| Even assuming that this clause in the agreement can be construed into a violation of § 5 of the Interstate Commerce Act, this suit would not be maintainable, because it is not authorized by that act, and is precluded by its express provisions. People v. Fisher, 14 Wend. 9, 28 Am. Dec. | earnings of traffic which this agreement does 501; Hooker v. Vandewater, 4 Denio, 34, not contemplate. 47 Am. Dec. 258; Stanton v. Allen, 5 Denio, 434, 49 Am. Dec. 282; Cleveland, C. C. & I. R. Co. v. Closser, 126 Ind. 348, 9 L. R. A. 754, 3 Inters. Com. Rep. 387; Shrewsbury & B. R. R. Co. v. London & N. W. R. Co. 17 Q. B. 652, 6 H. L. Cas. 113; Hare v. London & N. W. R. Co. 2 Johns. & H. 80; Manchester & L. R. Co. v. Concord R. Corp. 66 N. H. 100, 9 L. R. A. 689, 3 Inters. Com. Rep. 319. Agreements simply designed and operative to restrain ruinous competition are not in any manner objectionable when entered into by persons engaged in ordinary business. They have been repeatedly sustained, and, it is believed, nowhere condemned. But agreements between such parties, when calculated and designed simply to raise prices by suppressing ordinary competition, are equally obnoxious to the law. Wickens v. Evans, 3 Younge & J. 318; Skrainka v. Scharringhausen, 8 Mo. App. 522; Sayer v. Louisville Union Benev. Asso. 1 Duv. 143, 85 Am. Dec. 613; Collins v. Locke, L. R. 4 App. Cas. 674; Central Shade Roller Co. v. Cushman, 143 Mass. 355; Gloucester Isinglass & G. Co. v. Russia Cement Co. 154 Mass. 92, 12 L. R. A. 563. The agreement is in no manner in violation of the provisions of § 2 of the act. It creates no monopoly, nor is it an attempt or conspiracy to monopolize. In the attempt made by the bill to array every possible objection to the agreement, there is an evident purpose to suggest that its 8th article, in connection with other subsidiary provisions, constitutes pooling, and therefore is a violation of § 5 of the Interstate Commerce Act. There is no foundation for such a charge. The agreement in no manner violates any provision of the Interstate Commerce Law. Davies v. Davies, L. R. 36 Ch. Div. 359. Mr. Edward J. Phelps, for the New York Central & Hudson River Railroad Company, appellee: Whether the agreement by its terms violates the Federal law depends entirely on the inquiry whether it conflicts with any statute of the United States. The bill is not based upon any statute, but proceeds apparently upon common-law grounds. No statute is referred to or charged to have been violated. The United States has no common law. Wheaton v. Peters, 8 Pet. 591, 8 L. ed. 1055; United States v. Hudson, 7 Cranch, 32, 3 L. ed. 259; Bucher v. Cheshire R. Co. 125 U. S. 555, 31 L. ed. 795. The only statutes of the United States that are claimed to be infringed by the terms of the agreement are the Interstate Commerce Act of February 4, 1887, amended by acts of March 2, 1889, February 10, 1891, and February 8, 1895, and the Anti-Trust Act of July 2, 1890. The agreement violates no provision of the Interstate Commerce Act. The only provision in that act which is claimed to be infringed is contained in § 5, which prohibits "pooling." "Pooling" means a division of the money This court has no power to grant an injunction, either interlocutory or upon final decree, at the suit of the United States government, against the commission of a crime, where no other grounds for the injunction exist except that the act sought to be enjoined is an offense, unless such power is specially conferred by the statute. Nor does it come within the general equity jurisdiction of the court, since an injunction of that character is unknown in equity jurisprudence. United States v. Debs, 158 U. S. 564, 39 L. ed. 1092. No power to grant an injunction against a "pooling" contract is conferred upon the court by the Interstate Commerce Act. The Interstate Commerce Act does not authorize the commencement of any suit until an inquiry and decision of the Commissioners has first taken place, which in this case has not taken place. The Anti-Trust Act of July 2, 1890, does not apply to the business of railroad transportation. The case of United States v. Trans-Missouri Freight Asso. 166 U. S. 290, 41 L. ed. 1007, is by no means controlling in this case. The points of difference are clearly pointed out in the brief of Mr. Edmunds, and need not be restated. We ask of the court a reconsideration of the conclusions reached by the majority of the judges in that decision, which overrules the judgment of six United States circuit and district judges who sat in the different stages of that case and this, and is opposed to the opinion of four members of this tribunal, and also overrules the decision of Mr. Justice Jackson in the case Re Greene, 52 Fed. Rep. 109, which is directly in point. Its consequences are far-reaching and dis astrous. It deprives the citizens of this country of the right, never before questioned in an English or American court, of making a large class of just and reasonable contracts, often absolutely necessary to the use of property, the transaction of business, and the fair compensation of industry. Many decisions of this court to this effect are cited by Mr. Justice White, to which many more might be added. Where a special statute fully covers the subject to which it is addressed, and a subsequent general statute contains words that might, if standing alone, receive a construetion broad enough to include the same matter, the general will always give way to the special statute, and will be regarded as not intended to intrude on its province, unless that intention is clearly manifested. And especially will this construction be given where, as in the present case, the statutes, if taken to relate to the same thing, would not only be superfluous, but inconsistent. Endlich, Stat. §§ 113, 137, 225; Bishop, | v. Washington Market Co. 108 U. S. 250, 27 Written Law, § 126; Brewer v. Blougher, L. ed. 717. 14 Pet. 178, 10 L. ed. 408; Reiche v. Smythe, 13 Wall. 164, 20 L. ed. 566; Atkins v. Fibre Disintegrating Co. 18 Wall. 272, 21 L. ed. 841; United States v. Saunders, 22 Wall. 492, 22 L. ed. 736; Townsend v. Little, 109 U. S. 504, 27 L. ed. 1012. Says Chief Justice Marshall in United States v. Wiltberger, 5 Wheat. 95, 5 L. ed. 42: "The rule that penal laws are to be construed strictly is perhaps not much less old than construction itself." And in United States v. Morris, 14 Pet. 475, 10 L. ed. 548, the court remarked: "It has been long and well settled that such [penal] statutes must be construed strictly." In Harrison v. Vose, 9 How. 378, 13 L. ed. 181, this court observed: "In the construction of a penal statute, it is well settled also that all reasonable doubts concerning its meaning ought to operate in favor of the respondent.' In the case of The Enterprise, 1 Paine, 32, Judge Livingston said: "It should be a principle of every criminal code, and certainly belongs to ours, that no person be adjudged guilty of an offense unless it be created and promulgated in terms which leave no reasonable doubt of their meaning." "Statutes creating crimes will not be extended by judicial interpretation to cases not plainly and unmistakably within their terms. If this rule is lost sight of the courts may hold an act to be a crime when the legislature never so intended. If there is fair doubt whether the act charged in the indictment is embraced in the criminal prohibition, that doubt is to be resolved in favor of the accused." Per Dillon, Justice, in United States v. Whittier, 5 Dill. 219. See also United States v. Sheldon, 2 Wheat. 119, 4 L. ed. 199; United States v. Hartwell, 6 Wall. 395, 18 L. ed. 832; United States v. Shackford, 5 Mason, 445; United States v. Clayton, 2 Dill. 219; United States v. Garretson, 42 Fed. Rep. 22; Dwarris, Stat. 641; Hubbard v. Johnstone, 3 Taunt. 177. But if any doubt could still exist on this point, it is completely set at rest by reference to the proceedings of Congress in both Houses, on the passage of the Anti-Trust Act. Gardner v. The Collector, 6 Wall. 511, 18 I. ed. 894; Church of the Holy Trinity v. United States, 143 U. S. 465, 36 L. ed. 230. Views of individual cannot be taken into consideration. Aldridge v. Williams, 3 How. 24, 11 L. ed. 476; United States v. Union P. R. Co. 91 U. S. 79, 23 L. ed. 224; District of Columbia Assuming for the purposes of argument that the Anti-Trust Act does apply to railway traffic contracts, no provision of that law is violated by the agreement now under consideration. The prohibitions of the act are two: (1) Against contracts, combinations, or conspiracies in restraint of trade or commerce; (2) the monopoly of, or the attempt or combination to monopolize, any part of the trade or commerce of the states or with foreign nations. The agreement in this case is not "in restraint of trade or commerce." The theory of the bill seems to be that the agreement comes within this description because it tends to restrict competition, and because any agreement which restrains competition is "in restraint of trade." Both these assumptions are erroneous; the one in fact, the other in law. The agreement does not restrain competition to any such appreciable extent as would justify an injunction, except that competition which is unlawful because it is secret. Assuming, again, against the fact, that a certain restriction of competition is the necessary result of this agreement if it is allowed to proceed, it plainly appears by its terms to be only such restraint of competi tion as is necessary to secure "just and reasonable rates." By the Interstate Commerce Act all rates are required to be "reasonable and just." Every unjust and unreasonable charge is made unlawful. Schedules of rates are required to be published and kept open to the public inspection, and to be filed with the Commissioners, and not to be changed without due notice to the public and the Commissioners. Ample remedies, criminal and civil, are provided for the violation of these requirements, the enforcement of which is made the duty of the Commissioners. And the companies are also made subject to the state laws regulating rates. The precise question, therefore, under this clause of the Anti-Trust Act, is whether a contract that produces a result which the Interstate Commerce Act in terms authorizes and provides for, and helps to repress a practice which that act forbids, is for that reason a contract for the unlawful restraint of trade. Or, in other words, whether it can be made unlawful by a forced construction of the general provisions of one statute of the United States, for a carrier company to provide by a traffic contract for the maintenance of those "just and reasonable rates" which another statute of the United States not only authorizes, but creates elaborate means for making permanent, and for preventing the secret changes of rates which the Interstate Commerce Act prohibits. It is the statutes themselves that have prescribed a definition of this clause of the Anti-Trust Act, so far as it applies to railway traffic contracts, if it is held to apply to them at all, whatever its meaning as to cther contracts may bc. That the just and reasonable rates of [494] *Mr. Chief Justice Fuller delivered the opinion of the court: the securities did not absolutely cut off the Petitioner contends that his alleged lien or It is provided by the judiciary act of March 3, 1891, that any case in which the judgments or decrees of the circuit court of appeals are thereby made final, may be required, by certiorari or otherwise, to be certified to this court "for its review and deter-ly abstracted and diverted from said trust mination, with the same power and authority in the case as if it had been carried by appeal or writ of error to the supreme court." company in subsequent rehypothecation with This case belongs to the class of cases in which the decree of the circuit court of ap-known to be *fictitious, usurious, ultra vires, [496] peals is made final by the statute, and having been brought up by certiorari on the application of petitioner below, is pending before us as if on his appeal. And as respondents did not apply for certiorari, we shall confine our consideration of the case to the examination of errors assigned by petitioner. These errors as assigned in the brief of counsel are, in short, that the circuit court erred, (1) in not establishing the priority of petitioner's lien or right in and to the securities; (2) in subordinating that lien or right, and decreeing foreclosure unless payment was made as prescribed; (3) in not entering a decree giving priority to petitioner because respondents set up absolute title by purchase, which was not sustained by the court; (4) in not restraining respondents by injunction and not ordering the surrender of the securities to petitioner. [195] *The supposed errors in decreeing foreclosure, and that respondents were entitled to hold as pledgees notwithstanding their title by purchase was so far defective as to let in redemption, may readily be disposed of. The circuit court and the circuit court of appeals agreed that respondents' right to the securities was superior to that asserted by petitioner, and we entirely concur in that conclusion. So far from the securities being wrongfully abstracted from the trust company, we think that, whatever the agreement between the trust company and the syndicate, the trust company must be held to have parted with such of the securities as were ever in its custody, with full knowledge that they were to be hypothecated by Garretson; that, indeed, the evidence fairly shows that those which at any time came into the possession of the trust company were either deposited there by Garretson or by his order and direction, with the understanding on his part that he was authorized to withdraw them for the purpose of sale, pledge, or otherwise, and that he always acted on that theory, with the consent and participation of Smith, as secretary and treasurer; and that in any view Smith's acts in the company's behalf must be held to have been performed with the actual or implied authority of the directors. This was not a proceeding by Tod & Co. to obtain foreclosure. It was petitioner who Smith, as secretary and treasurer, was the sought the aid of the court, and this by an person who was actively engaged in the manapplication which was, in effect, a bill to re-agement of the affairs of the Union Loan & claim the securities absolutely and free from encumbrance. The circuit court treated the pleading as if framed in the alternative, and allowed redemption on conditions stated, the right thus accorded being necessarily declared to be extinguished if the conditions were not complied with as prescribed. And no error is assigned to the particular terms imposed. Nor is there any tenable basis for the proposition that respondents' failure to sustain their purchase at the sale as a defense affected their rights as pledgees. Respondents stood on all their rights, and were not put to an election. If the purchase were valid the equity of redemption was wiped out. If invalid, the original lien remained. If superior, its superiority was not displaced by the claim of absolute title derived through the pledge as set forth in the pleadings. Assuming that, as between the Union Loan & Trust Company and the syndicate, the company or its assignee had a lien on the securities in question, did the circuit court err in holding that the rights of respondents in respect thereof were paramount to those asserted by the intervening petitioner? If not, then although the circuit court may have erred in holding that the sale of Trust Company, and held out to the public and bonds tendered by him as collateral to It appears to us indisputable on the face the balance were applied with Smith's knowl- | everything belonging or appertaining to said edge, without objection on his part, or that estate, and, generally, do whatsoever the of any other officer or director of the trust debtor might have done in the premises." company, to taking up notes secured thereby, which had been given by Garretson to acquire the Nebraska & Western bonds, which he afterwards pledged to Tod & Co., and which were exchanged for the bonds of the Sioux City, O'Neill, & Western Railroad in controversy. None of the securities ever stood in the name of the Union Loan & Trust Company. And they were delivered in such form as to enable Garretson to hold himself out as the owner or lawful holder thereof, with full power of disposition. The district judge well said [65 Fed. Rep. 564]: "It is entirely clear that E. R. Smith, the secretary and treasurer of the trust company, dealt with these securities as though he had full authority from the company so to do, and he obeyed Garretson's instructions in regard to the same without demur; and it does not appear that the trust company, or any officer thereof, ever objected to such disposition of the securities; and, furthermore, so far as the evidence in this case discloses, the general management of the business of the trust company was intrusted to Smith, with but little, if any, supervision on part of the directors or other officers of the corporation." The truth of the matter seems to be, as the circuit court held, that, in order that the various properties represented by the stock and bonds should become valuable, it was necessary that the enterprises on which they were based should be carried through, and this required additional funds, to procure which the trust company consented to Garretson's negotiations with Tod & Co., and the debenture company, and the pledging of the urities. [498] The presumption on the facts is that the urities were delivered by the company to Garretson for use, and, if they had ever been pledged to the company, that the pledge was discharged by the voluntary parting with possession. There is nothing to show an intention to limit the use to a hypothecation in subordination to a prior pledge, let alone the question whether any such pledge existed, and the absence of evidence of any assertion thereof. Conveyances by insolvent debtors in fraud of their creditors may be attacked by their statutory assignees, though equity would not aid the debtors themselves to recover the property, for the property transferred would, in the eye of the law, remain the debtors' and pass to the assignees, who would not be subject to the rule that those who commit iniquity have no standing in equity to reap the fruits thereof. But equities or rights belonging to particular creditors are not, by operation of law, transferred to such assignees. The trust company did not own these securities, and did not transfer them in fraud of its creditors, prior to the assignment, so as to entitle the assignee to treat the transfers as void and the securities as belonging to the company. *And it must be remembered that this prc [499] ceeding is an attempt on behalf of the holders of railroad syndicate paper, which constituted only a portion of the liabilities of the trust company, to establish equities in the securities on the ground that they were pledged to the company to secure it against liability on its indorsements of such paper, and that these equities, if any, must be worked out through the company. The difficulty with the contention that the trust company was bound to hold the securities for the benefit of the holders of syndicate paper; that they were not duly parted with; and that Tod & Co. took with notice of the alleged interest of the trust company, and the equities of those holders, is that it does not appear that any of the syndicate paper was taken on the strength of these particular securities; or that Smith acted otherwise than with the knowledge and assent of the directors; or that Tod & Co. had notice of any claim of the trust company or its indorsees, or of any defect in Garretson's right to dispose of the securities. The securities were railroad bonds, payable to bearer, and certificates of stock in the names of Garretson and his associates, with transfers indorsed by them in blank; and they were, in large part, sent to Tod & Co. by the trust company, at Garretson's request, with presumably full knowledge that they Certainly, under the circumstances, the were to be used as collateral to loans he was company could not be allowed to set up its procuring, without anything to indicate that alleged title as against third parties taking the trust company had any interest in them, in good faith and without notice. And the or any intimation of such interest. The sesame principle is applicable to its assignee curities did not stand in the name of the and to creditors seeking to enforce rights in trust company, and Garretson did not, in any of his dealings with Tod & Co., assume to act for the company. The mere fact that he his name. So far as this case is concerned there is nothing to the contrary in the statute of Iowa regulating assignments for the benefit of creditors as expounded by the supreme court of the state. Code Iowa, title 14. chap. 7; Schaller v. Wright, 70 Iowa, 667; Mehlhop v. Ellsworth, 95 Iowa, 657. Section 2127 of the Code provides: "Any assignee as aforesaid, shall have as full power and authority to dispose of all estate, real and personal, assigned, as the debtor had at the time of the assignment, and to sue for and recover in the name of such assignee 171 U. S. U. S., Book 43. 17 was one of its officers was not in itself sufficient to call for an inference that he was acting as such in these transactions, nor did he make his requests of Smith in that capacity, nor were they complied with by Smith as on that theory. There was no actual notice, and as the visible state of things was consistent with Garretson's right to deal with the securities as he did, such notice cannot be presumed or 257 implied. Nor do we regard the conduct of [800] *The circumstances relied on as imputing Thus, it is said that because the Nebraska & Western bonds were overdue, and the mortgage in process of foreclosure, they were not negotiable and were taken subject to the alleged lien of the trust company. But they were assignable choses in action susceptible of being pledged, and were pledged to Tod & Co. until through the foreclosure and reorganization the new securities were substituted. As we have seen, the power of disposition had been lodged in Garretson by, or with the assent of, the trust company, and no secret equity could be set up by the latter. So as to the fact that some of the shares of Sioux City & Northern stock delivered to Tod & Co. under the agreement of December 31, 1892, stood in the name of "A. S. Garretson, Trustee," the evidence disclosed that this stock belonged to Booge, one of the original members of the syndicate, and that he, having failed, had consented it should be put out of his name and held in trust, and that at this time there were no notes furnished by Booge to the syndicate outstanding. The trust company had no greater interest in this stock than in any other, and the word "trustee" was not intended to give, and did not give notice of any rights claimed by the trust company. Again, elaborate argument is devoted to the point that Garretson was induced to assume the Nebraska & Western enterprise by false representations by the Manhattan Trust Company as to the condition of the improvement company; and that this led him to pledge the securities which he should have left with the Union Loan & Trust Company. which no issue could be, or was, joined, or additional testimony taken, and it was then set up, for the first time, that the loans were void because in contravention of the stat utes of New York in relation to usury, and that petitioner was, therefore, entitled to reclaim the securities without compensation. The prohibition against usury of the New York laws (N. Y. Rev. Stat. Banks Bros.' 7th ed. p. 2253) could not be interposed by corporations as defense (Id. p. 2256; Laws 1850, chap. 172), nor could the indorsers of their paper plead the statute (Union National Bank v. Wheeler, 60 N. Y. 612, 96 U. S. 268 [24: 833]; Stewart v. Bramhall, 74 N. Y. 85; Junction Railroad Co. v. Bank of Ashland, 12 Wall. 226 [20: 385]); nor did it apply to demand loans of $5,000 or upwards, secured by collateral. Laws 1882, chap, 237, § 1; Laws 1892, chap. 689, § 56. Apart from these considerations, the circuit court disposed of this contention on the ground that the petitioner, in order to any relief in equity, would be compelled to pay the sums advanced and interest, but had not tendered or made any offer of payment. This assumed that the point might have been passed on, if there had been such tender or offer, notwithstanding the trust company was not a party to the contract of loan, and neither the bridge company, nor Garretson, nor any member of the syndicate, nor the debenture company, nor any other loan holder, was a party to the record. We think the court was right if the question was properly before it. This was not a proceeding to enforce an alleged usurious agreement, but it was petitioner who sought the affirmative [502) aid of equity, which he could only obtain by doing equity. It is true that by a statute of New York (N. Y. Rev. Stat. 7th ed. 2255; Acts 1837, chap. 430, § 4), it is provided that whenever a borrower files a bill for relief in respect of violation of the usury law, he need not pay or offer to pay "any interest or principal on the sum or thing loaned;" but this act has been rigidly confined to the borrower himself (Wheelock v. Lee, 64 N. Y. 242; Buckingham v. Corning, 91 N. Y. 525; Allerton v. Belden, 49 N. Y. 373); and, moreover, is not applicable to suits brought in courts not within the state of New York. It is further urged that the transaction with the bridge company was ultra vires, and that, this being so, the securities should have been awarded petitioner free and clear from any condition whatsoever. While we must not be understood as intimating in any degree that this charge of misrepresentation was made out, or, if it were, that Tod & Co. were cognizant thereof, it is enough that we are not satisfied that the transactions complained of involved notice of the claim of the trust company now set up. But we do not feel called on to do more [601]than allude to these matters. Tod & Co. held the securities under the $1,500,000 loan in trust for the purchasers of the notes there- The circuit court held that the bridge comunder issued, and neither the debenture company did exceed its powers, and that the pany, through which the transaction was matter must be treated as if that company made, and which holds a few of the notes, had not been interposed as an actor in the nor any other of the beneficiaries, was before transaction. Relief to the extent of redempthe court. Nor was Garretson, nor any mem- tion was on that account accorded, yet it ber of the syndicate, nor any holder of part was limited to that because there was nothof the million-dollar loan, other than Tod & ing in the invalidity of the action of the Co., a party to the record. bridge company which gave the trust company any greater right to the securities than it had before. The bridge company was not a party to the proceeding, and, indeed, if it had itself instituted suit for the cancelation of its notes, it could not have demanded possession of the securities. Clearly the trust The circuit court correctly held that the prior transactions could not be overhauled under such circumstances; and applied the same principle to the last loan as well. By the final decree petitioner was permitted to file a second amended petition, on |