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of all their right, title, and interest to the curred in the result, the Chief Justice saying land on the west side of the canal and also that he was not satisfied that the plaintiff to allow it the free and uninterrupted use of ever acquired title to the land upon which the said 500 horse power of water power the works in question had been erected. reserved to the penitentiary, with the excep. There is nothing to *indicate that either of[487] tion of the 100 horse power so reserved for them dissented from the views expressed by its private use. This contract was subse- Mr. Justice Gary, who presumably spoke for quently ratified and confirmed by an act of the court, with respect to the Federal ques. the general assembly approved December 24, tion. 1892.

In holding that the contract with the de. While no special mention is made in the fendant and the legislative act confirming complaint of the Constitution of the United the same were valid, the court proceeded up. States, the whole theory of the plaintiff's on the idea that the act of 1887 authorizing case taken in connection with the answer is the transfer of the property to the board of that the rights which it acquired to the 500 trustees of the Columbia canal made the res. horse power in question under the act of ervation to the state of the 500 horse power 1887 were impaired by the subsequent act of an absolute one; that the directors of the December 24, 1892, ratifying and approving penitentiary could do with it as they pleased, the contract of the board of directors of the and hence they had the right to turn it over state penitentiary with the defendant. The to the defendant if, in their judgment, such contract of the defendant is set up in the course was warranted by a due regard for complaint, and although the act of Decem- the interests of the state. While, in so hold. ber, 1892, ratifying the same, is not set up ing, the court disposed of the case upon the there, it appears in the answer and is relied construction of the contract under which the

upon as validating the contract; so that, plaintiff asserted its right, such construction (486) rading "the complaint and answer together,

is no less a Federal question than would be the question whether the contract of the the case if the construction of the contract plaintiff was impaired by subsequent state were undisputed, and the point decided upon action appears on the face of the pleadings. the ground that the subsequent act confirmIn passing upon the case the supreme

ing the contract with the defendant did not court, speaking through Mr. Justice Gary, impair it. The question in either case is held that one of the objects of the plaintiff's whether the contract has been impaird, and action was to have the contract between the that question may be answered either by state and the defendant as to the 500 horse holding that there is no contract at all, or power declared null and void on the ground under its contract, or, granting that it

that the plaintiff had no exclusive rights that the state could not lease the same. view of an intervening suggestion filed by the had such exclusive rights, that the subattorney general, to the purport thať the sequent legislation did not impair it. state had interests which would be affected These are rather differences in the form of by granting the relief prayed for, he held expression than in the character of the questhat the state, being an indispensable party tion involved, and this court has so frequent. and refusing to become a party, the cause of ly decided, notably in the very recent case of action on the equity side of the court could McCullough v. Virginia, 172 Ŭ. S. 102 [ante, not be sustained ; and in considering the 382,) that it is the duty of this court to decause of action on the law side of the court termine for itself the proper construction of he reached the conclusion that the state was the contract upon which the plaintiff relies, not an indispensable party. He then pro

that it must be considered no longer as an ceeded to consider whether the contract be open question. New Orleans Water Works tween the state and the defendant relative to Co. v. Louisiana Sugar Ref. Co. 125 U. S. 18 the 500 horse power was null and void, and [31: 607); Bridge Proprietors v. Hoboken held that the proviso to section 7 of the act Land & Improv. Co. 1 Wall. 116 [17: 571]. of 1887 being that the right of the state to

To the argument that the Federal right the free use of this horse power should be was not “specially set up and claimed”in absolute, the construction given to it by the the language of Revised Statutes, section legislature in the act of 1892 was correct, 709, it is replied that this is not one of the and that the word “absolute” was used for the cases in which it is necessary to do so. Un purpose of creating a right in the state to der this section there are three classes of this horse power separable and distinct from cases in which the final decree of a state the ownership in other lands, and not de- court may be re-examined here: pendent upon any particular lands to which *(1) “Where is drawn in question the va- [488) it might be appurtenant. It followed that lidity of a treaty, or statute of, or authorthe contract between the state and the deity exercised under, the United States, and fendant was not null and void.

the decision is against their validity;" He further held that the right of the de

(2) "Where is drawn in question the fendant to erect the steam plant depended validity of a statute of, or an authority exupon the fact whether it was merely inciden- ercised under, any state on the ground of tal and essential to the enjoyment of the their being repugnant to the Constitution, water power plant; that the parties had a treatics, or laws of the United States, and right to trial by jury as to these issues, but the decision is in favor of their validity;” as no demand was made therefor the court (3) "Or where any title, right, privilege, assumed that the circuit court properly de- or immunity is claimed under the Constitucided all questions of fact upon which its tion, or any treaty or statute of, our commis. judgment rested. The other justices con- 'sion held or authority exercised under, the

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United States, and the decision is against port of this contention, plaintiff relies not
the title, right, privilege, or immunity spe- only upon the act of 1887, under which it
cially set up and claimed by either party un. takes title, but upon certain prior acts of
der such Constitution, statute, commission, the general assembly.
or authority."

Thus, under section 2 of the act of SeptemThere is no doubt that under the third ber 21, 1866, “to Provide for the Establishclass the Federal right, title, privilege, or ment of a Penitentiary" (13 8. C. Stat. No. immunity must be, with possibly some rare 4797), it was made the duty of the commis exceptions, specially set up or claimed to give sion “to select and procure a proper site, at this court jurisdiction. Spies v. Illinois, 123 some point if practicable where water power U. S. 131, 181 (31: 80, 91); French v. Hop- may be made available for manufacturing kins, 124 U. S. 524 [31: 536); Chappell v. purposes within the inclosure, on which to Bradshaw, 128 U. S. 132 [32: 369]; Bald- erect suitable penitentiary buildings." And win v. Kansas, 129 U. S. 52 (32: 640]; by a subsequent act, approved December 19, Leeper v. Texas, 139 U. S. 462 [35: 225); 1866 (13 S. C. Stat. 398), the commissioners, Oxley Stave Co. v. Butler County, 166 U. S. who had been authorized by a previous act 648 [41: 1149].

of December 18, 1865, to sell and convey the But where the validity of a treaty or stat- Columbia canal, were authorized to sell it at ute of the United States is raised, and the public or private sale, ut their discretion, decision is against it, or the validity of a provided that at any sale that may be made state statute is drawn in question, and the by said commissioners there be made a reser. decision is in favor of its validity, this court vation to the state of water power sufficient has repeatedly held that, if the Federal ques- for the purposes of the state penitentiary for tion appears in the record and was decided, all time free of charge. In a subsequent act or such decision was necessarily involved of September 21, 1868 (14 S.C. Stat. 83),the 490 in the case, and the case could not have been commissioners were vested by section 4 with determined without deciding such question, like authority to sell at public or private the fact that it was not specially set up and sale, with a similar reservation to the state claimed is not conclusive against a review of of water power sufficient for the purposes of such question here. Miller v. Nicholls, 4 the state penitentiary for all time, free of Wheat. 311 [4: 578]; Willson v. Blackbird charge. In another act, approved March 12, Creek Marsh Co. 2 Pet. 245 [7: 412]; Sat. 1878 (10 Stat. 445), to provide for the disterlee v. Matthewson, 2 Pet. 380, 410 [7: posal of the Columbia canal, there was also 458, 468]; Fisher's Lessee v. Cockerell, 5 a proviso in section 4 that, “in all grants Pet. 248 [8: 114); Crowell v. Randell, 10 that may be made, sufficient power shall be Pet. 368 [9: 458]; Harris v. Dennie, 3 Pet. reserved to the state for the use of the pen292 [7: 683]; Farney v. Towle, 1 Black, 350 itentiary and the city of Columbia.” So, too, [17: 216]; Hoyt v. Shelden, 1 Black, 518 in an act of February 8, 1882 (17 Stat. 855), (17: 65); Mississippi & M. Railroad Co. v. to authorize the canal company to transfer Rock, 4 Wall. 177 [18: 381); Furman v. the canal and lands to the board of directors Nichol, 8 Wall. 44 [19: 370]; Kaukauna of the penitentiary, it was provided that the Water Power Co. v. Green Bay & M. Canal board of directors should take possession on Co. 142 U. S. 254 (35: 1004).

behalf of the state of the canal with its apThe case under consideration falls within purtenances, and, for the purpose of provid. (489]the second class, *and as it appears from the ing iin adequate water power for the use of

record and from the opinion of the court the penitentiary, were authorized to improve
which may be examined for that purpose and develop the same. By section 6 of the
(Kreiger v. Shelby R. R. Co. 125 Ư. S. 39 same act they were authorized "to furnish
[31: 675),) that the question was presented to the city of Columbia, for the purpose of
and decided, that the act of 1892 affirming operating its waterworks and for other pur.
the validity of defendant's contract with the poses, 500 horse power of water power ;
board of directors of the state penitentiary and after reserving for the use of the
did not impair the obligation of plaintiff's penitentiary a power sufficient to meet the
contract, evidenced by the act of 1887, be demands of its ordinary operations and other
cause that act properly construed conveyed industries conducted and carried on within
no exclusive rights, we think the Federal its walls, they are further authorized,
question sufficiently appears.

with the comptroller general on behalf of the
2. Upon the merits the case presents state, to lease to other persons or corpora-
but little difficulty. The argument of the tions water power upon such terms and upon
plaintiff is that under the act of 1887 the such annual rental per horse power as in
board of trustees of the Columbia canal, of their judgment may be proper, and also to
which plaintiff is the successor, took an abso- lease such mill sites along the line of the
lute title to the canal and appurtenant said canal as may be owned by the state,
lands, with the right to "purchase, sell, or upon such terms as may be deemed most ad.
lease lands adjoining the canal useful for vantageous to the interest of the state."
purposes of the canal," and to "sell or lease It will be observed that these acts are pro-
the water power of the canal, subject to such gressively liberal to the state; that the
rules and regulations as it shalí prescribe, earlier ones contemplated the use of the wa-
having first provided the state with 500 ter power only for manufacturing purposes
horse power of water power at the peniten within the walls of the penitentiary, while
tiary," for the individual use of the peniten- the latter ones indicated that such power
tiary alone, and with no right to lease or was also reserved for the use of the city of
suhlet it to others for private gain. In sup. Columbia, for the purpose of operating its

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peal to the court of appeals for the District, sadly at variance; that he had there testi. where the judgment was affirmed, and the de- fied before the committee that it cost 48.38 fendants then brought the case here on writ cents per thousand to manufacture gas in of error.

the holder, and 40.09 cents per thousand for It appears from the declaration that a com. distribution, and that he knew of but one mittee of the House of Representatives, in way that a small amount could be saved, and January, 1893, having in charge the sundry that was by reducing the salaries of the civil appropriation bill, had therein provided clerks and the price paid to the labcrers, that not more than seventy-five cents per which the company would not like to do. In thousand feet should be paid for gas used in 1894, before a committee of Congress, the the government buildings in the District of plaintiff testified that, from his knowledge of Colunbia. The gas company desired to de- the business and the condition of affairs at ieat this provision in the bill, and the pres- Washington, the gas company could sell gas ident, Mr. McLean, sent for the plaintiff be and pay a reasonable profit at a dollar a low, who was general manager of the thousand. He stated that in his opinion the company, for the purpose of inquiring what gas could be manufactured and put in the the plaintiff could testify to in regard to the holder for about thirty-two cents a thousand price of gas if called before the committee. feet, and that it ought to be distributed for The president asked the plaintiff to furnish from twenty to twenty-two cents a thousand, 36]him with a written "memorandum showing which would make the whole cost from fifty. generally what he could testify to, and which two to fifty-four cents per thousand. The he might use as a basis for questions to be article then continued: put to him by some member of the committee. "From the foregoing extracts of this wit. The plaintiff wrote out such a memorandum, ness's testimony only one of two conclusions but did not mention therein the cost of gas to can be arrived at, and we are too sensible of the defendant company, and when the presi. the reader's power of analysis and feel too dent noticed the omission he asked the plain- keenly for the witness to heap coals of iro tiff what the cost would be, and plaintiff on the head of one who, it is only too evident, stated that that was a matter which should has allowed his sense of justice to be distortcome from the chief officers of the company, ed by real or fancied_grievances. The testiand which was unknown to him.

mony given by Mr. Lansden in 1893 states The plaintiff did not testify before the com. in eífect that there is no way open to his mittee at that session of Congress.

company by which it could reduce the cost of Thereafter and in February, 1894, and manufacturing gas. In 1894 he tells the when not requested by the president of the committee that_taxes and repairs added, company or any of its officers or agents, the items not considered in the inquiry of the plaintiff did appear before a committee of previous year—the cost of gas delivered to Congress, and did testify to figures at which the consumer could be brought within seventy plaintiff supposed gas could be actually pro-cents, or about eighteen and one half cents duced and furnished in the city of Washing less per thousand than he quoted as the lowton.

est manufacturing and distributing cost the The plaintiff then alleged that the defend- year before; and yet Mr. Lansden must know ants in the month of February, 1894, pub- that the generating apparatus at the Washlished or caused to be published in a news- ington works is the same as when he filled paper or periodical called the Progressive the position as superintendent; that the cost Age, which was printed in the city of New of all materials used, coal, and labor, are York, and widely circulated as an organ de just the same, save only naphtha, which is voted to the interests of gas producers and now higher in price than when he testified manufacturers throughout the country, the a year ago.”. libel in question.

*For publishing or causing to be published(538) The article states in substance as follows: this article the plaintiff brought this action. The plaintiff had once filled the position of The defendants joined in their plea of not general manager of the gas company, which guilty, and the plaintiff joined issue thereon. he had resigned in June, 1893, and that in After verdict a motion for a new trial was his testimony before the congressional com- made and denied, and judgment entered upon mittee in 1894 the plaintiff had arrayed him the verdict. self within the ranks of those who sought to The questions which present themselves in tear down and lay waste the business and this record relate primarily to the liability emoluments of his former employers. He of each of the plaintiffs in error, and those gave testimony which was reported through questions depend for their proper solution the land, and was of such a nature as was upon the evidence set forth in the record. calculated to do the utmost harm to gas in- And first in regard to the liability of the terests everywhere. The figures supplied by corporation. From the evidence it appears Mr. Lansden of the cost of gas were start that at the time of the publication of the ling, and only a year ago (in 1893) a similar libel John Leetch was the general manager of inquiry emanating from the same quarter the gas company. After the plaintiff had was instituted before a congressional com been sworn before the congressional commitmittee against the Washington Gaslight tee, in February, 1894, one E. C. Brown, who Company, and plaintiff appeared as a wit- was the publisher of the periodical called ness in behalf of the company; that he then The Progressive Age, and who lived in the +7]occupied the position of general manager of city of New York, wrote a letter, under dato

the company, and his testimony then, as com- New York, February 12, 1894, addressed on
pared with that given subsequently, was the inside to the Washington Gaslight Com.
172 U. S. U. S., BOOK 43.
35

545

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court.

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PITTSBURGH, CINCINNATI, CHICAGO, mentioned in the above deed of trust, subject & ST. LOUIS RAILWAY COMPANY, to prior mortgage liens of $3,200,000; that Plff. in Err.,

it should "be transferable by delivery, or it

may be registered as to its ownership on a LONG ISLAND LOAN & TRUST COM- registry to be kept by the company, and be

PANY, Executor of the Last Will and Tes- ing so registered, it shall then be transfer.
tament of Charles R. Lynde, Deceased,

able only on the books of the company until

released from such registry on said books by (See 8. C. Reporter's ed. 493-515.) its owner;" also, that it "shall not becomo

obligatory until it shall have been authentiFederal questionpendency of a suit in a cated by a certificate annexed to it, duly Federal court.

signed by the trustee."

To each bond was attached this certificate: 1. A claim that a llen on property was wholly “I hereby certify that this bond is one of the

devested by foreclosure proceedings in a Fed series of bonds described in and secured by
eral court involves such an assertion of a the deed of trust or mortgage above men:
right and title under an authority exercised tioned. A. Parkhurst, Trustee.”
under the United States as gives the Supreme
Court of the United States jurisdiction to

The property and rights covered by the re-examine the final judgment of the state above deed of trust, and which were ordered

to be sold by the decree in this case if the 2. The pendency of a foreclosure sult in a Fed Columbus, Chicago, & Indiana Central Rail.

eral court, in which the decree saves the way Company did not, by a named day, pay rights secured by a prior mortgage, does not the amount found due to the plaintiff, was interfere with the negotiation of bonds se- a line of railroad extending from Columbus, cured by such prior mortgage, or impalr in Ohio, to Indianapolis, Indiana, including a any degree the lien thereby created.

branch from Covington to Union, together (No. 16.)

with the franchises, equipment, property,

tolls, and interests appertaining thereto. Argued April 11, 12, 1898. Decided Janu- The case made by the record is set forth ary 9, 1899.

in an extended finding of facts covering six

teen pages of the present transcript. Many N ERROR to the Supreme Court of the of the facts so found are not necessary to be court affirming a judgment of the Circuit upon the present inquiry may be thus sum. Court of Franklin County, in that state, in marized : favor of the plaintiff adjudging that, unless *The Columbus & Indianapolis Central(498) certain sums found due be paid by the defend- Railway Company prepared, signed, and ant to the plaintiff, a certain mortgage secur- sealed the 1,000 bonds referred to (part of ing certain bonds' held by the plaintiff be which were the 36 bonds held by Lynde), and foreclosed, and the defendant barred of its to secure the same executed and delivered the equity of redemption in the premises em- mortgage or deed of trust to Archibald Park. braced by the mortgage. Judgment of the hurst, as trustee. Supreme Court affirmed.

The above deed recited the consolidation
The facts are stated in the opinion. of the Columbus & Indianapolis Railroad

Messrs. Lawrence Maxwell, Jr., and Company and the Indiana Central Railway
Charles E. Burr for plaintiff in error. under the name of the Columbus & Indian-

Messrs. E. W. Kittredge and Joseph apolis Central Railway Company, the con.
Wilby for defendant in error.

solidated company becoming liable for and

assuming all the just debts and liabilities of [494) *Mr. Justice Harlan delivered the opin- the respective constituent companies; that, ion of the court:

for certain purposes, a new series of bonds, This writ of error brings up for review a 1,000 in number, and each for $1,000, should • final judgment of the supreme court of Ohio be issued, dated November 1st, 1864, to be affirming a judgment of the circuit court of secured by a deed of conveyance covering the Franklin county, in that state.

mortgagor company's road, its appurtenan. [495] *The general question presented for deter. ces, franchises, equipments, property, tolls,

mination is whether certain railroad prop-income, and interest, to a trustee to secure erty may be sold in satisfaction of a judg. the payment of said bonds and interest war. ment obtained in 1891 by Charles R. Lynde rants. Such a deed was made, and conveyed in the circuit court of the United States for to A. Parkhurst, trustee, for the “purpose of the southern district of Ohio for the amount assuring the punctual payment of the said of 36 coupon bonds, part of 1,000 bonds is. 1,000 bonds and each of them to each and sued by the Columbus & Indianapolis Cen every person who may become the holder of tral Railway Company, an Ohio corporation, the same or any of them,” the mortgagor in the year 1864.

company's entire railroad from Columbus to The bonds were secured by a deed of trust, Indianapolis, including the branch from Cov: and were made payable to William D. ington to Union, its franchises, etc., in trust Thompson or bearer, on the 1st day of No to secure the bonds about to be issued by it. vember, 1904, each bond reciting, among The deed contained all the provisions usualother things, that it was one of an issue of ly found in such instruments. not exceeding $1,000,000, and had a special Parkhurst accepted the trust, and the lien on all of the railway property, equip mortgage or deed of trust was duly recorded ments, and franchises of the company, as 'in Ohio and Indiana,

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It appeared in evidence that some time af- mands economy in its management, and that ter Leetch answered the letters he placed them the gas produced shall be uniformly good." among papers of the company in the secre From that time until the year 1886 there is tary's office, and they were so placed, be- no evidence regarding the duties of superincause

, as Mr. Leetch testified, it was a mat- tendent or manager of the company. ter that had then assumed a position when In September, 1886, at a meeting of the it was necessary to save the letters, and he board of directors, the president called attherefore placed them in the care and cus- tention of the board to the necessity *of em-[543] tody of the secretary.

ploying a competent man to fill the position Mr. Leetch further testified that none of of superintendent of the company (said posithe letters written by him was written in tion being formerly designated engineer), his capacity as general manager of the com- and Mr. Mclhenny (the president) was aupany; that they were written by him as a thorized to employ such person for the posi. mere personal inatter, altogether exclusive tion. Pursuant to that authority the presi. of any duty that he owed the gas company; dent wrote to Mr. Lansden (the plaintiff) that the gas company had no interest in the stating: "Our board of directors has author. matter, and that he merely wrote them as ized me to employ a superintendent, and I an act of courtesy, stating the facts. have concluded to offer you the position at a

It also appeared that all the letters writ- salary of $5,000 per annum, payable monthten by Mr. Leetch to Mr. Brown were copied ly, the condition being that you will give by Leetch into the letter book of the com- satisfaction, presuming that you are a firstpany kept in the secretary's office, all the class gas-works superintendent, otherwise letters in which book were written either by this agreement may be revoked at any the secretary, the assistant secretary, or the time.” The plaintiff was at this time a gas general manager. Mr. Leetch did not know engineer, who is, as plaintiff testified, a man of

any letters of personal or individual mat- who constructs and manufactures gas works ters in that book prior to March 1, 1894, or and manufactures gas. His duties as super142]that did not relate to the affairs of the gas intendent would not enable him precisely to

company, except those of the same nature as know the cost of the manufacture and dis. those letters above referred to.

tribution of gas. The testimony also showed that Mr. Mr. McLean, president of the company, Leetch, at the time he was made manager, testified on this trial in regard to the posi. was appointed generally to take care of the tion of Mr. Leetch: That he first had a works and to do the best he could for the recognized position with the company after company; that he was a gas engineer, and Mr. Lansden (plaintiff) had left the servico took care of the works and took the place of of the company; that he thought Leetch was what used to be the engineer, and after his on the pay roll of the company at that time; appointment they had two engineers, one at he was just generally employed there and each end, who were subordinate to Mr. familiarized himself with the company, but Leetch.

had no positive employment until after Mr. As bearing upon the duties of Mr. Leetch, Lansden, the plaintiff, left; that Mr. Leetch the record also contains evidence in the was not put in exactly the position Mr. shape oi a letter signed by the president by Lansden had occupied, but that in fact he the authority of the board of directors of the was appointed generally “to take care of the gas company, dated Washington, March 1, works and do the besť he could do for the 1865, and addressed to Mr. George A. Mc- company; that he was a gas engineer and Ilhenny, by which the latter was appointed took care of the works.” superintendent of the gas works, and his du- This is all the evidence contained in the ties were therein stated to be to take charge record bearing upon the duties of Mr. Leetch of every portion of said works pertaining to as general manager of the company and of the manufacture, distribution, and consump- his right to act for it in the above mattion of gas, and all persons employed in ter. those departments; contracts for purchasing The question arises whether, upon these coal and selling tar were to be made by the facts and the legitimate inferences which president, but the superintendent was au- may flow from them, the corporation defend. thorized to contract for other supplies to the ant can be held liable for the publication of works, the contracts to be submitted to the the libelous article in the Progressive Age. president for approval. The superintendent That a corporation may be held responsible was to fix the price of coke, but all coke was in an action for the publication of a libel is to be purchased and paid for at the office. no longer open for discussion in this court. The superintendent was to have stated hours Philadelphia, W. & B. Railroad Company v. for being at the office in town and give at. *Quigley, 21 How. 202 [16:73}. In that case[544) tention to all complaints of leaky mains, etc. the company was held liable in damages to His special attention was directed to certain the plaintiff, Quigley, for the publication of points regarding the standard for gas and a libel regarding the plaintiff's skill and caincreasing its product per pound of coal; in- pacity as a mechanic. Quigley brought his creasing the coke sold; saving of refuse action against the company because the comcoke; reduction of men employed at the pany published a letter addressed to it in works; number of thousand feet of gas pro- the course of an investigation by its board of duced, and all other points which need cor- directors in regard to the conduct of some of rection; the letter closing with the state-| its subordinates. The letter contained libel. ment: "The welfare of the company de- ous matter in regard to the plaintiff, and

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