Εικόνες σελίδας
PDF
Ηλεκτρ. έκδοση

#629

*821

culties and contradictions. In the present case, for example, after the execution of the first mortgage, we should have the railroad company continuing as a corporation in esse, and the trustees for the bondholders, or their beneficiaries or assigns, a corporation in posse; and, after condition broken, the company would hold the title to its own existence as a mere equity of redemption. That equity it makes the subject of a second mortgage, and, in default, the beneficiaries, under the power of sale, became purchasers of the franchise, and organize themselves, by virtue of it, into the Memphis & Little Rock Railway company. The latter can hardly claim the status of a corporation at law, as the legal title to the franchise of being a corporation had never passed to it, on the supposition that it might pass by a private grant; and, if a corporation at all, it could only be regarded as the creature of equity, according to the analogy of equitable estates, a nondescript class hitherto unknown in any system of law relating to the subject. It finally was displaced by the judicial sale, under which the plaintiff in error organized as successor to both. In the mean time the original corporation has never been dissolved, and, for all purposes not covered by the mortgage, still maintains an existence as a corporate body, capable of contracting, and of suing and being sued. A conception which leads to such incongruities must be essentially errone

ous.

If we concede to the argument for the plaintiff in error the position that the language used, which authorizes the mortgage of the charter, may be taken in a literal sense, still the assignment would transfer it in the very state in which it might be at the date of the transfer. But at that date the only corporation which the charter provided for had already been organized. The only powers conferred upon corporators to that end had already been exercised and exhausted. The bondholders under the mortgage and their assignees, the purchasers at the sale, therefore took, and could take, nothing else than the charter, so far as it remained unexecuted, with such franchises and powers as were capable of future enjoyment and activity, and not such as, having already spent their force by having been fully exerted, could not be revived by a conveyance. This would include, by the necessity of the case, the franchise to organize a corporation which can only be exerted once for all; for the simple act of organization exhausts the authority, and having once been effected, is legally incapable of repetition.

It is a mistake, however, to suppose that the mortgage and sale of a charter by a corporation, in any proper sense which can be legally imputed to the words, necessarily conveys every power and authority conferred by it, so far, at least, as to vest a title in them, as franchises, irrevocable by reason of the obligation of a contract. In many, if not in most, acts of incorporation, however special in their nature, there are various provisions which are matters of general law and not of contract, and are, therefore, subject to modification or repeal. Such, in our opinion, would be the character of the right in the mortgage bondholders, or the purchasers at the sale under the mortgage, to organize as a corporation, after acquiring title to the mortgaged property, by sale under the mortgage, if in the charter under consideration it had been conferred in express terms, and particular provision had been made as to the mode of procedure to effect the purpose. It would be matter of law, and not of contract. At least it would be construed as conferring only a right to organize as a corporation, according to such laws as might be in force at the time when the actual organization should take place, and subject to such limitations as they might impose. It cannot, we think, be admitted that a statutory provision for becoming a corporation in futuro can become a contract, in the sense of that clause of the constitution of the United States which prohibits state legislation impairing its obligation until it has become vested as a right by an actual organization under it; and then it takes effect as of that date, and subject to such laws as may then be in force. Such a

contract, so far as it seems to assume that form, is a provision merely that, at the time, or on the happening of the event specified, the parties designated may become a corporation according to the laws that may then be actually in force. The stipulation, whatever be its form, must be construed as subject. and subordinate to the paramount policy of the state and to the sovereign prerogative of deciding in the mean time what shall constitute the essential characteristics of corporate existence. The state does not part with the franchise until it passes to the organized corporation; and when it is thus imparted it must be what the government is then authorized to grant and does actually confer.

It is immaterial that the form of the transaction is that of a mortgage, sale, or other transfer inter partes of the franchise to be a corporation. "The real transaction, in all such cases of transfer, sale, or conveyance," as was said by the supreme court of Ohio in the case of State v. Sherman, 22 Ohio St. 411-428, "in legal effect, is nothing more or less, and nothing other, than a surrender or abandonment of the old charter by the corporators, and a grant de novo of a similar charter to the so-called transferees or purchasers. To look upon it in any other light, and to regard the transaction as a literal transfer or sale of the charter, is to be deceived, we think, by a mere figure or form of speech. The vital part of the transaction, and that without which it would be a nullity, is the law under which the transfer is made. The statute authorizing the transfer and declaring its effect is the grant of a new charter couched in few words, and to take effect upon condition of the surrender or abandonment of the old charter; and the deed of transfer is to be regarded as mere evidence of the surrender or abandonment." It is, of course, the law in force at the time the transaction is consummated and made effectual that must be looked to as determining its validity and effect. This is the principle on which this court proceeded in deciding the case of Railroad Co. v. Georgia, 98 U. S. 359. The franchise to be a corporation remained in and was exercised by the old corporation, notwithstanding the mortgage of its charter, until the new corporation was formed and organized; it was then surrendered to the state, and by a new grant then made passed to the corporators of the new corporation, and was held and exercised by them under the constitutional restrictions then existing.

Our conclusions, then, are that the exemption from taxation contained in the twenty-eighth section of the act of January 11, 1853, was intended to apply only to the Memphis & Little Rock Railroad Company as the original corporation organized under it; that it did not pass by the mortgage of its charter and works, as included in the transfer of the franchise to be a corporation, to the mortgagees or purchasers at the judicial sale; that the franchises embraced in that conveyance were limited to those which had been granted as appropriate to the construction, maintenance, operation, and use of the railroad as a public highway and the right to make profit therefrom; and that the appellants, not having become a corporate body until after the restrictions in the constitution of 1874 took effect, was thereby incapable in law of having or enjoying the privilege of holding its property exempt from taxation. The decree of the supreme court of Arkansas is accordingly affirmed.

V.5s-20

*646

(112 U. S. 645)

UNITED STATES v. GREAT FALLS MANUF'G Co.
(December 22, 1884.)

1. PRIVATE PROPERTY TAKEN FOR PUBLIC USE-COMPENSATION.

Where property to which the United States asserts no title, is taken by their of ficers or agents, pursuant to an act of congress, as private property, for the public use, the government is under an implied obligation to make just compensation to the owner.

2. SAME JURISDICTION OF COURT OF CLAIMS-PROSECUTION OF CLAIM.

* Such an implication being consistent with the constitutional duty of the government, as well as with common justice, the owner's claim for compensation is one arising out of implied contract, within the meaning of the statute defining the jurisdiction of the court of claims, although there may have been no formal proceedings for the condemnation of the property to public use.

3. SAME-WANT OF FORMAL PROCEEDINGS-WAIVER.

The owner may waive any objection he might be entitled to make, based upon the want of such formal proceedings, and, electing to regard the action of the gov ernment as a taking under its sovereign right of eminent domain, may demand just compensation for the property.

Appeal from the Court of Claims.

This is an appeal from a judgment in favor of the Great Falls Manufacturing Company, a corporation of the state of Virginia, for the sum of $15,692 as compensation for all past and future use and occupation by the United States of certain land, water-rights, and privileges claimed by that company, and all consequential damages which it may legally assert by reason of the execution of a certain one of the plans adopted by the government for supplying the cities of Washington and Georgetown with water. The case made by the finding of facts, is, in substance, as will be now stated:

On the thirty-first of August, 1852, congress appropriated $5,000 to enable the president to cause the necessary surveys and estimates to be made for the best means of supplying those cities with good and wholesome water. 10 St. 92, c. 108. In execution of that act, President Fillmore transmitted to congress the report of Gen. Totten, of the corps of engineers, recommending the construction of an aqueduct from the Great falls of the Potomac, situated in the state of Maryland, about 16 miles distant from Washington, The Great falls form a series of rapids extending for about one-half or three-fourths of a mile, in the course of which the river falls about 70 feet; from which to the tide-level at Washington there is a further fall of about 70 feet. Just above these rapids is Conn's island, lying near the Maryland shore, and distant about 1,400 feet from the Virginia shore. At its head, extending up the stream, are several small islands called the Cyclades, separated from each other and Conn's island by narrow channels. On the Virginia side, is a body of land known as the Toulson tract, extending along the river from a point opposite the middle of Conn's island to a point below the Great falls, and running back a distance of about half a mile. A considerable portion of it is elevated ground, well adapted to the construction of mills and manufactories, which may be supplied with water-power from the river, and by canals, races, or other artificial water-ways. Before the construction by the government of the dam and other works to be presently referred to, Conn's island divided the Potomac river into two unequal channels, about 98 per cent. of the water passing through the Virginia channel, and 2 per cent. through the Maryland channel, at low stages; the total flow at low water being estimated at about 1,065 cubic feet per second, or 700,000,000 gallons daily. Of these lands, waterrights, and privileges, the Great Falls Manufacturing Company claimed to be the owner at and prior to the before-mentioned appropriation of $5,000.

On the third of March, 1853, congress appropriated, "to be expended under the direction of the president of the United States, for the purpose of bring ing water into the city of Washington, upon such plans and from such places she may approve, one hundred thousand dollars: provided, that if the plan

adopted by the president should require water to be drawn from any source within the limits of Maryland, the assent of the legislature of that state should first be obtained." 10 St. 206, c. 97. On the third of May, 1853, the legislature of Maryland passed an act giving her assent to the purchase by the United States of such lands, and to the construction of such dams, reservoirs, buildings, and other works, within her limits, as might be required under any plan adopted by the president for supplying Washington with water. That act provided that if the United States could not agree with the owners for the purchase of land, earth, timber, stone, or gravel required for the construction of such works, or in case the owner thereof should be a feme covert or under age, non compos mentis, or a non-resident, "it shall, nevertheless, be lawful for the United States to enter upon such lands, and to take and use such materials, after having first made payment or tendered payment for the same at the valuation assessed thereon," in the manner prescribed in that act; also, that before the act should take effect, the United States "shall agree to such conditions as the Chesapeake & Ohio Canal Company may consider necessary to secure the canal from injury in carrying into effect any plan that may be adopted for supplying the city of Washington with water as aforesaid." Then followed certain appropriations by congress for the purpose of executing the said plan: $250,000 "for continuing the work on the Washington aqueduct," (10 St. 664, Act March 3, 1855, c. 175;) $250,000, or so much thereof as was necessary, "for paying existing liabilities for the Washington aqueduct, and preserving the work already done from injury," (11 St. 86, Act August 16, 1856, c. 129;) and $1,000,000 "for continuing the Washington aqueduct," (11 St. 225, Act March 3, 1857, c. 108.)

By an act entitled "An act to acquire certain lands needed for the Washington aqueduct, in the District of Columbia," approved April 8, 1858, (11 St. 263, c. 14,) it was, among other things, provided: "Whereas, it is represented that the works of the Washington aqueduct, in the District of Columbia, are delayed in consequence of the proprietors' refusal, in some cases, to sell lands required for its construction at reasonable prices, and because in other cases the title to the said land is imperfect, or is vested in minors or persons non compos mentis, or in a feme covert, or in persons out of the District of Columbia; and whereas, it is necessary for the making of said aqueduct, reservoirs, dains, ponds, feeders, and other works, that a provision should be made for condemning a quantity of land for the purpose: Therefore, be it enacted, etc., that it shall and may be lawful for the United States, or its approved agent, to agree with the owners of any land in the District of Colum-a bia, through which said aqueduct is intended to pass, for the purchase or use and occupation thereof; and in case of disagreement, or in case the owner thereof shall be a feme covert, under age, non compos, or out of the District of Columbia, on application to a judge of the circuit court of said district, the said judge shall issue his warrant, under his hand, to the marshal of the said district to summon a jury. * * The rest of the act is limited to mere details. On the twelfth of June, 1858, (11 St. 323, c. 154,) the further sum of $800,000, and so much of the $250,000 as was not used under the act of August 18, 1856, were appropriated "for the completion of the Washington aqueduct." Thereafter, on the twenty-seventh of July, 1858, proceedings were commenced by the United States, before a justice of the peace in Maryland, for the assessment of the damages which the dam of the Washington aqueduct proposed to be constructed at the Great falls should cause to the appellee, of which the latter had due notice. The damages were assessed at $150,000; but, in November of the same year, the inquisition, upon the application of the United States, was set aside by the circuit court of Montgomery county, Maryland, and another one was ordered. But there was no further prosecu tion of these proceedings.

[ocr errors]

*651

*650

By an act approved March 3, 1859, (11 St. 435, c. 84,) the dams, aqueducts, water-gates, reservoirs, and all improvements connected therewith, constructed or to be constructed by the United States for the conveyance of water from the Potomac river, above the Great falls, to the cities of Washington and Georgetown, were directed to be placed by the president "under the immediate care, management, and superintendence of a properly qualified officer of the United States corps of engineers to be appointed by him, who shall act under the department of the interior," etc.; his decision "to be subject only to appeal to the secretary of the interior." On the twenty-fifth of June, 1860, (12 St. 106, c. 211,) congress appropriated the sum of $500,000 for the aqueduct, "to be expended according to the plans and estimates of Capt. Meigs, and under his superintendence.' On the twentieth of November, 1862, articles of agreement were executed between the secretary of the interior, in the name of the United States, and the Great Falls Manufacturing Company, wherein was recited the claim of the latter for compensation for the use by the former of certain lands and water-rights at the Great falls, the cost that would ensue to both parties from any further delay in the settlement of their differences, and the anxiety of the government to prosecute the work in question, and whereby such claim was referred to arbitrators, one of whom was the late Benjamin R. Curtis, with power to examine into, decide upon, and award such compensation, if any, as the claimant may be entitled to for the use and occupation of said land and water-rights, and all consequential damages that the company might legally claim by reason of the execution of the several plans adopted by the government in the location and construction of the dams and other works of the Washington aqueduct. Pursuant to this agreement, the United States and the claimant appeared by counsel before the arbitrators, witnesses were examined, and documentary evidence was submitted by the respective parties.

At the hearing the Great Falls Manufacturing Company filed with the arbitration a specific description of the lands to which they asserted title, and which they claimed would be affected by the improvements made or proposed to be made. The United States filed the specifications of their proposed plans of operations, being four in number. The arbitrators made an award in writing on the twenty-eighth of February, 1863, all the costs and expenses of which, including $12,000, the amount of compensation charged by them, were paid by the secretary of the interior out of the appropriations for the completion of the Washington aqueduct. By the award it was determined that the amounts to which the company was entitled as compensation and damages for the use and occupation by the United States of the land, waterrights, and privileges claimed by it, were as follows: If the first plan of inprovements was carried into execution, $63,766; if the second, $50,000; if the third, $77,200; if the fourth, $15,692. The fourth plan involved the construction of a dam of masonry from the Maryland shore to Conn's island, and gave the United States the right to deepen the channels in the Maryland side of Conn's island, near its head, so as to supply the aqueduct with whatever quantity of water the dams would yield. The claimants presented to the arbitrators title deeds and proofs, showing a valid title in it to the Toulson tract, Conn's island, and the Cyclades. Objections were presented and urged on behalf of the United States, but the arbitrators held the title of claimants to be valid and satisfactory. No other title than that of claimant is asserted.

The conduit through which the water supply of the city of Washington is drawn was completed on the fifth of December, 1863. On the fourth of July, 1864, congress appropriated the sum of $150,000 "for the purpose of constructing the dam of solid masonry across the Maryland branch of the Potomac river, near the Great falls, and for constructing the conduit around the receiving reservoir, and for paying existing liabilities and expenses, engi

« ΠροηγούμενηΣυνέχεια »