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Argued October 11, 12, 1898. Decided Octo-ecution of the mortgage, the provision for

ber 31, 1898.

IN ERROR to the Supreme Judicial Court
of the State of Maine to review a judgment
of that court in favor of the defendant in er-
ror, the Somerset Railway, in an action com-
menced by it against Lewis Pierce et al. to
enjoin the further prosecution of certain ac-
tions and for other relief. Dismissed.
See same case below, 88 Me. 86.
The facts are stated in the opinion.
Messrs. D. D. Stewart
Cleaves for plaintiffs in error.
Messrs. Josiah H. Drummond, Edmund
F. Webb, and Joseph W. Symonds for de-
fendant in error.

and H. B.

[642] Mr. Justice Peckham delivered the opinion of the court:

This is a writ of error directed to the Supreme Judicial Court of the state of Maine, for the purpose of reviewing a judgment of that court in favor of the defendant in error, who was plaintiff below. (88 Me. 86-100.) The facts necessary to an understanding of the case are as follows:

the formation of corporations by the holders of bonds was extended so as to include the

case of railroad corporations where the prin cipal of the bonds should have remained overdue for the space of three years, and by an act of March 6, 1883, the provision was still further extended so as to apply to the case in which no interest had been paid thereon for more than three years.

By virtue of the provisions of the Revised Statutes of 1871, as amended and extended by the statutes of 1878 and 1883 (both statutes, as will be seen, being subsequent to the execution of the mortgage), the holders of bonds of the Somerset Railroad Company, following the method provided by those stat utes, and on the 15th day of August, 1883, formed a new corporation under the name of the Somerset Railway. The capital stock of this new corporation was $736,648.76, made up of the principal of $450,000 of the unpaid outstanding bonds, and $286,648.76 of interest thereon up to the 15th of August, 1883. This was in accordance with the provisions of the statute that the new company should issue the capital stock to The Somerset Railroad Company was or- the holders of the bonds, secured by the ganized in 1871, pursuant to an act of the mortgage, in the proportion of one share of legislature of the state of Maine, for the stock for each one hundred dollars worth of On the 1st of Septempurpose of building and operating a railroad bonds and interest. between Oakland, in the county of Kennebec, ber, 1883, the Somerset Railway took possesand Solon, in the county of Somerset, in that sion of the railroad from Oakland to Anson state. In order to obtain the money to build (which was as far as it had then been comits road, the company, on the first day of pleted), and of all the other property emJuly, 1871, executed a mortgage to three braced in the mortgage, and it has ever since trustees, covering its railroad and fran- held and operated the same. Its capital chises and all its real estate and personal stock was divided into shares of one hundred property then possessed by it or to be there- dollars each to the amount of the bonds and after acquired. By the terms of the mort- overdue coupons as the law provided. The gage the trustees were to hold in trust for stockholders of the old company had prethe holders of the bonds of the railroad com-viously and on the 13th of July, 1883, at their pany, to be issued by it, payable as therein mentioned. The company thereupon issued and sold its bonds, secured by the mortgage, to the amount of $450,000, with proper coupons for interest attached, payable semiannually on the first days of January and July in each year, at the rate of seven per cent, the principal of the bonds becoming due on the first of July, 1891. The proceeds of the sale of these bonds were applied to the building, equipping, and operating of the road from Oakland to North Anson, a station between Oakland and the proposed terminus of the road at Solon. In 1876 the road had been completed as far as the village of Anson, twenty-five miles from Oakland, and it was opened and its cars commenced running in that year between those points. The company continued to so operate its road until September, 1883. It had, how ever, become insolvent some time prior to April first, 1883, and at that time its coupons for interest on the bonds secured by the above-mentioned mortgage had been unpaid [643] for more than three years. At the time when this mortgage was given, corporations could be formed by the holders of bonds secured by a railroad mortgage, in the manner provided for by the statute. (Rev. Stat. 1871, chap. 51.) In 1878, seven years after the ex

annual meeting, voted that the bondholders
should organize a new corporation under the
statutes of the state, and take possession of
the railroad, and at the same meeting voted
to surrender possession of the road to the
new corporation, the Somerset Railway.
these bonds, including some held by the
*The holders of a very large majority of[644]
parties in whose interest the plaintiffs in er-
of this corporation, but the holders of all the
ror now act, participated in the formation
bonds did not so participate, a majority
being sufficient under the statute for the reg-
ular formation of the corporation. Bonds
largely exceeding a majority of those which
were issued under the mortgage were sur-
rendered to the Somerset Railway, and are
now held by it, and the stock issued therefor,
the amount being at the time the suit herein
was instituted $339,400; and the amount of
bonds not surrendered was $110,600, not
counting overdue coupons.

From the time the new company took pos-
session of the railroad it has continued to
operate it as far as it was then completed,
and it has also extended the same some six-
teen miles, and as extended it has continued
to operate it.

To obtain the funds necessary for the completion of the sixteen miles of extension

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the new company, under what is claimed to
be due authority of law, issued its bonds on
the first day of July, 1887, to the amount of
$225,000, payable in twenty years from their
date, and to secure payment of the same
mortgaged its entire railroad from Oakland
to Bingham, forty-one miles. These bonds
were sold by the company and the proceeds
applied towards the completion of the road.
The mortgage given by the Somerset Rail-
road Company in 1871 included the roadbed
from Oakland to the terminus of the road in
Solon. The mortgage given by the new com-
pany in 1887 embraced the railroad so far as
it had been constructed by the old company,
as well as the sixteen miles constructed by
the new company after it took possession of
the road. The giving of this mortgage in
Answering that complaint, the trustees
1887 was a matter of public notoriety, well denied that the new company was ever estab-
known to the trustees of the original mort-lished under any law of Maine; they denied
gage, and no objection was made in behalf
of anyone; on the contrary, the trustees
stood by and saw this mortgage of 1887 given
and the bonds sold to innocent parties and
the money expended in extending the rail-
road sixteen miles, and it was not until more
than five years afterwards, when the road
had been built and completed and was in
operation to Bingham, that the trustees took

ment of the $225,000 borrowed for the ex-
tension of its road; also the contracting of
debts and the expending of large amounts
of money in useful repairs and improve-
ments; and that all this was done without
the trustees making known to the new com
pany that they or those whom they repre-
sented as bondholders had any claim or cause
of action against the new company; and the
complainants therefore averred that the trus
tees and those whom they represented had
been guilty of such delay and laches as to
estop them from denying the validity of the[646]
new corporation or its title or possession.
The new company also alleged the entire va-
lidity of the proceedings resulting in its for-


[645] *In December, 1892, the trustees in the mortgage of 1871 commenced two actions at law, one in each of two counties in which the railroad was situated, in which actions the president of the new corporation, its superintendent, treasurer, accountant, and various station agents and conductors, were made parties defendant because they were in possession of the road, and the plaintiffs, trustees, claimed to recover from the defendants, as disseisors, the possession of the railroad, and from the defendants, as individuals, the sum of $180,000 as mesne profits. The ground upon which the trustees based their action was that the new company was never legally organized; that by the terms of the mortgage the trustees alone could take proceedings to foreclose the mortgage, and that the acts of the legislature passed subsequently to the execution of the mortgage, and under which the new company was formed, could and did have no validity as against the contract rights of the plaintiffs, secured to them by the law as it stood at the time of the execution of the mortgage of


Upon these facts and many others which are not now material to be stated, the new company commenced this suit in equity against the trustees in the mortgage of 1871, who were plaintiffs in the two actions at law, to enjoin the further prosecution of those actions, and for other relief as mentioned in their complaint. In this suit the new company alleged (among other things) that the trustees in the mortgage of 1871 and their successors had stood by, allowed, and encouraged the formation of the new company and the surrendering of the bonds and the ssuing of the stock in lieu thereof, and also the execution of the mortgage by the new company to secure the pay

that it ever had any legal organization or
any legal existence; they denied that the
mortgage of July 1, 1871, had ever been le-
gally foreclosed, and they alleged that neither
the original board of trustees named in the
mortgage, nor their successors, had ever
taken any steps towards a legal foreclosure,
or had ever determined that there had been a
breach of the conditions of that mortgage,
and that the attempted foreclosure of that
mortgage was in violation of the contract
rights secured to the trustees thereunder at
the time of its execution, and the attempted
foreclosure of that mortgage was therefore
utterly void; they denied that any statute
of the state had been enacted, or could be
enacted, which would or could deprive the
bondholders or trustees of the rights secured
to them by virtue of their contract of July 1,
1871, and the laws of the state in force when
the contract was made. They alleged that
the contract rights of all the parties to the
mortgage of July 1, 1871, were fixed by the
laws in force when the mortgage was execut-
ed, and that no law of the state of Maine then
existing authorized the organization of the
new corporation in the manner attempted
herein, and that the laws then existing
formed a part of the mortgage contract, and
provided a mode by which the mortgage
could be legally foreclosed and a new com-
pany formed for the benefit of all the bond-
the bondholders who took no part in the
holders; and they alleged that the rights of
formation of the new company were fixed by
the mortgage contract, and could not be af-
fected in any way except by payment. Vari-
ous other matters were set up in their an-
swer, which it is not now necessary to men-

these issues held: "(1) That the new com-
The supreme judicial court of Maine upon
pany was legally organized; that the various
acts of the legislature of Maine, passed sub-
sequently to the execution of the mortgage,
did not impair the obligations of the con-
tract contained in the mortgage, but simply[647]
afforded a more convenient and quicker rem
edy for a violation of the agreement and for
the foreclosure of the mortgage than existed
at the time of its execution." (2) The
court also stated and held as follows: "The
new corporation took possession of the mort-




gaged property on the first day of September, 1883, and has ever since held it and operated the railroad. This action was authorized by the statute, consented to by the Somerset Railroad Company, the mortgagor, actively proposed and aided by one at least of the trustees, and ever since has been acquiesced in by all the trustees. It is too late for the trustees or dissenting bondholders now to object to technical irregularities, if any exist, especially as the Somerset Railway has since extended the railroad from North Anson to Bingham, a distance of abount sixteen miles; built a branch railroad of one mile in length of great importance to the productiveness of the main line; placed a mortgage upon the road for $225,000 to make these extensions and other improvements; and in other ways materially changed the condition and relations of all parties in terested in the road. Their long acquiescence, without objection, coupled with the changed conditions and relations resulting from the possession and management of the property by the Somerset Railway, estops them from now questioning the legality of the organization of the new corporation." The court further held that, under the statutes of Maine, the bondholders who had refused to take stock in the new company still retained the same rights under their bonds as the holders of the stock in the new company which had been given in exchange for bonds, and that if any bondholder deelined ultimately to exchange his bonds for stock he could not be compelled to do so, and that the net earnings of the company when distributed in the form of dividends or otherwise must be distributed to its stockholders and to the holders of any unexchanged bonds in equal proportions; that if the holders of unexchanged bonds chose to take stock they could do so at any time, or they might retain their present possessions and receive their share of the net earnings pro rata with the stockholders.

[648] It is thus seen that there were two questions determined by the state court: One related to the validity of the statutes passed subsequently to the execution of the mortgage, the court holding them valid, and that they did not impair the obligation of the contract contained in the mortgage. That is a Federal question. The other related to the defense of estoppel on account of laches and acquiescence, which is not a Federal question. Either is sufficient upon which to base and sustain the judgment of the state court. In such case a writ of error to the state court cannot be sustained. Eustis v. Bolles, 150 U. S. 361 [37: 1111]; Rutland Railroad Co. 7. Central Vermont Railroad Co. 159 U. S. 630 [40: 284]; Seneca Nation v. Christy, 162 U. S. 283 [40: 970].

A person may by his acts or omission to act waive a right which he might otherwise have under the Constitution of the United States, as well as under a statute, and the question whether he has or has not lost such right by his failure to act, or by his action, is not a Federal one.

dend under the insolvency proceedings Eustis
waived his legal right to claim that the dis
charge obtained under the subsequent laws
impaired the obligation of a contract. This
court held that, whether that view of the
case was sound or not, it was not a Federal
question, and therefore not within the prov
ince of this court to inquire about.

Mr. Justice Shiras, in delivering the opin-
ion of the court, said:

"The defendant in the trial court depended on a discharge obtained by them under regular proceedings under the insolvency statutes of Massachusetts. This defense the plaintiffs met by alleging that the statutes under which the defendants had procured their discharge had been enacted after the promissory note sued on had been executed and delivered, and that to give effect to a discharge obtained under such subsequent laws would impair the obligation of a contract, within the meaning of the Constitution of the United States. Upon such a state of facts it is plain that a Federal question decisive of the case was presented, and that if the judgment of the supreme judicial court[649] of Massachusetts adjudged that question adversely to the plaintiffs it would be the duty of this court to consider the soundness of such a judgment.

"The record, however, further discloses that William T. Eustis, represented in this court by his executors, had accepted and receipted for the money which had been awarded him, as his portion, under the insolvency proceedings, and that the court below, conceding that his cause of action could not be taken away from him, without his consent, by proceedings under statutes of insolvency passed subsequently to the vesting of his rights, held that the action of Eustis, in so accepting and receipting for his dividend in the insolvency proceedings, was a waiver of his right to object to the validity of the insolvency statutes, and that, accordingly, the defendants were entitled to the judgment.

"The view of the court was that, when the composition was confirmed, Eustis was put to his election whether he would avail himself of the composition offer, or would reject it and rely upon his right to enforce his debt against his debtors notwithstanding their discharge.

"In its discussion of this question the court below cited and claimed to follow the decision of this court in the case of Clay v. Smith, 3 Pet. 411 [7: 723], where it was held that the plaintiff, by proving his debt and taking a dividend under the bankrupt laws of Louisiana, waived his right to object that the law did not constitutionally apply to his debt, he being a creditor residing in another state. But in deciding that it was competent for Eustis to waive his legal rights, and that accepting his dividend under the insolvency proceedings was such a waiver, the court below did not decide a Federal question. Whether that view of the case was sound or not, it is not for us to inquire. It was broad enough, in itself, to support the final judgment, without reference to the Fed

In the above case of Eustis v. Bolles the
state court held that by accepting his divi-eral question."

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patented by the applicant, is valid, in the ab sence of any statutory provision.

[No. 305.]

ber 31, 1898.

IN ERROR to the Supreme Court of the

Eustis had a right which was protected by the Constitution of the United States. This right, the state court held, he had waived by his action, and this court said whether the state court was right or not was not a Fed-Submitted October 10, 1898. Decided Octo eral question. In Seneca Nation v. Christy, supra, it was [650]held by the state court that even if there were a right of recovery on the part of the plaintiffs in error because the grant of 1826 was in contravention of the Constitution of the United States, (which the court held was not the case), yet that such recovery was barred by the New York statute of limita-Lewis and Clarke in favor of the plaintiff, tions. This court held that as the judgment of the state court could be maintained upon the latter ground, it was without jurisdiction because the decision of the state court upon that ground involved no Federal ques


In this case there being two distinct grounds upon which the judgment of the state court was based, each of which is sufficient, and one of which involves no Federal question, we must, upon the authority of the cases above cited, hold that this court is without jurisdiction, and the writ of error must be dismissed.

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State of Montana to review a decree of that court affirming the decree of the Disthe State of Montana in and for the County of trict Court of the First Judicial District of

brought by it against the St. Louis Mining the Montana Mining Company, in an action & Milling Company of Montana et al. for decree that defendants shall convey to plaintiff by a good and sufficient deed a portion of a mining claim. On motion to dismiss or affirm. Affirmed.

See same case below, 20 Mont. 394.

Statement by Mr. Chief Justice Fuller:

*This was a suit for specific performance[651 brought by the Montana Mining Company against the St. Louis Mining & Milling Company of Montana and Charles Mayger in the district court of the first judicial district of the state of Montana, in and for the county of Lewis and Clarke.

The complaint alleged that on March 7, A. D. 1884, plaintiff's predecessors in interest, Robinson, Huggins, Sterling, DeCamp, and Eddy, were the owners of and in possession, and legally entitled to the use, occupation, and possession, of a certain portion of the Nine Hour Lode and Mining Claim, which embraced in all an area of 12,844.5 feet, together with the minerals therein contained.

That Mayger applied to the United States land office at Helena for a patent to the St. Louis Lode Mining Claim, owned by him,

Argued October 11, 12, 1898. Decided Octo- and that in the survey he caused to be made

ber 31, 1898.

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(See S. C. Reporter's ed. 650-658.) Compromise as to mining claim, when valid. A compromise of a dispute as to a mining claim, whereby an action to determine the right thereto is dismissed, in consideration of an interest in the ground when thereafter

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of his claim he included that part of the Nine
complaint; whereupon an action was com-
Hour Lode Mining Claim described in the
menced by Robinson and Huggins against
Mayger in the district court of the third ju-
tana to determine the right to the possession
dicial district of the then territory of Mon-
of March, for the purpose of settling and
of the particular premises. That on said 7th
compromising that action, and settling and
agreeing upon the boundary lines between
the Nine Hour Lode Mining Claim and the
St. Louis Lode Mining Claim, Mayger made,
executed, and delivered to Robinson, Hug-
gins, and Sterling a certain bond for a deed,
whereby, in consideration of the compromise
and settlement of the action and the with-
covenanted and agreed that when he should
drawal of the protest and adverse claim, he
obtain a patent as applied for, he would, on
demand, make, execute, and deliver to Rob-
inson, Huggins, and Sterling, or their assigns,
a good and sufficient deed for the premises [651
described in the complaint; and thereupon
Robinson, Huggins, and Sterling dismissed
their said action, withdrew their adverse
claim, and performed all of the conditions of
the bond on their part.

That Mayger then proceeded with his ap

plication and obtained a patent, but that he tiff have ever since remained in possession gave no notice to plaintiff, or any of its pred- thereof, claiming and holding the same as a ecessors in interest, of the obtaining of the part of the Nine Hour Lode Mining Claim; patent until some time in November, 1889. that at the date of the execution and delivery That when the bond for a deed was exe of the bond, it was expressly agreed between cuted, plaintiff's predecessors in interest were the parties thereto that all of the ground in possession of the premises, and have ever lying to the east of the westerly line of the since been and are yet in possession thereof, strip should be a portion of the Nine Hour holding and using the same as a part of the Lode Mining Claim; that plaintiff is the sucNine Hour Lode Claim; that by mesne con- cessor in interest of Robinson, Huggins, and veyances the title to this claim, including Sterling, the obligees named in the bond, and the portion in dispute in this suit, had come also of De Camp and Eddy, who were coto plaintiff; that it is entitled to a convey-tenants with said obligees in the premises at ance of the premises from Mayger; that May- the date of the execution of the bond; that ger, on or about June 10, 1893, assumed to the mesne conveyances introduced in eviconvey said piece of ground to the St. Louis dence on the part of plaintiff embraced and Mining & Milling Company, which then had were intended to include the ground in quesfull knowledge and notice of the making, ex- tion, and conveyed to the grantees therein ecution, and delivery of the bond for a deed named all of the interest, legal and equit by Mayger, and of the rights and able, which the grantor or grantors had equities of the Montana Mining Com-in said premises, covering as well their inpany thereunder; that the St. Louis terest in the ground in dispute as in every Company has instituted a number of suits other part and parcel of the Nine Hour Lode in the Circuit Court of the United States, Mining Claim. in which it claims that it is the owner of the

premises described in the complaint, and also the right to recover certain sums of money for ores alleged to have been wrongfully extracted therefrom. The bond referred to was appended to the complaint. The prayer was that the court should decree that defendants should convey to plaintiff a good and sufficient deed to the premises in controversy.

That in July, 1893, plaintiff duly demanded a deed to the ground in dispute from defend-[654] ants, which defendants refused to execute; that in June, 1893, Mayger assumed to convey the controverted ground to the St. Louis Mining & Milling Company, but that at the date of his conveyance the St. Louis Company had full notice and knowledge of plaintiff's equities in and to the disputed strip, and of its possession thereof; that defendants wrongfully asserted title to the ground in controversy, and thereby clouded plaintiff's title thereto, which cloud plaintiff had a right to have removed.

The district court concluded as matter of law that plaintiff was entitled to the conveyance prayed for, and that defendants should be enjoined from asserting any right, title or interest in or to the ground in dispute, and from in any manner interfering with the possession or enjoyment thereof by plaintiff.

In accordance with the findings of fact and conclusions of law, a decree was entered for plaintiff, and defendants appealed to the supreme court of the state of Montana, by which it was affirmed. [20 Mont. 394] 51 Pac. 824.

The answer denied all the material allegations of the complaint, and affirmatively alleged that the adverse claim interposed to the application of Mayger for a patent was for the purpose of harassing and hindering Mayger in obtaining a patent to his mining elaim, and that the bond was given contrary to equity, good conscience, and public policy. The case was tried by the district court without a jury, and the court made and filed findings of fact and conclusions of law. It was found that plaintiff's predecessors in in[653]terest were at the time mentioned in the complaint the owners of, in possession, and entitled to the possession, of the Nine Hour Lode Mining Claim as described, and that the strip of ground in dispute was at the time and continued to be a part of said claim; that the bond was executed and delivered by Mayger to the parties therein named, binding Mayger to convey to them or their assigns the ground in question when Mayger obtained a patent therefor; that it was given as a compromise and settlement of the controversy as to the land now in dispute, and then in litigation between the parties, and for the purpose of fixing and determining the boundary line beween the Nine Hour Lode Mining Claim and the St. Louis Mining Claim, as alleged in the complaint, and that Mayger thereafterwards did obtain a patent covering the premises in dispute; that plaintiffs in the adverse mining suit, on the execution to them of the bond by Mayger, dismissed their action and performed all the conditions of While it is conceded by plaintiffs in error the contract on their part; that at the time that there is no express prohibition on the of the execution of the bond the predecessors transaction involved in the record, it is conof plaintiff were in actual possession of the tended that the contract was contrary to the ground in dispute, and that they and plain-policy of the law, and that the question thus 171 U. S.

U. S., Book 43.


This writ of error was then sued out, and defendants in error now move to dismiss the writ, or that the decree be affirmed.

Messrs. Charles J. Hughes, Jr., and W.
E. Cullen for defendant in error in favor
of motion to dismiss or affirm.

Messrs. W. W. Dixon, Edwin W. Toole,
McConnell, Clayberg, & Gunn, and Thomas
C. Bach for plaintiffs in error in opposition
to motion.

*Mr. Chief Justice Fuller delivered the [654 opinion of the court:


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