FEDERAL
52.
}>l'ov.ements ·Q.nd,. th$ pz:opeliy t the complainanta shall, for, 90 daya option, have the ,ot:'tion to pay the after theexpimtionoMhe appraised value of the land, andi tipol'1the paymen1J'thereofinto the of tn-A defendant to the compJaillants,or tpe.clerk'soffice for them, l;l;. qeedJor said land, so to do" t.he decree shall operate. the legal title to il1 thecomplaiIlapt,s i that', if the defepdant .declines to exercise h,i.s ,o,ption to va)ueotthe improvementslUlp.take the property within .tlwtirne the complaimmtsdecline to exercise pay the: pf ·t4e land within the time then, their. of either' the. ;said ;de(epdant or .the. complainants, the upon. court Will.c:Jil'ect said l.anq, with theimprovemeIltsthereon, to oe sold by the mastel'" t\fter, giyingthe usul1-1nqtice, to the· highest. bidder for cash in hand., purchas!jr a de!ld for the which shall the effectto thE: purchaser aU the. right, titI.e, estate, aQdiJlte,l'Elst,of,the saiddefend,ant and co111plainants in- said Jandandthe tbere/:)ll.,l,lndsaid purchaSl:\r shall be let into the of the .Mwr paying, posts of .the suit, the ing S1l16,Q{ !¥lid land and improvements shall be paid tl;) the ,in the proportion that the value improvements belj.l'S!Ji> Vialue oftl;ie of
{
, SEABOARD &;
rel. B:uN"r.l1reasurer, v.
R. R.
(OtrQuft,Oourt, E. D.·NpT,tJl, .OaroUna. September 20, 1892.)
i. ·tur'LROAn CoMPiNIEs-TUATION....:QoNiRAoT. ,.".". ' in 1847, (Laws N. O.' The charter of the Roanoke Railroad Company, granted
, ,As the right to the tax.dependedelitirely on contract, the fact thatthe statenever , demanded,liny tax, until ,1,891 it from, then assessing the tax ,for . year frOm whICh tllne llrofltshad exceeded 6 per cent. per annum. ·If laches cQuld.'beJmputable to the legislature in failing to make demand for so long a ti.\lle, it eX;cuse.d: by tjlllfallt that no report. of j:ha, compallv's business was evermad!l; as required by sectiol! 88 of the until 1889. ...'S;. SAHE-'-EtoFEOT <b'CONSOLIDATIO*. : . ·.. The Railroadlayen,tI.rely In NQrth bl,ltterminated at Margar. on the porder of Virginia., 4t therj:lexis.ted a cor-,., poratlOn\ ·the Seaboa/'d & Roanoke COmpany, ownmg a road' lymg mostly 10 that 'state, to Margarettsville·. In ·1849 the legislatures of the two stateil consolidated the two corporations, the North Carolina !loct declaring (Laws 1848-49, c. 83, § 12) thMl'ttiestookhOlders of the Seaboard & RoainOlte Company were thereby ; constitute\l. stollkholders in .the Roanoke Company, with same rights, powers,
2.
87/)Pfovides.insec,Uon.24taataIl the property of the company shllll be vested In the stockholders in );lI,'OP9rtion to their shares, and "the same shall be deemed p6raODaJ.estate, and shlill bEl exempt from any public or tax whatsoever fpr the t4lrIll of 15 years jandtb,ereaftel,'the legislature may im{lose a tax not 2(> cents per spare on each share of the capital stock whenevertlleannual prolltsthereofshallexoeed six per·cent." Section 38 requires th ....e o.f the com.'1>lIny to m. to the. . report of receIPts and expenditures. that the 1'1ght of the legislatUre to Impose the charge did not taxing power; but lipon the charter contract by which it grantedthe,fr.. properly payable by the corporation, and not by the individual shareholders. .
STA-Tl!:
v.
SEABOARD & R. R.
00.
451
privileges, and franchises as'iftheyhad an aIllount In the Roanoke Company. Held, that this act operated:toiinoreasethe s)lares of ,he Roanoke Company by all the shares of the Seaboard 81; Roanoke Company, and that the latter company became subject to the burd'e\lstipulated for in ,the charter qf the former, andwas bound to pay the tax on all its shares, irrellpective of the pr'oportion " ' of its property lying in North Catolina, or of citizenship of its stockholders. '
, At Law. iActi,on by the state of North Catolina, on the relation of' Bain, public treasurer, to recover a tax alleged to be due from the Seaboard & Roanoke Railroad Company. Judgment for plaintiff. Atty. Gen. Davidson, C. M. Busbee, F; H. Busbee, and Armistead JcYne8, for plaintiff. L. R. Watts and Batchelr:rr &: Devereux, for defendant. SEYMOUR, District Judge. This action was brought by the public treasurer of North Carolina to recover certain taxes alleged by him to be due by the defendant corporation under its acts of incorporation and under chapter 323, § 38, of the Public Laws of North Carolina of 1891. By the last-mentioned act, the general assembly imposed a tax upon defendant company of 20 cents per annum upon each share of the capital stock of the defendant for the years from 1862 to 1892, both The Seaboard & Roanoke Railroad Company is in North Carolina the successor of the Roanoke Railroad Company, chartered in 1847. 'Laws N. C. 1846-47, c. 87. Section 24 of said chapter 87 contains the following provision: ' ".All machines. wagons, vehicles. and carriages purchased. as aforesaid. with the funds of the company, etc., and all the works of the said company constructed or property acquired under the authority of this act. and all profits which shall accrue from the same. sball be vested in the respective stockholders of the company forever. in proportion to their respective shares, and the same shall be deemed personal.estate. and shall be exempt from any public charge or tax. whatsoever for the term of fifteen years; and. thereafter the legislature may impose a tax not exceeding 25 cents per annum per share on each sbare of the capital stockwbenever the annual profits thereof shall exceed six per cent... At the time of the passage of this act the Roanoke Railroad Company had an actual capital of $200,000, with the privilege oC increasing the same to $400,000; and its line of road extended from Weldon, N. C., to Margarettsville, in the same state, but on the borders of the state of Virginia, a distance of a little less than 20 miles. At the same time, there existed in Virginia a corporation owning a line of railroad from about 60 miles in length. Portsmouth, in that state, to By the act of 1848-49, c. 83, (Laws N. C.,) the stockholders of this corporation, known as the Seaboard & Roanoke Railroad Company, were constituted stockholders in the Roanoke Railroad Company. Section 12 of said act reads as follows: . Be it enacted by the general assembly of N. C·· " etc., "that. from and after the time when this act shall take effect, the stockholders of the S. & R. R. R. Co., a corporation incorporated by the legislature of Va. by an act d;lted Feb., 1847, and otber acts. be. and they are hereby. constituted stockholders in the Roanoke R. R. Co.· incorporated by the legislature of N.
452
FEDERAl. REPORTER,
voL 52.
C. by 15. 1841. with the same rights, powers. privileges. and francbises..:as if tbey had subscribed an equal 'amount in the said Roanoke R. R. Co.; and alltolls. franchises. rights. privileges; powers. and profits then or at .al,ly tilDe thereafter owned; acquired. or enjoyed by the stockholders of said Roanoke R. R. CQ. shall belong to the stockholders of the said 8. & R. R. Co. in proportion to the number of shares by each of them owned; and. from and after the time when this act shall take effect, all property owned. acquired. or enjoyed1;>y either of said corporations shall be taken to be the joint property of the for the time being. of the two corporations." The only other atitutory provision necessary to be considered is section 38 of the first-cited act, the one chartering the Roanoke Railroad Company. It reads as follows: "Sec. 38. That it shall be the duty of the president of the said company on the first week.in December of each and every year to transmit to the general assembly correct statement of the receipts and expenditures of said company dliringthe year preceding." The has been heard tipon bill and answer, and certain admitted facts. The, material facts admitted are the following: (1) The company did n6t earn 6 percent. for the years 1862 to 1865, inclusive_ (2) The nimiber of shares in the consolidated company known as the Seaboarir&Roanoke Railroad Company was from 1866 to 1868, inelu!sive, 8,682 shares; for 1869, 11,293 Shares; for 1870, 12,314 shares; 'for 187J.; 12,784 shares; forJ872, 12,784 shares; for 1873, 12,801 shares; for 1874, 12,998 sh'ares; for 1875, 13,404 shares; for 1876, 13,494 shares; for 1877, 13,504 shares; for 1878, 13,504 shares; for 1879, for 1880, 12,996 shares; for 1881, 13,013 shares; for 1882, 13,Ot7 shares; for 1883 l 13,022 shares; for 1884, 13,028 sp.ares; for 1,38.$-1891, shares. (3) Of this number 261shares.only are owned by and .residents of North Carolina. (4) That no tax was ever imposed on the Seaboard &: Roanoke Railroad Company,under the provisions of charter, until·the one in question. (5) ·That theeEiaboatd & Roanoke. Railroad Corppany never filed with the legisl.atu.re . iiD.Y rEip.drt of its receipts and disbursements, as required ... (6) Since 1866 the company Iby the charter, until November, 1889. shares. ;hasoorned lUt>'Wardsof' 6 per cent. on its : . The contention' of the defendanti's (l.) that the entire tax is in'violationof the'cohtraotwith the state created by the charter of 1847; (2) that, if defendant be liable at an for the tax, it is only liable for a pro rata portion thereof, proportionate to the amount of its mileage in North Carolina; '(3) thMthe tax, the right to levy which is reserved by the oharter of the Roanoke Railroad Company, is one on the stockholders offhe company, 'andean only be levied on resident stockholders, and lipon them, notror past years, but only for the year immediately preceding the levying of the tax,. It would be difficult, perhaps, to sustain the tax sued for as a property tax, underthe·constitution·of North Carolina, or apart from: its contract character as a tax 'on the franchise of the road. Possi bly the imposition for which the state sues might be described as something due the state, but not in the nfl.ture of a tax at all. The right of the state to
its
i.
STATE V. SEABOARD & R. R. CO.
453
collect the amount sued for does not grow out of its power to tax, but out of its power to charge a price for the franchise granted by it. It is not a tax on the property of the road or of the shareholders, because it is not measured by the value of the property or of the shares. It is an . imposition annexed to the franchise as a royalty for the grant; the contract price to be paid by the company or its shareholders for the franchise granted to them. Bank of Commerce v. New York Oity,2 Black, 620; Attorney General v. Bank, 4 Jones, Eq. 287. This being the nature of the plainti.ff's right, no technical rules embarrass the questions in the case. They all depend on the ordinary rules relating to the conare-First. Is the imposition struction of contracts. These properly placed on the company, instead of the private stockholders? Second. On what stock is the 20 cents a share properly chargeable? Third. For what years can it be charged? 1. The statute, (Acts 1846-47, c. 87, § 24,) after vesting the property of the corporation in its stockholders, and declaring it personalty, provides that "the same"-that is, the property of the corporationshall be exempt from any public charge for the term of 15 years, and that thereafter the legislature may impose a tax "not exceeding twentyfive cents per annum per share on each share of the capital stock whenever the annual profits thereof shall exceed six per cent." It is evident, in view of the above phraseology, and of the fact that the tax is upon the privilege of the franchise, that it rests upon the company as a company, and is properly chargeable upon the corporation. The rate of 25 cents per share is mentioned to fix the amount of the charge, not the persons from whom it is collectible. '2. No definite number of shares of stock is mentioned as thenum. ber which shall regulate the imposition upon the company. By the original charter, the number of shares authorized was from 2,000 to 4,000. It is reasonable to suppose that, in fixing a compensation'for the franchise to be paid as a rental during the entire existence of the de. fendant's charter, it was contemplated that the amountto be paid should increase as the capital of the company should increase, However that may be, the contract is plain enough. The tax is upon each share of the capital stock. When the legislatures of Virginia and North Carolina consolidated the Roanoke with the Seaboard & Roanoke Railroad, it was expl1essly provided that the shares of the Roanoke Railroad should be increased by the shares of the Seaboard & Roanoke Railroad Company. The same act which gives the defendant immunity from all other taxation than that of 25 cents on each share of its stock places each share of that stock in the condition of the shares of the original corporation. The Seaboard & Roanoke Railroad stands in the shoes of the Roanoke Railroad Company, with its privilegE's and its contracts. The legal effect of the act of 1849 is the same as ifit expressly provided that every share of the Seaboard & Roanoke Railroad should after the term of 15 years be liable to the tax of 25 cents a share. No other effect can be given to the whole act, and, in particular, no other construction can result from the words, "the stockholders of the S. & R. R. R. Co. are
454
llIEDERAL, REPORTED,
vol. 52.
hetebyconstit1;lted stockholders in the·Roanoke'R. R. Co." The numberof shar,ea oLthe· defendant COlJlpa;oy-can:not 'p'Elincreased without its consent, but;: .Whenincreased by 'such consent,.. theproportional rate of . compensation chargeable against tlJ-e companY'on' aCCoimt of the franchise is increased in accordance; with the terms. M the original charter. The view which the court takes of'the 8Ub lite disposes of the contention'of defendant that the tax can be imposed only on the stock of stockholders residing in the state,or only on. that proportion of the stock which would equitabiy represent the one-fourth part of defendant's line which lies within the limits of North Carolina. As has been said, in substance,the tax is not upon the shares, but is only measured by the number of the shares. It is not upon the property of defendant. It is therefore immaterial where the shareholders reside, and what property defendant owns in North Carolina.. ' The tax is a charge agreed upon between the parties,-the price put by the state upon the franchise purchased by defendant, -,and has naught to do with anything other than the contract itself. 3. The tax is collectible for every year since 186f>' No time runs against the state. No possible presumption of payment exists. !flaches could b.e· attributable to the legislature in not demanding the 25 cents for the years since 1866, as each year expired, under any state of circumstances, it could llotunder the facts of this case, for it is admitted that defendant never until 1889 made the report of its receipts and disbursements required by its charter, and which might have formed the basis of the tax. Some weight would be due to the objection that a pailt tax upon the stockholders of a corporation cannot be reasonably collected oLtha corporation. In such case the tax is only collected of the corporation. The corporation can justly be required to pay its stoekholders' taxes if it has funds of theirs, which it can withhold, to the extent of the tax so paid, and not otherwise. The profits of a corporationsre supposed to be divided annually. The stock. holders are a perpetually changing body. But this tax is not one upon the stockholders. It is one on the corporation itself. If it is said that there is injustice in collecting now, after the lapse of 25 years, the tax of 1866, when perhaps all the stock of defendant company has changed owners since that time, the answer is,·first, the contract allows it; and, ,econd, each purchaser of stock bought his shares, with the unpaid bur· den of this. charge resting on them. The judgment: .oithe· court is that plaintiff recover the amount of the tax according to the admissions in the pleadings and facts agreed, and costs.
RIGHTER
II.
ANCHOR REMEIJY
CO.
45.5
RICHTER· ft. ANCHOR REMEDY eO·. (Oircuit Oourt, W. D. PennsyllVatnia. September 14, 1899.) 1. TRADE-MARX AT COMMON LAW-RIGHTS OF FOREIGNERS.
A foreigner engage4 in manufacturing and selling medical preparations in bis own country, under a reg'istered·trade-mark, has no common-law right to such trade-mark in the United States, such as will enable him to claim the same, on establishing a branch business here, as against a domestic firm which had an established business under a similar trade-mark, adopted in good faith, before be had I\old any goods in this country.
Sum-ABANDONMENT-REGISTRATION.
A fOI"6igner who registerll in this country a trade-mark consistIng of "a red anchqr, in a white oval or field, " in connection with particular words,cannot afterwards enlarge hIS rights as against persons having in good faith an established business undertbe symbol of an anchor. bta new,registration, claim. ing broadly the use of the picture of an anchor. .
In Equity. Suit by F. Ad. Riohter & Co. flgflinst the Anohor Remfor infringement of a trade-mark. Bill dismissed. edy A· .". Brieaen, W. Bakewell, and W. L. Pierce, for complainant. A. H. (Jlarke and Barton &; Barton, for defendants. Before ACHESON, Cirouit Judge, and BUFFIl'iGTON, District Judge. ACHESON, Circuit Judge. In the fall of 1887 the defendants, under the name of the Anchor Remedy Company, engaged, and have since continued, in business, at the city of Pittsburgh, as manufacturers and vendors of proprietary medicines of their compounding, marking their labels, wrappers, and bottles with their business name, and with the representation of a black anchor, and designating their compounds "Anchor Liniment," "Anchor Rheumatic Remedy," etc. In adopting this name and symbol the defendants acted in good faith, believing such use to be original with them. Their labels, wrappers, and packages have been always distinctly marked "Prepared by the Anchor Remedy Company, Pittsburgh, Pa." . "Laboratory, corner Liberty and Fourth streets, Pittsburgh, Pa." The plaintiff, Dr, F. Ad. Richter, a citizen and resident of Germany, by his bill, filed November 13, 1890, seeks to restrain the defendants" from selling proprietary medicines having thereon any labels, or wrapped in any wrappers, or contained in any bottles, having printed, blown, or otherwise applied the word 'Anchor.' or the pictorial representation of an. anchor, and from using the word'Anchor 'as part of their firm name, or the pictorial representation of an anchor in any connection whatsoever in their said business." In effect, the plaintiff claims an exclusive right to use in the United States the word" Anchor," and the symbol of an anchor, in connection with the manufacture or sale of medical compounds. The bill, which describes the plaintiff as "a citizen of the empire of Germany, doing business as l!"', Ad. Richter &00., in the city, county, and state of New York," sets forth that he has been in the city of New York, "for a number of years last past," in the sale of proprietary medicines manufactured at his factory; and that, about the year 1869,