Opinion of the Court.

Now the bills allege that $267,775 of stock was voted at the meeting authorizing the lease, by the representatives of the "Shelby Railroad District of Shelby County," under the authority of the last two acts of the general assembly, and that without such vote the majority of the stockholders did not approve the lease. At that time this amount of the bonds, issued in payment of the subscription, was outstanding. It is true there had been an exchange of the old for new bonds at a lower rate of interest, but the principal of the indebtedness to that amount still remained. The question, therefore, is whether this stock was properly voted by the representatives of the "Shelby Railroad District of Shelby County."

This precise question was presented to the Court of Appeals of Kentucky, in a consolidated action to which certain taxpayers, the Shelby Railroad Company, and the "Shelby Railroad District of Shelby County" were parties, Kreiger v. Shelby Railroad Co., 84 Kentucky, 66, and by that court decided in favor of the right of the district to vote the stock. An attempt was made to have the judgment of that court reviewed by this, but the case was dismissed for want of jurisdiction, on the ground that no Federal question was involved. Kreiger v. Shelby Railroad Co., 125 U. S. 39. While that case may not work an estoppel by judgment, by reason of a difference of parties, it is an authority to be respected, if not followed.

But, passing that matter, what are the merits of these cases? The contention is, that, by the acts of 1851 and 1869, rights in the stock were vested in the taxpayer, which could not be divested after the issue of the bonds, though attempted to be, by the legislature, in the acts of 1870 and 1873, or as more fully expressed in the brief:

"The acts of 1851 and 1869 confer on the individual stockholders rights which are impaired by the acts of 1870 and 1873; that is, that the exclusive right to vote at stockholders' meetings, and the sole right to receive dividends given by the acts of 1851 and 1869, to the individual stockholders and those who should become so by the payment of taxes, is im

Opinion of the Court.

paired by the acts of 1870 and 1873, which grant the right to the Shelby Railroad District of Shelby County to vote at stockholders' meetings."

With respect to the matter of dividends, we have, in this case, no need of inquiry. The single question is, as to the right to vote this stock. The Court of Appeals held that a corporation was in fact created by the act of 1869, granting authority to a defined portion of Shelby County to subscribe stock and vote bonds; that that corporation, by virtue of the subscription and issue of the bonds, became the owner of the stock; and that the acts of 1870 and 1873 simply prescribed who should represent the corporation, and by what name it should be known. Counsel criticise this ruling severely, asserting that corporations are never created by implication, and that there is in the act of 1869, in terms, no attempt to create one. But this is a matter of a purely local nature. A corporation may be formed in any manner that a State sees fit to adopt; and when the highest court of a State decides that, by certain legislation, a corporation has been created, such decision concludes not only the courts of the State, but also those of the United States. It is a matter over which we have no review, and in respect to which the decision of the state court is final. If it were an open question, it would be difficult to avoid reaching the same conclusion. By the act of 1869, this prescribed portion of Shelby County was authorized to issue bonds and subscribe stock. The bonds when issued were not the obligations of Shelby County, nor of the individual taxpayers; and still there must be some debtor. That debtor was this portion of Shelby County. Giving to it power to issue bonds and create indebtedness, is the creation of an entity with power to act, and if this entity has power to create a debt, it becomes subject to suit. That this entity was not, in terms, named a corporation is not decisive. It is enough that an artificial entity was created, with power to exercise the functions of a corporation. It was, though not named, a corporate entity, and the acts of 1870 and 1873, as well said by the Court of Appeals, simply designate who should act for this corporate entity and give it a name. As a corporate en

Opinion of the Court.

tity, it issued bonds and subscribed for the stock. It became thereby the owner of the stock, and, as owner, it was entitled to exercise all the rights and privileges of ownership, includ ing the right to vote the stock, unless the legislature creating it and prescribing its powers had, in terms, vested such control of the stock in other hands.

But it is said that the acts of 1851 and 1869, in substance. gave to each taxpayer at the time of paying his tax an equal amount of the stock; that an amount of taxes had been paid prior to this lease nearly equal to the entire issue of the bonds; and that, therefore, there was substantially no stock left in the district which it had a right to vote. But the original act authorized no bonds; and did not provide for the payment of the subscription by the issue of bonds, but by taxes levied in amount and at times necessary to pay it according to its terms. When the taxpayer paid his taxes he, in effect, paid to the railroad company a proportionate amount of the subscription; and the provision was in substance that he should take the stock which he had then paid for. There was, therefore, an equality between the stock and the taxes, and the county was simply an agent to collect the taxes and pay them over to the company, and receive the stock and transfer it to the taxpayer. But the act of 1869 authorized a radical change; and this newly created corporation was not merely the conduit through which money passed from the taxpayer to the company, but it became an independent subscriber, making its own subscription and issuing its own bonds in payment therefor. Those bonds represent and are the equivalent of the stock, and until the taxpayer pays those bonds he has equitably no right to the stock. It is true the terms of the original charter were not changed by the amendment of 1869; but to hold that the parties thus far paying taxes- taxes which mainly have gone to the payment of the interest on the bonds

are entitled to the stock works this unreasonable result: Though $300,000 and over of interest has now been paid, the bulk of the bonds remain outstanding, and are yet to be paid, as well as several hundred thousand dollars of interest. Shall the whole issue of stock be absorbed by those who pay the

Opinion of the Court.

first interest on the bonds, leaving to those who thereafter pay taxes for account of future interest and to discharge the principal, no right to any stock; or shall the railroad company be compelled to issue stock in excess of the $300,000? Nothing of the latter kind is provided for; nothing to indicate that the district can, by extending the bonds and paying interest, compel an additional issue of stock. All the stock that the railroad company was called upon to issue by the terms of its contract was the $300,000, and that was paid for by the bonds; and the taxpayer's equity in the stock only arises as he pays the bonds, and not as he simply pays interest on them.

The character of the transaction contemplated by the act of 1851 and the difference created by the amendment of 1869, as above indicated, is made clearer by section 20 of the former act, providing "that said company shall not issue certificates of stock until the same shall be paid for." In other words, payment of taxes paid the subscription, and of course worked a right to the stock then paid for. This provision was not changed by the amendment of 1869, but the subscription made by the district was paid for at the time by the issue of its bonds; and having been paid for, it was the duty of the company to issue its stock; and to whom should it be issued but to the party who had made the payment, to wit, the district? Having paid for and owning and possessing the stock, who should vote it? Obviously the owner; and its right to vote should not be diminished until and except when the amount which it has paid for the stock in bonds is made good to it by the taxpayers. Such was the construction placed upon this matter by the Court of Appeals; and we think that construction, notwithstanding some little obscurity in the language of the various statutes, is correct.

With reference to the suggestion made by the counsel for the appellees, that the delay in bringing these suits is such laches as defeats any rights which existed in the first instance, we refer to the case of The St. Louis, Vandalia & Terre Haute Railroad Company v. The Terre Haute and Indianapolis Railroad Company, ante, 393.

The decrees are

VOL. CXLV-27

Affirmed.

Opinion of the Court.

AERKFETZ v. HUMPHREYS.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MICHIGAN.

No. 355. Submitted April 29, 1892.- Decided May 16, 1892.

The obligation upon an employé of a railroad company to take care and exercise diligence in avoiding accidents from its trains, while in the performance of his duties about the tracks, is not to be measured by the obligation imposed upon a passenger when upon or crossing them.

In an action by a track repairer against the receiver of a railroad to recover damages for injuries received from a locomotive and train while at work repairing the track in a station yard, it is held that the servants of the receiver were guilty of no negligence; and that if they were, the plaintiff's negligence contributed directly to the result complained of.

ON May 17, 1887, William Aerkfetz, being under twentyone years of age, by Frederick Aerkfetz, his next friend, commenced this action in the Circuit Court of the United States for the Eastern District of Michigan against the defendants in error, receivers duly appointed and in possession of the Wabash Railroad, to recover damages for personal injuries caused, as alleged, by their negligence. The defendants answered, and on a trial before a jury the verdict and judgment were for the defendants. To reverse such judgment this writ of error has been sued out.

Mr. C. E. Warner and Mr. L. T. Griffin, for plaintiff in error, submitted on their brief.

Mr. W. H. Blodgett, for defendants in error, submitted on the printed record.

MR. JUSTICE BREWER delivered the opinion of the court.

Plaintiff was in the employ of the defendants in the yard of the railroad company at Delray, working on one of the tracks therein, and, while so engaged, was run over and injured by a freight car, moved by a switch engine.