"In the drawing, the letters, A, B, designate two wires, which extend along the line of a railroad track, or, in other words, form the line-wires of a telegraph line. The wire, A, connects by a wire, 10, with one-say the positive-pole of a galvanic battery, G, and the other pole of this battery connects by a wire, 11, with the ground. The battery, G, is supposed to be situated at one end of the line, and at the opposite end of said line the wire, B, is made to connect by a wire, 12, with the ground. Along the line are distributed a series of keys or circuit-closers, C, D, each of which is connected with the line-wires, A, B, the connection of the circuit-closer, C, being effected by wires, 13 and 14, and that of the circuit-closer, D, by wires, 15 and 16. If the circuit is closed through the circuit-closer, C, the current passes from the battery through wire, 10, line-wire, A, wire 13, circuit-closer, C, wire 14, line-wire, B, and wire, 12, to the ground, and through the ground and wire, 11, back to the battery. If the circuit is closed through the circuitcloser, D, the current from the battery passes through wires, 10, A, 15, circuit-closer, D, wires, 16, B, and 12, to the ground, and through the ground and wire, 11, back to the battery. From these two examples it will be seen that whenever the circuit is closed along the line, the electric current has to traverse the whole circuit, and consequently the resistance is the same in all cases."

It thus clearly appears that the difference in this particular, between the invention claimed by the complainants and the alleged infringement, is a difference in the arrangement of the parts and in the principle of the combination, with different elements performing different functions; and that the difference is something more than the mere substitution of a connection by means of the earth for one of the conducting wires. The case is, therefore, clearly distinguishable from that of Electric Tel. Co. v. Brett, 10 C. B. 838, cited and relied on by counsel for the appellants as in point, where the substitution of the earth for a wire as a conductor, being the sole difference, was held, under the English patent laws, not to be sufficient to destroy that identity between the two competing devices, which constituted in that case the infringement alleged, although the patent itself called only for metallic conductors. Were that the only difference between the two plans under examination in the present case, there might still be question, in view of our own patent laws, whether the patentee had not made a wholly metallic circuit a necessary part of his combination, to be determined by considerations which we have not thought it necessary to bring into view as bearing upon that point. For, as we have seen, the difference on which we ground our conclusion that the defendants are shown not to have infringed the complainant's patent, in this particular, is, not merely that they have used the earth for the return of the current that completes the circuit, instead of a metallic conductor, but that they have arranged their conductors, in reference to the battery, the magnets, the rails, and the earth, upon such a system, and with such relations and connections, that, in operating their signals by a single battery, the circuits are equalized as to resistance; while in that of the plaintiffs the circuits are of unequal size and resistance, requiring for successful practical use the equalization of the resistances thus created by means of independent and additional devices. One plan proceeds upon the idea of unequal circuits, to be afterwards equalized; the other adopts and embodies the idea of avoiding the necessity of subsequent rectification by an original adjustment of equal resistances. The difference is inherent in the two combinations and is substantial.

On the ground that, in the two points mentioned, the defendants' system of signaling is shown not to be an infringement of that described in the patent of the appellants, the decree of the circuit court dismissing the bill is affirmed.

*564

*563

(114 U. S. 562)

ALLING, Surviving Partner, etc., v. UNITED STATES.

(May 4, 1885.)

COURT OF CLAIMS-JURISDICTION-CLAIM GROWING OUT OF A TREATY.

A claim growing out of and dependent on a treaty stipulation entered into with a foreign government is not cognizable in the court of claims.

Appeal from the Court of Claims.

C. W. Hornor and W. L. McGary, for appellant. Asst. Atty. Gen. Maury, for appellee.

MILLER, J. This is an appeal from the court of claims. Belden & Co., having a claim for seizure and confiscation of goods by the Mexicans during or shortly after the Mexican war, preferred their claim to the United States for presentation to the Mexican government. The goods having been*imported into Matamoras while that city was in the possession of the American forces, on which Belden & Co. had paid duties to the amount of $18,347, the United States refunded this sum to Belden & Co. and took an assignment pro tanto of their claim against Mexico. By the convention or treaty of July 4, 1868, between Mexico and the United States, (15 St. 679,) a commission was organized for the adjustment of the claims of the citizens of the respective countries against the government of the other for injuries to persons and property. To this commission Belden & Co.'s claim was submitted by the United States, and its award was that the Mexican government should pay to the United States, on account of this claim, the sum of $53,099.25, of which the United States might retain out of this gross award the sum of $35,920.81, on account of the tax which it had refunded to Belden & Co. and its interest. An act of congress provided that the distribution of the money received by the United States under all the awards made by this commission should be distributed under the order of the secretary of state.

Claimants in this case having received the sum specifically awarded to them, appealed to the secretary for the whole or a part of the sum for customs duties, which was awarded to the United States under the assignment of Belden & Co. This was refused, and this suit is brought to enforce the claim. It is clearly a claim founded on and growing out of a treaty with a foreign nation, within the provisions of section 1066 of the Revised Statutes. It is in all respects like the case of the Great Western Ins. Co. v. U. S. 112 U. S. 193, S. C. ante, 99, which holds that the court of claims had no jurisdiction by reason of that section. That was a case of a claim submitted to the United States for reclamation against Great Britain. A treaty between the two powers provided, as in the present case, for an arbitration, under which the claim was allowed and paid to the United States. On appeal from the court of claims we decided that it was, within the meaning of section 1066 of this Revision, “a claim*growing out of and dependent on a treaty stipulation entered into with a foreign government" of which that court could not entertain jurisdiction. The present case is stronger than that, because the act of congress of June 18, 1878, (20 St. 144,) confers on the secretary of state the authority to distribute these awards among the several claimants. Frelinghuysen v. Key, 110 U. S. 63; S. C. 3 Sup. CT. REP. 462. Not only is the court of claims forbidden to entertain jurisdiction of this claim, but the secretary of state is by law authorized and directed to do all that can be done for claimants, without further legislation.

It is apparent from the record that the court of claims entertained jurisdiction of the case and decided against the claimants on the merits. As that court had no such authority, its judgment must be reversed, with direction to dismiss the petition for want of jurisdiction.

(114 U. S. 587)

WABASH, ST. L. & P. RY. Co. v. HAM and others.1

(May 4, 1885.)

RAILROAD BONDS-CONSOLIDATED CORPORATIONS.

Four railroad corporations, whose roads formed a connecting line in Ohio, Indiana, and Illinois, were consolidated, according to the statutes of those states, under an agreement in which the capital on the basis of which each entered into the con. solidation was described as composed of the amount of its stock and of its mortgage bonds, and other bonds, and it was agreed that all those bonds should, "as to the principal and interest thereof, as the same shall respectively fall due, be protected by the consolidated company, according to the true effect and meaning of the bonds." Two years afterwards the consolidated company, to secure its own bonds payable at a later date than the old ones, executed a mortgage of all its property to trustees, which recited that it had been deemed for the interest of the corporation, as well as for the interest of all the various classes of existing bonds, (which were specifically described,) that the whole of them should be consolidated into one mortgage debt upon equitable principles; and provided that a sufficient amount of the new bonds should be retained "to retire, in such manner and upon such terms as the directors may from time to time prescribe," an equal amount of the old bonds. Six years later the consolidated company made another mortgage to secure other bonds, for non-payment of which it was afterwards foreclosed by sale of the whole property. Held, that the property was not subject to any lien in favor of bonds of one of the old companies, issued after the passage of the statutes authorizing the consolidation, unsecured by any mortgage or lien before the consolidation, and the holders of which had not exchanged or offered to exchange them for bonds of the consolidated company before the proceedings for foreclosure.

Appeal from the Circuit Court of the United States for the District of Indiana.

This was an appeal from a decree in equity, declaring certain bonds issued by the Toledo & Wabash Railway Company to be a lien upon property formerly owned by that company, and since transferred by it to the Toledo, Wabash & Western Railway Company, a corporation created by its consolidation with three other railroad corporations. 11 Biss. 510; S. C. 15 Fed. Rep. 763. The material facts appearing by the record were as follows:

The Toledo & Wabash Railway Company, a corporation organized under the laws of the states of Ohio and Indiana, owning a railroad extending from Toledo in Ohio to Wabash in Indiana,-its property in Ohio being subject to a first mortgage for $900,000, and a second mortgage for $1,000,000, and its property in Indiana subject to a first mortgage for $2,500,000, and a second mortgage for $1,500,000,-on November 2, 1862, executed and issued for value bonds to the amount of $600,000, styled "Equipment Bonds," payable in New York on May 1, 1883, with coupons attached for semi-annual interest, at the yearly rate of 7 per cent.; and convertible at the option of the holder, at any time within five years, into common stock of the company at par. The company paid interest on those bonds to May 1, 1865.

On May 29, 1865, no lien of any kind then existing in favor of the equipment bonds, the Toledo & Wabash Railway Company, and three railroad corporations incorporated by the states of Indiana and Illinois, whose roads formed a continuous line from Toledo to the Mississippi river, entered into an agreement to consolidate their railroads, property, and capital stock, and to become one corporation under the name of the Toledo, Wabash & Western Railway Company, with a capital stock of $15,000,000, "upon the basis and conditions hereinafter to be specified," the material parts of which were as follows:

"The Toledo & Wabash Railway Company enters into said consolidation on the following basis, viz.: Its capital is $10,000,000, composed as follows first mortgage bonds, $3,400,000; second mortgage bonds, $2,500,000; con

18. C. 15 Fed. Rep. 763.

vertible equipment bonds, $600,000; convertible preferred stock, $1,000,000; common stock, $2,500,000."

The basis on which each of the three other corporations "enters into said consolidation" was then set forth in like manner, by which the capital of the three together appeared to be $8,486,000, composed of mortgage bonds, $5,800,000, and stock, $2,686,000; and one of those corporations assigned to the consolidated company certain mortgage bonds, and agreed to pay to it in cash the sum of $780,300, required to place its road in equal condition with the Toledo & Wabash Railway.

"It is further agreed that the bonds and other debts hereinabove specified, in the manner and to the extent specified, and not otherwise provided for in this agreement, shall, as to the principal and interest thereof, as the same shall respectively fall due, be protected by the said consolidated company, according to the true meaning and effect of the instruments or bonds by which such indebtedness of the several consolidating companies may be evidenced." "The directors shall have power to issue any other and further bonds of said corporation to such an amount that the indebtedness of the consolidated company at any time shall not exceed the amount of the capital stock authorized by this agreement, and they may secure the bonds so issued by mortgage or other lien on the property of the consolidated company, or any specified part thereof."

The agreement of consolidation was ratified by the directors and stockholders of all the companies, and the stockholders of the old companies became stockholders in the new one; and this company came into possession of all the railroads and property of the four old companies, and received and distributed the earnings.

*On February 1, 1867, the consolidated company executed to trustees a mortgage of all its railroads, property, and franchises, to secure bonds to be issued by it, to the amount of $15,000,000, payable in 40 years, with interest at the yearly rate of 7 per cent. and convertible at the option of the holders, at any time within 10 years, into common stock of the company at par. The mortgage recited the consolidation, and also contained the following recitals: "Whereas, at the time of such consolidation, the property of said various companies was subject to certain bonded debts, and the mortgages created by said several companies, or by other railroad corporations which, at the time of the creation of said debts and mortgages, were the owners of the property so consolidated; and whereas, all the bonded debt of said company, party of the first part, including that secured by said mortgages, as well as that not secured by any mortgage, now amounts, in the aggregate, to the sum of $13,300,000, besides interest; and whereas, said bonded debt, as it now exists, is represented and made up as follows, viz.”

Then followed a statement of the various classes of mortgage bonds, above mentioned, amounting in all to $11,700,000; the equipment bonds, $600,000; and bonds issued by the consolidated company, due April 1, 1871, $1,000,000; and the last two classes described as not secured by any mortgage.

"And whereas, it has been deemed for the interest of the said party of the first part, as well as for the benefit of the holders of all said various classes of bonds, that the whole of the same should be consolidated into one and the same mortgage debt, upon equitable principles; and whereas, the increasing freight business of the road of the party of the first part requires additional equipments to do the same; and whereas, it has been deemed expedient for the preservation of the bridges on the line of said road that the same should be covered, and that additional depot accommodations should be obtained, and that the road through its entire length should be fenced; and whereas, the expenses to be incurred for the above should be provided for by the creation of new capital; and whereas, for the purposes aforesaid, and for the objects herein stated, the said company, party of the first part, has resolved to make

and issue its bonds to the extent of $15,000,000, and to secure the payment of the same by a mortgage upon its entire property; and that of the amount of said bonds to be made and issued thereon should be retained $13,300,000 to retire, in such manner and upon such terms as the directors of said company may from time to time prescribe, a like amount of the bonds of the various companies herein above enumerated, and described, and representing the aforesaid bonded debt, and that the balance of said bonds, to-wit, $1,700,000 thereof, should be used to provide the said additional equipment and other improvements hereinabove mentioned and for such additional purposes as the said directors may deem advisable."

Bonds to the amount of $2,700,000 only were issued under that mortgage; $1,700,000 for money borrowed, and $1,000,000 to retire the bonds of the consolidated company that became due April 1, 1871. The consolidated company paid the interest on the equipment bonds until November 1, 1874, after which no payment was made of interest thereon.

On April 1, 1873, the consolidated company executed to the trustees under the mortgage of February 1, 1867, and in order "to give assurance to all persons whom it may in anywise concern that the said reserved bonds shall not, nor shall any or either of them, be used for any other purpose than the retiring of the said funded debt in some part thereof," a supplemental agreement, by which it covenanted with the trustees, and with all such parties, that it would not "make or issue, or attempt to make or issue, any of the remaining $12,300,000 aforesaid bonds secured by the said indenture of mortgage, except for the purpose of, and subsequent to or simultaneously with, the retiring of an equal amount of the balance remaining of the said funded debt.

On February 1, 1873, two months before the execution of the agreement of further assurance, the consolidated company made another mortgage to secure other bonds to be issued by the company to the amount of $5,000,000, payable in gold. Default having been made in the payment of interest on bonds so issued, proceedings for the foreclosure of that mortgage were instituted, and a receiver appointed on February 22, 1875, and a decree was afterwards entered for the sale of the railroad, franchises, and other property of the company, subject to the liens of all earlier mortgages, and without prejudice to any claim that might be made by the holders of the equipment bonds. Under that decree the property was sold, and conveyed to the purchasers, who afterwards became the Wabash, St. Louis & Pacific Railway Company, the appellant in this case. None of the equipment bonds were ever exchanged for bonds under the mortgage of 1867, nor did any holders of equipment bonds demand an exchange until after May 1, 1875.

The statute of Ohio of April 10, 1856, in force at the time of the issue of the equipment bonds and of the consolidation in question, by section 1, made it lawful for any railroad company in Ohio to consolidate its capital stock with the capital stock of any railroad in an adjoining state, whenever their roads united so as to form a continuous line; by section 2, provided that the consolidation should be made by agreement of the directors of each company, "prescribing the terms and conditions thereof," and that such agreement, when ratified by the stockholders, should "be deemed and taken to be the agreement and act of consolidation of said companies;" and also contained the following provisions:

"Sec. 3. Upon the making and perfecting the agreement and act, as provided in the preceding section, and filing the same, or a copy, with the secretary of state, the several corporations, parties thereto, shall be deemed and taken to be one corporation, possessing within this state all the rights, privileges, and franchises, and subject to all the restrictions, disabilities, and duties of such corporation of this state so consolidated."

"Sec. 5. Upon the election of the first board of directors of the corporation created by said agreement of consolidation and by the provisions of this act,