without having first obtained said written cided upon its facts. Knox County Comrs. consent, signed by the resident stockholders v. Aspinwall, 21 How. 539, 545 [16: 208, [573]in Illinois, shall be null and void." *Of that 210]: Moran v. Miami County Comrs. 2 statute, this court said: "It did not limit Black, 722, 724 [17: 342, 344]; Gelpcke v. the scope of the powers conferred upon the Dubuque, 1 Wall. 175, 203 [17: 520, 525]; corporation by law, an excess of which could St. Joseph Twp. v. Rogers, 16 Wall. 644, 666 not be ratified or be made good by estoppel; [21: 328, 339]; Humboldt Twp. v. Long, 92 but only prescribed regulations as to the U. S. 642, 650 [23: 752, 756]. And see Zamanner of exercising corporate powers, com- briskie v. Cleveland, Columbus, & Cincinpliance with which the stockholders might nati Railroad Co. 23 How. 381 [16: 488], waive, or the corporation might be estopped, above cited. by lapse of time, or otherwise, to deny." 145 U. S. 403 [36: 752].

Royal British Bank v. Turquand was an action upon a bond signed by two directors, A corporation, though legally considered a and under the seal of the company, and given person, must perform its corporate duties for money borrowed by a joint-stock comthrough natural persons, and is impersonated pany formed under an act of Parliament limin and represented by its principal officers, iting its powers to the acts authorized by its the president and directors, who are not deed of settlement, and whose deed of settlemerely its agents, but are, generally speak-ment provided that the directors might so ing, the representatives of the corporation in its dealings with others. Shaw, Ch. J., in Burrill v. Nahant Bank, 2 Met. 163, 166, 167 [35 Am. Dec. 395]; Comstock, J., in Hoyt v. Thompson, 19 N. Y. 207, 216. And the appropriate form of verifying any written obligation to be the act of the corporation is by affixing the signatures of the president and secretary and the corporate seal.

The bonds of the Beattyville Company were instruments negotiable by delivery; and the guaranty indorsed upon each of them by the Louisville, New Albany, & Chicago Railway Company was signed by the president and secretary and under its corporate seal, and was in terms payable to the holder thereof and itself negotiable.

borrow such sums as should, by a resolution passed at a general meeting of the company, be authorized to be borrowed. The defense was that no such resolution had been passed, and that the bond had been given without the authority of the shareholders. The court of exchequer chamber, affirming the judgment of the Queen's bench, without passing upon the sufficiency of the resolution in that case, held the company liable on the bond; and, speaking by Chief Justice Jervis, said: "We may now take for granted that the dealings with these companies are not like dealings with other partnerships, and that the parties dealing with them are bound to read the statute and the deed of settlement. But they are not bound to do more. And the party here, in reading the deed of settlement, would find, not a prohibition from borrowing, but

Finding that the authority might be made complete by a resolution, he would have a right to infer the fact of a resolution authorizing that which on the face of the document appeared to be legitimately done." 6 El. & Pl. 332.

One who takes from a railroad or business corporation, in good faith, and without actual notice of any inherent defect, a negotia-a *permission to do so on certain conditions.[575) ble obligation issued by order of the board of directors, signed by the president and secretary in the name and under the seal of the corporation, and disclosing upon its face no want of authority, has the right to assume its validity, if the corporation could, by any action of its officers or stockholders, or of both, have authorized the execution and issue of the obligation.

In Merchonts' Nat. Bank v. State Nat. Bank, 10 Wall. 604 [19: 1008], this court stated, as an axiomatic principle in the law of corporations, this proposition: "Where a party deals with a corporation in good faith -the transaction is not ultra vires-and he is unaware of any defect of authority or oth[574]er irregularity on the part of those acting for the corporation, and there is nothing to excite suspicion of such defect or irregularity, the corporation is bound by the contract, although such defect or irregularity in fact exists. If the contract can be valid under any circumstances, an innocent party in such a case has a right to presume their existence, and the corporation is estopped to deny them." 10 Wall. 644, 645 [19: 1018]. The proposition was supported by citations of many English and American cases, and among them Royal British Bank v. Tur quand (1856) 6 El. & Bl. 327. And the justices of this court, while differing among themselves in the application of the principle to municipal bonds, have always treated Royal British Bank v. Turquand as well de

The decision in Royal British Bank v. Turquand has been followed, and Lord Wensleydale's dicta to the contrary, a year later, in Ernest v. Nicholls (1857) 6 H. L. Cas. 401, 418, 419, have been disapproved or qualified, in a long line of decisions in England. Agar v. Athenæum Life Assurance Society (1858) 3 C. B. N. S. 725, 753, 755; Prince of Wales Life & Educational Assurance Co. v. Harding (1858) El. Bl. & El. 183, 221, 222; Re Athenum Life Assur. Society (1858) 4 Kay & I. 549, 560, 561; Fountaine v. Carmarthen R. Co. (1868) L. R. 5 Eq. 316, 321; Colonial Bank of Australasia v. Willan (1874) L. R. 5 F. C. 417, 448: Mahony v. East Holyford Min. Co. (1875) L. R. 7 H. L. 869, 883, 893, 894, 902; County of Gloucester Bank v. Rudry Merthyr Steam & H. C. Colliery Co. [1895] 1 Ch. 629, 633. The only English decision cited at the bar, which appears to support the opposite conclusion, is Commercial Bank v. Great Western Railway Co. (1865) 3 Moore, P. C. C. N. S. 295, which, unless it can be distinguished on its peculiar circumstances, is against the general current of authority. See also a very able judgment of the court of errors and appeals of New Jersey, delivered by Mr. Justice Depue, in Hacken

sack Water Co. v. De Kay, 36 N. J. Eq. 548,
559-567.

It necessarily follows that the rights and liabilities, if any, that it may have as a corporation of Kentucky, or as a corporation of Illinois, cannot be adjudicated in this case; and that the decrees both of the circuit court and of the circuit court of appeals, so far as regards the Louisville Banking Com

In the present case, all natural persons or corporations by whom bonds of the Beatty ville Company bearing the guaranty of the Louisville, New Albany, and Chicago Railway Company, signed by the proper officers of the company and under its seal, were pur-pany, must be reversed, and the case remandchased in good faith, and without notice that there had been no petition of a majority of the stockholders for their execution, had the right to assume that such a petition had been presented, as required by the statute of 1883. The records of the railroad corporation and of its board of directors, which would naturally show whether such a petition had or had not been filed, were private records, [570]which a purchaser of the bonds was not obliged to inspect, as he would have been if the fact had been required by law to be entered upon a public record. Brewer, J., in Blair v. St. Louis, Hannibal, & Keokuk Rail road Co. 25 Fed. Rep. 684; Hackensack Water Co. v. De Kay, 36 N. J. Eq. 548, 568; McCormick v. Market Nat. Bank, 165 U. S. 538, 551 [41: 817, 8221; Irvine v. Union Bank of Australia, L. R. 2 App. Cas. 366,

379.

ed to the circuit court with directions to dismiss the bill as to the guaranty on the ten bonds of which the Louisville Banking Company was a bona fide purchaser, and to enter a decree, as to the guaranty on the forty-five bonds of which it was not a bona fide purchaser, that an injunction be issued against bringing suit upon the guaranty on these bonds against the Louisville, New Albany, & Chicago Railway Company, a corporation of Indiana, and that there be stamped on these bonds the following words: "This guaranty is not binding on the Louisville, New Albany, & Chicago Railway Company, a corporation of Indiana, and is to that extent canceled, without prejudice to the rights or liabilities, if any, that it may have as a corporation of Kentucky, or as a corporation of Illinois."

Accordingly, in the first case, the decree of the Circuit Court of Appeals is affirmed, and It follows that the decree of the circuit the case remanded to the Circuit Court of court of appeals, so far as it ordered the bill the United States with directions to dismiss to be dismissed with regard to the guaranty the bill as against the Louisville Trust Comon the bonds which the Louisville Trust Company; and, in the second case, the decrees of pany and the Louisville Banking Company took in good faith, and without notice of any want of authority to execute the guaranty, was correct.

But, in regard to the guaranty on the bonds which the Louisville Banking Company took with notice that the guaranty had not been authorized by a majority of the stockholders, the decree of the circuit court of appeals needs to be modified.

That court, in its opinion and decree, undertook to determine whether the Louisville, New Albany, & Chicago Railway Company was liable upon the guaranty as a corporation of Kentucky, and as a corporation of 11linois.

Apart from the question whether it was a corporation of Kentucky, and from the difficulty of treating the negotiable guaranty upon each bond as itself divisible, binding the guarantor as a corporation of one state, and not binding it as a corporation of another state, there is an insurmountable objection to the decree in its present form.

The Louisville, New Albany, & Chicago Railway Company is a party to this suit as a corporation of Indiana only, and not as a corporation of Kentucky. It could not, either as a corporation of both states, or as a corporation of Kentucky only, have brought this suit against corporations and citizens of Ken

tucky, in the circuit court of the United States for the district of Kentucky, without ousting the jurisdiction of the court. Baltimore & Ohio Railroad Co. v. Wheeler, 1 Black, 286 [17: 130]; St. Louis & San Francisco Railway Co. v. James, 161 U. S. 545 [40: 802]. And citizens of Illinois also be[577]ing defendants in the bill, it is equally impossible to take jurisdiction of the plaintiff as a corporation of Illinois.

|

both those courts are reversed, and the case remanded to the Circuit Court of the United States with directions to enter a decree in conformity with the opinion of this court.

UNITED STATES, Appt.,

V.

EARL B. COE.

(See 8. C. Reporter's ed. 578, 579.)

Void Mexican grant.

A Mexican grant of lands made in 1838 by the state of Sonora, without approval by the general government, was vold.

[No. 8 of October Term, 1897.]

Leave granted to submit petition for rehearing, May 31, 1898. Petition for rehearing ordered to be filed and leave granted to counsel to file additional briefs, October 81, 1898. Resubmitted on briefs heretcfore filed, December 5,1898. Decided May 22, 1899.

APPEAL from a decree of the Court of Private Land Claims. Petition for rehearing of the decision reported in 170 U. S. 681, 42 L. ed. 1195. Rehearing denied.

See same case, 170 U. S. 681, 42 L. ed. 1195.

The facts are stated in the opinion.
Messrs. Amos Steck and Carpenter &
McBird for petitioner.

Messrs. A. M. Stevenson and John F.
Shafroth for appellee.

[578]

*Mr. Chief Justice Fuller delivered the opinion of the court:

After a careful re-examination of this record we adhere to the judgment heretofore rendered, and the petition for rehearing must be denied.

In the opinion heretofore delivered, and reported 170 U. S. 681 [42: 1195], it was stated that a grant from the state of Sonora was relied on, and not a grant from the Mexican government. This was in accordance with the petition originally filed, but it appears that it had been stipulated and agreed below between counsel for the government and the claimant that the petition should be considered as amended so as to claim title from both the nation and the state. That stipulation, however, did not appear in the record, but this was not material, as we did not regard the grant, whichever its alleged source, as a valid one, for the reasons given.

We remain of opinion that, from and after | 1. the adoption of the Constitution of 1836, no power existed in the separate *states to make such a grant as this. Camou v. United 2. States, 171 U. S. 277 [43: 163], related to a grant made prior to 1836, and ruled nothing to the contrary of the decision in this case.

Construing the various applicable statutes and decrees in relation to the sale of public lands, which were in force April 12, 1838, the date of the alleged grant, together, we think it clear that the Board of Sales which assumed to act in this matter had no power to sell and convey these lands so as to vest the purchaser with title, unless the sale was approved by the general government, and that it was not so approved. Furthermore, this Board of Sales did not assume to comply with the requirements of the law in making this sale. The members of the board really professed to be officers of

This court accepts the interpretation of a statute of a state affixed to it by the court of last resort thereof.

The Missouri statute of 1889 making a railroad company issuing bills of lading for the transportation of property liable for damages to the property caused by the negligence of another railroad company over whose lines the property passes does not curtail the power of the company to restrict its liability by contract, to its own line, by a restriction in unambiguous terms put into the portion of its agreement reciting the contract to carry, and such statute is not, as affecting interstate transportation, repugnant to the Federal Con stitution.

[No. 11.]

Argued January 7, 10, 1898. Reargument
ordered January 24, 1898. Reargued Oc-
tober 11, 1898. Decided May 22, 1899.

the state, and to act for the state, although State of Missouri to review a judgment of

We un

N ERROR to the Supreme Court of the
that court affirming the judgment of the
trial court in favor of plaintiffs McCann &
Smizer against the Missouri, Kansas, &
Texas Railway Company for damages to cat-
tle transported upon its contract of ship-
ment. Affirmed.

See same case below, 133 Mo. 59, 35 L. R.
A. 110.

The facts are stated in the opinion.
Mr. George P. B. Jackson, for plaintiff
in error:

the grant was declared to be made in the
"name of the free, independent, and sovereign
state of Sonora as well as of the august Mexi-
can government." But it seems to us that
they referred to the nation as it existed un-
der the Federal system of 1824, as contra-
distinguished from the supreme central sys-
Item that was in existence in 1838.
derstand that when this grant purports to
have been made, the officers and people of
Sonora were undertaking to carry on their
government as a sovereign and independent
state under the national Constitution of 1824
and the laws passed thereunder, as well as
the state Constitution of 1825, and subse-
quent laws, in violation of the National Con-
stitution of 1836 and the laws promulgated
under that instrument. This refusal to rec-
ognize their constitutional obligations put
them in antagonism to the general govern
ment, and, although appellee's counsel deny
that Sonora was in rebellion, and say that at
the time of the sale she "was a conservative
protestant against the dictatorial proceed- Michigan C. R. Co. v. Mineral Springs
ings which gave rise to the central system," Mfg. Co. 16 Wall. 318-324, 21 L. ed. 297-
we cannot agree that this sale was conducted 301; Ogdensburg & L. C. R. Co. v. Pratt, 22
in accordance with the paramount law, and Wall. 123, 22 L. ed. 827; St. Louis Ins. Co.
it does not appear that the national govern- v. St. Louis, V. T. H. & I. R. Co. 104 U. S.
ment ever ratified or approved the grant. 146, 26 L. ed. 679: Myrick v. Michigan C.
The various Constitutions and laws bearing R. Co. 107 U. S. 102, 27 L. ed. 325; Coates

In the absence of the statute under consideration, Mo. Rev. Stat. 1889, § 944, what has been designated as the "American rule" was in force in the state of Missouri; and under that the carrier, plaintiff in error here, was not to be regarded as a "forwarder" beyond its own line, and not liable for delays which occurred on a subsequent connecting line, in the absence of a special contract assuming the duties and liabilities of a common carrier beyond its own line.

Hale, Bailm. & C. 9, 433; Levering v. The statute as now construed is a regula-Union Transp. & Ins. Co. 42 Mo. 88, 97 Am. tion of commerce; and as by its terms it ap- Dec. 320; Hutchinson, Carriers, 223, § 262. plies to shipments to points "within or without this state" (Missouri), and in the case at bar is made to control the shipment from a point in Missouri to a point in Illinois, it is regulation of commerce among the

D]

Holsapple v. Rome, W. & O. R. Co. 86 N. | weights applying to cars of various lengths
Y. 275.
as per tariff rules in effect on the day of ship-
ment, the same being a special rate, lower
than the regular rates, or at a rate mutually
agreed upon between the parties, for and in
consideration of which said second party
hereby covenants and agrees as follows:

There was an expressed, but no real, consideration for such alleged releases. Plaintiff's uncontradicted evidence shows a total lack of such alleged consideration.

McFadden v. Missouri P. R. Co. 92 Mo. 351; Fontaine v. Boatmen's Sav. Inst. 57 Mo. 552; York Mfg. Co. v. Illinois C. R. Co. 3 Wall. 107, 17 L. ed. 170; McMillan v. Michigan S. & N. I. R. Co. 16 Mich. 116, 93 Am. Dec. 208.

*Mr. Justice White delivered the opinion of the court:

A statute of the state of Missouri, found in the Revised Statutes of that state, 1889, chap. 26, reads as follows:

"1st. That he hereby releases the party of the first part from the liability of common carrier in the transportation of said stock, and agrees that such liability shall be that of a mere forwarder or private carrier for hire. He also hereby agrees to waive release, and does hereby release, said first party from any and all liability for and on account of any delay in shipping said stock, after the delivery thereof to its agent, and from any delay in receiving same after being tendered to its agent.

1] **Sec. 944. Whenever any property is received by a common carrier to be transferred from one place to another, within or without this state, or when a railroad or other trans- consideration aforesaid hereby assumes, and "4th. That the said second party for the portation company issues receipts or bills of releases said first party from, risk of injury lading in this state, the common carrier, railor loss which may be sustained by reason of road or transportation company issuing such bill of lading shall be liable for any loss, dam- any delay in the transportation of said stock age, or injury to such property, caused by its actual violence to person or property, from caused by any mob, strike, threatened or negligence or the negligence of any other common carrier, railroad or transportation jury to track or yards, storms, floods, escape any source; failure of machinery or cars, incompany to which such property may be delivered, or over whose line such property may fright of animals, or crowding one upon anor robbery of any stock, overloading cars, pass; and the common carrier, railroad or other, or any and all other causes except the transportation company issuing any such receipt or bill of lading shall be entitled to re-gence not to be assumed, but to be proved by negligence of said first party, and said neglicover, in a proper action, the amount of any the said party of the second part. loss, damage, or injury it may be required to pay to the owner of such property from the common carrier, railroad or transportation company, through whose negligence the loss, damage, or injury may be sustained."

Whilst this statute was in force the defendants in error shipped from Stoutsville in the state of Missouri, on the line of the Missouri, Kansas, & Texas Railway, to Chicago, Illinois, which was beyond the line of that road, ninety-nine head of cattle. At the time of the shipment a bill of lading was delivered to the shippers. The portions of the contract pertinent to the questions here arising for consideration are as follows:

"13th. And it is further stipulated and agreed between the parties hereto, that in case the live stock mentioned herein is to be transported over the road or roads of any other railroad company, the said party of the first part shall be released from liability of every kind after said live stock shall have left its road, and the party of the second part hereby so expressly stipulates and agrees,[583] the understanding of both parties hereto that the party to the first part shall not be held or deemed liable for anything beyond the line of the Missouri, Kansas, & Texas Railway, excepting to protect the through rate of freight named herein."

When this bill of lading was executed an ancillary agreement was indorsed thereon, as follows:

This agreement made between George A. Eddy and H. C. Cross, receivers of the Missouri, Kansas, & Texas Railway, parties of the first part, and M. B. Smizer, party of the second part, witnesseth that whereas the receivers of the Missouri, Kansas, & Texas "We, the undersigned persons in charge of Railway transport the live stock as per above the live stock mentioned in the within conrules and regulations, and which are hereby tract, in consideration of the free pass furmade a part of this contract, by mutual nished us by the Missouri, Kansas, & Texas agreement between the parties hereto; now, Railway, Geo. A. Eddy, and H. C. Cross, retherefore, for the consideration and mutual ceivers, and of the other covenants and covenants and conditions herein contained, agreements contained in said contract, insaid party of the first part is to transport cluding rules and regulations at the head for the second party the live stock described thereof and those printed on the back therebelow, and the parties in charge thereof, as of, all of which for the consideration aforehereinafter provided, namely: six cars said said are hereby accepted by us and made a to contain 95 head of cattle m. or 1. o. r. from part of this contract, and of the terms and con582] Stoutsville *station, Missouri, to Chicago, Il-ditions of which we hereby agree to observe linois, station, consigned to Brown Bros. & Smith, care Union Stock Yards at Chicago, Illinois, at the through rate of 172 c. per hundred pounds, from Stoutsville, Missouri, to Chicago, Illinois, subject to minimum

and be severally bound by, do hereby express-
ly agree that during the time we
are in
charge of said stock, and while we are on our
return passage, we shall be deemed employees
of said receivers of the Missouri, Kansas. &