[179]

them, " I may contract with the Covington an Ohio Railroad Commissioners for the constru tion of the railroad from Covington to the Ohi River, and in the event such contract be mad the said Virginia Central Railroad Company or the West Virginia Central Railway Con Ohio Railroad Company, and shall be entitle to all the benefits of the charter of the Coving ton and Ohio Railroad, and to all the right interests and privileges which by this Act an conferred upon the Chesapeake and Ohio Rai road Company when organized."

pletion of a railroad from Covington, in Virginia Central Railway Company, or either
ginia, to some point on the Ohio River, the con-
struction of which had been undertaken by the
State of Virginia as a public work by its own
means, but which was suspended, after an ex-
penditure of several millions of dollars, in con-
sequence of the breaking out of the civil war
in 1861. A portion of it was within the terri-pany, shall be known as the Chesapeake an
tory that became West Virginia, and thence-
forward that part of the work fell within the
jurisdiction and ownership of the new State.
To provide for its completion was the object of
the Act of March 1, 1866, to incorporate the
Covington and Ohio Railroad Company. That
Act did not, by its terms, create a corporation,
but authorized a future organization under it.
It ceded to the company, when constituted and
certified as thereinafter provided, "all the
rights, interest and privileges, of whatsoever
kind, in and to the Covington and Ohio Rail-
road and appurtenances thereunto belonging,
now the property of the State of West Virginia,
upon condition that it shall within six months
after its incorporation, as provided in the 10th
section of the Act, commence, and within six
years complete, equip and operate a railroad,"
etc., as therein described; and a failure to com-
ply with this condition operated to forfeit the
title to the road, which should then revert to
the State.

The Act also appointed commissioners on the part of the State to act in conjunction with others appointed by the State of Virginia, whose duty it was to offer the benefits of the charter for the acceptance of capitalists, so as to secure the speediest and best construction, equipment and operation of said railroad. "To this end," it added, "they are empowered to make a contract with any parties who shall give the best terms and the most satisfactory assurances of capacity and responsibility, and to introduce into said contract any additional stipulations for the benefit of the State and in furtherance of the purposes herein declared and not inconsistent with this Act, which contract shall be, to all intents and purposes, as much a part of this charter as if the same had been herein included at the time of the passage of this Act." The certificate of these commissioners of the due execution of such a contract, and the organization of the company, should operate to confer upon said company all the benefits of this charter, subject only to the provisions of the Code of Virginia for the government of internal improvement companies, so far as not inconsistent with that Act.

On February 26, 1867, the Legislature of West Virginia passed an Act to provide for the completion of a line or lines of railroad from the waters of the Chesapeake to the Ohio | River, which authorized the consolidation of the Covington and Ohio Railroad Company, when organized under the Act of March 1, 1866, with one or more of several other railroad companies, including the West Virginia Central Railway Company; the consolidated company to be known as the Chesapeake and Ohio Railroad Company, and to be vested with "All the rights, privileges, franchises and property which may have been vested in either company prior to the Act of consolidation." It was also thereby provided that the Virginia Central Railroad Company and the West Vir

Accordingly, on August 31, 1868, the Con missioners of Virginia and of West Virginia e tered into a contract with the Virginia Centr Railroad Company by which the Chesapeak and Ohio Railroad Company was formed an under which it was organized, and the sam was approved, ratified and confirmed by an A of the Legislature of West Virginia, “Čonfirn ing and amending the charter of the Chesapeak and Ohio Railroad Company, passed Januar 26, 1870." Among other things, it was there in provided that the Company might borro such sums of money, at a rate of interest no exceeding eight per cent per annum, as migh be necessary, in addition to the funds arisin from stock subscriptions, for the completion o the road, and should have power to execute lien on its property and resources to secure th payment of the principal and interest of suc loans; and the Chesapeake and Ohio Railroa Company was thereby declared to be entitle to all the benefits of the charter of the Coving ton and Ohio Railroad, and to all the rights interests, benefits and privileges, and be subjec to all the duties and responsibilities provide and declared in the said contract and in th statutes therein referred to.

In pursuance of these powers, the Chesapeak and Ohio Railroad Company completed th contemplated line of railroad and put the sam in operation, not indeed, strictly within th time limited in the charter, but the forfeitur thereby incurred was released by an Act of th Legislature of West Virginia passed Februar 20, 1877.

In the meantime, to raise the funds necessar to complete the construction and equipment c the road, a large amount of bonds had been i sued by the Company, secured by several deed of trust, the particulars of which are fully s out in the bill; and default in the payment interest having occurred, due proceedings fo the foreclosure and sale of the property en braced in the deeds of trust were prosecuted t final decrees in the courts of Virginia and We Virginia; so that, in the latter, all of the railroa and other property situate in that State we brought to sale under a decree of the Circu Court of the County of Kanawha, in West Vi ginia, rendered on December 18, 1877, an were sold and conveyed to the purchasers, wh in pursuance of the statute then in force appl cable thereto, became a corporation under t name of the Chesapeake and Ohio Railwa Company, the plaintiff in error in these pr ceedings.

The statute under which these proceeding took place was an Act of the Legislature West Virginia passed February 18, 1871, rela

mes made under deeds of trust or mort- | clause containing the exemption from taxation.
yads or other internal improve- Chap. 5, West Va. Acts, 1879.
es in that State, as amended by
February 20, 1877, extending its

That the Chesapeake and Ohio Railroad Company, by virtue of its organization as a corporation under the Act of March 1, 1866, became enwas prided by these Acts that "if a sale titled to the exemption from taxation secured by > >»der a deed of trust or mortgage ex- the 7th section of that Act, and that as a matter road or other internal improve- of contract, is not denied or disputed. Whethy in this State, on all its works er the Chesapeake and Ohio Railway Company my, and there be a conveyance pur-succeeded to that right and immunity, is the question to be determined.

c. such sale and conveyance shall purchaser at the sale, not only the It is quite clear that, as a contract originally property of the company, as they entered into between the State of West Virginia [183] me of making the deed of trust or and the stockholders who organized the Chesabuty works which the company peake and Ohio Railroad Company, under the that time and before the sale, have Act of March 1, 1866, it was personal to that amed and all other property of which it Corporation, and intended to benefit those who sed at the time of the sale, other should be induced to subscribe to its stock. de to it. Upon such conveyance Every circumstance that is referred to for the haser, the said company shall ipso the purpose of proving its nature as a contract, ved. And the said purchaser shall such as, that the State had already sunk a large be a corporation by any name which amount of money in an incomplete and therefin said conveyance, or in any fore unprofitable public work, that it was very ed by him or them, and recorded desirous to induce private capitalists to finish cera office of any county wherein its construction, and to that end was willing to Old, or any part thereof, is sit- cede to them the property itself, and the fran7ere said conveyance is recorded. chises of a railroad connected with it; and, by The corporation created by or in conse- way of further inducement, to exonerate the ach sale and conveyance shall suc- property in their hands from all burdens of such franchises, rights and privi- taxation until the investment yielded a profit antnerform all such duties as would have equal to ten per cent upon the capital invested; Lor should have been performed by also prove that the only persons in contemplay, but for such sale and con- tion as beneficiaries of these privileges and ime only that the corporation so cre- munities were those who were willing to risk not be entitled to debts due to the their money in an enterprise the future success ay, and shall not be liable for any of which could only be regarded as doubtful. claims against, the said first com- The contract was not for the benefit of those may not be expressly assumed in who should become creditors of the Company, of purchase; and that the whole further than the fact that the property of the bustness done by such corporation Company was itself exempted from the charge the said purchaser and his as- of taxation would enhance its credit by securterest in the corporation shall be ing to mortgage bondholders a lien which could state, and be, or his assigns, may cre- not be subordinated by the State. It was not Lares of stock therein as he or made with the creditors of the Company, nor proper, not exceeding, together, was it conferred as a franchise inhering in the stock in the first company at the property itself, so as to pass by way of incumand assign the same in a book brance or assignment to mortgagees or purchaspurpose. The said shares shall ers. The language of the clause which conon the footing of shares in joint tains the exemption is explicit. It is, that generally, except only that the "No taxation upon the property of the said of the stockholders shall be held Company shall be imposed by the State until 3 and at such place as shall be fixed the profits of the said Company shall amount to ser, of which notice shall be ten per cent on the capital of the Company." r successive weeks in a news But one company is spoken of, and that is the ach county in the State where- company to be incorporated under the Act. on may do business." The property to be exempt is the property of Ts are copied from the Code that company and of no other, and while it con160, chap. 61, §§ 28, 29 and 31. tinues to be the property of that company and abe is material to the case, as no longer. And the exemption is to cease when stiff in error, in view of the the profits of that particular company have est section of the Act of the reached the limit designated, and that limit is West Virginia of March 1, 1866, measured by a ratable proportion fixed with the Covington and Ohio Rail- reference to the capital to be subscribed to form which provided for its future that company and no other. And there are no corporation, "according to the words of assignability attached, either expressthe Code of Virginia, second edi-ly or by any implication, to this immunity. ment of incorporated com- The reasons for considering such an exempins to be added that the Leg- tion to be a privilege pertaining to the corporaVirginia passed an Act on Jan- tion, and not inhering in the property, and * 15 amend section 7 of the Act to passing to an assignee, were fully stated by Mr. Comington and Ohio Railroad Justice Field in delivering the opinion of the to omit from it altogether the court in the case of Morgan v. Louisiana, 93 U.

[184]

[185]

*

66

8., 217 [bk. 23, L. ed. 860], and have been uni- | not, in reference to the subject-matter now
formly applied to similar cases subsequently. hand, apply it with that force and meanin
Wilson v. Gaines, 103 U. S. 417 [bk. 26, L. ed. The words used are, it will be observed, “fra
401]; Louisville & Nashville R R. Co. v. Palmes, chises, rights and privileges," *
109 U. S. 244 [bk. 27, L. ed. 922]; Memphis & would have been had,” * * "by the fir
Little Rock R. R. Co. v. R. R. Comrs., 112 company, but for such sale," etc. There is n
U. S., 609 [bk. 28, L. ed. E37]; St. Louis, I. M. express reference to a grant of any exemptio
& S. R. Co. v. R. R. Comrs., 113 U.S. 465, [bk. or immunity; nothing is said in relation to th
28, L. ed. 1055]. And the circumstances of the subject of taxation. The words actually use
case distinguish it from that of Humphrey v. do not necessarily embrace a grant of such a
Pegues, 16 Wall., 244 [83 U. S., bk. 21, L. ed. exemption. As was said, on this point, in Mo
3261.
gan v. Louisiana, 93 U. S. 217-223 [bk. 23, L. ee
860, 862]: "Much confusion of thought ha
arisen in this case and in similar cases from a
taching a vague and undefined meaning to th
term 'franchise.' It is often used as synony
mous with rights, privileges and immunitie
though of a personal and temporary characte
so that, if any one of these exists, it is loosel
termed a ‘franchise,' and is supposed to pas
upon a transfer of the franchises of the com
pany. But the term must always be consi
ered in connection with the corporation or prop
erty to which it is alleged to appertain. Th
franchises of a railroad corporation are right
or privileges which are essential to the opers
tions of the corporation, and without which it
road and works would be of little value; suc
as the franchise to run cars, to take tolls, to ap
propriate earth and gravel for the bed of it
road, or water for its engines, and the like
They are positive rights or privileges, withou
the possession of which the road of the com
pany could not be successfully worked. Im
munity from taxation is not one of them. Th
former may be conveyed to a purchaser of th
road as a part of the property of the company
the latter is personal and incapable of transfe
without express statutory direction.'

There is no claim made that the exemption
passed to the trustees in the trust deeds or
mortgages given to secure the payment of the
bonds of the Company; and none can be made
that it passed to the purchasers by the judicial
sale made under the decree for foreclosure and
sale, by force of the statute declaring what such
a sale should pass. The language of the Act
upon this subject is, that "such sale and con-
veyance shall pass to the purchaser at the sale,
not only the works and property of the com-
pany, as they were at the time of making the
deed of trust or mortgage, but any works
which the company may, after that time and
before the sale, have constructed and all other
property of which it may be possessed at the
time of the sale, other than debts due to it." So
far, nothing is said of what rights, privileges,
franchises and immunities shall vest in the
purchaser in respect to the property, the title to
which is thus conveyed. The Act, however,
proceeds to say, that "upon such conveyance
to the purchaser, the said company shall ipso
facto be dissolved." From this it necessarily
follows that all privileges, which by the terms
of its charter were personal to it, ceased with
its dissolution. But the statute adds: "And the
said purchaser shall forthwith be a corporation.
by any name which may be set forth in saidtion. Nor is there an equivalent implicatio
conveyance, or in any writing signed by him or
them and recorded in the recorder's office of
any county wherein the property, so sold or
any part thereof, is situated, or where said con-
veyance is recorded." Thus is formed a new
corporate body, succeeding to the title of the
property sold and conveyed to it, but deriving
its existence from this law and not from the
original Act of incorporation, which constituted
the charter of its predecessor, and with such
powers, rights, privileges, franchises and im-
munities only as are conferred upon it by the
law which has brought it into being.

These are defined in the next succeeding section. So far as material to the question its language is: "The corporation created by or in consequence of such sale and conveyance shall succeed to all such franchises, rights and privileges, and perform all such duties as would have been had, or should have been performed by the first company, but for such sale and conveyance,"

etc.

It is earnestly contended, on behalf of the plaintiff in error, that by virtue of this language, it is entitled to enjoy the property formerly belonging to the Chesapeake and Ohio Railroad Company, its predecessor, precisely as though it had been incorporated under the charter of that company, and therefore with the exemption from taxation which was conceded to that company. But, broad, general and comprehensive as the language is, we can

Here, there is no such express statutory d

by necessary construction. There is nothing i the language itself, nor the context, nor the sub ject-matter of the legislation, nor the situatio and relation of the parties to be affected, whic indicates that a grant of an exemption from tax ation to a particular railroad corporation, or t a class of such, was in the contemplation of th Legislature. The subject-matter of this legisla tion was not the original construction of rail roads, but the operation of railroads alread constructed. The State was not in the attitud of a contractor, soliciting subscriptions of cap ital, in the formation of companies to under take the risk of public improvements, for the benefit of the State, with the hazard of loss and perhaps financial ruin to the first promoters and offering exemptions from taxation as a con sideration, by way of contract, for the accept ance of its proposals. It was legislating in ref erence to enterprises already undertaken, prose cuted and completed by companies originally thus incorporated, and who, by reason of in solvency, had been stripped of their property by creditors and sentenced by the law to dis solution; and the purpose of the statute wa simply to provide suitable means of incorporat ing the purchasers, to facilitate their use of the property, in operating it for the benefit of the public, as designed from the beginning. Thes purchasers had not bought the immunity now demanded either from the State or the prio possessor. The contract of the creditors woul

on failure of payment of the stip-| certificate of incorporation hereafter granted to by sabjecting to sale the property a joint stock company, and to alter or repeal for its payment, with such rights, any law applicable to such company." The and privileges only as were neces- Constitution of the State of West Virginia of beneficial use and enjoyment. The 1863, art. 11, § 5, also provides as follows: from taration, as we have already "5. The Legislature shall pass general laws Decessarily included in that des- whereby any number of persons associated for The debtor corporation, and its cred- mining, manufacturing, insuring, or other pured, could not confer upon the purpose useful to the public, excepting banks of cirAts which were not assignable; ulation and the construction of works of intereration moved to the State for nal improvement, may become a corporation, the grant, there is no motive for on complying with the terms and conditions re construction and implication, thereby described; and no special Act incorpois of the law have failed to ex- rating or granting peculiar privileges to any rtainly is not a reasonable in- joint stock company or association, not having for which no sufficient reason can in view the issuing of bills to circulate as money or the construction of some work of internal improvement, shall be passed. No company or association, authorized by this section, shall issue bills to circulate as money. No charter of incorporation shall be granted under such general laws, unless the right be reserved to alter or amend such charter at the pleasure of the Legislature, to be declared by general laws. No Act to incorporate any bank of circulation or internal improvement company, or to confer additional privileges on the same, shall be passed, unless public notice of the intended application for such Act be given under such regulations as shall be prescribed by law."

t

Tale therefore, that the Act from parti in error derives its corpoand powers in West Virginia does -renewal of the grant by exemp-=tation, which, in the 7th section of Mar 1, 1966, applied to the ChesaRulroad Company.

erwise, so that we should be conthat the language of the Act Via of February 18, 1871, as that of February 20, 1877, had the to the plaintiff in error of the invested by the 7th section * March 1, 1866 in the Chesapeake The incorporation of the plaintiff in error Ad Company, nevertheless we comes within the provisions, both of the Conpelled also to hold on distinct stitution and of the Code of 1868. Its charter the exemption thus conferred did is the law of 1871 as amended by that of 1877. as a contract, protected from Its certificate of incorporation is the conveyThe Constitution of the United States.ance to it, by the name it has chosen, as a purnow made, it would still chaser at the judicial sale, or set forth in some all the rights of the plaintiff in writing signed by such purchaser, and recorded ration, other than the title to as required. It is a charter granted under a acquired by the judicial sale, general law, which the Constitution declares to in and depended upon the be subiect to legislative alteration and amend7,177 under and by which it was ment. The laws subjecting its property to taxoration. It can, in no sense, be ation, and which form the subject of the presidentical corporate body of ent controversy, are but the exercise of that me the successor, merely dis- legislative discretion, which, as it became the process of insolvency from fur- law of the contract itself, cannot be complained past debts, which is the view of as a breach of the contract. argument by counsel for The conclusion is not weakened by the sugaere The language of the statutes gestion that the rights of the plaintiff in error licts this assumption. The originate in the provisions of the Code of Virterms is dissolved. The pur-ginia, referred to in the Act of March 1, 1866, expitly declared to become a incorporating the Covington and Ohio Railroad The corporate powers are con- Company, and of which the Acts of 1871, 1877 * to those which had be- are re-enactments. For even then they would Ser pred ressors. The language of not antedate the provision of the Constitution involved in its provisions of 1863, nor avoid the effect of the reasoning of of cases beretofore decided this court in case of St. Louis, I. M. and close further controversy on S. R. Co. v. R. R. Comrs. 113 U. S., 465 [bk. Mr. Olio, 95 U. S., 319 [bk. 28, L. ed. 1055]. The rights of the plaintiff in BRON. Maine, 96 U. S., 499 error, as a Corporation, are determined by the RR.Cov. Georgia, 98 U.S., law in force when it came into being, although RR. Co. v. Palmes, there is no ground on which it can be contend4427, L. ed. 922]. ed that there was any legislative contract in the Act of March 1, 1866, for the further creation of any corporation in favor of possible purchasers at judicial sales under decrees of foreclosure of deeds of trust or mortgages.

T

case, all grants of corporate Te-a privileges, franchises and im**** subject to existing laws, reAt the time the plaintiff Corporation, chap. 53, § 8, of est Virginia of 1869, which took 1 was in force, and has never Reacted, among other things, And the right is hereby reLegnature to alter any charter or

In either view the result is the same, and for the
reasons given the decree of the Supreme Court of
Appeals of the State of West Virginia is affirmed.
True copy. Test:

James H. McKenney, Clerk, Sup. Court, U. S.
Cited-114 U. S., 296.

[189]

[252]

[253]

CHARLES R. BISSELL, Appt.,

v.

SIMON H. FOSS et al. 1

(See S. C. Reporter's ed., 252-262.)
Mining partnerships-bill against copartners to
enforce claim for share of benefit of purchase of
interest of other copartners.

1. There is no relation of trust or confidence be-
tween mining partners which is violated by the sale
and assignment by one partner, of his share in the
property and business, to a stranger or to one of

the associates, without consulting the other.

2. A mining partner or cotenant is not entitled to share in the purchase by his copartner or cotenants of the share of another, in the absence of an express contract that the purchase should be for the benefit

of all.

3. It does not lie in the mouth of one who seeks to
share in the fruits of a contract, to complain that
it was fraudulently procured.
[No. 103.]

Argued Mar. 11, 12, 1885. Decided Apr. 6, 1885.

APPEAL from the Circuit Court of the United

States for the District of Colorado.
The history and facts appear in the

ans offered for sale their one-fourth interest in the mines. Bissell and Foss were anxious les the interest of the Missourians should fall int the hands of Tabor and Reische, who migh thereby gain some advantage in their suits ther pending. They had a conversation in refer ence to the purchase of the interest of the Mis sourians. They differ in their account of thi conversation. It is thus detailed by Bissell:

"Along about the 30th day of September Mr Foss came to my room and stated that the Mis sourians, as we termed them, were wanting to sell their quarter interest in the property and had offered it for $30,000, and he said tha he thought we had better go in and buy it. said to him that it was all well enough to buy it if they wanted to sell, but that I was conti I am almost certain, Mr. Foss, that I can buy dent that I could get it at better figures. I said it for less; let me manage it and I think I can buy it for $15,000,' and went on to say what would say to them concerning all the trouble and suits in the case. He said, 'Very well, if you can get it for that, so much the better. I

was an agreement and understanding between us that if we could get it for $15,000 we were to take it."

He further stated in reference to the same interview

"We sat down there and made figures to see if we could pay for it out of the money belonging to the company in bank; and the result of our figuring was that we couldn't do it to the full extent; that we could pay a portion of it from that money; and the balance outside, each of us raise our share.”

Statement of the case by Mr.Justice Woods: This was a suit in equity. The facts as they appeared by the pleadings and evidence were as follows: In January, 1878, two miners named Davidson and Van Boxall located a mining claim near Leadville, Colorado, which they called the Winnemuck. In March following they jointly conveyed to the appellant Bissell and to the appellees Foss and Hunter, each a one-fourth interest in the property in considera- In answer to the question who were to have tion of their agreement to furnish money to the interests in the quarter to be purchased of sink a shaft to the ores on the claim. These the Missourians, he said: "They were to go beparties worked the mine as mining partners un-tween us three, Trimble and Hunter, Foss and til July, 1878, when Davidson and Boxall, with the consent of their associates, sold their one fourth to three persons, Rawlings, Handley and Robertson, called in the record "The Missourians," who with Bissell, Foss and Hunter continued the working of the mine.

myself. Mr. Trimble and Hunter's were interests together; they owned jointly that quarter interest, so I was informed by Mr. Trimble and Mr. Hunter."

Foss gave the following account of his interviews with Bissell in reference to their project to buy out the Missourians:

Tabor and Reische, who owned and worked a mine adjoining the Winnemuck, on an al- "I met Dr. Bissell over Tribe & Jeffrey's leged title not necessary to state, claimed the store, in Leadville, and we talked the purchase ore from the Winnemuck mine, and insti- over. I told him that the boys wanted to get tuted, from time to time, attachment proceed-out bad, and I thought they would sell pretty ings by which they seized the ore as it was taken from the mine. The associates who were working the Winnemuck mine procured the release of the ore by giving forthcoming bonds, with one Halleck as security, who signed the bonds on condition that the money arising from the sale of the ore should be placed and kept in bank as an indemnity to him until the ownership of the ore could be settled. On this understanding the proceeds of the sale of the ore were deposited in the Miners' Exchange Bank of Leadville.

In August or September, 1878, the owners of the Winnemuck-Bissell, Foss, Hunter, and the Missourians having received, from the sale of ore, money more than sufficient to indemnify Halleck, with the surplus bought and paid for an interest in the New Discovery Lode. About October 1, 1878, they had on deposit to their credit in the bank $16,000, and Halleck was bound for them to the amount of $12,000.

In the latter part of September the Missouri

reasonable; but that as I was working about there managing the mine, he could do better than I could. I said he had mentioned to us one night on the street, $30,000 as a price, but that we wouldn't agree to for a moment. We wondered how we could do about the money for the purchase. If we could use the company money we thought we must use a little, more than our joint interest. Bissell was to see the boys in regard to it."

In answer to the question "What was said about the price?" he replied: "We talked the amount; $20,000 was spoken of. He thought that was too high and more than we should give. I thought so, too; but $30,000 was the price fixed by them. That I wouldn't think of for a moment. We figured it over, but I don't remember the exact figures, and we concluded that at $15,000 we could pay for it, in case we could draw out the money in the Exchange Bank. Dr. Bissell thought it could be bought for less than $10,000. There was no propo