PENNSYLVANIA SUPREME COURT, MAY 21, 1883.

ENTERPRISE TRANSIT Co. v. SHEEDY.

A notary public who took the acknowledgment of a married woman to a lease of her lands neglected to insert in his certificate a statement required by statute, that the contents of the instrument had been made known to her. The lease was recorded. Thereafter he annexed a new certificate in compliance with the statute in force. Held, that the second certificate was ineffectual to render the lease valid as to the married woman.

A

CTION of ejectment for a tract of land, the title of which in fee was vested in the defendant, Maryette Sheedy. Plaintiff claimed under a lease executed by said defendant, and the other defendant her husband. On the trial it appeared that the lease in question had been executed by the defendants, and that the notary before whom the same was acknowledged affixed at the date a certificate of the acknowledgment of the defendant, Maryette, which did not state that the contents of the instrument had been made known to her. The lease was shortly after recorded. Five months thereafter he affixed a new certificate to the lease in which he stated that the contents had been made known to her at the time of the acknowledgment mentioned in the first certificate. The court below directed a verdict for the defendants, on the ground that the acknowledgment was defective, and from the judgment entered thereon plaintiff took a writ of error.

Hamlin & Son and W. B. Chapman, for plaintiff in

error.

O. A. Hotchkiss and N. B. Smiley, for defendants in

error.

BY THE COURT. This attempt to impart life to a void instrument has the merit of novelty. When Mrs. Sheedy affixed her name to the written instrument and acknowledged it, the acknowledgment was confessedly so defective as not to bind her or pass her title to the land. It was then delivered and eleven days thereafter recorded. More than five months after the acknowledgment was actually taken and the certificate thereof signed by the notary public indorsed thereon, he wrote and signed a second certificate of acknowledgment. The parties to the instrument did not again come before him, but he certifies what occurred months before. To this last certificate he adds facts not contained in his former certificate, with a view and for the purpose of making valid the writing of a married woman, which was then invalid. Effect cannot be given to this latter action of the notary public.

Judgment affirmed.

UNITED STATES SUPREME COURT ABSTRACT.

APPEAL REFUSAL OF NEW TRIAL NOT REVIEWABLF. -The action of the court below in refusing a new trial is not subject to review here. This has long been settled by the decisions of this court. Railroad Co v. Fraloff, 100 U. S. 24; Wabash Railway Co. v. McDaniels, 107 id. 456. Terra Haute and Indianapolis Railway Co. v. Struble. Opinion by Harlan, J. [Decided Nov. 26, 1883.]

CONSTITUTIONAL LAW-STATE LAW IMPAIRING CONTRACT-REQUIRING CORPORATE CREDITORS TO ACT OR BE BOUND BY ACTION OF OTHER CREDITORS. - The Legislature of Pennsylvania enacted a statute authorizing a settlement between a corporation and its creditors, and providing for an agreement for converting the entire debt into a funded indebtedness. The statute provided in express terms that the agreement, if entered into, should only be binding on such of the

holders of bonds then existing "as shall signify their assent in writing thereto; and in case any such bondholder shall fail to file with the president of such corporation his or her refusal in writing, to concur in the said agreement within three months from the date thereof, such bondholder shall be taken to have assented to the same." Ample provision was made for notice to the bondholders to appear and express in writing their assents or dissents, and for the reservation of all the original rights of such as dissented. Held, that the statute which made the failure of a boudholder to signify his refusal to concur in the agreement of settlement within the specified time equivalent to an express assent in writing, did not impair the obligation of the bond. Corporate mortgages securing bonds are of a peculiar character, and each bondholder under them enters by fair implication into certain contract relations with his associates. Such bondholders are not like stockholders in a corporation, necessarily bound in the absence of fraud or undue influence, by the will of the majority, when expressed in the way provided by law, but they occupy to some extent an analogous position toward each other. The mortgage with the issue and distribution of bonds under it, creates a trust, of which the selected mortgagee, or his duly constituted successor, is the trustee, and the bondholders primarily and the stockholders ultimately the beneficiaries. It not unfrequently happens that compromises and adjustments of conflicting interests become necessary in the course of the administration of such trusts. As in the present case a very large majority of the bondholders sometimes think it is for their own interest as well as that of their associates to surrender a part of their rights and accept others instead, and they prepare and submit for execution an agreement, the object of which is to carry their plan into effect. No majority however large can compel a minority, small though it be, to enter into such an agreement against their will, and under the Constitution of the United States, it is probable that no statute of a State, passed after the bonds were issued, subjecting the minority to the provisions of the agreement without their consent would be valid. But it seems to us a proper exercise of legislative power to require a minority to act whenever such an arrangement is proposed, and to provide that all shall be bound who do not in some direct way within a reasonable time after notice signify their refusal to concur. To sustain such legislation it is only necessary to invoke the principle enforced in statutes of limitations which make neglect to sue within a specified time conclusive evidence of the abandonment of a cause of action. As was said in Terry v. Anderson, 95 U. S. 634, where the limitation was of actions upon certain legal obligations that embarrassed the entire community at the close of the late civil war, "the obligation of old contracts could not " in this way "be impaired, but their prompt enforcement could be insisted upon or their abandonment claimed." In Vance v. Vance, 108 U. S. 99, where it was held that an article in the Constitution of Louisiana, adopted in 1868, which provided that existing secret mortgages and privileges should cease to have effect against third persons after the 1st of January, 1870, unless before that time recorded, did not impair the obligation of a contract between an infant and her natural tutor. Miller, J., after stating that the strong current of modern legislation and judicial opinion was against the enforcement of secret liens on property, said: "We think that the law in requiring the owner of this tacit mortgage for the protection of innocent persons dealing with the obligor to do thus much to secure his own right and protect those in ignorance of those rights, did not impair the obligation of the contract, since it gave ample time and op

portunity to do what was required and what was eminently just to every body." And in Jackson v. Lamphire, 3 Pet. 290, it was said: "It is within the undoubted power of State Legislatures to pass recording arts, by which the elder grantee shall be postponed to ayounger, if the prior deed is not recorded within the limited time: and the power is the same whether the deed is dated before or after the recording act." GilHany. Union Canal Co. Opinion by Waite, C. J. [Decided Nov. 26, 1883.]

CORPORATION-NEW YORK STATUTE-LIABILITY OF STOCKHOLDERS A CONTRACT ONE-LIMITATIONS-EXCORPORATION

HAUSTING LEGAL REMEDY AGAINST

PENAL LAWS HAVE NO EXTRA-TERRITORIAL FORCE. -(1)Section ten of the New York statute relating to manufacturing corporations provides thus: "All the stockholders of every company incorporated under this act shall be severally individually liable to the creditors of the company in which they are stockholders, to an amount equal to the amount of stock held by them respectively for all debts and contracts made by such company until the whole amount of capital stock fixed and limited by such company shall have been paid in, and a certificate thereof shall have been made and recorded as prescribed in the following section." Held that the liability imposed by the section is a contract liability and not a penalty, and that the statute of limitations of six years and not three applied to it. Such has been the construction given to section 10 by the Court of Appeals of New York. Wiles v. Suydam, 64 N. Y. 173. (2) Section 24 of the statute provides that no suit shall be brought against a stockholder until an execution against the company shall have been returned unsatisfied in whole or in part." Held, that in an execution returned unsatisfied by a court of the State of New York was not necessary where the corporation had been adjudicated a bankrupt and was shown to have had no other assets. The object of section 24 was to compel the creditor to exhaust the assets of the company before seeking to enforce the liability of the stockholder. When the declaration shows that this was done, and that a literal performance of the condition would have been vain and fruitless, the performance of the condition may well be held to have been excused. (3) The suit against the stockholder need not be prosecuted in equity. The statute makes every stockholder individually liable for the debts of the company to an amount equal to the amount of his stock. This liability is fixed and does not depend on the liability of other stockholders. There is no necessity for bringing in other stockholders or creditors. Any creditor who has recovered judgment against the company, and sued out an execution thereon which has been returned unsatisfied, may sue any stockholder, and no other creditor can. Shillington v. Howland, 53 N. Y. 371; Wiles v. Suydam, 64 id. 173; Handy v. Draper, 89 id. 334; Rocky Mountain Nat. Bauk v. Bliss, id. 338. (4) The penal laws of one State can have no operation in another. They are strictly local and affect nothing more than they can reach. The Antelope, 10 Wheat. 66; Scoville v. Canfield, 14 Johns. 338; Western Transp. Co. v. Kilderbouse, 87 N. Y. 430; Lemmon v. People, 20 id. 562; Henry v. Sargeant, 13 N. H. 321; Story Confl. L. (8th ed.), § 621. Flash v. Conn. Opinion by Woods, J. [Decided Nov. 26, 1883.]

MORTGAGE-WHAT DOES NOT CONSTITUTE ATTEMPT TO REVIVE DISCHARGED MORTGAGE.-While no precise form of words is necessary to constitute a mortgage, yet there must be a present purpose of the mortgagor to pledge his land for the payment of a sum of money, or the performance of some other act, or it cannot be construed to be a mortgage. Wilcox v. Morris, 1 Murph. 116; S. C., 3 Am. Dec. 678. An agreement

undertaking to keep alive and in full force a mortgage made by another party after it had been foreclosed, the mortgaged property sold and the mortgage extinguished, held not to be a mortgage and to create no lien or privilege in the premises mentioned in the old mortgage. New Orleans National Banking Association v. Adams. Opinion by Woods, J. [Decided Nov. 12, 1883.]

MUNICIPAL BONDS--INTERNAL IMPROVEMENT-- STEAM MILL, NOT UNDER NEBRASKA STATUTE.-This case was decided at the last term of this court, and is reported in 106 U. S. 181 The court there held that a steam grist-mill was not a work of internal improvement within the meaning of the statute of Nebraska, approved February 15, 1869, authorizing counties, cities and precincts of organized counties "to issue bonds to aid in the construction of any railroad or other work of internal improvement." It was also said that the court was not justified by anything in Township of Burlington v. Beasley, 94 U. S. 310, or in the decisions of the courts of Nebraska, "in holding that a steam or other kind of grist-mill is of the class of internal improvements which municipal townships in that State are empowered, by the statute in question, to aid by an issue of bonds." The Supreme Court of Nebraska in Traves v. Merrick County, recently decided that a grist-mill operated by water power was a work of internal improvement within the meaning of the beforementioned statute. This court adheres to its previous decision, citing as authority the following remark of the Nebraska Court in the case above referred to. "In our view there is a clear distinction between aiding the development of the water-power of the States-a power that is continuing in its nature and may be used without cost or expense, and must be used at certain points on a stream where a dam can be erected and power obtained-and a mill propelled by steam that must be attended with a continuous cost for fuel, and may at any time be moved to another locality." Osborne v. County of Adams. Opinion by Harlan, J. [Decided Nov. 5, 1883.]

MUNICIPAL BONDS-VALID THOUGH UNSEALEDWHEN EQUITY WILL ADJUDGE UNSEALED INSTRUMENT AS SEALED-NEGLIGENCE- CITIZENSHIP GIVING JURIS

DICTION.-(1) If commissioners authorized by statute to subscribe in the corporate name of a town for stock in a railroad company, and upon obtaining the consent of a certain majority of taxpayers, to issue bonds of the town under the hands and seals of the commissioners, and to sell the bonds and invest the proceeds of the sale in stock of the railroad company, which shall be held by the town with all the rights of other stockholders, issue without obtaining the requisite consent of taxpayers to the railroad company in exchange for stock, such bonds sigued by the commissioners, but on which the seals are omitted by oversight and mistake; and the town sets up the want of seals in defense of an action at law afterward brought against it by one who has purchased such bouds for value, in good faith, and without observing the omission, to recover interest on the bonds; a court of equity at his suit will decree that the bonds be held as valid as if actually sealed before being issued, and will restrain the setting up of the want of seals in the action at law. It has been settled upon fundamental principles of equity jurisprudence, by many precedents of high authority, that when the seal of a party required to make an instrument valid and effectual at law has been omitted by accident or mistake, a court of chancery, in order to carry out his intention, will at the suit of those who are justly and equitably entitled to the benefit of the instrument, adjudge it to be as valid as if it had been sealed, and will grant relief accordingly, either by compelling the seal to be affixed, or by

PENNSYLVANIA SUPREME COURT, MAY 21, 1883.

ENTERPRISE TRANSIT Co. v. SHEEDY.

A notary public who took the acknowledgment of a married woman to a lease of her lands neglected to insert in his certificate a statement required by statute, that the contents of the instrument had been made known to her. The lease was recorded. Thereafter he annexed a new certificate in compliance with the statute in force. Held, that the second certificate was ineffectual to render the lease valid as to the married woman.

Ao

CTION of ejectment for a tract of land, the title of which in fee was vested in the defendant, Maryette Sheedy. Plaintiff claimed under a lease executed by said defendant, aud the other defendant her husband.

On the trial it appeared that the lease in question had been executed by the defendants, and that the notary before whom the same was acknowledged affixed at the date a certificate of the acknowledgment of the defendant, Maryette, which did not state that the contents of the instrument had been made known to her. The lease was shortly after recorded. Five months thereafter he affixed a new certificate to the lease in which he stated that the contents had been made known to her at the time of the acknowledgment mentioned in the first certificate. The court below directed a verdict for the defendants, on the ground that the acknowledgment was defective, and from the judgment entered thereon plaintiff took a writ of error.

Hamlin & Son and W. B. Chapman, for plaintiff in

error.

0. A. Hotchkiss and N. B. Smiley, for defendants in

error.

holders of bonds then existing "as shall signify their assent in writing thereto; and in case any such bondholder shall fail to file with the president of such corporation his or her refusal in writing, to concur in the said agreement within three months from the date thereof, such bondholder shall be taken to have assented to the same." Ample provision was made for notice to the bondholders to appear and express in writing their assents or dissents, and for the reservation of all the original rights of such as dissented. Held, that the statute which made the failure of a boudholder to signify his refusal to concur in the agreement of settlement within the specified time equivalent to an express assent in writing, did not impair the obligation of the bond. Corporate mortgages securing bonds are of a peculiar character, and each bondholder under them enters by fair implication into certain contract relations with his associates. Such bondholders are not like stockholders in a corporation, necessarily bound in the absence of fraud or undue influence, by the will of the majority, when expressed in the way provided by law, but they occupy to some extent an analogous position toward each other. The mortgage with the issue and distribution of bonds under it, creates a trust, of which the selected mortgagee, or his duly constituted successor, is the trustee, and the bondholders primarily and the stockholders ultimately the beneficiaries. It not unfrequently happens that compromises and adjustments of conflicting interests become necessary in the course of the administration of such trusts. As in the present case a very large majority of the bondholders sometimes think it is for their own interest as well as that of their associates to surrender a part of their rights and accept others instead, and they prepare and submit for execution an agreement, the object of which is to carry their plan into effect. No majority however large can compel a minority, small though it be, to enter into such an agreement against their will, and under the Constitution of the United States, that is probable no statute of a State, passed after the bonds were issued, subjecting the minority to the provisions of the agreement without their consent would be valid. But it seems to us a proper exercise of legislative power to require a minority to act whenever such an arrangement is proposed, and to provide that all shall be bound who do not in some direct way within a reasonable time after notice signify their refusal to concur. To sustain such legislation it is only necessary to invoke the principle enforced in statutes of limitations which make neglect to sue within a specified time conclusive evidence of the abandonment of a cause of action. As was said in Terry v. Anderson, 95 U. S. 634, where the limitation was of actions upon certain legal obligations that embarrassed the entire community at the close of the late civil war, "the obligation of old contracts could not" in this way "be impaired, but their prompt enforcement could be insisted upon or their abandonment claimed." In Vance v. Vance, 108 U. S. 99, where it was held that an article in the Constitution of Louisiana, adopted in 1868, which provided that existing secret mortgages and privileges should cease to have effect against third persons after the 1st of January, 1870, unless before that time recorded, did not impair the obligation of a contract between an infant and her natural tutor. Miller, J., after stating that the strong current of modern legislation and judicial opinion was against the enforcement of secret liens on property, said: "We think that the law in requiring the owner of this tacit mortgage for the protection of innocent persons dealing with the obligor to do thus much to secure his own right and protect those in ignorance of those rights, did not impair the obligation of the contract, since it gave ample time and op

Judgment affirmed.

UNITED STATES SUPREME COURT ABSTRACT.

APPEAL-REFUSAL OF NEW TRIAL NOT REVIEWABLF. -The action of the court below in refusing a new trial is not subject to review here. This has long been settled by the decisions of this court. Railroad Co v. Fraloff, 100 U. S. 24; Wabash Railway Co. v. McDaniels, 107 id. 456. Terra Haute and Indianapolis Railway Co. v. Struble. Opinion by Harlau, J. [Decided Nov. 26, 1883.]

CONSTITUTIONAL LAW-STATE LAW IMPAIRING CONTRACT-REQUIRING CORPORATE CREDITORS TO ACT OR BE BOUND BY ACTION OF OTHER CREDITORS. - The Legislature of Pennsylvania enacted a statute authorizing a settlement between a corporation and its creditors, and providing for an agreement for converting the entire debt into a funded indebtedness. The statute provided in express terms that the agreement, if entered into, should only be binding on such of the

portunity to do what was required and what was eminently just to every body." And in Jackson v. Lamphire, 3 Pet. 290, it was said: "It is within the undoubted power of State Legislatures to pass recording acts, by which the elder grantee shall be postponed to a younger, if the prior deed is not recorded within the limited time; and the power is the same whether the deed is dated before or after the recording act." Gilfillan v. Union Canal Co. Opinion by Waite, C. J. [Decided Nov. 26, 1883.]

CORPORATION-NEW YORK STATUTE-LIABILITY OF STOCKHOLDERS A CONTRACT ONE-LIMITATIONS-EXHAUSTING LEGAL REMEDY AGAINST CORPORATION PENAL LAWS HAVE NO EXTRA-TERRITORIAL FORCE.

-(1) Section ten of the New York statute relating to manufacturing corporations provides thus: "All the stockholders of every company incorporated under this act shall be severally individually liable to the creditors of the company in which they are stockholders, to an amount equal to the amount of stock held by them respectively for all debts and contracts made by such company until the whole amount of capital stock fixed and limited by such company shall have been paid in, and a certificate thereof shall have been made and recorded as prescribed in the following section." Held that the liability imposed by the section is a contract liability and not a penalty, and that the statute of limitations of six years and not three applied to it. Such has been the construction given to section 10 by the Court of Appeals of New York. Wiles v. Suydam, 64 N. Y. 173. (2) Section 24 of the statute provides that no suit shall be brought against a stockholder until an execution against the company shall have been returned unsatisfied in whole or in part." Held, that in an execution returned unsatisfied by a court of the State of New York was not necessary where the corporation had been adjudicated a bankrupt and was shown to have had no other assets. The object of section 24 was to compel the creditor to exhaust the assets of the company before seeking to enforce the liability of the stockholder. When the declaration shows that this was done, and that a literal performance of the condition would have been vain and fruitless, the performance of the condition may well be held to have been excused. (3) The suit against the stockholder need not be prosecuted in equity. The statute makes every stockholder individually liable for the debts of the company to an amount equal to the amount of his stock. This liability is fixed and does not depend on the liability of other stockholders. There is no necessity for bringing in other stockholders or creditors. Any creditor who has recovered judgment against the company, and sued out an execution thereon which has been returned unsatisfied, may sue any stockholder, and no other creditor can. Shillington v. Howland, 53 N. Y. 371; Wiles v. Suydam, 64 id. 173; Handy v. Draper, 89 id. 334; Rocky Mountain Nat. Bank v. Bliss, id. 338. (4) The penal laws of one State can have no operation in another. They are strictly local and affect nothing more than they can reach. The Antelope, 10 Wheat. 66; Scoville v. Canfield, 14 Johns. 338; Western Transp. Co. v. Kilderhouse, 87 N. Y. 430; Lemmon v. People, 20 id. 562; Henry v. Sargeant, 13 N. H. 321; Story Confl. L. (8th ed.), § 621. Flash v. Conn. Opinion by Woods, J. [Decided Nov. 26, 1883.]

MORTGAGE-WHAT DOES NOT CONSTITUTE-ATTEMPT

TO REVIVE DISCHARGED MORTGAGE.-While no precise form of words is necessary to constitute a mortgage, yet there must be a present purpose of the mortgagor to pledge his land for the payment of a sum of money, or the performance of some other act, or it cannot be construed to be a mortgage. Wilcox v. Morris, 1 Murph. 116; S. C., 3 Am. Dec. 678. An agreement

undertaking to keep alive and in full force a mortgage made by another party after it had been foreclosed, the mortgaged property sold and the mortgage extinguished, held not to be a mortgage and to create no lien or privilege in the premises mentioned in the old mortgage. New Orleans National Banking Association v. Adams. Opinion by Woods, J. [Decided Nov. 12, 1883.]

MUNICIPAL BONDS--INTERNAL IMPROVEMENT--STEAM MILL, NOT UNDER NEBRASKA STATUTE.-This case was decided at the last term of this court, and is reported in 106 U. S. 181 The court there held that a steam grist-mill was not a work of internal improvement within the meaning of the statute of Nebraska, approved February 15, 1869, authorizing counties, cities and precincts of organized counties "to issue bonds to aid in the construction of any railroad or other work of internal improvement.' It was also said that the court was not justified by anything in Township of Burlington v. Beasley, 94 U. S. 310, or in the decisions of the courts of Nebraska, “in holding that a steam or other kind of grist-mill is of the class of internal improvements which municipal townships in that State are empowered, by the statute in question, to aid by an issue of bonds." The Supreme Court of Nebraska in Traves v. Merrick County, recently decided that a grist-mill operated by water power was a work of internal improvement within the meaning of the beforementioned statute. This court adheres to its previous decision, citing as authority the following remark of the Nebraska Court in the case above referred to. "In our view there is a clear distinction between aiding the development of the water-power of the States-a power that is continuing in its nature and may be used without cost or expense, and must be used at certain points on a stream where a dam can be erected and power obtained-and a mill propelled by steam that must be attended with a continuous cost for fuel, and may at any time be moved to another locality." Osborne v. County of Adams. Opinion by Harlan, J. [Decided Nov. 5, 1883.]

MUNICIPAL BONDS-VALID THOUGH UNSEALEDWHEN EQUITY WILL ADJUDGE UNSEALED INSTRUMENT AS SEALED-NEGLIGENCE- CITIZENSHIP GIVING JURISDICTION. (1) If commissioners authorized by statute to subscribe in the corporate name of a town for stock in a railroad company, and upon obtaining the consent of a certain majority of taxpayers, to issue bonds of the town under the hands and seals of the commissioners, and to sell the bonds and invest the proceeds of the sale in stock of the railroad company, which shall be held by the town with all the rights of other stockholders, issue without obtaining the requisite consent of taxpayers to the railroad company in exchange for stock, such bonds signed by the commissioners, but on which the seals are omitted by oversight and mistake; and the town sets up the want of seals in defense of an action at law afterward brought against it by one who has purchased such bonds for value, in good faith, and without observing the omission, to recover interest on the bonds; a court of equity at his suit will decree that the bonds be held as valid as if actually sealed before being issued, and will restrain the setting up of the want of seals in the action at law. It has been settled upon fundamental principles of equity jurisprudence, by many precedents of high authority, that when the seal of a party required to make an instrument valid and effectual at law has been omitted by accident or mistake, a court of chancery, in order to carry out his intention, will at the suit of those who are justly and equitably entitled to the benefit of the instrument, adjudge it to be as valid as if it had been sealed, and will grant relief accordingly, either by compelling the seal to be affixed, or by

restraining the setting up of the want of it to defeat a recovery at law. Smith v. Aston, Freem. Ch. 308; S. C., Cas. temp. Finch, 273; Cockerell v. Cholmeley, 1 Russ. & Myl. 418; Wadsworth v. Wendell, 5 Johns. Ch. 224; Montville v. Haughton, 7 Conn. 543; Rutland v. Paige, 24 Vt. 181. See also Wiser v. Blachly, 1 Johns. Ch. 607; Green v. Morris & Essex R. Co., 1 Beas. 165, and 2 McCart. 469; Druiff v. Parker, L. R., 5 Eq. 131. See also Morrison v. Bernards, 7 Vroom, 219; Draper v. Springport, 104 U. S. 501; Dallington v. Pultney, Copp, 260; DeReimer v. Cantillon, 4 Johns.Ch. 85. (2) The mere fact that the purchasers at the time of their purchase did not observe the omission of seals upon securities having in all other respects the appearance of municipal bonds, is not such negligence as should prevent them from appiying to a court of equity to correct a mistake of this character. See Harris v. Pepperell, L. R., 5 Eq. 1; Elliott v. Sackett, 108 U. S. (3) A bill in equity in the Circuit Court of the United States against a town in one State by a citizen of another, for relief against the accidental omission of seals from bonds of the defendant, payable to bearer and held by the plaintiff, some of which are owned by him, and others of which are owned in different amounts, part by citizens of the State in which the town is, and part by citizens of other States, and have been transferred to him by the real owners for the mere purpose of being sued, should be dismissed uuder the act of March 3, 1875, ch. 137, § 5, so far as regards all bonds held by citizens of the same State as the defendant, and bonds held by a citizen of another State to a less amount than $500. See Sheldon v. Sill, 8 How. 441; Corbin v. Black Hawk County, 105 U. S. 659; Barney v. Baltimore, 6 Wall. 280; Williams v. Notaway, 104 U. S. 209; Thompson v. Perrine, 106 id. 589; Chickaming v. Carpenter, id. 663; Douglas Commissioners v. Bolles, 94 id. 104; Cromwell v. Sac County, id. 351. Inhabitants of Bernards v. Stebbins. Opinion by Gray, J.

[Decided Nov. 26, 1883.]

TAXATION-EXEMPTION OF A CORPORATION FROM TAXATION NOT ASSIGNABLE-CONSTITUTIONAL LAWIMPAIRING CONTRACT-WHEN FEDERAL COURT WILL NOT FOLLOW STATE COURT.-(1) Au exemption from taxation conferred upon a railroad company, unless authority to assign is found in the statute granting the exemption, is a personal privilege and does not pass by a conveyance of the railroad and franchises of the corporation to another company. See Morgan v. Louisiana, 93 U. S. 217; Wilson v. Gaines, 103 id. 417. Authority to assign cannot be conferred by a Legisla ture acting under a Constitution providing that taxation shall be equal and forbidding exemption from taxation. In Trask v. Maguire, 18 Wall. 391, it was said, speaking of provisions in the Constitution of Missouri: "The inhibition of the Constitution applies in all its force against the renewal of an exemption equally as against its original creation;" and in Shields v. Ohio, 95 U. S. 319, it was decided that in cases of corporations created by consolidation, the powers of the new company did not pass to it by transmission from its constituents, but resulted from a new legislative grant, that could not transcend the constitutional authority existing at the time it took effect. (2) As to a State law claimed to impair the obligation of a contract, this court will decide for itself independently of the decision of the State court, whether there is a contract, and whether its obligation is impaired; and if the decision of the question as to the existence of the alleged contract requires a construction of State Constitutions and laws, it is not necessarily governed by previous decisions of the State courts upon the same or similar points, except where they have been so firmly established as to constitute a rule of prop

erty. Such has been the uniform and well-settled doctrine of this court. State Bank of Ohio v. Knoop, 16 How. 369. As was said in Ohio Life Ins. and Trust Co. v. Debolt, 16 How. 416: "But this rule of interpretation is confined to ordinary acts of legisla tion, and does not extend to the contracts of the State, although they should be made in the form of a law. For it would be impossible for this court to exercise any appellate power in a case of this kind, unless it was at liberty to interpret for itself the instrument relied on as the contract between the parties. It must necessarily decide whether the words used are words of contract, and what is their true meaning, before it can detertermine whether the obligation, the instrument created, has or has not been impaired by the law complained of. Now in forming its judgment upon this subject, it can make no difference whether the instrument claimed to be a contract is in the form of a law, passed by the Legislature, or of a covenant or agreement by one of its agents acting under the authority of the State." To the same effect are Jefferson Branch Bank v. Skelly,1 Black, 436, and Bridge Proprietors v. Hoboken Co., 1 Wall. 116. It is true that in all these cases the State courts, whose judgments were brought into review, had construed the statutes as not creating a contract; but the principle is equally applicable in the converse case. Burgess v. Seligman, 107 U. S. 20. Louisville & Nashville Railroad Co. v. Palmer. Opinion by Matthews, J.

Philadelphia,

ENGINE (1) The right which a passenger by railway has to be carried safely, does not depend on his having made a contract, but the fact of his being there creates a duty on the part of the company to carry him safely. It suffices to enable him to maintain an action for negligence if he was being carried by the railroad company voluntarily, although gratuitously, and as a mere matter of favor to him. etc., R. Co. v. Derby, 14 How. 468; Steamboat New World v. King, 16 id. 469. The carrier does not, by consenting to carry a person gratuitously, relieve himself of responsibility for negligence. When the assent to his riding free has been legally and properly given, the person carried is entitled to the same degree of care as if he paid his fare. Todd v. Old Colony, etc. R. Co., 3 Allen, 18. As is tersely stated by Blackburn, J., in Austin v. Great Western R. Co., 15 Weekly Rep. 863, "the right which a passenger by railway has to be carried safely does not depend on his having made a contract, but the fact of his being there creates a duty on the part of the company to carry him safely." (2) The presumption of law is that persons riding upon trains of a railroad carrier which are palpably not designed for the transportation of per sons, are not lawfully there, and if they are permitted to be there by the consent of the carrier's employees, the presumption is against the authority of the employees to bind the carrier by such consent. But such presumption may be overthrown by special circumstances; and where the railroad company would derive a benefit from the presence of drovers upou cattle trains, and may have allowed its employees in charge of such traius to invite or permit drovers to accompany their cattle, the presumption against a license to the person thus carried may be overthrown. *Appearing in 17 Federal Reporter.

its