an acceptance by the company to make it complete and binding as a subscription. On the new trial such an acceptance was shown, and in the findings then made it appears that Betz was present, for the purpose of making the subscription, at a meeting of the directors of the company on the seventeenth of June, 1870; that he presented to the board for acceptance a copy of the record of the proceedings of the county court at the meeting on the fifth of April, and at the meeting when the subscription was ordered, and he was directed to make it on the books of the company. Upon the presentation of these orders of the county court they were read, and, after the reading, "were ordered by the board to be spread upon the record-books of this company, and, on motion, the subscriptions made and specified in the * * * orders to the capital stock of the Lexington, Chillicothe & Gulf Railroad Company were accepted by the board of directors of the said company." At the same time, by order of the directors, the secretary indorsed on the back of the papers, "Filed and accepted June 17, 1870."

It is difficult to see what more was necessary to bind the parties. Undoubtedly, if there had been at that time any book prepared in which subscriptions were to be made, Betz would have entered the subscription of the county court in that book in proper form. But what he did was in its legal effect the same. He presented the action of the county court in respect to the subscription for acceptance. That action was in the form of a present subscription upon certain conditions, and in his presence it was, when presented, formally accepted by a resolution of the directors as and for a subscription to the capital, stock of the company. We say it was done in the presence of the agent. That is the fair inference from the record. The finding is that Betz went on the fourteenth of June to make the subscription. The meeting of the directors was held on the seventeenth of that month, and the minutes show that he presented the papers from the county court at that meeting. He was also appointed at that time to act as the agent of the company in obtaining municipal subscriptions. According to the minutes, the orders of the county court were read on their presentation, and at once, on motion, accepted as a subscription made. It also appears from the findings that another meeting of the directors was held on the twenty-fifth of August, at which Betz was present. At this meeting the minutes of the preceding meeting, which was presumably that of the seventeenth of June, were read and approved. Those minutes contained at length the orders of the county court which had been presented by Betz, and the acceptance thereof by the board. If the minutes of the board are correct, and it does not appear that any attempt was made to impeach them, "the minds of the parties met" on the seventeenth of June, and the county subscribed $90,000 to the capital stock of the Lexington, Chillicothe & Gulf Company, before the consolidation, on certain conditions, and the subscription received the formal acceptance of the company. It is undoubtedly true that Betz, as well as the county, supposed that an actual subscription on the books was necessary, and that he afterwards went to the office of the company to make it, and while there, for reasons satisfactory to himself, concluded not to do so. All these facts, save, perhaps, the action of the directors on the seventeenth of June, he reported to the county court, and the court approved what he had done; but supposing something more was necessary to complete the subscription, another agent was appointed for that purpose, who finally made a formal subscription to the stock of the consolidated company. That, however, did not avoid the subscription which had actually been made before. This court decided in Harshman v. Bates Co. 92 U. S. 569, and County of Bates v. Winters, supra, that this last subscription was invalid, but never until the last trial of this case has it been shown that another and a valid subscription had been made at the earlier date which rendered another unnecessary. The former decisions have all been upon the assumption that the last was the only subscription ever made, and as it was

made to the consolidated company, when the vote only authorized a subscription to the Lexington, Chillicothe & Gulf Company, it was held to be inoperative and not binding on the township for which the court was acting as agent.

As Betz, the agent of the county court, was present at the meeting when the subscription was made and accepted, no other notice of the acceptance of the subscription was necessary. He was present as the agent of the county court, and notice to him was notice to the court. The case stands in this particular precisely as it would if Betz had in form subscribed to the stock on the books of the company, and in making such subscription had copied in full, as he was instructed to do, the orders of the county court. The acceptance of such a subscription from him by the company would certainly be enough. No further notice of acceptance was required. As Betz was authorized to make the subscription, he was authorized to receive notice of its acceptance. What was in fact done amounted in law to the making of a valid subscription by him for the county court and its acceptance in his presence by the company. As the Lexington, Chillicothe & Gulf Company was organized under the general railroad law of Missouri, which authorized consolidations, the subsequent consolidation of that company with another organized under the same law did not avoid the subscription which was made to its stock on the seventeenth of June, and the bonds in payment of the subscription were properly delivered to the consolidated company. That has been many times decided. New Buffalo v. Iron Co. 105 Ū. S. 76, and the cases there cited.

The judgment is affirmed.

(112 U. S. 311)

OGDENSBURG & L. C. R. Co. v. NASHUA & L. R. Co.1

(November 24, 1884.)

CONSTRUCTION OF THE TERMS OF A CONTRACT.

By the terms of the contract between the Ogdensburg & Lake Champlain Railroad Company and other companies, to secure the control of the Northern Transportation Company, the advance of the $600,000 mentioned therein to be made by the first-named company was intended to be paid back by the several other companies only through their receipts from the traffic coming to them from the transportation company through the Ogdensburg & Lake Champlain Railroad.

Appeal from the Circuit Court of the United States for the District of New Hampshire.

Sidney Bartlett, for appellant. F. A. Brooks, for appellee.

MILLER, J. This is an appeal from a decree of the circuit court for the district of New Hampshire, dismissing the bill of appellant, who was complainant below. The plaintiff is the owner of a railroad commencing at Ogdensburg, on Lake Ontario, and terminating at Plattsburgh, on Lake Champlain. The defendant owns a road between Nashua and Lowell. The Vermont & Canada Railroad Company, the Vermont Central Railroad Company, the Northern Railroad Company of New Hampshire, the Concord Railroad Company of New Hampshire, the Nashua & Lowell of New Hampshire, and the Boston & Lowell of Massachusetts, were all largely interested in the freight and passenger business which came over the Ogdensburg road from the great lakes for points in New England and Canada, and which went from the latter to the lakes. The Vermont Central and the Vermont and Canada companies were in the hands of receivers, or trustees, appointed by courts under whose control they were, and these trustees had a lease of the Ogdensburg road for 20 years from March 1, 1870. In this condition of the affairs of these companies a contract was made between them all except the Concord Company, the object of which was to secure an increased traffic over all these roads by obtaining control of the Northern Transportation Company of Ohio, which was also a party to the contract, and which was engaged in steamboat transportation on the Western lakes. One of the items of this agreement was that the Ogdensburg Company should advance a sum not exceeding $600,000 to secure this control, which it did, and the only question on the present appeal is whether, by virtue of the contract, the several railroad companies which were parties to it, were bound to repay to the appellant this money at all events, or were only bound to pay out of receipts from the traffic which came to them severally from this transportation company over the Ogdensburg road. This requires a careful examination of the contract, and a consideration of the circumstances under which it was made. The agreement is as follows:

"Articles of agreement between the Northern Transportation Company of Ohio, a corporation established under the laws of Ohio, party of the first part; J. Gregory Smith, of St. Albans, Vermont, and George Stark, of Nashua, New Hampshire, parties of the second part; and the trustees and managers of the Vermont Central and Vermont & Canada Railroad Companies, the Northern Railroad of New Hampshire, (the Concord Railroad Corporation of New Hampshire, provided they execute this agreement,) the Nashua & Lowell Railroad Corporation of New Hampshire and Massachusetts, and the Boston & Lowell Railroad Corporation of Massachusetts, parties of the third part; and the Ogdensburg & Lake Champlain Railroad Company, the party of the fourth part.

“Whereas, the above-named railroad companies and trustees and managers,

18. C. 5 Fed Rep. 882.

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which have become parties to agreements hereto annexed, bearing date the twenty-fourth day of February, A. D. 1870, and whose tracks form a large part of the connecting line between Boston, in Massachusetts, and Ogdensburg, in New York, depend largely for their business upon the regular transportation, by steamers, of freight and passengers between said Ogdensburg and the western cities and towns upon the great lakes; and whereas, the party of the first part was chartered to carry on the business of such transportation, but by reason of financial embarrassments is unable to carry it on efficiently, and it is feared that its steamers may be taken from this line; and whereas, the parties of the third part and the party of the fourth part believe it to be for their and the public interest to advance or lend to the parties of the second part some portion of the gross receipts for the transportation of freight and passengers to be brought to and from their line by the steamers of the party of the first part, in order to secure the most regular, efficient, and permanent service by steamers between Ogdensburg and said western cities and towns for the term of nineteen years from the first day of March, A. D. 1871; and whereas, the parties of the second part have agreed to use all sums advanced or lent to them to secure the ownership or the control of the stock of said party of the first part, and otherwise to secure the most efficient management of its business to carry out the purposes of this agreement, and for no other purposes, and to hold all said stock which they may hold or control, and all other property or rights which they may purchase or otherwise acquire with said funds, except debts due from said party of the first part, in trust to secure the repayment of all sums which may be so advanced or lent, as aforesaid, with interest, as hereinafter provided:

"Now, therefore, in consideration of the premises, it is covenanted and agreed between said parties as follows:

"Article First. That the party of the first part shall, during said term, continue to hold and own as many and as serviceable steamers as it now has, and will keep them properly equipped, seaworthy, and in good running order, and will make such addition to the number of said boats as the business shall require, and will run them for the transportation of freight and passengers between said Ogdensburg and said western cities and towns, at such time and in such manner, and at such rate of freight and fare as shall be satisfactory to the executive committee of the parties of the third part for the time being; or, if there be no such executive committee, or there is any legal impediment to their action, to the satisfaction of the presidents, for the time being, of the third and fourth parties, or a majority of them. And that the party of the first part will keep all other property owned by it in good repair and in serviceable condition, and that, so far as may be practicable during said term, it will send all freight and passengers for points east of Ogdensburg over the lines of the roads of the parties of the third and fourth parts.

"A schedule of said steamers and other property is hereto annexed. "Article Second. That the parties of the third part will, during said term, semi-annually reserve out of the gross receipts, either upon said line or upon any road now leased or operated, or which may hereafter be leased or operated by the parties of the third part, or either of them, for the transportation of freight and passengers brought to said line at Ogdensburg by the steamers of the party of the first part, the sum of one hundred and fifty thousand dollars, or so much thereof as shall be adequate for the purposes herein set forth, and pay over the same to the parties of the second part to be used for the purpose of securing regular, efficient, and adequate service to and from said Ogdensburg as aforesaid; and the party of the fourth part will, in case it shall be necessary to secure the regular and efficient running of said steamers to and from said Ogdensburg, when called upon by parties of the second part, advance from time to time sums not in all exceeding six hundred thousand dol lars, to be used by said parties of the second part for the same purposes as said

semi-annual payments, and to be pro tanto in lieu thereof, and to be repaid out of said semi-annual reservation as hereinafter provided, it being understood and agreed that each of said parties of the third part shall only be liable to reserve and advance or pay to the parties of the second part, or to the party of the fourth part, as the case may me, its share of such reservation, advance, or payment, to be ascertained by the proportion which said gross receipts of each of said parties bear to the entire amount of said gross receipts between Ogdensburg and points eastward, upon the roads owned, leased, or operated by any of said third parties.

66

Article Third. That the parties of the second part shall hold all stock and rights to control stock of the party of the first part which they now have or shall purchase or acquire, and all other property or rights that may be purchased or otherwise acquired under this agreement, except debts due from the party of the first part as aforesaid, in trust, to secure the repayment of all sums which the parties of the third and fourth parts, either or any of them, lend or advance under this agreement, and interest thereon at the rate of ten per cent. per annum, payable semi-annually, and shall apply all div. idends which they shall receive on said stock and income from other property to repay the same, and in case said sums shall not all have been repaid with interest, as aforesaid, on or before the expiration of said term, or at any time, in case of failure of the third parties, or either of them, to perform the stipulations of this agreement, then said parties of the second part shall, in case the parties hereto of the third and fourth parts shall not otherwise agree, sell said stock and other property at public auction in said Ogdensburg, after advertising the same for at least thirty days in some newspaper published in said Ogdensburg, and a newspaper published in said Boston, and divide the net proceeds among the parties entitled thereto, but any change may at any time, and from time to time, be made in said trust funds by sale, purchase, or otherwise, by said parties of the second part, with the written consent of the presidents for the time being of the parties of the third and fourth parts. "That while the parties of the third part continue to pay the semi-annual interest to the party of the fourth part, and the semi-annual payments to the trustees of the sinking fund as herein provided, the parties of the second part shall pay any dividends or income which they may receive to the parties of the third part, but in case of any default on the part of the parties of the third part said dividends and income shall be paid directly to said Ogdensburg & Lake Champlain Railroad Company and to said trustees of said sinking fund in proportion to the amount of the semi-annual payments to them herein provided, and to be received by them pro tanto in place of said semi-annual payments.

"Article Fourth. That in case of vacancy in the number of the parties of the second part, or their successors, by death, resignation, or otherwise, the party of the second part or his successors continuing in the trust may fill the vacancy, subject, however, to the approval of the parties of the third and fourth parts, and that the parties of the second part or their successors are to assume no personal liability to repay the money advanced by the parties of the third and fourth parts, but to apply the same according to the terms of this agreement, and to hold said stock, rights, and other property in trust, and apply the same and the dividends thereon and income thereof as aforesaid.

"Article Fifth. That in case the party of the fourth part shall advance any sum or sums amounting to six hundred thousand dollars, or any part thereof, under this agreement, then the parties of the third part are to pay to the party of the fourth part so much of said semi-annual payments reserved from gross receipts as aforesaid as will pay the semi-annual interest on said sum or sums so advanced by the party of the fourth part at the rate of eight per cent. per annum, and shall pay to the persons who may for the time being