FEDERAL REPORTER ,vol.
42.
thereon; that the corporation became insolvent; and that of its creditors, recovered judgment against it in an Ohio stfJ-te court, upon which judgm(jnt e:lCecution was returned unsatisfied. The complainant now seeks·;. by this bill, in behalf of itself and the other creditors,to compelpaymeotby the defEmdant of the amount of said subscription to tbecapital stock. No judgment bas been recovered against tbe railroad corporation in tbe state of New York. In the three cases of Claflin v. McDermott,12 Fed. Rep. 375; Walser 'T. Seligman, 13 Fed., Rep. 415; and NationflZ Co. v. Ballou, ante, 749,Judge WALI,ACE' held that a creditors' bill in this court could not be sustained which was based only upon a judgment obtained against his debtor in a state court at the place of his domicile, in another state, and upon an un!'1atisfied e:lCecution issuing out of that court, no judgment having been recovered in this state. No distinction of importance is perceived, and none has been pointed out, between the last two cases and this case. The bill does not seem to be authorized by statute which permits the liability to be enforced by an immediate resort to a court of equity in case of the insolvency of the corporation. In the Tube- Works 0>. Case the judge says that he qoubts whether a too technical view has not been adopted in and hopes that the last case may be taken to the supratnecourt' for review, which has been done. Unless a valid distinction can, be shown between the case at har and the precedinj:( cases, '. the demurrer must be sustained; in the present state of the decisions in this circuit. The'demurrer is sustained;
& S. Col.niT. L
Co.'". TOWNSHIP
()F
at
(Ci.rcuit Court. D. South Carolma. June 23. 1890.) RAILROADS-MuNIOIPAL Am-DELIVERY OF BONDS.
, ereeu. S.
1l:! St. at Large S. C. 866, authorized certain townships to issue bonds in aid of a railroad, whicq was done; and they W,ere deposited with a trust company to be delivered to complain.ant,' W'hich WIlS build,ing the railroad, when the road was shown to be complete by certificate of its engineer, indorsed by thll chairman of county of the countr. ,.Theqhairman refused to make such lllddl'semeat ''O\:Hhe''8trengtb'OfadeClslOn of the state supreme court that the issue of bonds was void, as there was no law conferrillgon townships corporate functions, they being merely divisions. But thereafter the legisP"a.SBed, act,"'<,:#l af( L,'arge, expres.sly recogniZing the bonds as Ii ,toW;nShlp debt, and autJlp,rl,zmg the levy ofa tax to pay them. Beld that, as the the bonds to complainant should be de-
'
"
,
APPEAL-BoND-AMOUNT.
On appeal from sucb decree for the specific delivery of the bonds, the amount of the supersedeas bond, nnder supreme court rule' No, 29, will be fixed tb cover the coupons already due and to mature in four years" with 7 per cent. interest, '10 per cent, damage on the aggregate of interest, and the costs.
In Equity. :1Jbrd Hart, ,for complRinant. A.' Rol MileJt" ira; 'Jones. and W. B. WilBon, Jr., for defendants. Before :B0Npan,d ..8wollTON"JJ,,::
HASSACHUSETTS' &
CONST.CO·. tI. TOWNSHIP OF CHEROKEE.
751
SIMoNr£oN, J. In 1878 the general assembly of South Carolina incorporated the Georgetown & North Carolina Narrow-Gauge Railroad Company. ,This act was amended in 1882, 1883, and 1885. The only amendments which bear on this case are one by which the name of the corporation was changed .int0 that of the Chadeston, Cincinnati & Chi. Railroad Company, and the one providing that townships, on certain conditions, were authorized to subscribe to this road. This last aowndmentis in these words, (18 St. at Large S. C. p. 366:) "Sec.H.·It shall and may be lawful for any county or township interested in theeonst.ruction of the said railroad to subscribe to its capital stock such sums, as a majority of tt\evoters voting at an election held for that purpose may. auth,orize the county commissioners to subscribe. which subscription shall be made at 7 per cent. <lO\lJ>on bondfl.payabletwenty-five yea.rs after tile date thereof, and to be onhe'{jehomination of $100; $000. and $1,000." "Sec. 14. Such counties' and itownships as shall votef9r subscriptions' are hereby created bodies politic and corporate under their' respecti ve names, and are vested' with powers necessary· for carrying out the prOVisions of this act; and the. county of,any. couotyso incorporated, or of any ,county in which shall be situated any, township so iucorporated, are hel'eby declared to be the corporate agents of 'such county or township." At,UtE! time of the passage of this/act, there was 00 provision. in the constitution of South Carolina, or in any act of assembly of that state, conferring any corporate (jr other function or duty on townships.. They' were l$imply territorial names, covering. a certain portioo of aeounty, usedrforeonvenience (mly:. On 5th,:September, 1885, an election, was held under this act in Cb,eI»keetownship, York county, and a subscription of $25,000 voted-to the, capital stock of this railroad company. Thereupon the countYComtnissioners of:York ceunty made the subscription, and prepared alild e.xecuted the bonds. By an agreement made between the railroad company, the Massachusetts.& Southern Construction Company, (the complainants,) and the <lounty commissioners, these bonds were placed in the hands of the Boston: Safe-Deposit & Trust 'Company, to be. to the complainant as the construction progressed between certain points in this township, so that, upon the completion ofthe road through the township, all the bonds should be delivered. The delivery was tp be made upon thecertifi.cate of the engineer of the complainants that the road had been so completed, indorsed by the chairman of the board. of tbe county commissioners. Under this agreement the road was built through this township. It was accepted by the railroadcommissionerson thEl 1st day, of December, A. D. 1888. Sixteen thousand six hundred dollars of bonds have been delivered to the complainants, leaving $ih400 still in the hands of the Boston Trust Company. The chairman oOhe countycommUlsioners of York comity refuses to indorse the certificate of the engineer that the road has been completed through Cherokee township, although he admits this fact to be true. The Boston Trust Company have inc;lorsed the bonds as required by the agreement, and have them in hand ready for delivery.' In fact the company is anxthem, and are only awaiting the action of the chairman ious to of the county commissioners. They have no claim upon, and nointer-
752
FEDERAL REPORTER,
vol. 42.
est whatever in, the bonds. The bill is against the township, setting out tbese facts, praying a specific performance on the part of the township of its contract, and the delivery to complainant of these bonds, and for general relief. The refusal of the chairman of the board' of county commissioners is -based on this ground:.The supreme court of South Carolina, at April term, 1888, after these bonds had been prepared, signed, and deposited with the Boston Trlist Company, decided that township bonus prepared and iunder the provisions of an act, in this respect, like the one providing for these bonds, were issued without constitutional authority, and were void. Floydv. Perrin, 30 S. C. I, 8 S. E. Rep. 14. It may be noted that the of the county commissioners was not bound, under the agreement, t{) express or pass any opinion on the validity of thesebpnds, nor was he to exercise any discretion whatever. All that ·he was to do, under .the agreement, w.as to state a fact, to-wit, that the railroad was built through the township. The consequences of that fact he was in no sense responsible for,asthe!board had already done everything towards the issue 'CJf the bonds upon the occurrence. of the fact he was called upon to state. The case of Floyd v. Perrin having been decided, the legislature passed in December, 1888, an act to provide for ·the payment of township bonds issued in aid of railroads in this state. · 20 St. at Large, 12. The constitutionality of this act has been sustained ·in Stalev. White8idea, 80 S. C. 579. 1 The act recites that certain townships in this state have by vote expressed willingness to be taxed to pay bonds issued by them in aid of certain railroads, which bonds, by reason of a defect in the acts authorizing theiJiissue, have been declared invalid. For the purpose of carrying into effect the expressed will of the · people of these townships, it is enacted that the township bonds hereto·fore issued by county .commissioners, as ·the corporate agents of any township in this /:ltate, inlaid of any 'railroad, by vote of the township, are declared to be debts of the township which authorized the issue of the same, the interest and principal to be paid, by a tax levied annually ·on such township for that purpose, to the holders of such bonds, as the interest may become due according to the terms·thereof. All dividends on stock received for such. bonds are pledged to the payment of such interest.. No tax sHall be levied until the road is completed through the township, and accepted by the railroad commissioners, and no interest wHich accrued on said bonds beforesllcn completion is to be paid. This act distinctly recognizes and im poses on the townships these bonds as a debt of the township to be paid by the taxes levied on it,and not a debt to takeefl'ect from tHe passage of tHe act, but a debt payable, as to its interest,.from tHe day the road is compl$ted tHrough the tOwnship, and is accepted by the railroad commiSSioners. The bonds issued before the act was passed are recognized as in existence. The issue of no new bonds is required, and such bonds are declared to be the debt of the township, II.ccordingto their terms. That is to say, the bonds fix the amount of .1G
B. E. Rep. 661.
MASSACHUSETTS & B. CONS'.l" CO. V. TOWNSHIP OF CHEROKEE.
753
the debt, the interest payable thereon, the time for the payment of interest, the time for payment of principal, and the person to whom payable. As the taxes are to be levied annually, and when collected to be paid to the holders of said bonds, such holders are entitled to the possession of the bonds as muniments of title. Such is the result of the opinion of the supreme court of South Carolina in State v. Neely, 30 S. C. 605, 9 S. E. Rep. 664. If, as is contended, this is but the expression of an opinion upon a matter not necessary to the decision of a question before the court, and so obiter dictum, we may construe the act for ourselves, and, doing so, have reached the same conclusion. The railroad having been completed ,through the township, the complainant is entitled to possession of the bonds. But the defendant insists that this right cannot be enforced under these proceedings. It objects to the jurisdiction of the court because the defendant the Boston Trust Company is a citizen of the same state as the complainant. But no relief is asked against that company, no delict of the company has been set up, no act of it complained of. The pleadings and testimony all showthllt it is a mere stakeholder, with no interest whatever in these bonds,-with no interest in the controversy as to their validity. It is called in to see merely that the! defendant township does an act in fulfillm:ent of its obligation to complainant. Then the trust'compll.ny can complete its duty. Foster's Fed. Prac. § 18, p. 26. It is said that the chairman of the board and the clerk of the board should be parties.. The former is one of the agents of the defendant corporation"and the laiter- is his agent. The only act they can do is, as such agents, for and on behalf of the princi-pal, to certify that the road has been completed through the township. when the principal is present, the court can deal with it directly, can ascertain as a matter of fact whether the road has been completed through the township, and, if upon this fact depends the delivery of the bonds to the complainant, can orderand direct such delivery. It is also alleged that complainant in this case is the assignee of a corporation of the state of South Carolina, and caonotsue a citizen of the in the bill is the state of South Carolina in this court. The relief possession of certain bonds to be held and used as muniments of title elsewhere. The bill does not seek to collect these bOlids, or coupons on them, or to collect the debt or any interest on it. It comes wholly within Deshlerv. Dodge, 16 How. 622. The question is as to the form of a decree. The bonds are to be delivered to complainal1t when the road has been completed through the township, and when the agent of the defendant certifies to that fact on the engineer's certificate. The latter is in the record. The defendants' agent refuses to indorSE> it. The fact remains, however, that the road has been completed through the township, The .certificate providing for the delivery of the bonds was for the mutual convenience of the parties. The court cannot permit that which was intended for mutual convenience to be used by one of the parties as an unreasonable obstruction. The act of the chairman in indorsing the certificate would be an act binding v.42F.no.13-48
75.4
FEDERAT, REPORTER,
. ,I
his principal as to the fach')fthe completion ofthe road.·, .Fbrthis pose only. would it be desirable. .The principal being the decree can bind it as effectually to the admission of this fact as his certificate would. It is ordered that the ,Boston Trust Company deliver to complainant the bonds properly certified. . ,'i'
BOND, J., concurs. fo
MOTION TO FIX'l'HE AMOUNT 'OF THE SuPERSEDEAS BONDS.
J. 'the is ,on the amount of the supersedeas bond t()be !g!ven in each ofthesecases, an appeal in each of them having been allo;\Ye(,l. . If these cases had been brought to enforce a. Bubscription in bonds,' and ifthe pourthitd assumed jurisdiction anctgrimted this relief, ,the could. ri.qt., obtaip a lfUpersedeas without giying security for all coupons and interest already and such may mature'duringthe p,endency of tpe appeal, 10 per cent. by of damages, and the costa ,of the Gases·... would h,e, the Ihllit pf appellees' rights, UD:d.,,.e.· r.· r.pl.e.29 ., . . . . eis r.·.e.me co.u.rt,.....BU t . .. ac.tio ns w.erebrought fo.rthe . coupons th,e;lIandsofthe Boston SafeTrust Con,j munimen,tS oftitle, for tIle purpose ofpresentmg thegoupons for pay.ment to the cO\lntytreasurer under the act of the legiSlatur6.·pfSouth Decetriper, 1888. The granting ofa supersedeliverY of the bonds and coupons. TheresuIt Ult9at, npt to its cou,pons to the county trell.B- ' urer,. the complainant is kept out of, its' money on them, payable under that act. The caSell, come under the .latter clause of rule 29. 'We rmist secure the"complai.Oant indemnity for the use and detention of money, the costs thel;lltSes,. and just damages for delay, and costs'.imcl interestl;ln .the llPpeal. . for the detention ofmoney, damageS therefor, are measured by Interest duri l1g Let it be C,puP9fll'l;ill E(ach .'yaSe have already matured on these bonds c<;nipons on said bonds will mature duri,ng four fronis,eporid Mondayil?- October next. Let interest,at the rate of 7 per cent. per annum be cal,culated on these coupons up to the period.:>f fouryea,rs 'fr.om secopd Monday in October, and 10 per cent. damages on the aggregate of interest so ascertained in each case, and the costs of the case. In each case. let a bond be prepared, with surety, for the aggregate so aSOOFtained iIi each case; and when such bond is approved, ifpresented withipthe time,allowed by law, it shall operate as a supersedeas. ' ' .
of
.
NOTE·· Several other cases presenting precisely the same question as in theOa86 oj' Oherokee TowriShtp. but against other tOWDBhip8. were submitted at the same time with this case. ' .. ., "'t
BELL V. FOXEN.
.755
BEJ.L V. FbxEN
et al.
(Owcuit Oourt, S. D. Oalifornia. May 111, 181lO.) 1. EJECTMENT-PLEADING-COSTS
In ejectment for land of which the several defendants had taken possession, each claiming a certain portion, where some of the defendants enter a disclaimer. and others, withplaintifl"s consent, agree to a judgment against them without costs or damages; the remaining defendants, who only plead the general issue, are, on a general verdict against them, liable for all the costs and damages. . Ejectment lies against persons who have entered on land, and claim possession adverse the true 0'Yner, though they are not personally in possessiolj. at. the commencement of the actIon.
AND
DAMAGES.
BAME-POSSESSION.
James
At Law.
Ejectment. and Charle8 Fernald, for plaintiff. Waldo M. York, for defendants.
Ross, J. There can, I think, be· no doubt about the facts of this case. Thellction is ejectment, and the land in controversy is a part of the Rancho La Laguna de San Francisco, which was a Mexican grant, confirmed and patented by the government of the United States. At the trial plaintiff deraigned title to the portion in dispute, which title vested in him long prior to the acts of the defendants complained of. In January of 1889 the defendants entered upon the land, asserting that the patent was Qbtainp.d by fraQ-d, and that the land was public land of the United Statesi surveyed and staked it off, each posting a notice that he claimed 160 acres thereof,and some erecting shanties and some tents upon their respective c1aims,and in one or two instances taking possession of small houses thM the plaintiff had theretofore erected upon the premises. The case shows that the action of the defendants was in pursuance ora concerted plan on their part to assail the validity of the patent under which the plaintitJ' holds, and to assert a right in themselves to the possession of the land; and, although they did not long remain in personal, physical of the land, they continued to maintain their notices and claim to it,and, when remonstrated with by the agent of the plaintiff, continued to assert the invalidity of the patent, and that the land belonged to the government, and that they were therefore entitled to the possession of and daimed 160 acres each; and.this claim was reiterated to the marshal of this district when serving the process issued in this action. The land in question is a large body of grazing land, and by these acts of the defendants plaintiff was prevented from ren'tingit for grazing purposes, which he otherwise could have done, its rental value being$1,500 per annum. In respect to some of the original defendants, namely, J. M. Birabent, Luis Birabent, William Foxen and J. W. Oliver, the action has been dismh'sedj and some of them, to-wit, Gustavus A. Davison, John T. Rice, William E. Shanklin, C. H. Mills, F. M. Tunnell, and William B. Holland have filed written consp.nt to judgment against them, without damages or costs, to which consent plaintiff in