[522] wealth, 9 Wall., 353 [76 U. S., bk. 19, L. ed. | ment, either for damages or interest. The The case therefore depends upon the construction of the statute. The Supreme Court of Ohio has decided that shares owned by a resident of Ohio in a foreign corporation, none of whose capital was taxed in Ohio, but all of it in the State where the corporation had its home, was taxable in Ohio. Bradley v. Bauder [supra]. The controversy on this part of the case is, therefore, reduced to the question, whether the Legislature has clearly and unmistakably expressed the purpose in the Act under consideration to exempt from taxation shares in a foreign corporation owned by residents of Ohio, when but a small part of the property of the company was subject to taxation in Ohio. The exemption from taxation of investments in stocks, provided by the statute, applies only to shares of those corporations which are required to return their capital and property for taxation in the State. Jones v. Davis, 35 Ohio St., 474. This clearly means those corporations which are required to return all, or substantially all their capital and property. There is no rule of interpretation by which the statute can be held to apply to corporations who list only a small part of their property for taxation in Ohio. If the Legislature had intended to allow an exemption in such a case, it could and would have expressed that purpose by words not admitting of doubt. As the shares of the plaintiff in error in the Western Union Telegraph Company were not only not expressly, but not even by fair implication, exempted from taxation, we are of opinion that the tax complained of was authorized by law. Lastly, complaint is made that the Circuit Court erred in rendering judgment for the penalty and interest upon the additional taxes assessed against the plaintiff in error.. Under the circumstances, we must presume that the judgment of the Circuit Court, in respect to its amount, as well as in other respects, was right, unless the contrary is shown. Ventress v. Smith, 10 Pet., 161; Townsend v. Jami son, 7 How., 714; The Ship Potomac, 2 Black, 581 [67 U. S., bk. 17, L. ed. 263]. We find no error in the record. Judgment affirmed. True copy. Test: Jurisdiction review of judgments of State Courts-bankruptcy of corporation-sale of franchises sustained. 1. This court has jurisdiction to review the judgment of a State Court against the validity of a title claimed under a sale in bankruptcy. 2. The jurisdiction of the bankruptcy court to adjudicate a railroad company bankrupt and to administer its property, under the Bankruptcy Act, is settled by the decisions of the Circuit Courts and this court is unwilling at this late date to re-examine the question. 3. The authority to mortgage the franchises of a railroad company necessarily implies the power to bring the franchises so mortgaged to sale, and to transfer them, with the corporeal property of the company, to the purchaser. 4. Where the franchises of a railroad corporation essential to the use of its road, and other tangible property, can by law be mortgaged to secure its debts, the surrender of its property, upon the bankruptcy of the company, carries the franchises, and they may be sold and passed to the purchaser at the bankruptcy sale. 5. There is nothing in the nature of a corporate franchise under the law of Louisiana,which forbids its transfer with the other property of the corporation. [No. 252.] Argued Apr. 15, 1885. Decided May 4, 1835. The judgment of the Circuit Court was for $10,727.65, which is less than the taxes de: INERROR to the Supreme Court of the State manded in the petition without either interest But we have not been referred to any statute the of Louisiana The history and facts of the case appear in Statement by Mr. Justice Woods: This is a writ of error to bring under review a decree of the Supreme Court of Louisiana reversing a decree of the Fifth District Court for the Parish of Orleans. The facts, as they appeared from the plead age its property and franchises. M. & L. R. R. CO T erice, were as follows: The Canal | Orleans, by an ordinance numbered 4,523, adPark and Lake Shore Railroad Com- ministration series, dated May 22, 1878, had corporation organized under the granted to the second Canal Street, City Park a of the State of Louisiana. By an and Lake Railroad Company the right of way of the City of New Orleans, num- upon which to lay a railroad through and on 24 administration series, dated August the same streets and along the same route as had the city granted to the corporation been previously granted by ordinance to the e nest of way from the neutral first Canal Street City Park and Lake Railroad Basin Street, by certain other desig- Company. 4 and along the embankment on the Both Handy and the railroad company to sue of the Orleans Canal to the lake which he sold the property, made default in the is and the entire route being payment of the mortgage debt, and at the suit Le cry limits. The route upon which of Elizabeth Strathman and another, holders of was to be built was subsequently modi- one of the mortgage notes made by Handy, a tre Lumbered 2,548, administra-writ of seizure and sale was issued, and the d March 25, 1874. The com- property described in and covered by the mortved and used a railroad upon the gage was seized and sold to Moses Schwarts & FIT 80 granted. In the year 1876, Brother, and afterwards conveyed to them by a in bankruptcy filed by Edward the sheriff, by deed dated April 4, 1879. another, the railroad company In the meantime, on March 31, 1879, the presthankrupt by the District Court ent plaintiff, the New Orleans, Spanish Fort 21 States for the District of Louisi- and Lake Railroad Company, had been organother property and assets surren-ized under the general law of the State for the the bankrupt, were "the railroad organization of corporations, and on April 9, and Focular, built in pursuance of 1879, Schwartz & Brother sold and conveyed of outer of the said company, and the vari- to the last named Railroad Company the railand privileges conferred upon said road, "with all and singular the right of way, City of New Orleans, ***powers, privileges and immunities and franthe mad bed of main tracks and chises conferred and granted by the City of and all rights and appurtenances of New Orleans to the Canal Street, City Park and a tracks, as well as rights of way Lake Railroaad Company" by the ordinance of 3 bed. and all the franchises August 5, 1873, as amended by the ordinance " of said company. of March 24, 1874, being the same property 5 totem ber 29, 1976, the assignee in bank- bought by Schwartz & Brother at the mortgage red to the bankruptcy court for an sale. the property above described, and On November 15, 1879, George Delamore, se of the company, free and clear of one of the defendants, recovered a judgment in as, and on May 19, 1877, the the Fifth District Court for the Parish of OrThe order prayed for, and directed leans for $5,720 against the Canal Street, City be made on the following terms: Park and Lake Railroad Company, being the dard and the balance on one and two second company above mentioned organized ~11, to be secured by mortgage on the under that name. Delamore, on the 11th day On July 14, 1877, the property of November, 1879, caused execution to issue The special master appointed by the on this judgment, which, on the 18th of NoH Handy. The sale was af- vember, the Sheriff for the Parish of Orleans red by the court, and a deed levied on a certain frame building or structure Easter to the purchaser for the known as "the pavilion," being on the Bayou ail the right of way, powers, St. John, at or near the entrance thereto into nities and franchises conferred the Lake Pontchartrain, and also on "all and y the City of New Orleans to the singular the right of way, the powers, priviCry Park and Lake Railroad Com-leges, immunities and franchises conferred and Finances above mentioned. At granted by the City of New Orleans to the Caze, and by the same act, Handy nal Street, City Park and Lake Railroad Comon the property conveyed to pany, under and by virtue of an ordinance of notes given for two thirds of the City of New Orleans, being No. 4,523 of ey. The mortgage contained the administration series adopted by the Common Council of the City of New Orleans on the 21st of May, 1878." do. 1878, a new railroad compaunder authority of the genaw of Louisiana, bearing the wit the "Canal Street, City Railroad Company," and havets and purposes as the combeen adjudicated bankrupt. acrazy Handy, on August 16, my fathe Act the property hereurchased by him at the bankthe original Canal Street, City Lore Railroad Company, and Led the mortgage of Handy t to pay the balance due from ase of the property. Cyance, the City of New Thereupon the plaintiff, the New Orleans, Spanish Fort and Lake Railroad Company, filed the bill in this case in the Fifth District Court for the Parish of Orleans against Delamore and the Sheriff, the prayer of which was for a writ of injunction against the defendants to restrain them from advertising or selling, or offering for sale, the property so levied on, as above stated. The Fifth District Court allowed the injunction as prayed for, but on final hearing so modified it as only to restrain the seizure and sale of the rights and franchises enjoyed by the plaintiff which it acquired from Moses Schwartz, and decreed that the plaintiff be quieted in the enjoyment and possession of the [504] The jurisdiction of the bankruptcy court to judicate a railroad company bankrupt and to iminister its property under the Bankrupt Act be has been sustained by several Circuit Courts ses of the United States. Adams v. Boston, H. & E. R. R. Co., 1 Holmes, 30; Siceatt v. Boston, the H. & E. R. R. Co., 5 N. Bk. Reg., 234; Ala. the & Chatt. R. R. Co.v. Jones, 5 N. Bk. Reg., 97; Winter v. The lowa, etc., R. R. Co., 2 Dill., 487. No Circuit Court before which the question has been brought has denied the jurisdic tion. As they were the courts of last resort upon this question, and valuable rights may depend upon their judgments upon this point, we think the question should be considered as settled by the authorities cited, and are unwil ling at this late day to re-examine it, especially as we have no jurisdiction to do so, except in a collateral proceeding like the present. the railso much me Court as ne sale of he plaintiff. Robert Mott error. Sernor and Wm. S. Tered the ophia of The plainti contends that the right of way, with the franchise to build and use a railroad urisdiction of the thereon for profit, was surrendered by the bank We think the jurisdic-rupt corporation as a part of its property, and in section 709 of the was scid to Handy at the bankruptcy sale, and provides that "A final was subsequently acquired by it by means of any suit in the highest the claim of tide above set forth. It is not conen à decision in the suit tended in this case that Handy acquired the where any title, right, priv- franchise to be a corporation or any other fran sciaimed under the Consti- chise except those just mentioned by virtue of * statute of the his purchase at the bankruptcy sale. On the other hand, it is contended by the deSes and the decision is against the privilege or immunity specially set fendant that the right of way and the franchise e under such Constitutione buld and use a railroad thereon reverted to may be re-examined and re- the City of New Orleans when the railroad firmed in the Supreme Court of the company was adjudicated bankrupt, and that all that was surrendered in bankruptcy by the Ses upon a writ of error." naf, by its petition in this case, filed road company and sold at the bankruptcy Sa District Court of the Parish of Orse or the mortgage sale, was the railroad with its demand to the relief prayed for outright of way or other franchise. le to the right of way, privileges caises derived under the provisions of The contention of the defendant, if sustained. wet ene destroy the value of the prop srupt law of the United States by which ad For it is plain that a large ht of way, privileges and franchises part, if not all the line, of the railroad is laid were surrendered in bankruptcy and scid and upon the streets and public grounds of the city. sed under the orders and decrees of the therefore, the franchise of the right to oc rupt court. The decision of the Supreme cry the streets and public grounds with the Court of Louisiana was against the method track did not pass to the purchaser a specially claimed. The case, therefore, is the bankruptcy sale, then all that he took by precisely into the class of suits described by the his purchase was a lot of ties and iron rail statute in which a writ of error lies to the he he would be compelled at any time, by the order of the city authorities, to remove. I est court of a State. The very question here presented she be contended by the defendant in er cided by this court in the recent esse of Fueror, a facial sale of the railroad and its fran tors' Ins. Co. Murphy, 111 U. §. 38. 3 would be the destruction of both. The ground upon which this view of the de L. ed., 582 where it was held that this count had juristicnon in error over the pairment of fendant is based is that the franchises of a rail the Supreme Court of Louismans 2 s sur beroad corporation are inalienable in Louisiana tween ciazens of hat State for the forecisar a pasty on this question it is necessary to of a mortgage, in which 2 My bear in mind the distinction between the differ ent cissses of railroad franchises. This wa related to me affect in de given à seď zgj 114 U. S Justice Curtis in the case of Hall | preme Court of Louisiana has recognized the R. R. Co., 21 Law Rep., 138, where thority to mortgage the franchises of page of the Act of 1856, the Su In the case of Chaffee v. Ludeling, 27 La. Ann., 607, it was declared that the defendants, by their purchase at sheriff's sale of the property of the Vicksburg, Shrevesport and Texas Railroad Company, a Louisiana corporation, acquired "the privileges and franchise of the corporation, its powers to operate the railroad. The sheriff's sale made them the owners of the road, its right of way, its property, its franchise, but did not and could not make them a corporation. *** This sale conveyed to them the rights and property of that company; it made them joint owners thereof."* There is, therefore, nothing in the nature of a corporate franchise under the law of Louisiana which forbids its transfer with the other property of the corporation. And such must be the conclusion whenever a railroad company is authorized by law to mortgage its tangible property and franchises. [510] When there has been a judicial sale of railroad property under a mortgage authorized by law, covering its franchises, it is now well settled that the franchises necessary to the use and enjoyment of the railroad passed to the purchasers. This was assumed to be the law by the opinion of this court pronounced by Mr. Justice Matthews in the case of Memphis R. R. Co. v. Commissioners, 112 U. S., 609 [Bk. 28, L. ed. 837], when it was said: "The franchise of being a corporation need not be implied as necessary to secure to the mortgage bondholders or the purchasers at a foreclosure sale the substantial rights intended to be secured. They acquire the ownership of the railroad and the property incident to it and the franchise of maintaining and operating it as such." See also, Hall v. Sullivan R. R. Co., 21 Law Rep., 135; Galveston R. R. Co. v. Cowdrey, 11 Wall., 459 [78 U. S., bk. 20, L. ed. 199]. It follows that if the franchises of a railroad corporation essential to the use of its road, and other tangible property, can by law be mortgaged to secure its debts, the surrender of its property, upon the bankruptcy of the company, carries the franchises, and they may be sold and passed to the purchaser at the bankruptcy sale. The plaintiff, therefore, by virtue of the bankruptcy sale, and the subsequent mortgage sale and the several mesne conveyances mentioned, acquired with the tangible property of the original Canal Street, City Park and Lake Railroad Company the franchise granted by the City of New Orleans to lay its track over the streets and public grounds designated in the ordinance of August 6, 1873, and the amendatory ordinance of March 24,1874. This right of way so vested could not be affected by the ordinance of the City of New Orleans to grant a similar right of way over the same streets and route to the second Canal Street, City Park and Lake Railroad Company, and The sale in this case was made by virtue of a writ of seizure and sale issued upon a mortgage executed by the Railroad Company upon its property and franchises to secure its bonds. See Jackson v. Ludeling, 99 U. S., 513 Bk. 25, L. ed. 460). [505] [505] [506] said road, right of way, powers, privileges, im- The present writ of error taken by the rail- Mr. Justice Woods delivered the opinion of the court: erty under an order of the bankruptcy court directing the mortgaged property of the bank. rupt to be sold free of incumbrances. The case is in point and decisive of the jurisdiction of this court on the present appeal. We therefore proceed to consider the merits of the case. They are involved in the one question, whether the right of way and franchises granted by the City of New Orleans to the first Canal Street, City Park and Lake Railroad Company passed by the sale thereof made in pursuance of the decree of the bankruptcy court. The jurisdiction of the bankruptcy court to adjudicate a railroad company bankrupt and to administer its property under the Bankrupt Act has been sustained by several Circuit Courts of the United States. Adams v. Boston, H. & E. R. R. Co., 1 Holmes, 30; Sweatt v. Boston, H. & E. R. R. Co., 5 N. Bk. Reg., 234; Ala. & Chatt. R. R. Co. v. Jones, 5 N. Bk. Reg., 97; Winter v. The lowa, etc., R. R. Co., 2 Dill., 487. No Circuit Court before which the question has been brought has denied the jurisdiction. As they were the courts of last resort upon this question, and valuable rights may depend upon their judgments upon this point, we think the question should be considered as settled by the authorities cited, and are unwil ling at this late day to re-examine it, especially as we have no jurisdiction to do so, except in a collateral proceeding like the present. was sold to Handy at the bankruptcy sale, and was subsequently acquired by it by means of the claim of title above set forth. It is not contended in this case that Handy acquired the franchise to be a corporation or any other franchise except those just mentioned by virtue of his purchase at the bankruptcy sale. The plaintiff contends that the right of way, with the franchise to build and use a railroad The defendant denies the jurisdiction of the thereon for profit, was surrendered by the bankcourt upon this appeal. We think the jurisdic-rupt corporation as a part of its property, and tion is clear. It is based on section 709 of the Revised Statutes, which provides that "A final judgment or decree in any suit in the highest court of a State in which a decision in the suit could be had *** where any title, right, privilege or immunity is claimed under the Constititution or any*** statute of *** the United States, and the decision is against the title, right, privilege or immunity specially set up or claimed under such Constitution*** or statute *** may be re-examined and reversed or affirmed in the Supreme Court of the United States upon a writ of error." The plaintiff, by its petition in this case, filed in the Fifth District Court of the Parish of Orleans, based its demand to the relief prayed for upon its title to the right of way, privileges and franchises derived under the provisions of the bankrupt law of the United States by which such right of way, privileges and franchises were surrendered in bankruptcy and sold and purchased under the orders and decrees of the bankrupt court. The decision of the Supreme Court of Louisiana was against the title thus specially claimed. The case, therefore, falls precisely into the class of suits described by the statute in which a writ of error lies to the high On the other hand, it is contended by the defendant that the right of way and the franchise to build and use a railroad thereon reverted to the City of New Orleans when the railroad company was adjudicated bankrupt, and that all that was surrendered in bankruptcy by the railroad company and sold at the bankruptcy sale or the mortgage sale, was the railroad without right of way or other franchise. The contention of the defendant, if sustained, would entirely destroy the value of the property as a railroad. For it is plain that a large part, if not all the line, of the railroad is laid upon the streets and public grounds of the city. If, therefore, the franchise of the right to occupy the streets and public grounds with the railroad track did not pass to the purchaser at the bankruptcy sale, then all that he took by his purchase was a lot of ties and iron rails which he could be compelled at any time, by the order of the city authorities, to remove. If The very question here presented was de- the law be as contended by the defendant in ercided by this court in the recent case of Fac-ror, a judicial sale of the railroad and its frantors' Ins. Co. v. Murphy, 111 U. S., 738 [Bk. 28 chises would be the destruction of both. L. ed., 582], where it was held that this court The ground upon which this view of the dehad jurisdiction in error over the judgment of fendant is based is that the franchises of a railthe Supreme Court of Louisiana in a suit be-road corporation are inalienable in Louisiana. tween citizens of that State for the foreclosure In passing upon this question it is necessary to of a mortgage, in which the only controversy bear in mind the distinction between the differ related to the effect to be given a sale of prop-ent classes of railroad franchises. This was est court of a State. [507 |