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by this payment. Hammond & Bogue having advanced part of the money to take up the notes, could undoubtedly have held them to secure the repayment of their advances; but, as that repayment has been made, the case stands precisely as it would if Hyde had himself furnished the money originally. But if relief had been asked on the ground of subrogation, it could not have been granted on the facts as they now appear. The notes were paid by Hyde under his obligation for that purpose, and that discharged the security on block 2 as well as on block 1. The question is not whether, if the notes had not been paid by Hyde, and Dickson were now endeavoring to enforce his security, Richardson could require him to exhaust his lien on block 1 before coming on block 2; nor whether, if Richardson's security on block 2 had been diminished by a compulsory sale of that block for Dickson's benefit, he could resort to block 1 to make good his loss; but whether, having voluntarily released his security on block 2, without the consent of or notice to Henry Traver, to enable Hyde to raise the money to take up the notes, he can hold the notes with a lien on block 1 in place of the security he gave up. The doctrine of subrogation, which is a creature of equity, has never been carried to that extent. If Richardson had in good faith paid the notes with his own money to protect himself under his junior security, he would have been put in the place of Dickson as the owner of the notes, and, upon a foreclosure, his rights in block 2 as against those of Henry Traver in block 1 could have been ascertained and protected. But such is not the case. His agents and trustee saw fit, without consulting Henry Traver, to allow Hyde to use block 2 to pay the notes. This block Hyde owned subject to the liens (1) in favor of Dickson, and (2) in favor of Richardson. As against Hyde, Henry Traver had the right to have block 2 sold to pay the Dickson debt before block 1 was resorted to, because Hyde was bound to pay the Dickson debt and release block 1 from incumbrance on that account. Whether, as against Richardson's junior incumbrance on block 2, Traver could require Dickson to sell that block before coming on block 1, depends entirely on the effect of Henry Traver's covenants in his deed of release and quitclaim to Michael, about which we express no opinion, because to our minds it is clear that Richardson, by voluntarily releasing, without the consent of Henry Traver, a part of his junior security on block 2 to enable Hyde to raise the money to discharge the debt to Dickson, was not subrogated to the rights of Dickson under his original security on block 1. If Traver had been consulted, and had consented to the keeping alive of the Dickson notes to take the place of the security of Richardson which had been released, the case would have been different; but as property bound for the Dickson debt was in fact used to pay it with the consent of the junior incumbrancer, no lien upon other property for the security of the Dickson debt can be kept alive for the benefit of the releasing junior incumbrancer without the consent of those whose interests in the other property are to be affected. The payment to Dickson discharged the debt, and all that pertained to its continued existence. Decree affirmed.
(112 U. S. 414)
KANSAS PAC. Ry. Co. v. ATCHISON, T. & S. F. R. Co.1
(October Term, 1884.)
The admission of a territory as a state into the Union, and the consequent change in its form of government, in no respect affects the essential character of the corporations, or their powers or rights, deriving their existence from the legislature of the territory.
2. SAME-FEDERAL COURT-RAILROAD CORPorations-JURISDICTION.
Where a federal court can take jurisdiction of controversies between citizens of different states or of the same state, it will take jurisdiction of like controversies between corporations, and treat them as citizens of the state under whose laws they were created, or continue to exist.
R. SAME-ACTS OF CONGRESS-GRANTS FOR RAILROAD PURPOSES-CONSTRUCTION.
In July, 1862, congress passed an act granting to the Kansas Pacific Railway Company, for every mile of the road constructed by it, five sections of public land designated by odd numbers on each side of it within the limit of 10 miles, not already sold, or otherwise appropriated at the time its line was fixed. On the second of July, 1864, an amendatory act was passed doubling the grant, and extending the limits, within which the lands were to be withdrawn, to 25 miles. On the sixth of February, 1866, the odd-numbered sections of land within 20 miles of the road were withdrawn from sale and reserved for its use. On the third of March, 1863, congress passed an act granting lands to the state of Kansas for railroad purposes, and these lands were the alternate sections, designated by odd numbers, for 10 sections in width on either side of a road. The grant was accompanied with a proviso that in case it should appear when the lines or routes of a road should be definitely fixed, that any section granted had been sold, reserved, or otherwise appropriated, an equal amount of land, nearest the tiers of sections specified, should be selected, not previously sold, etc., to be held by the state of Kansas for the like uses and purposes. Under the provisions of this act the Atchison, Topeka & Santa Fe Railroad Company entered on its work of constructing its road, but its line was not definitely fixed until 1866, when it appeared that a large part of the lands lying within the limits of 10 miles of it had been sold by the United States, and had been greatly diminished in other ways. To supply the deficiency, the secretary of the interior selected lands lying within 20 miles of the plaintiff's road, and a patent was issued therefor to the defendant. Held, that the grant to Kansas by the act of congress of March 3, 1863, did not cover the title to these lands; that the act of 1862 should be construed as if the larger number had been originally inserted in it; and that the increased quantity of land, with the exceptions mentioned, passed to the grantee at the date of the original act.
Appeal from the Circuit Court of the United States for the District of Kansas.
J. P. Usher, for appellant. James Hagerman, A. T. Britton, J. H. McGowan, and A. B. Browne, for appellee.
FIELD, J. The plaintiff and the defendant were incorporated by the territorial legislature of Kansas; and the question in controversy relates to land which they respectively claim under grants from the United States. The plaintiff's original name was the Leavenworth, Pawnee & Western Railroad Company, and it is thus termed in the act of congress of 1862 creating the Union Pacific Railroad Company. After the territory became a state that name was changed to the Union Pacific Railroad Company, Eastern Division, and the corporation was so called in subsequent legislation of congress until some time in 1869, when it received its present designation. The admission of Kansas as a state into the Union, and the consequent change of its form of government, in no respect affected the essential character of the corporations, or their powers or rights. They must, after that change, be considered as corporations of the state; as much so as if they had derived their existence from its legislation. As its corporations they are to be treated, so far as may be necessary to enforce contracts or rights of property by or
'S. C. 13 Fed. Rep. 106.
against them, as citizens within the clause of the constitution declaring the extent of the judicial power of the United States. It has been expressly held that they are to be so considered when they have controversies with citizens of other states. And the same course of reasoning which led to this decision must also lead to the conclusion that in all cases where a federal court can take jurisdiction of controversies between citizens, whether of different states or of the same state, it will take jurisdiction of like controversies between corporations, and treat them as citizens of the state under whose laws they were created or continue to exist. The constitution declares that the judicial power of the United States shall extend to all cases in law and equity arising under it, the laws of the United States, and treaties made under their authority. The act of 1875 invests the circuit courts with original cognizance, concurrent with the courts of the several states, "of all suits of a civil nature at common law or in equity" thus arising, where the matter in dispute exceeds, exclusive of costs, the sum or value of $500. 18 St. 470. The reasons for granting this jurisdiction, and for investing it in the circuit courts, are as applicable where the controversies are between citizens united under a corporate name, as where they are between citizens in their individual capacity. A private corporation is, in fact, but an association of individuals united for a lawful purpose, and permitted to use a common name in their→ business, and to have a change of members without dissolution. As said by Chief Justice MARSHALL in Providence Bank v. Billings:*"The grant of incorporation is to bestow the character and properties of individuality on a collective and changing body of men." 4 Pet. 514, 562.
The controversy in this case arises upon laws of the United States. As far back as Cohens v. Virginia, decided more than 60 years ago, it was said that a case may be considered to arise under the constitution or a law of the United States whenever its correct decision depends upon the construction of either. 6 Wheat. 379. The same thing is expressed by the statement that a case arises under the constitution or laws of the United States whenever the rights set up by a party may be defeated by one construction or sustained by the opposite construction. Osborn v. Bank of U. S. 9 Wheat. 738. Here both corporations claim title to the same land in Kansas under different acts of congress, and the decision depends upon the construction given to those acts. It is, therefore, clear that the court below had jurisdiction of the subject of the suit and of the parties.
The plaintiff claims, under the act of July, 1862, to aid the construction of a railroad and telegraph line from the Missouri river to the Pacific ocean, and acts amending or supplementing it. That act granted to the company formed under its provisions, for every mile of the road, five sections of public land designated by odd numbers on each side of the line of the road within the limit of 10 miles, which were not sold, reserved, or otherwise disposed of by the United States, and to which a pre-emption or homestead claim had not attached at the time the line was definitely fixed. It also provided that whenever the company had completed 40 consecutive miles of any portion of the road and telegraph line, and supplied all necessary equipments and appurtenances of a first-class road, the president of the United States should appoint three commissioners to examine the same, and if they reported that the road and telegraph line had been constructed and equipped in all respects as required, patents were to issue for the adjacent lands. An examination was to be had, as each successive section of 40 miles was completed, and, upon a fa-➡ vorable report of the commissioners, other similar patents were to*issue. * Within one year after its passage the company was required to file in the department of the interior its assent to the act, and within two years afterwards to designate the general route of its road as near as might be, and to file a map of the same in that department. The secretary of the interior was then to withdraw the lands within 15 miles of the designated route from pre-emp
tion, private entry, and sale, and when any portion of the road was finally located he was to cause the lands granted to be surveyed, and set off as fast as necessary for the purposes mentioned.
On the second of July, 1864, an amendatory act was passed doubling the grant, and extending the limits within which the lands were to be withdrawn to 25 miles, but declaring that neither act should defeat or impair any preemption, homestead, swamp-land, or other lawful claim, nor include any gov. ernment reservation or mineral lands. It contained no express words of new and additional grant, but provided that the numbers in the act of 1862 should be stricken out and larger numbers inserted in lieu thereof. Thenceforth the act of 1862 is to be read as against the United States, and all parties not having acquired in the mean time paramount rights, as though the substituted numbers were originally inserted therein. Missouri, K. & T. R. Co. v. Kansas Pac. R. Co. 97 U. S. 497; U.S. v. Burlington, 98 U. S. 334. The title to the increased quantity of land must, with the exceptions mentioned, therefore be deemed to have passed to the grantee at the date of the original act. That act contemplated the connection of several branch roads with the main line, one of which the plaintiff was to construct. It directed the president to designate the initial point of that line in Nebraska, on the 100th meridian west from Greenwich, at which the eastern branches were to unite, and authorized the plaintiff to construct a railroad and telegraph line from the Missouri river at the mouth of the Kansas river, at the south side thereof, so as to connect with the Pacific road of Missouri at that point. In case the general route of the main line was located so as to require a departure northerly from the proposed Kansas road before it reached that meridian, the location of that road was to conform to it. The route in Kansas west of the meridian of Fort Riley to the initial point mentioned was to be subject to the approval of the president after actual survey. The amendatory act of 1864 enlarged the grants made to all the branches of the main road. As was said by this court in U. S. v. Burlington: "All the reasons which led to the enlargement of the original grant led to its enlargement to the branches. It was the intention of congress, both in the original and in the amendatory act, to place the Union Pacific Company, and all its branch companies, on the same footing as to lands, privileges, and duties, to the extent of their respective roads, except when it was otherwise specially stated. Such has been the uniform construction given to the acts by all departments of the government. Patents have been issued, bonds given, mortgages executed, and legislation had upon this construction. This uniform action is as potential, and as conclusive of the soundness of the construction, as if it had been declared by judicial decision. It cannot at this day be called in question." 98 U. S. 341.
On the third of July, 1866, congress passed an act enabling the plaintiff to designate the general route of its road, and to file a map thereof at any time before the first of December, 1866, and providing that after the filing of the map the lands along its entire line, so far as it was designated, should be reserved from sale by the secretary of the interior. It also provided that the company should connect its line of road and telegraph with the Union Pacific road at a point not more than 50 miles westerly from the meridian of Denver, in Colorado.
It is conceded that the plaintiff in due time filed in the department of the interior its acceptance of the acts of 1862 and 1864, commenced the construction of its road under them, completed it within the required time, and complied with the terms and conditions essential to entitle it to the lands granted; that on the tenth of January, 1866, it filed with the secretary of the interior a map of the definite location of its road, showing the dates of the actual location of its various parts in compliance with his instructions; that the road was located along and contiguous to the lands in controversy before February 4. 1865; that upon that location the road was afterwards duly constructed; that
on February 6, 1866, the location was approved by the commissioner of the general land-office; that by instructions soon afterwards given the odd-numbered sections of land within 20 miles of the road were withdrawn from sale and reserved for its use; that the railroad along and adjacent to the lands in controversy was completed and accepted by the president before December 14, 1866, and by his order the secretary of the interior was directed to issue patents to the plaintiff for the adjacent lands under the grant; that the lands in controversy in this case are odd sections within 20 miles of the line of the railroad as thus constructed and accepted, and were public lands, July 1, 1862, and have not since been entered under any pre-emption or homestead law, or otherwise reserved or disposed of by the United States, unless they are embraced in a grant to the state of Kansas by virtue of an act of congress of March 3, 1863, under which the defendant claims. If not thus embraced the title of the plaintiff to them is clear.
By that act congress granted lands to the state of Kansas for the purpose of aiding in the construction of various railroads, one of which was to extend from the city of Atchison via Topeka, the capital of that state, to its western line in the direction of Fort Union and Santa Fe, New Mexico, with a branch down the Neosho valley to a point where the Leavenworth and Lawrence road entered it. The lands were the alternate sections, designated by odd numbers, for 10 sections in width on each side of the proposed road. The grant was accompanied with a proviso that in case it should appear when the lines or routes of the road should be definitely fixed that the United States had sold any section granted, or any part thereof, or that the right of pre-emption or homestead settlement had attached to it, or that it had been reserved by the United States for any purpose whatever, then it should, be the duty of the secretary of the interior to select from the public lands, nearest to the tiers of sections specified, an equal amount of land in alternate* sections or parts of sections, designated by odd numbers, not previously sold, reserved, or otherwise appropriated, to be held by the state of Kansas for the like uses and purposes. The legislature of the state, by an act passed February 9, 1864, accepted the grant from the United States, and, in consideration that the Atchison, Topeka & Santa Fe Railroad Company would construct the road mentioned, directed the governor of the state, whenever any 20 consecutive miles were completed, to convey to that company by patent the lands granted by congress to aid in its construction, to be selected opposite to and within the limit of 10 miles of the road. On the sixteenth of the same month the company accepted the provisions of this act, and filed its acceptance with the secretary of state. On the nineteenth of March following, before any route of the road had been designated by the company, or any map of it filed, the commissioner of the general land-office made an order withdrawing from private sale or location, and from pre-emption or homestead entry, all the public lands lying within 10 miles of lines marked by him on a diagram as "the probable lines" of the road and its branches. This order was made at the request of senators and representatives in congress from Kansas, and was approved by the secretary of the interior. On the first of January, 1866, the company filed in the department of the interior a map or profile of its road from Topeka to Emporia, adjacent to which and within 20 miles thereof are the lands in controversy. It is conceded that afterwards the road was constructed in full compliance with the act of congress and the act of the state of Kansas, and that it was duly approved and accepted by the proper authorities. When its line was definitely fixed it appeared that of the lands lying within the limits of 10 miles thereof, many sections and parts of sections had been sold by the United States, and to many the right of pre-emption and homestead settlement had attached, and that some had been reserved by the United States for other purposes, thus greatly diminishing the quantity which would otherwise be covered by the grant. To make up the deficiency the