mortgage covering all its real estate, rolling stock, etc., then owned or thereafter to be acquired.

Until May 1, 1888, the terminal property continued to be operated by the St. Louis Company under the original agreement; on that date the terminal company took possession, and ever since then has continued to operate it and render terminal service thereon to the three railroad companies and their successors, as well as to other companies admitted from time to time under special agreements.

Upon a review of all the evidence, construing the writings in the light of the circumstances and the manifest purpose and intent of the parties, we are clear that the effect of the transactions thus far recounted was to establish a trust in the full and proper sense of the word, the terminal company being invested as trustee with complete legal title, but without beneficial ownership, and subject to a duty to maintain and operate the property and exercise all its corporate powers for the common use and benefit of the three railroad companies, their successors and assigns, and such other companies as might be admitted by them to a proprietary participation in the terminal.

in accordance with the terms and spirits of the aforesaid contract" is not merely contractual, but amounts to a declaration of trust, and, together with the other evidence, shows clearly that the powers were procured from the state expressly to enable the company the better to fulfil the purposes of its existence as such trustee, and not to set it up in business on its own account. The substitution of the terminal company with more elaborate powers in place of the depot company contemplated at the beginning shows a development and modification of the original plan, but no departure or substantial change. The particular stipulations contained in the articles respecting the control of the terminal company were intended not as a substitute for, but as safeguards of, the trust. The absolute form of the conveyances, and the issuance of stock and bonds "in payment," were intended to give credit to the company in its dealings with outside parties, and to render its bonds more readily salable; but they constituted the [208] mere mechanism for carrying into effect the main purpose of the parties, and, as between them, were controlled by that purpose and by the articles and resolutions that mani

The gist of defendants' argument to fested an express declaration of the the contrary is that the incorporation of trust. All the circumstances, and what the terminal company and the conveyance we have quoted from the resolution of the property to it by deeds absolute in of the terminal company directors, form manifested a substantial change of show that the title was conveyed for the plan from that embodied in the contract purpose of enabling that company to conof January 2, 1882; stress being laid trol and manage the terminal, in further[207] upon the fact that the powers ance of the objects of the 1882 agreement. of a terminal railway company, as It needs no particular form of words acquired under the articles of incorporation, were much more extensive than those of a depot company, and it being contended that the provisions of the articles respecting the control of the terminal company and the resolutions providing for the transfer of the property to it, the form of the deeds themselves, and the issuance of stock and bonds to the proprietary companies in payment, demonstrated a purpose to in vest the terminal company with title for all purposes. But the main object of es tablishing a joint terminal at the commor expense and for the common use of the three companies, and to retain their proprietary interest in it while confiding its maintenance and operation to their trustee, is so manifest that all the proceedings are properly to be construed as designed to give effect to it, and seeming inconsistencies and ambiguities resolved accordingly. The provision of the articles that "all the powers exercised by this company shall be

to create a trust, so there be reasonable certainty as to the property, the objects, and the beneficiaries. Colton v. Colton, 127 U. S. 300, 310, 32 L. ed. 138, 142, 8 Sup. Ct. Rep. 1164. But if, as here, the subject of the trust be a legal interest in property, and capable of legal transfer, the trust is not perfectly created unless the legal interest be actually vested in the trustee. Adams v. Adams, 21 Wall. 185, 192, 194, 22 L. ed. 504, 507, 508. Hence the necessity in this case of deeds conveying the fee to the terminal company. But it is not necessary that the trust be expressed in the same instrument that transfers the title. Various instruments may be read together in order to ascertain the intention to establish one. Loring v. Palmer, 118 U. S. 321, 340, 30 L. ed. 211, 218, 6 Sup. Ct. Rep. 1073.

The agreement of May 10, 1889, between the terminal company of the first part and the three proprietary companies of the second part, fixed the terms upon which the property should be managed

panies to the ordinary rights of stockholders. Their contributions to the original cost [210] of the property having been secured by mortgage bonds, according to the plan of 1882, provision was now made for distributing the entire capital stock according to the original proportions, one half to the St. Louis, one quarter to each of the two other companies, but with certain material restrictions upon the ordinary rights of stockholders, expressed in the agreement, and others necessarily implied.

and the terminal service performed for a period of thirty years to date from May 1, 1888. It constituted a working arrangement for that period, but did not in terms or by implication set aside the trust or place a time limit upon it. It provided that, for the terminal service, the proprietary companies should make payments, in proportion to the wheelage of each, to cover interest upon the mortgage bonds, the cost of maintenance, repairs, taxes, and insurance, and the cost of operating the terminal, including all expenses (except the operation of engine houses, care of engines, and repairs Since, from the very nature and terms [209] thereto. which were separately of the trust, all the property and frandealt with), after deducting any chises of the terminal company were to be amounts which other railway com- held for the benefit of the proprietary panies might be obliged to pay for companies, and all its corporate powers the use of the property. Engine- exercised in the administration of the house expenses were to be apportioned ac- joint terminal for their common use, the cording to the number of engines of each stockholding interest in the terminal comcompany, engine repairs to be charged to pany necessarily must be modified, as bethe company for which the work was tween the parties, to the extent necessary done. The agreement contained other to give full effect to the trust. In the provisions of permanent effect, providing hands of the proprietors of the connecting for the allotment of the stock of the termi- lines the stock was the evidence of their nal company to the proprietary com- right to participate in the benefits of the panies, and declaring the terms upon trust, in the control and management of which outside companies might be ad- the terminal company, and in the use of mitted to ownershp of the stock or the the terminal; but such use, in the nature use of the property. It recited that the of things, must be proportioned, not acproprietary companies were entitled to cording to the magnitude of their respecthe stock in the proportion of one half to tive stock holdings, but according to their the St. Louis Company, one fourth to respective traffic requirements. And since each of the others, and provided for the the terms of the trust required that these issuance of certificates accordingly, and connecting lines should have the entire that these should express upon their faces beneficial use of the property upon paythat they were not transferable without ing the cost of the terminal service, there the consent in writing of all the proprie- was no room for a profit from the operatary companies, except as to shares issued tions of the terminal company out of to qualify directors. And there was a which dividends could be paid. Except provision that the St. Louis Company in the theoretically possible but extremely might sell one half of its stock, or one improbable event of an abandonment of quarter of the whole, to such railroad the terminal (as to the effect of which no company as might be acceptable to a opinion need be expressed), it is plain majority of the proprietary companies, in that, as between the parties to the trust which case the purchasing company might and others having notice of it, the stock be admitted as one of the parties to the could have little or no exchange value exagreement upon the same terms and con- cept to a company owning or operating ditions as those stipulated for the other a railroad line connecting or capable of parties of the second part; and that, ex- connecting with the terminal. In the cept as thus provided, other railroad com- hands of others having notice of the trust, panies should not be admitted to the use the stock represented no substantial of the terminal property without the con- [211] property interest. Some recogsent of all the parties of the second part. nition of the anomalous status of the Here again we have a further modifica- stockholding interest is to be found tion of some of the details of the original in the acts of the parties above set plan, but in respects altogether consistent forth, especially in the provisions of with the continuance of the trust; incon- the agreement of 1889. The amount sistent, indeed, with a purpose to treat the of stock provided for shows that it terminal company as an independent en- was deemed probable that eventually tity, subject only to contractual obliga- the property would have a value in excess tions, and remit the proprietary com- of the original cost represented by the

bond issue, or that value might be given to the stock through liquidation of the bonds or otherwise, and that, upon a sale of a participation in the terminal property and facilities to an outside railroad company, evidenced by a transfer of stock in the terminal company, some return could be got for such increased value. The apportionment of the original issue, and the stipulations of the 1889 agreement, recognized that the St. Louis Company, as representative of the original Wabash Company, was equitably entitled to preference in any profits that might be derived from such a sale to an outside company. And evidently it was then anticipated that there would be four proprietary companies, each holding one fourth of the stock, with equal representation in the board of directors.

was

acquired and

adopted.

the amendments

Obviously the fiduciary character of the terminal company extended to its officers and directors as to all others concerned in its management, charging them with a duty to uphold the trust, and imposing upon them the usual disability about reaping a personal advantage at the expense of the beneficiaries. And it is clear and undisputed that the Messrs. Hubbell acquired their stock with full notice of all essential facts pertaining to the trust; they themselves, at all times material, were officers and directors of the terminal company, and acted in a fiduciary capacity in everything relating to its affairs. Mr. F. M. Hubbell was an officer and director of that company at the beginning and continuously thereafter, We are not here concerned with any especially active in its management; and question pertaining to the rights of the during a period which included the imbondholders. It may be assumed that, if portant transactions in question he also necessary for their protection, the mort- was a director and officer of each of the gage would be treated as conveying the proprietary companies, and their trusted entire estate, both legal and equitable, in representative in respect to terminal matthe terminal property. No express pro- ters at Des Moines. Mr. F. C. Hubbell vision appears to have been made for pay- became a director of the terminal coming off the principal of the bonds. Wheth-pany in January, 1890, president two er the beneficiaries of the trust, as years later, and has been such continubetween themselves, were or are entitled ously since. to have provision made for discharging the principal by including periodic amortization charges as a part of the cost of operating the terminal is a question that we need not consider.

[213] In the year 1886, and thereafter until and during the year 1890, the property of the Wabash system, including the stock of the St. Louis Company, with control of its part of Nor are we at this moment concerned the stock of the terminal company, in the hands of a purchasing with any question that might arise if was stock of the terminal company had come committee as trustees for the Wabash or should come to the hands of a bona bondholders. In February, 1890, F. M. fide purchaser for value without notice. Hubbell obtained from this committee an The principal controversy [212] arises option for the purchase of $135,000 of from the fact that defendants F. M. the terminal company bonds, and a quarHubbell and F. C. Hubbell have be- ter interest in its capital stock for $135,come the holders of five eighths of 000, accepted the option, made over to the capital stock, upon which fact, General Dodge a half interest in it, and together with the alleged effect of Hubbell and Dodge each received one half the amendments to the articles of in- of the specified bonds and one eighth of corporation adopted April 8, 1890, de- the outstanding capital stock, with a guaranty on the part of the purchasing comfendants rest the insistence that the pro-mittee that the St. Louis Company would prietary companies have lost their right to control the action of the terminal company, that the Messrs. Hubbell, as stockholders, are entitled to control it and to have dividends out of its profits, and that, from and after the expiration of the 1889 agreement, complainants have no right to the use of the terminal except upon terms to be agreed upon by the terminal company as controlled by the Messrs. Hubbell.

It is important, therefore, to consider the circumstances under which their stock

approve the transfer (as it afterwards did, through its board of directors), and that the committee would consent to such change in the articles of incorporation of the terminal company as would permit one director to be nominated by any person or company holding one eighth of the stock. At this time General Dodge was president of the terminal company, and also president and principal stockholder of the Northern Company; Hubbell, besides his relation to the terminal company, was president of the Northwestern Com

229

pany and its controlling stockholder. In The title now asserted by the Messrs. correspondence between Mr. Hubbell and Hubbell to five eighths of the terminal the purchasing committee antecedent to company stock was derived not directly this transaction, they warned him that it from the Wabash purchasing committee, would be necessary to confine a sale of but from [215] the consolidated Northstock "to such railway companies as ern and Western Company. That comwould be interested in the station;" and pany, in addition to the three eighths he assented to this, acknowledging that transferred to it by Hubbell and Dodge, "it would be prejudicial to sell any of this had the two quarter-interests originally stock to outsiders, and I understand it, as owned by those companies, making sevyou do, that the stock cannot be sold with- en eighths in all. In October, 1893, out the consent of the different railroad the consolidated company pledged to companies who now form the terminal F. M. Hubbell & Son five eighths of company." Later Hubbell acquired from the terminal company stock (2,500 the purchasing committee $50,000 of the shares) as security for a debt. The bonds and an additional eighth interest in stock was transferred to the Hubbell the capital stock of the terminal company firm on the books at that time, and for $57,736, being [214] par and ac- so remained down to the institution crued interest for the bonds and 15 of this suit, except as to five "qualifying per cent of par for the stock, upon the understanding, expressed in writing, that an eighth interest should be "sufficient to represent a proprietorship in the company, according to the understanding we had when you were here," evidently meaning that the eighth retained by the purchasing committee should carry with it a proprietary interest and influence in the terminal, not limited in proportion to the amount of the stock.

Defendants insist that because the purchasing committee sold the stock to Hubbell and Dodge for a valuable consideration, they must be taken to have dealt with it as having substantial value; and that since, in afterwards making report to the board of directors of the Wabash Company, with an account of their financial transactions, the committee included their receipts from sales of the stock and bonds of the terminal company, and the directors approved the account, complainant Wabash Railway Company is estopped from denying that Hubbell and Dodge acquired a substantial and valuable interest in the terminal company. We deem it clear, however, that the intent of the purchasing committee, known and assented to by Hubbell and Dodge at the time, was merely to enable the latter to sell the three-eighths interest to some railroad company capable of participating in the use of the terminal. Whether consistently with their fiduciary relations or not, they took advantage of this opportunity in the following year, when the Northern and Northwestern Companies were consolidated, and they sold to the consolidated company the stock in question, apparently and presumably at a profit over and above what they paid the purchasing committee for it. There is no foundation for the suggested estoppel.

shares" placed in the names of individuals, but controlled by the firm. On January 29, 1894, the indebtedness was settled between the directors of the consolidated company and the Messrs. Hubbell upon terms that included a purchase by the latter of the 2,500 shares of terminal company stock at 10 per centum of its par value. Passing for the moment certain special grounds of attack upon the title they thus acquired to these shares, it is obvious that they took them subject to all qualifications arising out of the trust that pertained to the property and franchises of the terminal company.

The quarter interest in the terminal company stock retained by the consolidated company afterwards passed from it to the complainant Chicago, Milwaukee, & St. Paul Railway Company, which acquired at the same time the Northern and Northwestern lines. That company took with notice of the claim of the Hubbells to a five-eighths interest; but this does not estop it from disputing the validity of their claim, nor from setting up, as in this suit, whatever beneficial participation in the trust respecting the terminal property may be incident to its ownership of one fourth of the stock of the terminal company, together with connecting lines of railroad, and asking for relief against any inequitable use by the Hubbells of the five-eighths interest claimed by them.

As to the amendments to the articles of incorporation: These are alleged to have been adopted at a meeting of [216] the stockholders of the terminal company held April 8, 1890. Their purport was, briefly, to omit from the articles the copy of the contract of 1882 recited therein, the declaration that the powers exercised by the com. pany should be in accordance with the terms and spirit of that contract, and

coming within the general scope of their duties. Nor did either of the proprietary companies, by any formal corporate action, accept or ratify the amendments.

the requirement that assent in writing of, the proprietary companies should be necessary before any disposition of the franchises of the terminal company should be made; to set aside previous proceedings Moreover, it affirmatively appears, and respecting the amount of capital stock to both courts below in effect found, that be issued to the proprietary companies, there was no actual intent on the part of and provide for the distribution of a much any of the parties concerned to affect the decreased amount ($400,000 par instead substantial rights or equities of the proof $2,000,000), but in the same propor- prietary companies, or to terminate, retions as before, the remaining capital pudiate, or substantially modify the trust steek ($1,600,000 par) to be issued only respecting the terminal property. It does by resolution of the stockholders, adopted appear that some of those active in proby vote of more than seven eighths of all posing the amendments, and assuming to the stock theretofore issued; and to elim- act for the proprietary companies in asinate the former method of selecting di-senting to them (there is a question rectors, and provide that they should be whether they actually were adopted by a elected by the stockholders, but that it proper vote of the stockholders, but we should require the votes of more than do not go into this), were under the imseven eighths of all the stock to elect a pression that the contract of 1882, recited director, and that as to all matters except in the articles of incorporation, already the ordinary operation of the property, had been abrogated and the trust set aside the directors could act only upon unan- by the issuance of the terminal company's imous vote of the eight members of the bonds and apportionment of the stock to board. One of the articles adopted pur- the proprietary companies in payment ported to repeal, strike out, and expunge for the property conveyed, and by the the proceedings of a stockholders' meeting making of deeds absolute in form; that held December 10, 1884, at which the both in respect to the ownership of the original articles of incorporation were property and the management of it unadopted. der the contract of 1889, the original arrangement had been abandoned; and [218] that it was desirable to amend the articles so as to make them conform to the situation actually existing.

It is plain enough, and is conceded, that the corporation could not, by merely altering its own internal organization, affect the interests of its cestuis que trustent. It is as evidence of a modification of the agreement between the stockholders of the terminal company-themselves benficiaries of the trust-that the amendments are invoked. So regarding them, the question is, by what authority and with what intent were they adopted? The stockholders' meeting was attended by six individuals (including the two Hubbells), and two others by proxy, each of [217] whom assumed to represent, and, in a general sense, did represent, one or the other of the three proprietary companies. F. M. Hubbell himself was president of the Northwestern Company and assumed to represent it. Others present were the vice president of the Northern and the president of the St. Louis Companies. The evidence fails to show that those present had express authority to act for the proprietary companies in amending the articles; and action of this kind-materially affecting the property interests of the three companies in a matter so vital as the ownership and control of an important terminal-was so far out of the usual or ordinary course of business that authority to represent their corporations in assenting to it was not to be implied as

Clearly, this was a mistaken impression, as will appear from what we have said. It was a mistake, not indeed as to any mere matter of fact, nor, on the other hand, as to any pure question of law, but rather as to the existing legal rights, interests, and relations of the parties resulting from antecedent transactions. Whether it was such a mistake as to furnish ground for a cancelation of the amendments in equity is a question into which we need not enter. See Snell v. Atlantic F. & M. Ins. Co. 98 U. S. 85, 90, 25 L. ed. 52, 54; Griswold v. Hazard, 141 U. S. 260, 284, 35 L. ed. 678, 688, 11 Sup. Ct. Rep. 972, 999; Utermehle v. Norment, 197 U. S. 40, 56, 49 L. ed. 655, 661, 25 Sup. Ct. Rep. 291, 3 Ann. Cas. 520; Philippine Sugar Estates Development Co. v. Philippine Islands, 247 U. S. 385, 389, 62 L. ed. 1177, 1180, 38 Sup. Ct. Rep. 513; Pom. Eq. Jur. §§ 841-849. For the fact that those who assumed to act for the proprietary companies in assenting to the amendments were mistaken as to the existing legal situation, so that the amendments, if given effect according to their terms, instead of bringing the articles into conformity with the situation already actually existing, would material