTRACT. See Contract; Constitutional Basis of Actions and Defenses. OFFENSES, State law as to inspection of hides , § 58 INDEX 823 OFFENSES— Continued : against United States s 443 single continuous offense; criminal law; place of trial; Elkins Act; discrimination in rebates & 45g See Criminal or Penal Offenses. OFFICERS, courts may restrain exercise unlawfully of legislative or adminis- trative powers by executive officers § 5 and agents of banks; criminal offenses; power of State as to § (50 of State as indisensable or necessary ])arties defendant in suits by corporation § 2.00 of State as parties plaintiff in suits against corporation § 251 or directors; duties and liabilities of, generally; parties § 261 of corporations; duties and liabilities of, generally; parties § 201 action by corporations against; damages; accounting § 202 of corporation; suits against by stockholders; corporation as party. § 203 or directors, suit by stockholders against; corporation as party. . § 203 and directors, individual liability of to creditors where capital stock not subscribed; suit in equity by creditors against direct- ors § 205 of corporation; suit against for mismanagement should be by cor- poration § 274 election of corporate ; mandamus § 359 by-laws increasing power of; stockholders entitled to protection in equity § 402 injunction against § 124 See Conditions Precedent; Departmental Officers; Public Officers. OFFICERS OF LAND DEPARTMENT, control and supervision of courts; mandamus; injunction § 129 OIL, stored in State; how far affected by inspection r^^gulationa § 59 State statute as to inspection of; interstate commerce § 59 mined; when assumpsit does not lie to recover § 321 mined; trespass for mesne profits lies to recover § 329 OIL CORPORATION, a foreign corporation; party defendant; suit for damages. . .note, § 228 ORDERS, of Interstate Commerce Commission; promulgation of general orders :: J^"^ of board of equalization: conclusiveness of §M-'-. '--^ of Interstate Commerce Commission; jurisdiction of courts over. generally '^ for service by publication ; averment of residence as basis for not e, § 1 73 824 INDEX ORDERS— Continued : of court requiring remedies to be exhausted; statute limitations. . § 312 mandamus to vacate order revoking charter § 360 of Interstate Commerce Commission; injunction to restrain enforcement of § 433 See Constitutional Basis of Actions and Defenses. ORDINANCE, power of city to enact ordinance regulating and controlling corporations § 25 equity jurisdiction to restrain enforcement of § 164 rates charged by gas company in excess of those prescribed may be recovered back § 314 See Municipalities. ORES, conversion of; person liable not to be credited with cost of mining ores § 340 OUSTER, quo warranto • . . . § 386 OVERVALUATION, of property; stock issued for; liability of stockholders to creditors §§ 295, 297 P PAPERS, mandamus to compel surrender of papers of corporation § 363 PARALLEL, and competing railroads; whether may consolidate; State may determine § 107 PARTIES, preliminary statement § 222 intervenors; action to enforce mechanic's lien; jurisdiction § 81 to bill in equity; plaintiff as lessee of property and creditor and mortgage bondholder of defendant railroad whose property was taxed § 83 jurisdiction of suit against State though nominally against in- dividual ." § 83 Interstate Commerce Commission has legal capacity to be plaintiff or defendant in Federal Courts § 103 railroad companies should be parties defendant in suit in court after proceedings before railroad commissioners § 141 whether suit against railroad, etc., commissioners is suit against State § 155 INDEX 825 PARTIES— Continued. Attorney-General of State is proper r)arfy defendant to suit to prevent enforcement of unfoiistitulional statute §155 presence of as essential to jurisdiction § 15(j jurisdi(!tion of I'ederal Courts not dependent on relative situa- ^^"'^^^ §157 persons interested should be; equity jurisdiction; Federal Courts. § KWi service on by publication; Federal Circuit Court § Kjs to suit to remove cloud on shares to mining 8to(;k; Federal Circuit <^''"'"* §168 nonresidents as in Court of Claims in New York § 171 jurisdiction of Federal Circuit Court; what const if utes dispute or controversy between; citizenship § 172 when corporation is and is not a citizen § 173 presumption as to citizenship of members of corporation ; president and stockholder § 171 joint-stock company not a corporation for jurisdictional purposes § 175 limited partnership not a corporation for juri.sdictioiial purposes. § 170 board of trustees not a corporation for jurisdictional purposes. . . § 177 citizenship of corporation of two or more States § 17S consolidated corporations § 180 obtaining jurisdiction of foreign corporations §§ 181, 182 plaintiffs citizens of different States § 1,^3 where territory divided into two States § 184 citizenship of guardian in suit against corporation § 185 State not a citizen; diverse citizenship § 18t> State not a citizen § 18G suit by State for injunction § I8G assignee of chose in action; when Federal Courts no jurisdiction . . § 189 assignee of chose in action ; jurisdiction Federal Courts relates to time when suit is brought § 190 assignee of promissory note a chose in action; jurisdiction Federal Courts; exceptions to statutory prohibition § 191 when Federal Courts have jurisdiction of suits by a.ssiKnee § 192 assignee of contract to convey land, when P'ederal Court no jurisdiction § 193 collusive assignment to give jurisdiction §§ 194, 195 arrangement between to give jurisdiction; diverse citizenship. ... § 196 consent of as conferring jurisdiction §§ 200, 201 appearance of as waiver of objection to juri.sdiction § 201 joinder of; separable controversy; removal of suits. §§ 213, 214, 215, 216 corporation as entity § 224 corporation asserting title to, regarded ;is distinct from stock- holders § 224 how stockholders regarded in corporate proceeding in equity. § 221 corporation as entity; equity § 225 directors of one corporation, directors of another does not prevent suit against; merger. § 22() 826 INDEX PARTIES— Continued : corporations may sue and be sued § 227 college established by church; right to sue note, § 227 corporation must assert right in corporate name § 227 corporations as necessary or indispensable parties § 228 corporation necessary in suit against stockholders of insolvent foreign corporation § 228 corporations as necessary or indispensable parties; equity § 229 dismissal of bill in chancery for want of proper parties § 229 distinction between necessary and proper parties defendant in equity § 229 suit by shareholder to enforce corporate right ; corporation neces- sary party § 229 corporation necessary where relief requires personal judgment . . § 229 to suit for injunction; corporation as necessary § 229 in suit to abate a public nuisance § 229 defendant in suits in equity under New York Code Civil Procedure § 229 corporation as salvors may maintain suit for salvage § 230 power of corporation to sue and be sued includes power to arbi- trate § 231 State bank converted into national bank; right to sue in former name § 232 corporation's right to sue; waiver; foreign corporation § 233 mode of objecting to corporate capacity to sue § 233 when corporation not entitled to equitable consideration of courts; consolidation to prevent competition; fraud on public § 234 consolidation; successor of corporation; rights of § 235 foreign corporation ; parties § 23b foreign corporation plaintiff; defense of failure to comply with State law § 236 foreign corporation; parties; presumptions § 237 right of corporation to sue as affected by dissolution . . . §§ 238, 239, 240 effect of forfeiture of charter on right to sue § 239 suit by receiver in own name; statute § 239 injuries to persons in execution of public trust; rule as to when not applicable to private corporations § 241 injuries to property, generally § 242 right of consignor to sue corporation § 243 suits by and against consignee § 244 corporation de facto may sue and be sued § 245 what constitutes a corporation de facto, generally; legislative power to cure defective organization § 246 right to sue railroad corporation not dependent on compliance by it with statute § 246 collateral attack; de facto corporation; estoppel to deny legal corporate existence §§ 247, 248 collateral attack; State or public officials as parties; de facto corporal ion ; instances 8 249 INDEX 327 PARTIES— Continued: State or State officers as indispensable or proper parties defendant in suits by corporation s 2'A) State or State officers as parties plaintiff in suits against corpora- tion i .)-! 8 Zol in behalf of people to quiet title to land § 251 suit to restrain corporation from doing business in State § 251 State proper in suit to enjoin corporation acting as such § 251 action by State to recover taxes 5 251 municipality as; obstruction in street §251 intent uf Congress requiring attorney-general to sue in equity in name of United St ates the Union Pacific Hailroad Co § 252 United States as plaintiff; pension checks; forgery; recovery from bank ^ 252 United States as plaintiff suit to collect taxes § 252 United States as plaintiff; action against railroads. . § 252 reorganized or successor corporation §§ 253, 254, 255 defendant; reorganization of corporation into foreign one § 253 levee districts or levee boards whether public or private corpora- tions may sue and be sued § 25»5 banks as parties, generally § 257 suit by corporation as taxpayer § 25,S suit by taxpayer against corporation § 25S promoters' duties; remedy against them; corporate liability for acts of, generally § 25li corporation must institute equitable suits to redress wrongs by promoters on directors § 25!) internal management of corporation; general rule § 2(}i> officers or directors; duties and liabilities of § 2(ii action against trustees for an accounting § 2(1 1 suit by corporation against officers or directors; damages; account- ing § 2ti2 suit by stockholders against officers or directors; corporation as party § 2G3 suit by stockholders against directors; negligence; maladministra- tion; averments necessary; what must be shown § 2('»t individual liability of officers and trustees to cretlitors where capital stock not subscribed § 205 suit in equity by creditors against directors § 205 suits by and rights of minority stockholders; when corporation should be made party § -'»'» suits by and rights of minority stockholders; creating new cor{)ora- tion; consoHdation agreement § 2(57 when stockholder may and may not sue in equity § 2()S right of stockholders to sue in equity in a Federal Court for surplus assets after decree of forfeiture of franchises § 209 suit by stockholder against trustee of funds for dividends; defense; counterclaim §2(0 828 INDEX PARTIES— Continued : suit by stockholder to compel successor in interest of lessee to pay rent reserved § 271 rights of subsequent stockholders to sue § 272 when corporation and not stockholders should sue under sher- man Anti-trust Act § 273 when corporation should sue or be made party to suit by stock- holder § 274 when stockholder may be made party defendant by court § 275 refusal of court to permit stockholders to defend § 275 stockholders as necessary parties in suit by policy hplder against insurance company for accounting and receivership; equity jurisdiction § 276 transfers of stock; pledge for collateral security; liability of pledgee as stockholder; national banks; bailment § 277 suits by creditors; parties, generally § 278 "Trust Fund" doctrine; capital stock; unpaid subscriptions. ... § 279 when unpaid subscriptions or unpaid stock are and are not assets . § 280 stockholders' liability to creditors, generally §§ 281, 282 subscriptions to aid organization; fictitious and colorable subscrip- tions; defense of illegality of corporate scheme § 283 whether stockholders' liability contractual, statutory or penal ... § 284 right of action by stockholder after receiver appointed § 285 receiver should sue to recover corporate property § 285 who should sue to enforce individual liability of stockholders of bank § 285 liability of nonresident stockholder § 286 liability of stockholder; pleading; what must be shown § 287 liability of stockholders to creditors; unpaid subscriptions or stock § 288 same subject § 289 liability of stockholders; unpaid subscriptions; parties § 290 liability of stockholders to creditors where stock received without coiLsideration or for less than its value; "bonus stock". . .§§ 291, 292 consideration for issue of stock; property, etc.; when payment in stock to contractor is not a stock subscription § 293 consideration for issue of stocks; property, etc., when payment in stock to contractor not a stock subscription § 293 stock issued for property; valuation should be fair and just; neces- sity of good faith in transaction § 294 stock issued for property; material overvaluation; stockholders not necessarily liable to creditors therefor; good faith § 295 stock issued for property; shareholder may be liable where over- valuation shows fraud upon creditors though none intended ... § 296 stock issued for propertj'; valueless property; material overvalua- tion § 297 stock issued for property which subsequently becomes valueless or consideration fails § 298 INDEX 829 PARTIES— Continued : judgment creditors; stockholders' liability to, for unpaid stock; parties § 209 judgment creditors; stockholders' liability to, for unpaid stock. . §299 amount of creditor's recovery on stock may Ijc limited by his knowledge of agreement under which shares issued § 300 creditor or stockholder may sue after demand upon and refusal of corporate authorities to act; stockholder may defend § 301 when demand upon corporate authorities and their refusal a condi- tion precedent to suit § 302 when demand upon and refusal of corporate authorities not a con- dition precedent to suit § '.iQ'.i demand upon and refusal of corporate authorities; necessity of alleging and showing same §§ 305, 306 effect of demand and refusal dependent upon circumstances; dis- cretion of directors; simulated demand § 304 enforcing stockholders' liability; exhausting remedies against corporation; when judgment and execution unsatisfied are con- ditions precedent § 307 enforcing stockholders' liability; exhausting remedies against cor- poration; when judgment and execution unsatisfied are not con- ditions precedent § 308 stockholders' liability;' dissolution as condition precedent to enforcing same § 309 effect of Equity Rule 94; when demand upon directors for relief is and is not condition precedent; stockholders; right to protect corporation when directory derelict § -{H' creditors' right to sue; parties; conditions precedent § 31 1 judgment creditors' right to sue; conditions precedent § 311 order of court requiring remedies to be exhausted; statute limita- tions § •■^1- railroad company may be sued in trespass quare clausum f regit. . . § .330 trespass quare clausum fregit lies against anyone unlawfully dis- turbing grave s 330 when trespass quare clausum fregit lies against company entering land and cutting timber § 330 joinder of plaintiffs; action to prevent nuisance § 334 who and who not entitled to sue; action for fraud and deceit. ... § 339 shipper; when may recover of express company for fraud causing loss §•■«!! proper and necessary to mandamus proceedmgs, generally § 3/.) plaintiff in mandamus; private persons § 376 plaintiff; private persons « "^ State; attorney-general § 390 to mandamus; attorney-general § "^^7 to mandamus; defendants S 3' quo warranto; State; attorney-general § 390 plaintiff; quo warranto » 830 INDEX PARTIES— Continued : defendant; quo warranto § 391 plaintiffs; defendants; joinder. § 391 generally; prohibition § 401 equity jurisdiction; generally § 404 when railroad no sufficient interest as to obtain injunction against street railroad § 404 reformation of contract of pledge may be decreed against bank- rupt and assignee § 404 policy holder and payee as parties in equity for reformation of insurance policy § 404 to reformation of contract of pledge; equity § 404 suit by stockholder for accounting, setting aside lease, etc § 404 when member of mutual insurance company may have aid of equity to protect property rights of corporation § 404 when party not sufficient interest to invoke and of equity to compel compliance with rates fixed by lease § 404 right of stockholder to bring suit in equity nominally against corporation but really for its benefit § 404 when may sue in equity to quiet title and remove cloud § 404 to foreclosure of liens or mortgages §§ 414, 415, 416 rights of upon foreclosure of liens or mortgages §§ 414, 417 joinder; injunction; nuisances : § 432 State or attorney-general; corporations; joinder; injunction; nui- sances § 432 when carrier liable as party to joint rate; rebates; Elkins Act. . . § 452 PARTNERS, stockholders' and members' liability § 282 PARTNERSHIP, when transfer by not a sham to oust court of jurisdiction.. . .note, § 194 limited not a corporation for jurisdictional purposes § 176 PASSENGERS, regulation and control of ship passenger laws § 18 right of recovery for injuries, of penson not passenger § 29 business of receiving and landing is incident to transportation; tax upon same § 61 taxation upon capital stock of corporations engaged in transporta- tion of § 62 action by for injury; jurisdiction of New York City Court. . . .note, § 89 ejection from train; fiability of corporation for acts of serv- ant note, § 317 corporation hable for personal injuries; negligence; action at law. § 318 when action ex delicto lies against railroad company for ejection from train § 327 when railroad company not liable for act of servant in causing arrest of § 331 INDEX g31 PASSES, right to issue. See Hepburn Act. PATENTS, regulation and control of jxitcnt righls 5 Ij^ in what district suits for infringement of should be brought, .note, § 161 PAVING, street; assumpsit to recover cost of from street railroad company. § 321 PAYMENT, by stockholder for stock must be actual and bona fide § 289 in stock to contractor; not a stock .subscription § 293 for property; stock given in; presumption jis to § 294 by fire insurance company for loss of property; when may be , recovered back s 313 PENAL, whether stockholders' liabihty is § 284 PENAL CODE, of New York; corporation cannot be guilty of manslaughter under. § 450 PENALTIES, State may prohibit trusts, etc., under note, § 11 right of State to classify corporations and impose penalty § 13 may be provided for not making reports by masters of vessels. . . § 18 for nonadjustment of claims by carriers within time limited .... § 30 for nonadjustment by carrier of claims; efTect of amount of claim being small note, § 30 may be imposed by State for noncompliance with statute requir- ing diligence, etc., in transmission of telegrams § 31 failure of railroad company to post its rates in depots or stations. § 32 clause of statute separable from other provisions; will not be con- sidered in suit to enjoin carriers from violating regulations where no penalty provided § 49 transportation of coal; commodities clause of Hepburn Act § 49 for refusal to stop trains at certain stations § 50 C. O. D. shipments of intoxicating liquors; State exclusion of. . §52 for transportation of intoxicating liquors into State § 52 for procuring insurance by company not conforming with con- ditions precedent to doing business § 55 action for; when jurisdiction acquired § 83 action for, for refusing transfer on street railroad; jurisdiction of New York Municipal Court note, § 89 enforcement of, on transportation company without judicial trial; by Secretary of Commerce and Labor § 100 against transportation company for bringing aliens with con- tagious disease is civil and not criminal offense § 100 832 INDEX PENALTIES— Continued : transportation company; bringing in alien immigrants with con- tagious diseases § 100 Congress may provide for, and empower executive officers to en- force § 100 shipper may sue for, in case of excessive charges and is not obli- gated to apply to commission § 151 statute as to; judgment of State Court; review by Federal Su- preme Court § 208 stockholders' liability; whether in nature of § 284 action of debt for; against insurance company § 324 employment of children under certain age § 449 See Criminal and Penal Offenses; Fines. PENSION CHECKS, forgery of payee's name on; right of United States to recover from bank § 252 PEOPLE, what powers are reserved to, of States note, § 3 PERSON, corporatidn regarded as, for civil purposes note, § 227 PERSONAL INJURIES, when noncompliance by plaintiff employe cannot be pleaded in bar to action for § 26 right of recovery for, of person not passenger § 29 jurisdiction of New York municipal court note, § 89 of wife and suit for loss of services; jurisdiction of New York municipal court note, § 89 liability of corporation for acts of servant note, § 317 negligence; corporation liable in action at law for damages § 318 when complaint states cause of action in trespass; negligence of railroad company § 328 trespass not proper form of action for, caused by neghgence of servants of corporation § 328 See Assault; Battery. PETITION, by railroad company for appointment of commissioners of ap- praisal § 81 in action to enforce lien on mining lode; when insufficient to be subject of order or decree § 88 for removal of cause insufficient ; not showing diversity of citizen- ship note, § 207 for removal of suit; denial of, petitioner's right to elect remedy. . § 217 for removal wrongfully denied in State Court § 218 See Complaint; Pleading. INDEX 833 PIPE LINE COMPANY, when liable in trespass for removing buried pipes § 32« PLAINTIFFS, citizens of different States . jo^ See Parties. PLANT, value of; elements in fixing rates « 3(3 PLEADING, noncompliance by plaintiff employ^ when cannot be pleaded as bar to action for personal injuries § 26 "jurisdiction of the case"; plea in abatement; averment suffi- /^°t §82 allegation of compliance with Equity Rule 94; jurisdiction §83 jurisdiction may be acquired though pleading defective § 83 averment as to residence of foreign corporation; jurisdiction of New York municipal court note, § 89 defense that suit against commission is suit against State § 155 as to averments of citizenship note § 173 as to citizenship of corporation in suit in equity; Federal Courts. . § 173 effect of averment as to citizenship of joint-stock company § 175 sufficiency of averment of citizenship of corporation §181 petition for removal of cause held insufficient note, § 207 petition for removal; denial of; petitioner's right to elect remedy. § 217 of failure of foreign corporation to comply with statute; time of. § 236 rule of, in equity § 253 suit by stockholders against directors; negligence; maladministra- tion; averments necessary; what must be done § 264 suit by minority stockholders; mismanagement; dismissal of bill. § 266 bill for accounting and appointment of receiver § 268 in actions against stockholders; what must be shown § 287 demand and refusal; conditions precedent to suit §§ 305, 306 mahcious, etc., acts of servant note, § 317 when complaint states action of trespass for damages for personal injuries § 328 trespass guare clausum f regit § 330 defense that acts of trespass were done under charter must be pleaded § 330 description of premises in action quare clausum f regit § 330 in action against nuisance § 334 in action for, for malicious prosecution § 336 what must appear or be shown to sustain action for fraud and deceit note, § 339 when averments sufficient to show fraud in causing plaintiff to part with stock § 339 to sustain action of fraud and deceit; misrepresentations § 339 53 834 INDEX PLEADING— Continued : sufficiency of showing; demurrer; judgment; appeal § 381 in mandamus; sufficiency of showing; demurrer § 381 sufficiency of showing; quo warranto. . § 393 PLEDGE, reformation of contract of; parties; bankrupt and assignee; pledgor § 404 PLEDGEE, liability for corporate debts § 277 PLEDGOR, where property wrongfully pledged may sue at law for damages; maintain claim and delivery or demand equitable relief § 341 as party to reformation of contract of pledge § 404 POLES AND WIRES, of telegraph, etc., companies in street; rental, etc., charges for. . § 31 ejectment, when lies to compel removal of telegraph poles § 315 POLICE POWER, State exercise of, cannot directly regulate interstate commerce . . § 2 is one reserved to States and no grant to Congress in Constitution. § 7 difficult to define; general principle stated § 7 may not trespass on rights and powers vested in National Gov- ernment § 8 when must yield to Congress § 8 limitations on § 8 limitations on ; Federal Constitution § 9 may be delegated to municipal corporations or other agencies. . § 10 private interest subservient to § 10 when beyond reach of judicial inquiry § 10 legislature is vested with a large discretion in exertion of § 10 to define and prohibit trusts §11 liberty to contract §§ 11> 12 statute under exercise of for criminal proceedings against resi- dents and civil proceedings against nonresidents held consti- tutional § 14 regulation of slaughter houses and stock yards § 15 to require reports from masters of vessels § 18 may regulate hours of labor § 18 extinction of grade crossings as proper exercise of § 24 Farm Drainage Act of State; when a proper exercise of § 24 of State to change or modify relations of employer and employe. § 26 to regulate hours of labor § 27 rate regulations § 32 regulation of railroad rates § 32 INDEX 836 POLICE POWER— Con tinuod: must yield who>n in conflict with oxclu.sivo jiowors of ConKrcss. . § 42 proper regulation not unconstitutional when indirectly affects interstate commerce § 42 when cannot compel absolute delivery of cars on certain day. ... § 47 when State may prohibit running freight trains on Sunday § 4!S prohibition against bringing intoxicating liquors into State; inter- state commerce | 51 regulation of sale of liquor is exercise of § 54 to fix rates and charges for elevating, etc., grain § 57 as to quarantine and inspection regulations; interstate commerce. § W requiring certain returns from insurance; companies § 7s State may designate agencies to carry out police regulations § 92 of States; crimes and penalties § 440 See Constitutional Basis of Actions and Defenses; Powers. POLICY. See Insurance POLICY HOLDER, suit by, against insurance company for accounting and receiver- ship § 270 POOLING, of freights; when agreement between initial and connecting carriers is not - § 104 POSSESSION, and title as basis of ejectment note, § 315 POSTAL CLERKS, of railways; classification of, with employes of railroads § 21) POSTMASTER, injunction against § 42S POST ROADS, bridges; as extent of right conferred on bridges by § ofi POST ROADS ACT, State statute must not conflict with ; telegraph line § 2 interstate commerce not affected by § 8 POWERS, of Federal and State governments distinguished § 3 implied and express; Federal Constitution § 3 of Federal and State governments distinguished; Territories § 3 of legislation may be taken away by implication § 3 nature of powers delegated to Congress § 3 of Federal Government; first eight articles of Federal Constitu- tion have reference to § '^ 836 INDEX POWERS— Continued : Federal Government one of enumerated § 3 revisory, of Congress over Territories § 3 Constitutions of States are limitations of § 3 what powers are reserved to the States note, § 3 judicial and legislative § 4 legislative and judicial, may be united in same body § 4 Federal Constitution does not forbid State legislature to exercise jurisdiction § 4 to regulate laws is legislative in character § 5 of courts to restrain unlawful exercise of legislative or adminis- trative powers by executive officers, municipal councils or administrative boards § 5 of State as to apportionment of expense of grade crossings § 24 of Congress to regulate hours of labor § 26 State tax may be enforced against foreign telegraph company. . § 31 of legislation and of taxation operates on all persons and property. § 67 Congress may employ corporations as instrumentalities to execute powers to regulate commerce § 92 of corporation supervisory bodies §§ 92-122 administrative duties and legislative powers distinguished § 92 when agreement between certain city officials, etc., with corpora- tions to abide result of test suits is void § 93 municipality; railroad commission and borough president; laying electric lines; repaving by street railroad § 96 of commission as to standard fire poUcy § 97 of Secretary of Agriculture; regulation of commerce; quarantine regulations § 99 of Secretary of State; reinsurance contract § 101 of State as to railroad and hke commissions §§ 107, 108 to remove or suspend commission §§ 107, 108, 109 of corporations, generally § 223 of corporation to sue and be sued include power to arbitrate § 231 legislative, to cure defective organization § 246 of corporation unlawfully exercised; quo warranto lies § 385 See Congress; Constitutional Law; Constitutional Basis of Actions and Defenses; Delegation of Power; Legislature; Police Powers; State. PRACTICE, and procedure; remanding cause to Interstate Commerce Com- mission § 135 PRAECIPE, filed; commencement of suit § 83 PRESIDENT, of corporation; presumption as to citizenship of § 174 INDEX 837 PRESUMPTION, as to citizenship of members of corporation; president and stock- holders j^ jy^ as to compliance by foreign corporation with State law § 237 as to ownership of goods shipped § 243 as to consideration for stock given in payin(!nt of property § 2'M PRINCIPAL AND AGENT, prospectus issued by agent; false statements in § 339 to solicit subscriptions; failure of agent to notify principal of withdrawal of subscriber § 31^9 PRIORITIES, on foreclosure of mortgage § 417 See Equity; Foreclosure; Sale. PRIVATE CAR COMPANY, when it violates statute as to rebates § 104 is subject to jurisdiction of Interstate Commerce Commission; rebates § 104 PRIVATE PERSONS, as parties. See Parties. PRIVILEGES. See Franchises. PROBATE MATTERS, equity jurisiliction of Federal Circuit Courts; diverse citizenship. § 109 PROCEDURE, and practice; remanding cause to Interstate Commerce Commis- sion § 135 PROCESS, when appeal does not constitute to invoke judicial power § 5 service of; foreign corporations maj^ be put on same footing and state as domestic corporations § 14 statute describing mode of serving, upon corporations different from charter provision § 22 issued after expiration of time limit for suing under terms of insurance policy § S3 service of upon defendant; jurisdiction of Federal Court § 83 service of summons on person defective; jurisdiction acquired. . . § 83 proper service of as essential of jurisdiction § S3 service of as essential to jurisdiction § 88 of Federal Court; use of in aid of inquiries before Interstate Commerce Commission; testimony; production of l)ooks, etc.; fine and imprisonment; contempt; power of conunission § 137 corporation commission of North Carolina no power to enforce its orders by final process § l-^" obtaining jurisdiction of foreign corporation § 1"^' 838 INDEX PROCESS— Continued : service of on foreign corporation doing business or having agent or office in State note, § 181 action lies for malicious abuse of, civil or criminal § 331 See Garnishee Process PROFITS, elements in fixing rates § 36 false statements in prospectus as to § 339 PROHIBITION, jurisdiction § 81 nature of, generally § 395 nature of continued; is a discretionary writ; effect of judgment or sentence § 396 does not lie where there is a plain and adequate remedy; ex- hausting remedies § 397 where act sought to be prohibited has been done § 398 to court without jurisdiction or where it exceeds jurisdiction. ... § 399 to admiralty court § 400 See Parties Generally. PROMISSORY NOTE, suit by assignee of judgment on; jurisdiction Federal Courts § 189 suits by assignee of; jurisdiction Federal Courts; exceptions to statutory prohibition § 191 PROMOTERS, duties of; remedy against; corporate liability for acts of, gen- erally § 259 contracts made by before incorporation not binding on corpora- tion § 259 duties; remedy against them; corporate liability for acts of, generally § 259 wrongs of; corporation has remedy at law to redress same § 259 equitable suits to redress wrongs of must be instituted by cor- poration § 259 false and fraudulent prospectus , § 339 PROOF. See Evidence. PROPER OR NECESSARY PARTIES, generally § 375 See Parties. PROPERTY, loss by fire from locomotive engines; State may provide for recovery of damages § 30 value of should be fixed at time inquiry made § 36 INDEX 839 PROPERTY— Continued : value of as element in fixing rates §3(5 corporation asserting title to regarded as persons separate from stockholders k 224 injuries to, generally; parties § 242 stock issued in paymont of § 293 stock issued for; valuation shoukl be fair and just; necessity of good faith § 294 stock issued for; material overvaluation; liability of stock- holders §§ 295, 297 stock issued for; fraud on creditors; stockholder liable § 296 materially overvalued; stock issued for; extent stockholder's liability § 297 valueless; stock issued for s 297 , given for stock; valuation placed on by stockholder does not bind court § 297 stock issued for; subsequently becoming valueless or considera- tion fails § 298 loss of or injury to; liability for acts of servant note, § 317 See Assets. PROSPECTUS, to induce subscriptions to or sale of bonds, etc.; deceit note, § 339 false statements in to induce sale of stock, etc., action for fraud and deceit § 339 to obtain increase of capital stock; fraud and deceit note, § 339 See Damages; Fraud and Deceit. PROTECTIVE TRADE ASSOCIATION, writing libelous letter to; action for § 335 PUBLICATION, order for service by; averment of residence as basis for note, § 173 PUBLIC CORPORATIONS, powers of not coextensive with those of individuals § 223 when levee district is a § 256 PUBLIC NUISANCE, parties to suit to abate § 229 by electric line in street; right of abutting owner § 242 PUBLIC OFFICERS, as parties; collateral attack § --i*' as indispensable or proper parties defendant in suits by corponi- tions § --'J^ as parties plaintiff in suits against corporations § 251 PUBLIC OFFICIALS, designation of by govern nent to carry out regulations of § 92 840 INDEX PUBLIC POLICY, contract for co-operation in procuring franchise § 407 PUBLIC SERVICE COMMISSION, jurisdiction and power of § 117 jurisdiction of; issue of stocks and bonds by corporation § 117 may rehear and redetermine on new evidence § 121 jurisdiction as to grade crossings § 121 jurisdiction of courts; certificate of pubHc convenience and ne- cessity , § 142 certiorari to review determination of § 154 nature of powers § 154 right of appeal by from court order annulhng its decision § 154 PUBLIC SERVICE CORPORATIONS, power of State to amend charter of § 22 issue by of stocks and bonds; jurisdiction of pubUc service com- mission § 117 See Names of Various Kinds of; Constitutional Basis of Actions and Defenses. PUBLIC TRUST, injuries to persons in execution of; rule as to when not appHcable to private corporations § 241 PUBLIC USE, owner of property devoted to, subject to have use, etc., regulated § G owner of property devoted to, must submit to have that use and employment regulated by public authority § 6 water for sale, rental, etc., may be declared to be a § 95 PUBLIC WAREHOUSES. See Warehouses. PUBLIC WORKS, regulation of hours of labor on § 27 PUNITIVE DAMAGES, against corporation; false imprisonment § 331 against corporation for libelous letter § 335 PURCHASER. See Foreclosure; Vendee. Q QUANTUM MERUIT, assumpsit § 321 QUARANTINE, line; intrastate commerce; power of Secretary of Agriculture to fix under cattle contagious disease act § 99 INDEX J^41 QUARANTINE REGULATIONS, for protection of health , eg interstate commerce; poHce power § 58 Federal authorities may adopt (|uarantinc line fixed hy State. . . . § 59 QUIETING TITLE, equity jurisdiction as to § j^.-, raining claim; Federal (juestion; jurisdiction note, § 208 suit by attorney-general for ' g .^rjj See Equity; Title QUO WARRANTO, corporation adjudged no legal existence; effect on rights of prop- ^^^y § 239 nature of e oj.., abolished in certain States §§ 3^2 385 when not exclusive remedy; when proper n mcdy § 3S3 when proper remedy is quo warranto and not mandamus § 352 when special or statutory actions or proceeilings exclusive § 384 hes in case of unlawful exercise of corporate power or franchises . . § 385 to forfeit or annul or test franchises of corporation; ouster § 38G to forfeit only misused franchise and leave corporation intact. . . § 387 to control rates and charges § 3S8 jurisdiction of q\io warranto proceedings § ;{89 parties; State; attorney-general § 31K) parties; plaintiffs; defendants; joinder § 391 seeking other relief as condition precedent to granting quo war- ranto § 392 pleadings; sufficiency of showing § ;iy3 defenses available, generally § 394 R RAILROAD AND WAREHOUSE COMMISSION, jurisdiction as to rates § 113 when without jurisdiction; rates § 1 15 jurisdiction as to increase of capital stock § 1 Ui jurisdiction as to erection of depots by railroads § 120 rates; jurisdiction of courts § 139 RAILROAD BRIDGES. See Bridges. RAILROAD COMMISSIONS, power of State to impose salaries and expenses of upon public service corporation § 21 order of, that railroad trains stop at certain stations § 50 powers of, over railroads organized under laws of I'nited States. . § 75 expenses of; taxation of railroads to pay .same § 70 842 INDEX RAILROAD COMMISSIONS— Continued: injunction to restrain, from approving and certifying assessment of taxes against railroad § 83 joint control with municipality as to use of streets by street rail- ways § 96 power of State as to §§ 107, 108 power to remove or suspend commission §§ 107, 108, 109 jurisdiction and powers of §§ 108-116 nature and extent of powers and jurisdiction of §§ 108-116 and like commissions; power to remove or suspend them § 109 jurisdiction as to rates § 113 application to; long and short hauls note, § 115 jurisdiction as to traffic note, § 119 jurisdiction of; delivery of cars; train connections § 119 refusal or consent of, to abandonment of railroad stations § 120 jurisdiction as to grade crossings; apportionment of expense of . . § 121 jurisdiction of; telegraph companies § 122 jurisdiction to require telegraph companies to establish offices. . . § 122 jurisdiction of, over telegraph companies, generally § 122 jurisdiction of courts in respect to §§ 139-142 of North Carolina is court of record § 140 proceedings before as conditions precedent to suit in court § 141 decision as to issuance of certificate of public convenience and necessity not subject to judicial revision § 142 certificate of public convenience and necessity; jurisdiction of courts § 142 jurisdiction of courts in respect to; rates §§ 149-151 relief where it acts without jurisdiction in ordering excessive rates refunded § 150 relief by, when not reviewable by courts; long and short hauls. . § 150 refusal to grant relief in "special cases" not reviewable by courts. § 150 injunction to restrain enforcement of rates under schedule pub- lished by § 150 action of as to rates cannot be controlled in advance by injunction § 151 may be enjoined from proceeding to fix rates § 151 whether suits against, are suits against State § 155 bill lies in equity to revise ruling of § 434 See Railway Commissioners. RAILROAD COMPANIES, power to regulate is legislative in character § 5 contract of, with elevator company when not an interference with power of Congress to regulate commerce §11 charter of, is taken subject to power of State to regulate and control § 21 subject to regulate and control to protect public against danger, injustice and oppression § 21 State may require companies to fence their roads § 21 INDEX 843 RAILROAD COMPANIES— Continuoil : State may regulate scihedule for miming trains {21 State may regulate operations of § 21 extent of power of State to compel railroad stations to be estah- lished < 21 ordinance giving p('rniis.sion to (H>nstru(;t tunnels under navigable water, when does not amount to contract under the Constitu- tion K 22 statute describing mode of serving iJiDcesM upon; when iKjt un- constitutional R 22 obligation of contract; due process of law § 22 obligation of contract; exemption and transfer thereof; due process of law § 23 taxation; exemptions and due process of law note, § 23 police power to direct extinction of grade crossings is propcsrly exercised | 24 power of State to apportion expense of viaducts over several crossings § 24 viaducts over grade crossings; power of State to control, etc § 24 right of, to a bridge over water course crossing to right of way; right of public to use such water course § 24 method of eliminating grade crossings; when not a matter of judicial determination § 24 when statute giving appeal from action eliminating grade cross- ings is unconstitutional § 24 right of, to maintain tunnels under navigable river subject to right of public § 25 acquiring vested property rights; statute requiring payment of expense of crossings; reserve power to alter or amentl charter. . § 25 statute providing for presentation and adjustment of claims against railroads § 30 statutes providing for recovery of attorney's fees against § 30 locomotives; State may provide for recovery of damages for loss by fire from § 30 company subject to penalty for failure to post rates in stations or depots § •^2 penalty for charging higher rates than those in s(;he(iule posted . . § 32 statute as to charging rates when in conflict with Interstate Com- merce Act § 32 rate regulations § -^2 incorporated by act of Congress; power of States to establish rates for § 3- may be compelled by State to perform certain duties, though jn-r- formance may entail loss § "^^ statute as to certain safety appliances, when vaiid § 47 statute as to heating passenger cars; validity of § 47 when company not exempt from State privilege tax on cab service on ground of interstate commerce § '^7 844 INDEX RAILROAD COMPANIES— Continued: statute requiring certain number of cars to be furnished on certain day; when unconstitutional § 47 Hmitation of liability; injury; interstate shipment § 47 interstate transportation of cars not delivered to consignee still protected by Interstate Commerce Act § 47 right of, to adopt provisions for through traffic § 47 power of Congress to regulate § 47 when State may prohibit running of freight trains on Sunday . . § 48 discrimination; terminal charges note, § 49 effect of ownership of stock by, in producing corporation under commodities clause of Hepburn Act § 49 when company is railroad company although originally chartered principally for mining; Hepburn Act § 49 commodities clause of Hepburn Act § 49 transportation of commodity mined, manufactured or produced; effect of Hepburn Act § 49 State requirement that interstate and other trains stop at specified stations § 50 " adequate or reasonable facilities " ; State requirement that trains stop at certain stations note, § 50 interstate commerce; transportation of intoxicating liquors into State §§51, 52 interstate shipment; when complete; delivery § 52 inspection of hides; interstate commerce § 58 mode of taxation of § 61 State tax upon gross receipts of § 61 corporation organized under laws of United States; effect as to exemption from taxation § 75 situs of personal property for taxation § 76 taxation of, to meet expenses of railroad commissions § 76 charter stipulation that percentage of gross receipts be paid State is constitutional § 76 powers of State to tax § 76 powers of State as to, and over § 76 incorporated in other States ; tax on stock of § 77 suit to enjoin certification of assessed value of property; jurisdic- tion § 81 company; petition for apportionment of commissioners of ap- praisal; jurisdiction § 81 condemnation proceedings; jurisdiction § 81 action against, for negligence causing death; definition of juris- diction applied § 82 bill in equity to decree railroad company exempt from taxation . . § 83 injunction to restrain commission from approving and certifying assessment of taxes against § S3 failure to signal at crossing; when jurisdiction of action for penalty acquired § 83 INDEX 845 RAILROAD COMPANIES— Continued: viaduct crossing; apportionment of repairs by city council § <>.{ valuation of property; duty and power of a-ssessnifut Ijoards § <»} action against, to recover damages for infection of cattle note, § '.W equipment of interstate railroad subject to ccjiitrol of Interstate Commerce Commission k ^j^-^^ routes of State corporations; State may determine § 107 jurisdiction of railroad and like commissions §107 order of commission to compel receiving loaded cars and to haul same to connecting line without compensation for loss, etc., when beyond own control note § 111 delay in transportation of goods note, § 1 II jurisdiction of railroad commissioners; stopping interstate trains. § lis delivery of cars; train connections; jurisdiction of railroad com- missioners §110 railroad "facilities" note, §§ 1 19 120 condemnation proceedings for terminal branch; jurisdiction of State Crossing Board ^127 right of way; decision of Secretary of Interior; final determination § bitj rate regulation; appeal on question of to State Supreme Court before suit in Federal Court § ir,2 suit by owners of stock of, to cancel deeds and leases § IGK when equity has no jurisdiction of bill to recover lands of § 170 where State engages in business of common carrier § 171 presumption as to citizenship of members of § 171 Hne in two or more States; citizensliip of §§ 17S, 170 citizenship of where two or more consolifhited § 1>«) suit to restrain unreasonable rates by ; jurisdicticju; where "found " § 1S7 suit by, in State Court, to condemn land; jurisdiction of Circuit Court § 207 taxation of property of; injunction; Federal question; jurisdiction note, § 2()S resumption of land granted to; Federal question; jurisdiction note. § 2(XS suit to enjoin putting schedule into cfTect ; jurisdiction of Circuit Court § l'<»0 sued jointly with servant for negligence; removal to Federal Court §-'H nature and extent of rights, powers or properties note, § 22.} action by, for injurj^ to property § al- right to bring suit against not dependent on compliance with stat- ute §^»<' de facto; collateral attack; estoppel § ->•*> cannot question right of another corporation to exercise powers. § 219 lease by; suit to establish; proper parties § -'")() when State necessary party to suit to foreclose >VJ')<) mandamus in name of State to compel performance by, of duty ? J.')! mandamus to compel to build station not^-, § 251 846 INDEX RAILROAD COMPANIES— Continued: United States as party plaintiff in suit against § 252 intent of Congress in authorizing attorney-general to sue in equity the Union Pacific Ilailroad Co § 252 reorganization; suit against committee for breach of trust § 253 not liable for torts or contracts of predecessor § 254 payment by, in stock to contractor; not a stock subscription. ... § 293 when can and cannot maintain ejectment § 315 action for ejectment against § 315 liability for acts of servant note, § 317 when company liable on account stated; assumpsit § 322 action by passenger for ejectment from train; when ex delicto. ... § 327 action ex delicto against, for damages caused by delay in shipment § 327 trespass quare clausum fregit lies against railroad corporation .... § 330 when liable in trespass quare clausum fregit § 330 when company not liable for acts of servant causing arrest of passenger § 331 embankment when nuisance; causing backwater § 334 company not responsible for libel of employe by its superintend- ent § 335 liable for malicious prosecution instituted through malice of officers of § 336 action against company, with others, for conspiracy to expel plaintiff from brotherhood of locomotive engineers § 338 when equity will not compel contract with third person to carry on public warehouse § 403 when no interest as party to restrain construction or extension of street railroad § 404 injunction by and against § 426 See Bridges; Common Carriers; Constitutional Basis of Actions and Defenses (III, IV); Foreclosure; Limitation of Liability; Master and Servant; Navigable Waters. RAILROAD CROSSINGS, State may impose entire expense of change of grade at § 21 statute requiring expense of, to be charged against railroads; reserve power to alter or amend charter § 25 failure to signal at; when jurisdiction of action for penalty ac- quired § 83 See Grade Crossings. RAILROAD STATIONS, abandonment of; refusal or consent of railroad commissioners. . . § 120 erection and maintenance of depots; jurisdiction of railroad and warehouse commission § 120 RAILWAY COMMISSION. See Railroad Commission. INDEX 847 RAILWAY COMMISSIONERS, jurisdiction of, uinior Krifrlisli 'Ifcisions noff, § I i;j jurisdiction when silting as aniilnitors ' § ]4| jurisdiction of English Higii Court of Justice in respect to § 141 RATE REGULATION. See Constitutional Bu.sis of Actions and Defenses (IV). REAL ESTATE, value of; elements in fixing rates § ;j(j equity jurisdiction to remove cloud upon f)r to ((uiet title. . §§ 1G7, 168 equity has jurisdiction to protect from trespass § 236 REBATES, connecting carriers; right of initial carrier § 104 joint through routes; right of initial carrier to reserve in published notice right to route gootls beyond its own terminal § 104 by private car company when a violation of statute § 104 accepting; Elkins Act; carrier liable to prosecution joint rate. . . .§ 452 accepting; when carrier liable as party to joint rate; Elkins Act. . § 452 construction of Elkins Act; criminal intent § 452 construction of Elkins Act; "device" to obtain rebates § 453 discrimination in rates; Elkins Act; criminal law; single con- tinuous offense; place of trial § 458 See Constitutional Basis of Actions and Defenses (IV, Vj; Criminal and Penal Offenses; Jurisdiction of Corporation Supervisory Bodies. RECEIVERS, franchises in hands of; equity jurisdiction to i)rotect § 167 of national bank; removal of suit by § 212 appointment of does not affect corporate existence § 239 suit by in own name; statute § 239 effects of decree appointing on suits §§ 239, 240 appointment of in .suit by minority § 2()6 suit by policy holder against insurance company for § 27«i merger in decree for, of rights to sue stockholder § 278 right of creditor to intervene in suit by § 2S5 right of action by stockholder after appointment of § 285 should sue to recover corporate property § 285 enforcing liability of stockholder through bill by § 290 action at law against, and against corporation for damages for personal injuries s 318 RECORDS, of Federal Courts; absence from all of jurisdictional facts is im- material » ^-^ 848 INDEX RECORDS— Continued : question of jurisdiction of Federal Supreme Court arising on face of § 157 what should be shown by ; removal of suits § 206 presentment of P'ederal question § 210 what must be shown by; removal of suits; separable controversy; joint action § 216 REGULATION AND CONTROL. See Constitutional Basis of Actions and Defenses (III). REFORMATION, of insurance policy; policy holder and payee as parties § 404 of, or relief from, written instruments or contracts § 412 REINSURANCE, contract; power of Secretary of State to approve § 101 REMANDING CAUSE, to Interstate Commerce Commission § 135 REMEDIES, petitioner's right to elect on denial of petition for removal § 217 against promoters § 259 exhausting remedies against corporations as conditions precedent to suit; stockholder's hability §§ 307, 308 when remedy is by action at law and not by mandamus § 351 when remedy to forfeit franchise and not mandamus is proper. . § 353 when remedy in equity and not by mandamus; injunction; manda- tory injunction § 354 See Actions Ex Contractu; Actions Ex Delicto; Conditions Prec- edent; Equity; Actions at Law. REMOVAL OF SUITS, condemnation proceedings taken to State Court may be removed to Federal Court § 127 to Federal Courts; corporation of two or more States § 179 to Federal Court; effect of statute as to; jurisdiction § 198 under Judiciary Act of 1888 § 205 what record must show § 206 petition for insufficient, as to showing diversity of citizenship note, §207 not removable unless it is one of which Circuit Courts given original jurisdiction § 207 corporation created by Congress; Constitution and laws of United States; separable controversy § 211 corporations created by Congress; national banks § 212 separable controversy ; joint action § 213 INDEX g4Q REMOVAL OF SUITS-Continued : separable controversy; joint action; torts; divereity of citizen- separable controversy; joint action; fraudulent joinder iVii separable controversy; joint action; what record mu«t show" ' ' J-^i denial of petition for; petitioner's risht to elect remedy " " § 217 denied in State Court; filing answer to record; averting affirma- ' tive remedy; denial of jurisdiction c ^ju Federal Circuit Court may determine removability of cause and protect such jurisdiction; injunction g .,,n effect upon jurisdiction of State Court of 5 ^220 when petitioner entitled to ? .,.,,. ordered by Circuit Court; jurisdiction of Federal Supreme Court. § 221 See Courts. RENT, suits by stockholders to compel successors in interest of lesaee to pay rent reserved c ny, RENTAL charge for use of streets; Constitution and laws of State may impose ^ ... charges; taxes; imposed upon telegraph, etc., companies; reason- ableness of. c ... REORGANIZATION, of corporation; effect of; parties § 253 of corporation into a foreign one; parties defendant § 253 committee; suit against for waste and misa[)f)lication § 253 of corporation; extent of Hability of new corporation; of duties of note, § 254 agreements by purchasers; foreclosure and sale of mortgage § 420 of corporation. See Successor Corporation. REORGANIZED CORPORATION, as party §§ 2.53, 254, 255 reorganized or successor corporation §§ 253, 254, 255 REPLEVIN, of property by cashier; bank not necessary party § 257 claim and delivery § 341 boom company cannot replevy logs illegally obtained § 341 does not lie against agent of corporation who holds possession only as agent § 341 RES ADJUDICATA, defense of not available on motion to dismi.ss appeal § S3 when agreement to abide result of test suits void § 'J3 See Judgments. 54 850 INDEX RESCISSION, of sale of stock; right of corporation § 259 of sale of stock; vfiidablc for fraud § 259 of sale of stock; when subscribers not entitled to § 256 See Equity. RESIDENCE. See Citizenship. RESOLUTION, of city council. See City Council. RESPONDENT. See Parties. REVENUE, public. See Taxation. REVENUE AGENT, bill to enjoin him from beginning or advising suit to be brought against railroad company § 83 REVISED STATUTES OF UNITED STATE.'. See Statutes; United States Revised Statutes. REVISORY POWER. See Powers. RIGHT OF WAY, railroads; conclusiveness of decision of Secretary of Interior. ... § 130 of railroad when ejectment by landowner does not lie § 315 See Ways. RIPARIAN RIGHTS, determination of, in equity § 402 ROUTES, of railroads created by State; State may determine § 107 s SAFETY APPLIANCES. See Railroads. SALARIES, of railroad commissions; power of State to impose same upon public service corporations § 21 and expenses of board of commissioners of electrical subways may be assessed on company § 31 SALES, on margins; liberty to contract § 12 INDEX ^r^l SALES— Con (inuod: order ()f, in iicljon to enforce mechanie's lien; Hiibjeel-maKcr and juriHdiction over it defined k j^ compulsory, of gas or electric light plant to city; "special com- mission," to hear and adjudicate § lo-j of stock, etc.; prospectus to induce fraud and deceit § ;«•) on foreclosure of mortgage; priorities; rights of parties §417 proceeds of, on foreclosure of mortgage; rights of parties; adjust- ment of claims; accounting § 1 1 7 of corporate stock, cancellation or rescission on setting aaide. ... § \'M contract of, of corporate stock; specific jjerformancc § 439 See Foreclosure. SALESMAN. See Traveling Salesman. SALVAGE, corporation as salvors may maintain suit for § 230 SALVORS, corporations as, may maintain suit for salvage § 230 SAVINGS BANKS, State tax law as to, may not violate obligation of contract clause of Constitution § 68 taxation; obligations, securities, bonds, stocks notes, etc., of United States §§ 72, 73, 74 action against by transferees of account; jurisdiction of New York municipal court note, § 89 SAVINGS SOCIETIES, when tax on is franchise tax § 74 SCHEDULES, of published rates; publication of § 32 of rates; publication of § 105 of rates furnish only lawful rates until changefl by Interstate Commerce Commission § 106 for running trains; power to regulate § 141 interference of equity to enjoin enforcing schedule of rates § 1.50 See Constitutional Basis of Actions and Defenses (III, IV). SEAL, mandamus to compel surrender of corporate seal § 363 SECRETARY OF AGRICULTURE, no power to regulate interstate commerce, under Cattle Conta- gious Disease Act § '*W 852 INDEX SECRETARY OF COMMERCE AND LABOR, enforcement by, without judicial trial, of penalty; fifth amend- ment; due process of law § 100 enforcement by, without judicial trial of penalty on transportation company; notice and hearing; civil and criminal action § 100 SECRETARY OF INTERIOR, jurisdiction of courts over § 129 decision as to railroad right of way; conclusiveness of § 130 SECRETARY OF STATE, power of to approve reinsurance contracts § 101 suit against by foreign corporation to prevent revocation of authority to do business § 250 SECRETARY OF WAR, power of as to bridges over navigable waters § 56 SECURITIES, of United States; taxation of savings banks §§ 72, 73, 74 of United States; deposits of savings societies invested in; taxation § 74 SELLER. See Vendor. SEPARABLE CONTROVERSY, removal of suits §§211, 213, 214, 215, 216 removal of suits; joinder of parties §§ 213, 214, 215, 216 joint action; torts; removal of suits § 214 fraudulent joinder; removal of suits § 215 joint action; removal of suits; what record must show § 216 SERVANT. See Master and Servant. SERVICE, by publication; averment of residence as basis of order for. .note, § 173 of process-,on foreign corporation § 181 of process on foreign corporation doing business or having agent or office in State note, § 181 See Notice; Process; Summons. SHAREHOLDERS. See Stockholders. SHARES. See Capital Stock; Stock. SHERMAN ANTI-TRUST ACT, when corporation and not stockholders should sue under § 273 See Criminal or Penal Offenses. INDEX 853 SHIPMENTS, requirement that certain number of cars be deliverwl on spec- ified day, when unconstitutional § 47 of tank-oil; jurisdiction of Interstate Commerce Commission aa to charges; discrimination s IO5 SHIP PASSENGER LAWS, regulation and (-ontrol as to jig SHIPPER, proceeding by, where aggregate charges excessive, though tenninal charge reasonable § 35 where must first resort for relief in case of rate regulation; to courts or to commission §§ i;}4, l/il indebtedness for denmrrage; jurisdiction of l-Y-deral Courts to determine same in tiie first instan(;e § IJitJ action by against carrier § 243 SHOOTING, person; liability for acts of servant note, § 317 SLANDER, corporation may be liable for slandering business . . . , § 335 SLAUGHTER HOUSES, of corporations; regulation and control § 15 SMELTERS, regulation and control of hours of labor in § 18 SOLICITOR. See City Solicitor. SPECIAL ACTIONS, or proceedings exclusive of quo warranto § 383 "SPECIAL CASES," jurisdiction in, defined and construed § 87 relief in by railroad commissioners; refusal of not reviewable by courts • » '•"' "SPECIAL COMMISSION," to hear and adjudicate, not a "court" §!<>■- SPECIAL FRANCHISE TAX, s r^4 certioran to review s '-^ SPECIAL TRIBUNAL, "Special Commission" to hear and adjudicate, not a "court"; ga.s and elect rii- |)I:int s - 854 INDEX SPECIFIC PERFORMANCE. See Equity. STAMP TAX, law of State when not protected by commerce clause of Federal Constitution § 60 STANDARD FIRE POLICY, delegation to commissioners to draft form of; unconstitutional. . §97 STATE AGENCIES. See Taxation. STATE AUDITOR, when cannot be compelled to issue certificate to foreign insurance company to do business note, § 128 courts will take jurisdiction of, as to control and disposition of insurance trust fund § 128 See Auditor. STATE BANK, converted into national bank; right to sue in former name § 232 STATE BOARD OF CONTROL, jurisdiction to adjudicate water rights § 93 is administrative body § 93 STATE BOARD OF LAND COMMISSIONERS, jurisdiction of § 129 STATE COMPTROLLER, suit to enjoin certification of assessment to; jurisdiction § 81 STATE CORPORATION COMMISSION, jurisdiction and powers of § 108 may declare statute imposing fine or forfeiture unconstitutional. § 112 acts judicially in determining corporation's liability for fine or forfeiture § 1 12 STATE CROSSING BOARD, jurisdiction in condemnation proceedings to condemn land for railroad § 127 STATE GOVERNMENT, if powers of, in conflict with Federal Government former must yield § 2 Federal and State Governments; powers of, distinguished § 3 STATES, whca not impowered to retard, etc., constitutional laws § 2 INDEX 855 STATES— Continued: power of over bridges over navigable waters not*, { 2 legislative powers of, sovereign in all matters not forbidden by Federal Constitution « 3 what powers an; n^sorved to note, i li cannot interfere with powers of national government § :i Constitutions of, are limitations and not grants of iM)wor j ;i governmental powers and powers of Federal Government dis- tinguished 5 ;^ cannot pass laws having force or effect over persons beyond jurisdiction § 4 cannot pass laws having force or effect over persons or property beyond jurisdiction g 4 to what extent sovereign and independent 54 legislature not prohibited by Federal Constitution from exercis- ing judicial powers § 4 may confer upon nonjudicial bodies certain functions that may be called judicial § 4 power of, to prescribe conditions for doing public work § »» pohce power inherent in and not affected by Interstate Com- merce Commission or post roads § X may impose conditions precedent to doing business upon foreign corporations § 1 9 power of to amend charter of public service corporation § 22 statutes; railroad bridges; expense of change of grade or removal; police power; nonjudicial question § 24 statutes; railroad tunnels, viaducts and crossings; expense of removal or repairs; vested rights § 25 may provide for protection of employes of railroad § 27 right of to augment or limit carrier's liability § 29 power to establish railroad rates § 32 cannot grant away its right to limit charges of common carriers, except, etc 5 32 power to establish rates for railroad incorporated by Act of Congress § 3- grant of power to railroad to fix rates does not preclude State from fixing rates for. § 32 power of to regulate and prevent discrimination in rates is sub- ject to constitutional limitations § 33 may compel performance by railroacJs of (Certain duties though loss may be entailed » 34 right of to bargain away right to fix water rates § 37 requirement that interstate and other trains stop at 8pocifie cannot compel corporations to pay for |)rivil('ge of engaging in interstate commerce » '"" control of Federal agencies; national banks 5 *><'> 856 INDEX •iSti^ STATES— Continued: no power to tax Federal agencies §§ 65-79 cannot tax any of the means employed by Federal Government to execute its powers § 69 power of, as to taxation ; generally § 67 may tax corporation as entity § 67 State agencies; exemption of from taxation § 69 cannot exclude from its limits corporation engaged in interstate commerce § 75 extent to which cannot tax franchises or privileges conferred by United States § 75 powers of, as to and over railroads § 76 powers of, as to exemptions from taxation § 79 suit against, though nominally against an individual § 83 jurisiliction as applied to, defined § 90 may designate agencies to carry out police regulations § 92 power of, to remove or suspend railroad and like commissions §§ 107, 108, 109 may regulate and control use of water, rates, etc § 95 power of, as to railroad, State corporation, public service and like commissions §§ 107-122 nothing in Federal Constitution prevents conferring judicial power on nonjudicial bodies § 138 cannot impart immunity to its attorney-general from responsi- bility to United States § 155 whether suits against railroad, etc., commissions are suits against State § 155 parties in suit against, in Court of Claims in New York § 171 where engaged as a common carrier § 171 suit by, for injunction; jurisdiction of Federal Supreme Court. . § 186 not a citizen; jurisdictional purposes § 186 statute as to removal by insurance company of action to Federal Court; effect of; jurisdiction § 198 legislature cannot change or modify maritime law note, § 198 laws as affecting Federal jurisdiction note, § 198 power of, to limit jurisdiction of its courts; power to administer common law § 199 only can test corporate authority § 249 as party; collateral attack § 249 or State officers as indispensable or proper parties defendant in suits by corporation § 250 as indispensable or proper parties defendant in suits by corpora- tions § 250 or State officers as parties plaintiff in suits against corporation . . § 251 as party for injunction to remove obstruction created by bridge structure in and over navigable river § 404 as party; injunction; nuisances § 432 as party; quo warranto § 390 INDEX ^ 857 STATES -Continued: jurisdiction over violation of Anti-trust Act where agreement made out of State « ^ce See Constitutional Kasis of Acti(jiiH and Defenses; (Jriniina! ,irid Penal Ull'enses; Legislation; I'arties; Police Powei-s; Powers; Statutes. STATION, mandamus to compel railroad company to build note, § -jril STATUTES, State statute must give way to Federal statute if in conflict. ... § 2 production of Looks anil pa|)ers by coriioralioii includf what note, § 4 territorial legislation, revisory power of C(jngress over § 5 Reviseil Statutes, § 720, legislative proceedings are not proceed- ings in courts within meaning of & ,5 when construed as not authorizing purchase of other or parallel railroad lines note, § 10 act of Congress of 1S90 to protect trade and against uidawful restraints and monopolies construed and applied note, § 11 liberty to contract §§11 12 classification statutes; Fourteenth Amendment § 13 classification as to business or corporations or persons must not be arbitrary § 13 classification as to corporations; constitutional law § 13 discrimination as to railroads; when not unconstitutional §14 classification, need not be logically and scientifically accurate. . § 14 regulation and control of foreign corporations and limitations thereon § 20 describing a mode of serving process upon railroa'), 297 issued for property; material overvaluation; stockholders not necessarily liable to creditors therefor; good faith § 29") issued for property; shareholder may be liable where overvalua- tion shows fraud upon creditors though none intended § 29<) issued for property; valueless property; material overvaluation. . § 297 issued for property which subsequently becomes valueless or consideration fails S -•'•*^ contract to take; assumpsit note, § 'A'l\ refusal to pay withdrawal yalue of; assumpsit § 321 action for fraud and deceit; misrepresentations to induce sale of; prospectus § -^'^^ title necessary to maintain action for conversion of § 340 when wrongful refusal to transfer on books amounts to conver- sion § ;J^0 trover lies for wrongful conversion of § 340 setting aside sale of; cancellation or rescission § 430 pretended purcha.se of; remedy in equity. § •3r» contract to sell; specific performance § l-I"-> See "Bonus Stock"; Capital Stock; Certilicates; Subscript iwn.s. 800 INDEX STOCKHOLDERS, effect of ownership of stock by railway company in producing corporation under commodities clause of Hepburn Act § 49 nonresident; tax on transfers of stock § 68 bank charter may limit tax on stock in hands of § 68 tax on shares of stock in national banks § 71 when tax on shares is tax on corporation itself § 77 shares of stock in hands of, and capital stock of corporation may both be taxed § 77 bills by; failure to aver compliance with Equity Rule 94, does not raise question of jurisdiction but of plaintiff's right to sue § 83 presumption as to citizenship of § 174 as to corporation being entity distinct from note, § 224 law regarded in corporate proceeding in equity § 224 same in different corporations; contracts between; suits § 226 suit by to enforce corporate right; corporation necessary party. . § 229 cannot release themselves from liability by transfer to new cor- poration § 253 suit by affecting internal management corporation § 260 relation of managing officers to § 261 suit by or against officers or directors; corporation as party § 263 suit by, against directors; negligence; maladministration; aver- ments necessary; what must be shown § 264 appointment of receiver at suit of minority § 266 relief in equity to minority where act of majority fraudulent note. § 266 rights of minority § 266 suits by and right of minority; when corporation should be made a party § 266 suits by and right of minority creating new corporation; consolida- tion agreement § 267 when may and may not sue in equity § 268 sale by to corporation at advance on market price § 268 suit by to set aside sale at public auction § 268 suit by to restrain infringement of trade mark § 268 right of to sue in equity iu a Federal Court for surplus assets after a decree of forfeiture of franchises § 269 suits by or against trustees of funds for dividends; defenses; counterclaim § 270 suits by, to compel successors in interest of lessee to pay rent reserved § 271 right of subsequent stockholders to sue § 272 when corporation and not stockholders should sue under Sherman Anti-trust Act § 273 when corporation should sue or be made party to suit by § 274 when may be made party defendant by court § 275 refusal of court to permit to defend § 275 as necessary parties in suit by poUcy holder against insurance com- pany for accounting and receivership; equity jurisdiction § 276 INDEX HOI STOCKHOLDERS-Continued : liability to cnxlitors; generally « 278 liability to creditor on dissolution < 278 right to sue niergeii in decree for receiver § 278 liability to creditors; generally . §§ li.S|, 2S2 liability to (treditors iis affected by statute 5 281 and members; liability a« partners j 282 effect of sale by of stock on liability j 282 constitutional provisions as to liability of & 282 of national bank; liability conditional § 2S2 whether liability contractual, statutory or penal § 2X1 liability for debts on dissolution is ex contractu & 281 nature of liability under Stock Corporation Law of New York. . . § 284 of banks; who should sue to enforce individual liability of § '2X5 right of action after receiver appointed g 2H.'j liability of nonresident j 28»J liability of; pleading what must be shown § 287 liability under General Manufacturing Act of 1848 in New York. § 287 liability to creditor's unpaid subscriptions or stocks §§ 288, 289 payment by for stock must be actual and in good faith § 298 liability of for unpaid subscriptions; parties § 21K) enforcing liability of through bill by receiver § 29«) liabiUty of to creditors; stock without consideration or for less than value; "bonus stock" §§291, 292 rights of "bonus stock " § 292 liability to creditors; stock issued for property; material over- valuation §§ 29r>, 297 liable; stock issued for property; fraud on creditors § 29«> extent of liability; stock issued for materially overvalued proj>- erty § 297 valuation placed by on property given for stocks does not bind court. . § 297 liability to judgment creditors for unpaid stock; parties § 2'.K» conditions precedent to suits; demand and refusal; exhausting remedies §§ •{••1 -;{12 may sue after demand upon and refusal of corporate authorities to act; shareholder may defend § .'JOl when demand upon and refusal by corporate authorities to act condition precedent to suit §§ 3()2, .'t03 when may sue in own name without first requesting directors to sue 5303 liabihty; exhausting remedies against corfK>ralion; wlii-n judg- ment and execution returned unsatisfied are and an- not conditions precedent to suit §§ •'^"7. :«)8 liability; dissolution as condition i)recedenf fo enforcing .«:ime § ;H)9 right to protect corporation when directory derelict : when deinans»or. . § 2.54 purchase at juflicial sale § -•5-1 suit by bondholder of predecessor to compel deliver>' of new bonds §2.5.5 when liable for debts of predecessor § 2.55 assuming liability of predecessor § 255 864 • INDEX SUE, right of corporation to, an implied one § 227 power to sue and be sued includes power to arbitrate § 231 right of corporation to, as affected by dissolution §§ 238, 239, 240 as to power of corporation to; parties. See Parties. SUIT, by corporation as taxpayer; suit by taxpayer against corporation. § 258 by corporation against officers or directors; damages; accounting. § 262 by stockholders against officers or directors; corporation as party. § 263 by stockholders against directors; negligence; maladministration; averments necessary; what must be shown § 264 by and rights of minority stockholders; when corporation should be made party § 266 by rights of minority stockholders; creating new corporation; consolidation agreement § 267 by stockholder against trustee of funds for dividends; defense; counterclaim § 270 by stockholder to compel successor in interest of lessee to pay rent reserved § 271 by creditors; parties; generally § 278 See Actions Ex Contractu; Actions Ex Delicto; Conditions Prec- edent; Criminal and Penal Offenses; Equity; Law, Actions at; Parties. SUMMONS, issued; commencement of action § 83 served on person; jurisdiction acquired though writ defective or summons irregular § 83 SUNDAY, when State may prohibit running freight trains on § 48 SUPERINTENDENT OF INSURANCE, may be enjoined from revoking hcense of foreign insurance com- pany § 128 SUPERVISORS, sitting as board of equalization of taxes; jurisdiction. . . . § 81 jurisdiction or power of to fix water rates § 95 SUPREME COURT. See Courts; Jurisdiction. SURETY, relief to, in equity § ^39 SURVEYOR GENERAL, may be required to survey all logs, etc., running out of booms. . § 93 INDEX 865 T TANK-OIL, shipments; rates on; orders of Interstate Commerce Commission as to § 105 TAXATION, exemption from, under legislative contract; right to transfer. ... § 23 may be enforced against foreign telegraph company §31 tax on telegrams as restriction upon power of Congress to regu- late commerce § 46 of railroad where part of its service rendered wholly in State and not as part of interstate commerce §§ 47, 48 when railroad company's cab ser\ace not exempt from State privilege tax on ground that employed in interstate commerce. § 47 power of State to impose, upon bridge companies § 56 interstate commerce ; generally § 60 of corporations doing business in different States; mode of § 61 single tax upon receipts of telegraph companies §61 of all instrumentalities used for interstate commerce § 61 method of assessment of corporations having property within and without State § 62 of railroads on account of transportation within State or within and without State § 62 property left temporarily within State ; interstate commerce .... § 63 of bridge and bridge companies; interstate commerce § f-l when no exemption from, in case of national banks § 66 power of States; generally § 67 right of corporation to be heard as to special assessment § 67 when State Court in making assessment does not assume legis- lative functions § 67 lack of pro\asion in law for notice does not take away jurisdiction of taxing officers § 67 method of assessing value § 67 how far matter of legislative discretion § 67 corporation may be taxed as entity § 67 tax on transfers of stock § 68 exemption from ; impairment of obligation of contract § 68 notice of proposed assessment of property § 68 obligation of contract; equal protection of law; due process of law. § 68 bank charter may limit tax on stock § 68 exemption; instrumentalities of Federal Government; State agencies § 69 when checks and warrants not within principle of exemption of governmental agencies from § 69 States cannot tax any of the means employed by Federal Govern- ment to execute its powers § 69 instrumentalities of Federal Government; qualification or Umita- tion of doctrine of exemption § 70 35 866 INDEX TAXATION— Continued : difference in methods of assessment of shares of national and State banks; when no discrimination § 71 national banks § 71 savings banks; obligations, securities, bonds, stocks, notes, etc., of United States §§ 72, 73 when tax is on franchise § 74 franchises; capital stock § 77 "franchise"; "corporate franchise"; bridge companies; insur- ance companies; uniformity of taxation § 78 franchises or privileges conferred by Congress; railroads; tele- graph companies § 75 railroads § 76; note, § 123 of railroads; cars temporarily absent from State § 76 situs of property for § 76 board of equalization; jurisdiction § 81 conclusiveness of decisions of boards of equalization § 123 bill in equity to decree that railroad exempt from § 83 injunction to restrain railroad commission from approving and certifying assessment of taxes . § 83 jurisdiction of State assessment board to correct valuations .... § 94 action of tax officers must be yielded to until set aside § 123 equity jurisdiction to restrain collection of taxes § 164 illegal; enforcement involving multiplicity of suits; equity juris- diction § 167 suit by State against telegraph company to recover taxes § 251 United States may sue bank to recover § 252 United States as party plaintiff in suit to recover taxes § 252 liability of nonresident stockholder for § 286 right of stockholder to sue in equity to enjoin corporation from paying § 404 See Assessment; Assessment Boards; Constitutional Basis of Actions and Defenses (VI); License Tax. TAX COMMISSIONERS, requirements as to return by; certiorari to review assessment of special franchise tax § 124 TAX DEEDS, suit by assignee of mortgage to set aside; jurisdiction of Federal Courts § 192 TAXPAYER, suit by corporation as § 258 suit by corporation as; parties § 258 suits against corporations; parties § 258 suit by, to enjoin illegal construction of street railroad § 258 suit by, as to act of municipaUty § 258 INDEX 867 TELEGRAMS, penalties for failure to exercise diligence in transmission of § 31 delivery of; statute as to cannot interfere with interstate com- merce § 31 delivery of; statute as to; reserved police power; interstate com- merce § 31 taxation upon; restriction on interstate commerce § 46 libelous; liability for act of servant note, § 317 TELEGRAPH COMPANIES, regulation and control of § 31 penalty for not exercising diligence in transmission of telegrams; State may provide §31 right to maintain lines over post roads; interstate commerce. ... § 46 method of valuation for taxation § 61 single tax upon receipts of § 61 no exemption of, from taxation because of privileges conferred by United States § 75 consent as prerequisite to construction of lines § 96 consent as prerequisite to extension of lines § 96 jurisdiction or power of court of visitation § 98 jurisdiction over, of railroad commissioners; generally § 122 jurisdiction of railroad commission to require offices of, to be established § 122 tariff regulation of, by railroad commission § 122 suit in name of State to recover taxes § 251 ejectment lies to recover for removal of poles § 315 sending libelous message; liability for act of servant note, § 317 when liable for acts of servant in causing false imprisonment. . . § 331 when mandamus lies and does not lie against § 372 injunction by and against , § 427 discrimination; penalties § 442 See Telegrams. TELEGRAPH LINE, Post Roads Act, State statute must not conflict with § 2 in street; right of abutting owner against § 242 TELEPHONE COMPANIES, regulation and control of § 31 jurisdiction or power of court of visitation § 98 requiring installment of in railroad station; jurisdiction of rail- road commissioners § 122 when liable for false imprisonment § 331 when mandamus lies and does not lie against § 371 injunction by and against § 427 discrimination; penalties § 442 868 INDEX TERRITORIES, revisory power of Congress over § 3 Congress has revisory power over legislative acts § 5 cannot pass laws having force or effect over persons beyond jurisdiction 8 "* effect as to of Employers' Liability Act of Congress § 26 regulation of commerce in; power of Congress § 45 divided into two States; jurisdiction; citizenship § 184 new rights of action given by statute, may be enforced in Federal Courts §402 See Statutes. TESTAMENTARY TRUSTEE, cannot question validity of corporate existence of institution for whose benefit he holds fund § 249 TESTIMONY, production of books, etc.; process of Federal Courts in aid of inquiries before Interstate Commerce Commission § 137 TEST SUITS, when agreement to abide result of is void § 93 THEATRICAL CORPORATION, or syndicate; action against for conspiracy not sustained § 338 TIMBER, running out of booms; inspection of by surveyor general § 93 action to recover for removal of when ex contractu § 320 trespass qimre clausum f regit for cutting and carrying away § 330 TIME LIMITATIONS, for suing. See Limitations. TITLE, equity jurisdiction to remove cloud upon or to quiet § 167 suit by attorney-general to quiet § 251 basis of ejectment action . note, § 315 equitable action to quiet and remove cloud on § 402 when party in possession may sue in equity to quiet title and remove cloud § 404 suit to quiet; what is not a condition precedent to § 405 TOLL ROAD COMPANY, State only can question right to exercise franchise § 249 TOLLS, powers of State as to § 76 INDEX 869 TORT, matters of defense in action of not ground for removal of suit .... § 206 joint actions; removal to Federal Courts § 214 action by consignor against corporation § 243 of predecessor; railroad company not liable for § 254 See Actions Ex Delicto; Embezzlement. TORT OR CONTRACT, election of remedy; form of action § 319 TOWN COUNCIL, power to fix water rates § 95 TRADE, and commerce; Act of 1890 to protect note, § 11 combinations in restraint of § 445 TRADE UNION, agreement by executive committee of corporation with; status of stockholder to attack note, § 261 TRADING CORPORATION, in England may maintain action for libel calculated to injure business, etc , § 335 TRAIN CONNECTIONS, jurisdiction of railroad commission as to § 119 TRANSFEREE, of warehouse receipt; liability of warehouseman to damages for refusal to deliver wheat to § 314 TRANSFERS OF STOCK, pledge for collateral security; liability of pledgee as stockholder; national banks; bailment § 277 as affecting liability of stockholder for unpaid installments § 288 TRANSPORTATION COMPANIES, regulation and control of § 21 TRANSPORTATION CORPORATION, enforcement of penalty for bringing alien immigrants with con- tagious diseases § 100 TRANSPORTATION FACILITIES. See Railroads. TRANSPORTATION LAW, of New York; consent to construction of extension of telegraph lines § 96 870 INDEX TRAVELING SALESMAN, when cannot recover statutory double damages for loss of baggage. § 314 TREATIES, with Constitution and laws are supreme law of land § 2 vaUdity as ground of jurisdiction of Federal Supreme Court. ... § 158 TREES, trespass quare daiisum fregit for cutting down § 330 TRESPASS, hes against a corporation § 328 jurisdiction, transitory action of; parties residents of other States than that of suit § 188 equity has jurisdiction to protect real estate from § 236 lies against corporation for assault and battery § 328 against corporation to recover damages for personal injuries. ... § 328 mesne profits § 329 for mesne profits lies against a corporation § 329 not proper form of action for injuries caused by negligence of servants of corporation § 328 for mesne profits to recover value of oil mined § 329 injury; liabihty for acts of servant note, § 317 TRESPASS ON THE CASE § 332 proper action for injuries caused by negligence of servant of corporation § 328 lies against corporation § 332 when lies are concurrently with assumpsit § 333 TRESPASS QUARE CLAUSUM FREGIT § 330 against railroad company for constructing railroad § 330 hes against corporation § 330 lies against railroad corporation § 330 TRESPASS VI ET ARMIS, lies against corporation § 328 TRIAL, enforcement, by Secretary of Commerce and Labor, of penalty, without judicial trial § 100 place of; criminal law; single continuous act; Elkins Act; dis- crimination in rates; rebates § 458 TROLLEY. See Electric Street Railway. TROVER AND CONVERSION . § 340 trover lies against corporation § 340 INDEX 871 when corporation no sufficient right to property to maintain action § 340 trover lies for wrongful converson of stock § 340 title necessary to maintain auit for conversion of stock § 340 when action is for trover and not for breach of contract of bail- ment note, § 340 when trespass and not trover alleged for injury, etc., to trees and timber. § 330 when does not he; cutting down and carrying away timber § 330 legal currency may be subject of action of trover § 340 removal and conversion of ores from mine; person liable not en- titled to be credited with cost of mining the ores § 340 when wrongful refusal to transfer stock on corporate books is a conversion § 340 when bank liable for conversion of bonds § 340 demand and refusal to charge conversion § 340 TRUST COMPANY, prospectus issued by; when basis of action for fraud § 339 when demand and refusal necessary to charge it with conversion of bonds § 340 TRUSTEES, board of not a corporation for jurisdictional purposes § 177 action against for an accounting; parties § 261 individual liability of to creditors where capital stock not sub- scribed § 265 of funds for dividends; suit by stockholders against; defenses; counterclaim § 270 TRUST FUND, of insurance company in hands of State auditor; jurisdiction over of court § 128 "TRUST FUND" DOCTRINE, capital stock; unpaid subscriptions § 279 See Equity. TUNNELS, under navigable water; ordinance as to construction of when not a contract under the contract clause of the Constitution § 21 right of railroad to maintain under navigable water subject to right of navigation § 25 power of city to compel railroad companies to remove tvmnels under navigable river at latter's expense § 25 u ULTRA VIRES, act; injunction at suit of stockholder to prevent § 268 872 INDEX ULTRA VIRES— Continued: contract; assumpsit for money had and received § 321 contract; assumpsit against bank § 323 UNITED STATES, Constitution and laws of; supreme law of land § 2 offense against; act of Congress as to discharge of employ^ when member of labor organization § 2G certificates of indebtedness of; taxation § 73 franchises or privileges conferred by; extent to which State can- not tax § "^ as plaintiff; right to recover from bank; forgery of payee's name on pension checks; internal revenue taxes; action against railroads § 252 may bring action to collect taxes on bank § 252 as plaintiff; right to recover from bank; forgery of payee's name on pension checks § 252 party plaintiff; action against railroad § 252 party plaintiff; suit to collect taxes § 252 party plaintiff; suit against bank; forgery; pension checks § 252 offenses against § 443 See Federal Government; Constitutional Law; States UNITED STATES COURTS. See Courts. UNITED STATES REVISED STATUTES, § 709; as to examining final decree of State Court § 158 UNITED STATES SUPREME COURT. See Courts; Federal Supreme Court; Jurisdiction of Courts. UNLAWFUL RESTRAINTS. See Commerce. UNPAID STOCK, when is and is not asset § 280 stockholder's habiUty for, to judgment creditors; parties § 299 UNPAID SUBSCRIPTIONS, a trust fund for creditors § 279 or unpaid stock when are assets § 280 when are not assets § 280 liability of stockholders to creditors §§ 288, 289 hability of stockholders for; parties § 290 USURY, by national banks; effect of § 66 V VENDEE, action by, for fraud ; false statements in prospectus § 339 INDEX 873 VENDOR, false statements by, in prospectus § 339 VENUE, defined § 91 VESSEL, place of taxation § 61 when consignee no claim against, for injury to cargo § 244 VESTED RIGHTS, right of State to alter, etc., charter should not interfere with § 25 VIADUCTS, over grade crossings; power of State to supervise and control. ... § 24 crossing several roads, power of State to apportion expense .... § 24 power of city to compel railroad to repair § 25 crossing railroad; apportionment of repairs by city council.... §93 VINDICTIVE DAMAGES, against corporation for false imprisonment § 331 w WAGES. See Lien. WAIVER, of award in condemnation proceedings § 127 of defense of adequate remedy at law § 165 of objection to jurisdiction by appearance § 201 of jurisdictional defect as to particular district § 202 of failure of foreign corporation to allege and prove capacity to sue § 233 of remedy on implied contract to return consideration § 259 imphed contract may be waived and suit brought on tort § 259 election of remedy; contract or tort; form of action §319 WANT OF CAPACITY, of foreign corporation to sue; waiver of § 233 WAREHOUSE COMMISSION. See Railroad and Warehouse Commission. WAREHOUSEMEN, suit against, by consignor § 243 liable for damages for refusal to deliver wheat demanded to transferee of warehouse receipts § 314 evidence of negligence as, when does not warrant recovery for negligence of carrier § 318 equity no jurisdiction to fix rates § 40S 874 JNDEX WAREHOUSES, power to regulate public warehouses does not include elevators or private persons; when § 57 when equity will not compel railroad company to own and operate § 403 and compress lease fixing rates; when party not sufficient in- terest to invoke aid of equity § 404 See Elevators. WARRANTS, when within principle of exemption of governmental agencies from taxation § 69 WASTE, by directors. See Directors. WATER, petition for condemnation of; jurisdiction in special cases § 87 jurisdiction of State board of control to adjudicate water rights. § 93 State may declare all water for sale, rental, etc., to be a public use § 95 See Navigation. WATER COMPANIES, regulation and control of § 18 jurisdiction of Circuit Court; validity of contract between municipahty § 208 flooding land; nuisance § 334 when mandamus lies and does not lie against § 373 WATER RATES. See Constitutional Law; Rate Regulation. WATER RIGHTS, contested title to; Federal question; jurisdiction note, §208 WATER SUPPLY, condemnation proceedings taken to State Court may be removed to Federal Court § 127 WATERWORKS COMPANY, pleading in action against directors for maladministration § 264 WAYS, petition for right of way; jurisdiction in "special cases" § 87 See Right of Way. WHARFAGE, held governed by local State laws; remedy is in legislature where rates as fixed are unreasonable § 34 INDEX 875 WHEAT, refusal of warehouseman to deliver, etc.; liability for damages to transferee of warehouse receipt § 314 WILLS, equity jurisdiction of Federal Circuit Court as to § 169 WILSON ACT, interstate shipment; delivery when complete § 52 intoxicating liquors; interstate shipment; "arrival"; original package §§ 53, 54 purpose of; exclusion of intoxicating liquors from State § 54 inspection of intoxicating liquors after they have ceased to be articles of interstate commerce s 59 WIRES, of electrical companies. See Poles and Wires. WITNESS, contempt; power of Interstate Commerce Commission § 137 compensation to; notice to corporation to produce books, etc., before grand jury s 133 WORK, performed; corporation may sue for § 227 WRIT, defective or service of summons on person irregular; jurisdiction acquired §83 hes to enforce discretionary or ministerial duties § 356 does not lie to enforce discretionary duties § 357 See Mandamus; Praecipe; Prohibition; Quo Warranto; Writ of Error. WRIT OF ERROR, Federal Supreme Court; fundamental question; jurisdiction... §157 Federal Supreme Court cannot deal with facts § 158 after 1891 to Federal Supreme Court § 159 from final judgment of State Court; what is final judgment. ... § 204 under § 709 of Revised Statutes of United States, as amended note, §204 to Federal Supreme Court to review judgment of State Court denying defense § 208 WRONGFUL DEATH, State statute as to actions for, where death occurs in another State § 199 joint action for; removal of suit § 214 WRONGFULLY SUING, out attachment § 337 m SOUTHERN REGIONAL LIBRARY FACILITY See Spine for Barcode Number UNIVERSITY OF CALIFORNIA LIBRARY Los Angeles This book is DUE on the last date stamped below. 0Cl"3r74 FEB 2 1981 taw litirai^ Mt FEB2V li^oi MAR 1 3 1981 law liijrani Rec'd ^'- / : MAR 16 1^81 Form L9-Sei-ies 4939 H^- J>. Ililiilii ii ill iiiiliiiiiiliiiil liiililii mm iiiiiil ;Hiiiiii: