WASHINGTON, ALEXANDRIA c& GEORGETOWN
RAILROAD COMPANY, et al.. Appellants,
vs.
ALEXANDRIA & WASHINGTON RAILROAD
COMPANY, p;t al.. Appellees.
|n % €mú flf of Utrgiitia.
The opinion of the Court, as delivered by Judge W.
WiLLouGHBY, afifrming the decrees of the Circuit
Court of Alexandria County, and the District Court
of Appeals at Fredericksburg.
/
^ \VA S H IN G T O N, I). C.
GIBSON BROTHERS, PRINTERS.
V V % W ^ 1870.
WASHINGTON, ALEXANDRIA & GEORGETOWN
RAILROAD COMPANY, et al,, íVppellants,
vs.
ALEXANDRIA & WASHINGTON RAILROAD
COMPANY, í;t al.. Appellees.
|ii t|e Cffiirt nf ^ptids flf Hirgiiiiit.
The opinion of the Court, as delivered by Judge W.
WiLLouGHBY, affirming the decrees of the Circuit
Court of Alexandria County, and the District Court
of Appeals at Fredericksburg.
WASHINGTON, D. C.
GIBSON BROTHERS, PRINTERS.
1870.
®0ttït oí ^ppoals.
THE W. A. & G. R. R. CO. and others,
Appellants,
vs. f-
THE A. & \V. R. R. 00. and others, |
Appellees. J
The Alexandria and Washington Eailroad Company was
chartered in February, 1854, by the legislature of Virginia,
and was organized pursuant thereto, and James S. French
was made president. In August, 1854, Congress passed an
act authorizing said company to purchase and hold lands in
the District of Columbia, and to lay a track through such
streets as the corporate authorities of Washington might
approve. In 1855, the authorities of Washington author¬
ized the company to lay its track on Maryland avenue, from
the Long Bridge to the Baltimore depot, and guaranteed
their bonds of $60,000 to assist the company in the construc¬
tion of the road, for which, in April, 1855, the company
executed a deed of trust to Joseph H. and A. T. Bradley,
for the benefit of the corporation, on all the property of the
company.
The track was laid from Alexandria to the Long Bridge,
and on Maryland avenue, and cars and engines were ob¬
tained, and the road operated until the spring of 1861, up
to the time of the breaking out of the war.
On the 31st of December, 1856, a second deed of trust was
made upon the property of the company, to J. Louis Kinzer,
trustee, to secure Fowle, Snowden & Company $14,849.50,
on which was paid $8,348.14.
On the 16th of July, 1857, a tliird deed of trust was exe¬
cuted to Walter Lenox, trustee, to secure the payment of
$30,000 in coupon bonds which the company had been au¬
thorized to issue by an act of the legislature. These bonds
were payable July 22, 1877, with interest semi-annually
at seven per cent., and it was provided that in default of
payment of principal or interest, the road might be sold by
4
giving at least sixty days' notice by publication in certain
newspapers.
This deed of trust in terms recognizes the first deed of
trust of $60,000 as an existing and prior lien.
These bonds were sold to Benjamin Thornton, of England,
for $10,000, upon which was paid $2,000 in cash, and notes
were given for the balance, upon which was afterwards paid
about $3,500, making about $5,500 paid in all, the balance
still being due.
This company was authorized by its charter to issue stock
to the amount of $300,000, and issued stock only to the
amount of $200,000. There were various judgments and
claims against the company, making the amount of the
indebtedness, together with the sums secured by said deeds
of trust, including interest on the 10th of April, 1862, as
reported by the commissioner, about $195,000. Of these
judgments, Alexander Hay claimed to be the owner of about
$40,000 in April, 1861 ; but it seems that in August 24,1860,
he had assigned these judgments which had been obtained by
him long before to James S. French, upon the payment to
him of $5,000, though it does not appear that this $5,000 has
been paid. By power of attorney executed at the same time,
he authorized said French to deal with such judgments in
the same manner as if the same were his individual property.
On the occupation of the city of Alexandria by the United
States troops, in May, 1861, the rolling-stock of the com¬
pany was transferred to the Orange and Alexandria railroad,
and taken beyond the Federal lines. The president, direct¬
ors, and the trustee, Lenox, all went South at that time,
and remained within the Confederate lines during the war,
and the rolling-stock was sold by said French to parties
within said lines.
The United States Government took possession of the road
in 1861, and laid the track with heavy rails, and put it in
good order, and used it till the close of the war, having ex¬
clusive possession thereof during that period, and leaving
the road in good order and very valuable.
It is claimed by Hay that he took possession of the road
early in 1861, and made a contract with the Secretary of
War, by which the War Department was to repair the road,
and binding himself to defray the expense of such repairs
which should not be discharged by the use of the road.
The Government used the road long enough to pay its
outlays upon the road, if the use thereof could be chargeable
against the Government.
5
The defendant, Joseph B. Stewart, an attorney-at-law,
acted as attorney for Alexander Hay, and during the year
1861, either as such attorney or on his own account, sold the
iron of the company for something over $10,000, and received
the proceeds. No account has ever been made of this money
by him or by Mr. Hay.
On the 28th of January, 1862, Joseph Davison, who
claimed to he the agent of Benjamin Thornton for the coupon
bonds said to he held by him, made an agreement with said
Stewart, authorizing him as attorney to take such steps as
might be necessary to close out and perfect the interest of
said bondholders in and to said road, and agreeing to give
him a contingent fee of one-half of the whole amount received
on said bonds in the sale of the same or of the said road over
and above the sum of $10,000, and all the interest that the
said bondholders or any of them may have paid or may have
to pay on the said $30,000 of bonds, at the rate of seven per
cent, per annum; and on the next day, January 29, said
Stewart, as attorney in fact for said Hay, gave to said Davi¬
son an agreement in writing that if a sale be made under
said deed of trust, and the said road be purchased by himself
or constituents, the said Thornton should have the right to
continue his interest in the same according to the ratio of
his present lien upon and demand against the same, and
shall enjoy and receive a pro rata rate of all the appreciations
of value or profits claimed from the future use or development
of the same, and he created a stockholder accordingly.
On the 3d day of February, 1862, said Davison filed a
petition in the county court of Alexandria county, sworn to
by him, stating that he is the attorney in fact of all the
bondholders secured by the deed of trust to Walter Lenox,
claiming that said trustee has become incapacitated from
performing said trust ; that he has made diligent search for
the president or some director or agent of said company, to
whom he could give notice, but could find none upon whom
notice could be served, and believed that they had abandoned
the franchises of the road and gone beyond the jurisdiction
of the court, and asks that Joseph B. Stewart be appointed
trustee.
Joseph Thornton also swears tliat he knows of his own
knowledge that said Davison is the agent of said bondholder,
Benjamin Thornton, and has authority to make the applica-
tions.-
Upon these affidavits and application, the said county
6
court make an order substituting said Stewart as trustee in
said deed of trust in place of said Walter Lenox, on the 3d
day of February, 1862.
On the 4th day of February, 1862, said Davison requested
said trustee to make sale of said road, and thereupon on the
10th day of February, 1862, such sale was advertised to take
place on the lOth day of April following, on which day it
was sold at public auction, and bid off by said Alexander
Hay for the sum of $12,500 ; and said Hay having assigned
one-half of his purchase to Joseph Thornton, and they hav¬
ing agreed to continue as a corporation under the name of
the Washington, Alexandria and Georgetown Eailroad Com¬
pany, conveyance was made to them and to such company
the road and all the franchises and property of said Alex¬
andria and Washington Company by the said Stewart as
said trustee.
On the 3d day of May, 1862, the organization of the new
company was perfected by tbe appointment of officers, the
stock having been divided between said Hay, Stewart, Davi¬
son, and Thornton, the same then being owned by them.
On the 3d of March, 1863, Congress extended the charter
of the old company so as to allow it to occupy its present
location on Maryland avenue, in Washington, and to con¬
struct a bridge alongside of the Potomac bridge upon certain
conditions named in the act. This charter is claimed to
have been obtained at the instance of members of the new
company, but it does not appear, and is not explained why,
in terms it was granted to the "Alexandria and Washington
Railroad Company."
By an act of the Alexandria legislature of January 23,
1864, the Washington, Alexandria and Georgetown Com¬
pany, which is therein declared to be a corporation, lawfully
succeeding by purchase to the old company, is authorized to
issue stock to the amount of $500,000, to sell its bonds to
the amount of $200,000 in addition to the $100,000 allowed
to the old company, and to borrow money upon its promissory
notes to the amount of $100,000 more. With the proceeds
of such stock, bonds and notes, it is claimed by the defend¬
ants that a large imrtion of the indebtedness of tlie old com¬
pany was paid ; money was raised to procure the charter from
Congress to build the bridge, repair and put the road in
good order, and such stock is now held by various parties in
Washington, New York, and Baltimore.
The bill which was filed in April, 1866, charges, among
7
otlier things, that the appointment of J. B. Stewart as trustee
was, for many reasons alleged therein, null and void ; and
that the sale hy him was consequently without authority,
and that all the action of himself. Hay, Thornton, and
Davison was the result of a fraudulent conspiracy on their
part to obtain the road unlawfully, and that this, together
with the conduct of said Stewart in making such sale, ought
to make the sale void.
The answers were filed, accounts taken by the Commis¬
sioner and filed, and various other proceedings had up to the
22d of November, 1867, when Coleman, Kiddle, and others
filed a petition representing that they were the owners of a
large majority of the stock of the new company, and as such
were deeply interested in the contest between the said com¬
panies, and asked that they be made parties defendants ;
which Avas allowed.
On the 23d day of December, 1867, a decree was made
adjudging that "the whole proceeding of the county court
of Alexandria county at its February term, 1862, substituting
Joseph B. Stewart as trustee in place of Walter Lenox,
under the deed of trust of the 16th of July, 1857, was with¬
out authority of laAV, and null and void ; and that all the
subsequent proceedings of the said Stewart under said deed,
his sale of the said road and its franchises to Alexander Hay,
and the incorporation of the said Washington, Alexandria
& Georgetown Railroad Company growing out of the said
sale, are null and void, and that the same should be set
aside and annulled."
By the same decree a reference was made to the Commis¬
sioner to inquire into the interests of said Coleman and others,
and make further report to the court.
On the 2d of June, 1866, a petition was filed by the new
company alleging that the corporation was the only party
having any real interest in the suit, except Joseph B. Sterv-
art ; that Hay was a citizen of Pennsylvania, and Stewart a
citizen of Kentucky ; and on the same day a petition Avas
filed by said Stewart alleging that he was a citizen of Ken¬
tucky ; that the company was made a defendant for the
purpose of preventing a removal of the same into the United
States court, and upon said petitions motion was made by
the petitioners to remove the cause into the circuit court of
the United States.
This motion was overruled.
On the 6th of December, 1866, this motion Avas renewed
8
by Stewart and Hay, each alleging their citizenship of an¬
other State ; which was also denied.
In May, 1868, two petitions for removal to the United
States court were filed by said Coleman and others, each
alleging their citizenship of Maryland and other States ; one
claiming that the validity of orders made by the Secretary
of War and other military officers in relation to said road was
involved in the suit, and the others that they, holding the
majority of the stock of the new company, the existence of
which, as a company, was denied by the bill, were the sub¬
stantial parties, defendants, and alleging that from prejudice
and local influence they did not believe they would be able to
obtain justice in the State court. They also filed their an¬
swers at the same term. The motion upon these petitions was
denied at the August term of 1868, and then, against the pro¬
test of Coleman and others, who claimed that they had had no
opportunity to take testimony, a decree was made again de¬
claring said order of the county court and the said bill null and
void ; and it appearing that large liabilities had been incurred
by the old and the new companies ; that under the authority to
issue stocks and bonds to a limited amount, a large amount
had been issued in excess of said authority, which have been
sold, and are now in the hands of purchasers thereof, a refer¬
ence was ordered to ascertain what equities might exist
growing out of said transactions. From this decree an
appeal has been taken to this court.
OPINION OF COURT AS DELIVERED BY JUDGE W.
WILLOUGHBY,
AND
Decrek affirming Decree below.
The two leading questions presented for our decision are :
First. Ought the case, under the circumstances thereof,
to have been removed on the petitions, or either of them, for
such removal to the United States circuit court?
Second. Was the sale made by the trustee, Joseph B.
Stewart, valid ; and did it operate to extinguish the Alex¬
andria & Washington Eailroad Company, and divest it of
its corporate rights and privileges?
It would seem to me, without reference to the validity or
invalidity of such sale, and without now passing upon the
question of its right tobe regarded as a corporation, consistent
with legal principles to regard for the purposes of the decis¬
ion of the points before us, the Washington, Alexandria &
Georgetown R. E. Co. as a company capable of being sued,
and of exercising certain powers.
This company certainly insists on being so regarded ; it
has acted as such with a full board of officers and directors ;
and as such, has issued stock, bonds, and notes to a very large
amount ; it has been so recognized by the public ; and trans¬
actions of great extent have taken place upon the faith of the
existence of such company, and it was recognized as such by
the act of assembly of January 23, 1864, by which large
powers and privileges were granted to it " as a lawfully ex¬
isting company."
The question regarding the petitions for removal seems to
me to require our first consideration.
I will designate the two companies as the old and the new
companies.
The bill, as at first presented, was brought by the old
company against the new company. Hay, Stewart, Benjamin
and Joseph Thornton, Davidson, and the persons interested
in the several deeds of trust.
Hay, in his answer, expressly waives all right to remove
such cause as to himself, and Joseph Thornton and Davidson
protested against such removal.
10
The first petition was made by the new company. That
this was properly overruled, it seems to me, there can he no
question. The old and the new companies were both resi¬
dents and citizens of the State of Virginia ; and, I think, it
is equally plain that Stewart alone, under the law as it then
existed, could not properly ask for a removal of such cause.
It had been settled that a suit could not he removed when
a part of the plaintiffs or defendants are citizens of the State
where the suit is brought and a part of some other State,
(Wilson vs. Blodgett, 4 McLean, 363 ; Northern R. R. Co.,
3 Blatchford, 84 ;) and in order to remove such cause to the
United States court, all the defendants must join in the peti¬
tion for such removal. (See 2 Sumner, 339.)
The motion to remove in December, 1866, was also prop¬
erly overruled.
The provision of the act of Congress of July, 1866, upon
which the petitioner then relied, provided for a removal, in
cases of citizenship of different States, on the petition of a
defendant, "if the suit is one in loliich there can he a final
determination of the controversy so far as it concerns him, ivitli-
out the 'presence of the other defendants as parties to the cause. ' '
That this was not such a case is perfectly manifest from the
slightest inspection of the pleadings and proceedings. Con¬
gress passed an act March 2, 1867, providing that where
there was a controversy between citizens of different States,
either party, plaintiff or defendant, might, on filing an affida¬
vit in the State court that he has reason to and does believe
that from prejudice or local influence he will not obtain jus¬
tice in such State court, file bis petition for such removal,
and it was made the duty of the State court then to proceed
no farther in the cause, but the cause should be removed.
This affidavit was made by Coleman and others, and also
an affidavit that orders of tiie military authorities were in¬
volved in May, 1868. As to the validity of military orders
being involved, it is perfectly manifest from all the pleadings,
and from the answers of these parties, filed at the same time,
that there is not the slightest foundation for removing the
cause on that ground. No such questions are raised in any
form whatever. This last-mentioned act of Congress, stand¬
ing alone, might be regarded as sufficiently comprehensive
to include this application. But a little consideration, I
think, must show us that it was not intended by tliis to
change the practice of the courts, and to override the decision
of such courts, which had been repeatedly and uniformly
made since tiie Judiciary Act of 1789, or to change the law
11
of 1866, providing for such removal in a case where there
could be a final determination of the controversy, so far as it
concerned the applicant, without the presence of the other
defendants. The act of 1866 is not repealed, nor are the
provisions of this act at all repugnant to it.
The act of 1867 merely extends the privilege of removal
to the plaintiff, as well as to the defendant, on making the
required affidavit.
In Fox's Admrs. vs. The Commonwealth, (16 Grat., 8,)
Judge Moncure says, in delivering the opinion of the court :
" The law does not favor a repeal by implication unless
the repugnance be quite plain, and then only to the extent
of such repugnance." Again he says : "It is, therefore, an
established rule of law that all acts ' in pari materia ' are to
he taken together as if they were one law ; and they are
directed to he compared in the construction of statutes he-
cause they are considered as framed upon one system, and
having one object in view. 'And the rule equally applies,
though some of the statutes may have expired or are not
referred to in the others."
The provision of the act of 1866, limiting the application
to a case where the party can have the suit determined, so far
as it concerns him, without the presence of the other parties
on the same side, is an eminently wise and just one.
It would be manifestly unjust that one defendant out of a
large number should have the right to take a case from a
court where all of the other parties wish it to be, without
very strong and peculiar reasons. It is very easy to see how
this might often work infinite mischief and confusion ; and
few cases can he found which would better illustrate this
than this case.
This has been seen and acted upon by all courts without
exception, and also by Congress, certainly up to the pas¬
sage of this act, and with this view, and looking at the great
mischief that otherwise would ensue, I cannot believe, with¬
out explicit words to that effect, that it was intended to
repeal the act of 1866 ; and, therefore, both must be taken
together in construing the real intention of Congress. I do
not at all call in question the constitutionality of these acts ;
hut construe them all together, as I think we are bound to
do. (See American Law Kegister, January, 1870.)
There are other reasons why, in this particular case, the
removal should not have been made :
The substantial parties in this controversy are the old
company on the one side, and the new one on the other.
12
These are both certainly citizens of Virginia. The individ¬
uals named derive all their rights in this cause through one
or the other of these companies. As individuals, they are
citizens of different States ; but as members of the several
companies, they are not. (The La Fayette Ins. Co. vs. French
and others, 18 How., 404.) These petitioners come in sim¬
ply as stockholders in the new company ; and while they
allege that there can he a final determination of the contro¬
versy, so far as'it concerns them, without the presence of
the other defendants, parties in the cause, the petition itself,
as well as their answers, show that this cannot he true.
The new company, of which they were stockholders, was .in
court defending the case, and in such case they could not,
as individuals, control the cause. (See Angelí and Ames
on Corporations, sec. 407, and cases there cited.) The
power of stockholders to bring proceedings against the com¬
pany for violation of the duty of such company is not denied ;
hut I do not think that this was the way to come into court
on such grounds. They had the power, holding, as they
claim, the majority of the stock, to remove their officers and
directors, if they were acting improperly, and put in their
place those who would do their duty. (Chap. 57, sees. 8
and 12, Code of 1860.)
These parties were allowed, at the discretion of the court,
to he made defendants upon their petition, representing that
they had interests which would he affected. But at the
same time a decree was made adjudicating the principles of
the cause. True, they complained of this, hut their an¬
swers did not set forth any new facts which could throw any
additional light upon the principles of such adjudication,
and having just come in as defendants with others, under
such circumstances, why should the decision of this ques¬
tion he delayed? The court says: "With a view to the
speedy determination of the cause, it is deemed proper to
make this adjudication." Nor do I see that this case is one
in which the parties who have not united in this last appli¬
cation for removal are mere formal or nominal parties, or
parties without interest, in which cases the real and substan¬
tial parties have been held to have the right to remove the
cause to the United States court. (See Wood vs. Davis, 18
How., 468.)
The action of the court below in making the decree ad¬
judging the principles of the cause, at the November term,
1867, has been so severely commented upon that it seems
proper to examine this action a little more critically.
13
The defendants, Coleman and others, then made a simple
petition as stockholders of the new company, asserting that
it was a legal corporation, and asking to be made parties,
as they were interested in the decision of the case. They
allege, it is true, that they can successfully defeat the claims
of the old company and establish the validity of the new
company. Their petition is not sworn to, nor any new facts
alleged.
The court, deeming their petition reasonable, allowed them
to be made parties, and required the complainants to amend
their bill so as to make them parties. It is evident, however,
that the court did not intend to allow them to be made more
than formal parties, and for the purpose only of establishing
such equities as they might be able to sbow, for it seemed
manifest that if the new company were adjudged void, still
they, as individuals, had equitable claims upon the road.
From the verj'- position they occupied and placed themselves
in, they could do nothing more than this in either event. If
the new company were adjudged a valid one, then this
new company being properly in court, they, as mere stock¬
holders of that company, as such, had no standing in court.
But if, on the other hand, the new company should be
adjudged invalid, as it was, they then had nothing but
equitable interests, and could be preserved in no other way
than as they were provided for in this very decree.
I do not see, therefore, how their rights were prejudiced.
In fact, I do not see how the cause could properly proceed as
to them until their precise position should be ascertained and
adjudged ; for as I have before said, if they were stockholders
of a valid corporation, they ha& no standing in court ; if
individuals only, they had merely equitable interests, and
could not then contest the validity of the old company. The
same decree that admitted them as defendants adjudged the
validity of the old company. The purpose of admitting them
as defendants was thus manifestly only to allow them to estab¬
lish such equitable interests as they might be able to establish,
and the bill was required to be amended only for thai purpose,
and they were allowed to file their answers only for that pur¬
pose. They complain that they were not allowed to take testi¬
mony, and that they had not then filed their answers. But they
have since, and before the final decree, filed their answers,
and the riglit to take testimony for the purpose for ivhich it
loas alone proper that they should take testimony has not been
denied, but, on the contrary, is expressly provided for in the
decree from which the appeal was taken.
14
It may be remarked that the answers filed hy them do not
set forth any facts additional to those which were before the
court which could have affected the decision of the question
which was then adjudicated. While, then, there seems to
he an apparent inconsistency in allowing them to he made
parties, and making the decree which was made before the
filing of their answers and the production of their testimony,
a critical examination of the situation of the parties, and the
real substance of the decree, and the intention of the court,
shows, I think, that it acted with entire propriety.
The petition for removal was not made until the next term
of the court, after there had been a decree in effect adjudi¬
cating the principles of the cause, and which even then might
have been regarded as sufficiently final for the purposes of
an appeal to an appellate court.
After their case is really decided, and this, too, without
objection to tbe jurisdiction of the court, then they ask to
have this cause removed, so that they can try the same ques¬
tion again in another form.
To allow the removal of the cause under such circum¬
stances would give them the chances of two courts, if the first
decided against them, or, in other words, would be substan¬
tially allowing an appeal from a State to a United States
court.
Under the act of 1867, the application must be made be¬
fore final hearing. The substantial final hearing had been
made, and though the parties call themselves defendants,
and put in what they call answers, such answers are sub¬
stantially nothing but petitions, or in the nature of cross¬
bills, setting up equitable interests, which they claim should
be protected. At least, they could not be otherwise regarded
by the court after the decree which it had made at a previ¬
ous term, fully adjudicating the principles of the cause.
In view of all these considerations, I am very clear that
there was no error in denying the motion for removal of the
cause to the circuit courts of the United States.
There is another view which may be presented, which, if
correct, is conclusive, so far as this court is concerned, upon
this question. The appeal to this court is not made by these
p)etitioners. It is made by the new company. It was not the
new company which presented this last petition for removal.
It did not make the motion in the court below. In fact,
then, I very much doubt whether this question is properly
before us. If there was an error in refusing the petition for
removal, it was an error by which the petitioners, not the
/
15
company were aggrieved. In this case, it seems to me the
petitioners should have taken the appeal, in order to have
the error hy which they were aggrieved corrected.
I very much douht whether one defendant can allege as
ground of error that a co-defendant is aggrieved hy a decis¬
ion of the court below. The co-defendant should make
known his complaint for himself. For all that the record
shows, these petitioners may noiu acquiesce in the decision of
the court helow. This view may he applicable also to some
of the other grievances which it is claimed these petitioners
have suffered by the final decree of the court helow.
The conclusion we have come to necessarily brings us to
the consideration of the next question, the validity of the
sale.
The deed of trust, upon which the sale was founded, con¬
tains this provision : And it is mutually agreed, that in case
of the death, incapacity, or resignation of the party of the
second part, or of his successors in this trust, then the office
of trustee filled hy him shall become vacant, and such va¬
cancy shall he filled by an appointment to be made by any
court of record in the county of Alexandria, on the appli¬
cation of the parties of the first part, or of the holders of
three-fifths of said bonds : Provided, however, in the last
case, notice of the application of the parties making such
request be given to the president or one of the directors of
said company, and all the rights, power, and authority here¬
by conferred on the original trustee shall then and there
devolve upon and be invested in his successor or successors
so appointed.
It also provides that in case at any time six months' inter¬
est becomes due and unpaid, the trustee "shall, upon the
request in writing of the holders of at least three-fifths'
interest of said bonds," cause the property to be sold at
public auction, after giving at least sixty days' notice of the
sale by publication in certain newspapers therein named,
and shall have autliority thereupon to convey the said prop¬
erty to tlie purchaser.
This is a contract, the authority to make which is not
disputed ; and upon this depends the authority of proceed¬
ings in relation to the sale, but of course is to be construed
with reference to the laws of the State then in force. The
manner of serving this notice must then be supposed to be
according to the law relating to such service. This notice
is agreed to be the process upon which the jurisdiction of a
court of record to appoint a trustee depends.
16
But we are met at the threshold of this inquiry into the va¬
lidity of the order of the court hy the proposition that as the
court was one of general jurisdiction its judgment cannot he
assailed only upon the ground of want of jurisdiction, and the
presumption is, that all the steps necessary to give it jurisdic¬
tion were taken by the court. It should be borne in mind
that this is not a proceeding in which this judgment is col¬
laterally assailed, but is a bill in equity, filed for the specific
purpose of setting aside this judgment and attacking it direct¬
ly. The bill sets out facts for the very purpose of showing
that the court did not have jurisdiction. Although the dis¬
tinctions made in different cases as to when the record of
a court may or may not be contradicted are very subtle, and
somewhat difficult to reconcile, I do not think that any case
can be found in which it is held that such record may not be
assailed in a direct proceeding for that purpose in equity, by
showing fraud, or especially by showing that the court did
not in fact have jurisdiction.
However this may be, I am sure that the defendant may
be allowed to show that he had no notice, and that there was
no process bringing him into court, and by filing a bill in
equity for this specific purpose, and by actually showing such
want of jurisdiction. Any other construction of law would
be the most apparent injustice, for there could be no other
remedy. An appeal would not correct it, for on an appeal
the party would be bound by the record as it is. A judgment
of a court beyond its jurisdiction is plainly void ; and to ren¬
der a judgment in personam it must have jurisdiction of the
person. If it be a judgment in rem, it must have jurisdiction
of the thing. Every lawyer knows, for example, that a judg¬
ment in a case of attachment, if there is not also a service
upon the person, is only a judgment against the property.
Such a judgment does not authorize a levy of an execution
upon other property, nor is it even evidence of a judgment
against the person. This is not a proceeding in rem. In
such cases courts acquire jurisdiction only by seizure of the
thing, and even then, in most, if not all cases, notice is given
in some way to parties interested, by publication or other¬
wise, and especially if it is agreed that jurisdiction shall not
attach only by giving a notice. (See Penobscot K. E. Co. vs.
Weeks, 52 Maine, 456; Hollingsworth vs. Barbour, 4 Pe¬
ters, 466 ; Harris vs. Hardeman, 14 How., 334 ; Webster
vs. Keid, 11 How., 431.)
In Harris vs. Hardeman, the court says : "In all judg¬
ments by default, whatever may affect their competency or
17
regularity—every proceeding, indeed, from the writ and
endorsements thereon down to the judgment itself inclusive—
is part of the record and open to examination.
Applying this principle to the present case, on the exami¬
nation of the affidavit of Joseph Davidson, we find that the
record itself shows that there was no notice. This would
make it void its face. I can see no escape from this
conclusion, and I do not see how it can he seriously ques¬
tioned. In the case of Voorhees vs. The Bank of the United
States, (10 Peters, 449,) the court say : "There is no prin¬
ciple of law better settled than that every proceeding of a
court of competent jurisdiction shall be presumed to have
been rightly done till the contrary appears." This is a case
strongly relied on by the appellants, and is perhaps one of
the strongest cases on record upholding the validity or judg¬
ments of a court. But this was a case in ejectment, and a
judgment of a court showing a sale by attachment was put
in as defence ; and in such a case the court say, though the
record does not show the proper steps to have been taken, el¬
even that the steps necessary to give jurisdiction were taken,
it must he presumed that they were taken, and the facts
could not he controverted in this collateral manner.
The cases of Harvey vs. Tyler, (2 Wall., 341,) Florentine
vs. Barton, (2 Wall., 210,) and Comstock vs. Crawford, (3
Wall., 304,) so strongly relied upon by the appellants, were
all actions of ejectment, and the records were all sought to be
set aside, by showing facts aliunde, and the court held that
this could not be done. The case of DeVaughn vs. DeVaughn,
decided by us at the present term, was a decision upon an
appeal from a record from the county court, in which it was
claimed that the record did not show affirmatively that it
had jurisdiction, and we held only that it was to be presumed
that the steps necessary to give jurisdiction were taken, and
that the presumption must be that the court had evidence
sufficient to justify the order which was made.
But it is easy to see the difference between these cases and
the one under consideration. Besides, in these cases the
records did not disclose the want of jurisdiction on their face.
But it is urged by the appellants that they had a sufficient
excuse for not giving a notice, from the fact that the persons
entitled to such notice had all left the country,had gone beyond
the Federal lines into the lines of a public enemy ; that they
had abandoned the property and were traitors to the United
States Government, and engaged in war upon that Govern¬
ment, and that it was impossible to give them notice ; and
18
the law does not require impossibilities. This presents a
strong appeal to all those who were loyally disposed to the
United States, especially when presented as it is in the an¬
swer in the fiercest language and in the most glowing
terms. Still, we must not be misled by such an appeal,
and must subject it to the test of legal principles. These
facts were certainly not shown to the county court. Nothing
of them appears in the affidavits upon which the order was
founded. If they could be regarded as an excuse for not
bringing the person within the jurisdiction of the court,
such excuse was certainly not made the basis of such juris¬
diction, and it seems to me rather late to offer such excuse
before another court to bolster up a jurisdiction which other¬
wise would fail. But suppose all this were true and then
shown to the court, it cannot really he seriously contended
that if the parties were the greatest criminals on earth, if
they had left their property without any one to attend to it,
that therefore they can be deprived of their rights or their
property, except by the law of the land, or, in the language
of the Constitution, "by due process of law." Certainly
this does not give to individual citizens the right to deprive
them of such rights or property. Nor can I see how it
matters whether such property were valuable or nearly
worthless, or whether it had been properly or improperly
managed.
But was it a sufficient excuse for not serving a notice that
the persons entitled to such notice could not be found?
When a condition precedent becomes impossible of perform¬
ance, a person may be excused from performing it ; but it does
not therefore always follow that because it is impossible the
right or privilege dejiending upon such condition precedent
can be maintained, not even if this is made so by the acts of
the other party entitled to such condition precedent.
Where a court has no jurisdiction of a person, it does not
follow that because a party has done all that he could do to
bring such person within such jurisdiction, and has failed,
that therefore the court can proceed without obtaining juris¬
diction. I cannot say, however, that in this case this impos¬
sibility was caused by the act of the party entirely. He
went South, it is true, voluntarily, but he went expecting to
return soon ; but he could not return. This rvas a misfortune
for him ; and it was also a misfortune, perhaps, for those
whose rights were affected by his not being able to return.
■ But it was a misfortune which resulted for the most part, at
least, from the war in which the nation was unfortunately
19
engaged, and by reason of which thousands of others in
common with the parties to this cause unavoidably suffered,
and for which courts and the usual legal proceedings could
not afford an adequate remedy.
But it does not seem to me that the parties asking for the
appointment of a trustee did, in fact, all that they might
have done. The president of the old company still had a
residence in Alexandria.
The deposition of E. S. Boynton, a witness for defendant,
shows that he had a residence with his family until April,
1861, and he himself resided there until May, leaving his
house and furniture in charge of said Boynton, and declar¬
ing that he expected to return in sixty or ninety days. We
can readily infer, from the facts of history within judicial
cognizance, why he öould not have returned if he had wished.
I cannot discover from the records how there is any proper
evidence of his having engaged in arms against the Govern¬
ment, for the answer stating such fact could not have been
given upon any knowledge by the affiant, and this is not to be
presumed ; nor is there any sufficient evidence showing that
he did not, at all times, intend to return to his place of resi¬
dence. In fact, the affidavit of Davidson, upon which the
order of the court was made, does not state that he had no
residence in Alexandria, and is defective on that ground.
This, at least, should be shown positively in any aspect of
the case.
I cannot see what excuse can be rendered for not serving
the notice by leaving a copy at his residence as the statute
prescribes.
Besides all this, the deed of trust itself shows that Lenox,
who was an officer and director of the company, and the
trustee in the deed of trust, was a non-resident. Notice to
him could certainly be given by publication in accord¬
ance with the statute. Why could not this have been done ?
It was said that he received notice as trustee. But this
would not prevent notice to him as director. What excuse
can be offered for not notifying him by publication ? This
would have brought them within the provisions of the deed
of trust.
If the facts, as alleged in tlie answer, were all true, and
it appccared that the road and all the property were aban¬
doned, and it was absolutely impossible to give any notice to
anybody, and in the meantime creditors had no other means
of saving their rights, while such a state of facts might be
urged with great force for a cowri of equity to assert jurisdic-
20
tioa for the protection of all parties interested, upon all these
facts being Ijrought before such court, I tbiuk it very clear
that a single creditor, without regard to the rights of others,
without showing the court this state of facts, cannot, upon a
single affidavit or petition, ask a court to make an order to
protect his rights, and without really taking into its own
hands the property itself for the benefit of all parties, owners
as well as creditors.
Cases have been produced to us to show that a corporation
by abandonment and nonuser of its franchises forfeits those
franchises. Suppose this to be so ; I cannot see bow it would
help these appellants. To whom would such franchise be
forfeited? Evidently to the sovereignty from which they
emanated. This would not allow individuals to seize upon
them. They could not take advantage of such forfeiture.
The new company could not derive its existence from such a
source.
It is objected that the application for the order was not
made by a person authorized to do so by the holders of three-
fifths of the bonds. I very much doubt whether the evi¬
dence fully establishes that any other than the person named,
Benjamin Thornton, was the holder at the precise time.
It is very evident that Charles M. Wilkes was the holder,
and entitled to hold within a very few days thereafter and
sometime before the sale, whether he was the owner or not,
and entitled, as such holder, to determine whether he would
allow them to be converted into cash or to remain on inter¬
est at 7 per cent., or whether they should become extin¬
guished in his hands by the conversion of the security into
cash to go into the hands of a trustee not required to give
security, and with whose appointment he has had nothing
to do, and whom he might not be able to compel to pay to
him the money to which he was entitled.
Suppose, however, that we are wrong in coming to the con¬
clusion that this order appointing the trustee should be set
aside, the admitted facts of this case show very plainly, I
think, that the sale should be set aside on the ground of facts
occurring after such order. Suppose that Stewart were the
proper trustee, invested with all the power of tlie original
trustee. He has simply a naked power to sell. His author¬
ity is based only upon the deed of trust, and he must pursue
the provisions of the deed strictly. He must be able to justify
his act, not by any presumption or influence, but positively
and necessarily. The divesting of the franchises and prop¬
erty of a railroad company is not tobe permitted upon a
doubtfully exercised power of a mere naked trustee.
21
The first step taken is, to say the least of it, a very doubt¬
ful one. Sale can be made only on the request, in writing,
of the holders of at least three-fifths of the bonds. Now the
request in writing was, as specified by Davidson, as agent
and attorney in fact of the owners of more than three-fifths
of the bonds. This is liable to two objections : first, there
was no ivriting then produced from even the owners of the
bonds. There was a writing from Davidson, but this was
not founded upon a writing from the owner. There is not,
to this day, written evidence that the owner then, at that
time, had ever authorized this demand ; second, even if
Davidson was the agent of the owners, this does not neces¬
sarily imply that he was the agent of the holder. An owner
may, and often does, divest himself for a time of the posses¬
sion and right to hold his property, and for all that appears
in this written notice, this may have been done.
More than this: the reasonable probability from the'evi¬
dence is, that this luas actually done at the time of giving
this notice. While this fact may not appear to be sufficiently
established to set aside an order of court, it does appear
sufficiently to throw great doubt upon the power of the trus¬
tee to proceed to the sale.
Certainly, at the time of the sale, Thornton was not in a
position to deliver up the bonds or to require the delivery."
But let us look further at the subsequent conduct of this
trustee and the circumstances of the sale.
A trustee is the agent of both parties. He is especially of
the party constituting him such trustee. His duty is to be
perfectly fair in all his conduct, and especially to see that the
interests of the party who has conferred upon him this power
are protected to the fullest extent. His action has, there¬
fore, been held to be especially the subject of inquiry by a
court of equity, (see Grlbson's heirs vs. Jones, 5 Leigh, 370,)
and as such it is his duty to do all that can reasonably be
done to effect the most advantageous sale possible. It has,
therefore, been the common practice of our courts to require
that in all such sales, if there are prior liens, either contested
or doubtful, or not precisely ascertained, such liens shall be
ascertained, so that they may be made known to the pur¬
chaser, (see Coles, Adm'r, vs. McRae, 6 Rand., 644; Ros-
sett vs. Fisher and others, 11 Grattan, 492, 15 Grattan, 83
and 103.) Otherwise, how is it possible that there could be
anything like a fair sale of the property? Now, what were
the facts in this case? The affairs of the road were con¬
fessedly, and in fact charged to be by the defendants them-
22
selves in a most complicated condition. There were numer¬
ous judgments and two deeds of trust. Most of the judg¬
ments, it is true, were, in fact, subsequent to the deed of
trust. But the fact should have been well ascertained as to
which were prior and which were subsequent. Tbere were a
large number of liabilities of the company, and, as the de¬
fendants themselves allege, persons owning these liabilities
were making them known even at the sale. The question of
the validity of the two prior deeds of trust was openly made
at the sale. The trustee of the deed of trust for $60,000 was
present at the sale asserting its validity, while Stewart says
in his deposition, " I at the same time saw fit openly to dis¬
pute the validity of both the deeds of trust of Corporation of
Washington, and Fowle, Snowden & Co., as valid liens upon
the road," and the record shows that there is at this time a
contest in the courts concerning the validity of this first deed
of trust.
Now, under such circumstances, was it possible that there
could be anything like a reasonable sale ? How could a pur¬
chaser have any knowledge of what he was buying? The
Code provides (ch. 61, sec. 29) that when a purchase is made
of the works and property of a corporation, the purchaser
shall not be entitled to the debts due to the first company,
nor be liable for any debts of or claims against "the company
" which may not be expressly assumed in the contract of
purchase."
The defendants contend that by this sale a new company
was formed. If this be so, ought not the contract of pur¬
chase to show whether the debts and liabilities of the old
company were assumed? Ought there not to have been at'
the sale an understanding whether it was sold subject to the
debts and liabilities of the old company or not ? If not, then
the purchaser should know it, for it would make a material
difference in his bid. Certainly this ought not to be left to
the mere will of the purchaser, after he has made his bid.
The matter ought to have been clearly and plainly under¬
stood at the sale, and I think it would have been proper, if
not necessary, that the advertisement of the sale should have
stated how the sale would have been made. It should, at
least, have been made known generally, as well as to the
purchaser, Hay, whether the sale was subject to the debts
and liabilities of the old company or not.
Again, the record discloses that Stewart, who all the time
professed to act in the capacity of attorney for the purchaser.
Hay, had already in his hands more than sufficient money.
23
the property of the company, to pay all that was then due
upon the bonds. This fact Hay must be presumed to have
known, and to have purchased with this knowledge. That
the interest of the seller was not properly attended to is fur¬
ther seen by the fact that the United States Government
had possession of the road during all this time, and it was a
well-known fact that possession could not then be delivered,
and no one could tell when it would be, or what claims the
Government would have upon it when so delivered. It was
impossible that, under such circumstances, a sale could be
made otherwise than at a ruinous sacrifice. The position of
Stewart was, to say the least of it, a peculiar one. He was,
if properly appointed, the trustee to make the sale, and as
such, in duty bound to effect the best possible sale, and the
attorney-at-law and in fact of Hay, the purchaser, and as
such interested to procure the sale on the lotoest possible
terms. More than this, he had made an agreement in
writing with Davidson, in which he stipulates what he will
do, "on behalf of himself and constituents," in case the
road be purchased by himself or constituents, showing that
he was then contemplating a purchase by himself, as well as
by his principal and client. Can he be said to have been
perfectly impartial and disinterested ?
Is it possible that a trustee for sale can at the same time
be attorney-at-law and in fact for the purchaser, and acting
in his interests ?
Stewart, in fact, did immediately become interested in the
purchase.
He had also previously been appointed, by writing, the
attorney for Davidson, the agent of the bondholders, and as
such was to receive from him a large contingent fee in case
of a sale of the road, he to use all diligence in the closing
out and perfecting the interest of said bondholders in and to
said road. (What interest had the bondholders in the road,
except to receive the money which might be realized from
the sale?)
On this writing there was endorsed by Joseph Thornton,
May 3, 1862, "There will go to Mr. Stewart $35,000 of
stock out of the $142,000 set over to me, his $35,000 being
subject to a pro rata deduction in making up the $50,000, or
whatever may be used of that amount, which is set apart."
This $50,000, it otherwise appears, was to be set apart for
procuring a charter from Congress. It is true that Stewart
testifies that no agreement was effected with Davidson and
Thornton before the sale. But these papers appear to have
24
been executed, and he himself testifies that the probabilities
and feasibilities of forming a new company were much dis¬
cussed, and, as he says, " in the event that either Thornton
or Davidson become the purchaser, the question of who would
take an interest and how was much figured over as a thing
entirely prospective, and it was agreed, if I saw fit to do so,
I could he one of the parties forming the new company."
These facts show, I think, that Stewart was at least so far
interested in the purchase as to render it impossible for him
to act as trustee with that propriety which a court of equity
requires.
It further appears that no money was ever paid to the
holder of the bonds from the proceeds of the sale, but they
were still, by the permission of said trustee, and at the re¬
quest of Joseph Thornton, allowed to remain in the bank of-
Riggs & Co., at Washington, as the basis of a loan of Benja¬
min Thornton from one Wilkes of something over two thou¬
sand pounds, and a portion of the proceeds were used in
reorganizing the new company. A company was immedi¬
ately organized, of which Stewart was the secretary and a
large stockholder, and stock was issued to the amount of
$300,000.
This fact tends strongly to show that the object of the sale
was not so much to satisfy the amount due upon the bonds,
and in accordance with the real wish of the holder of the
bonds, as it was to get the title of the old company into the
hands of these parties, who were devising a plan by means
of which they could form a new company, and which had
been much figured over" by all these parties, including
the trustee.
By special act of Assembly, this new company was soon
after authorized to issue stock to the amount of $500,000 ;
besides bonds to the amount of $200,000, and notes to the
amount of $100,000.
Stock has been issued to a large amount in excess of the
amount authorized, as the decree states, and bonds, &c.,
have also been issued, and out of this money has been raised
and in part expended for the benefit of the road ; so that it
will be seen that other parties have equities in the road
which should be provided for.
This history of the transactions connected with the sale
must show, I think, that even if the order appointing Stewart
was perfectly valid, yet the sale was conducted in such a
manner, and shows such a state of actual fraud that it can¬
not be sustained by a court of equity.
25
It is urged upon us with great earnestness and force, that
even if such order were void, and the sale was an illegal and
fraudulent one, yet that the company, taking no steps for a
period of four years, and allowing the stockholders of the
new company to invest large sums of money on the faith of
the validity of such sale, without being cognizant of such
fraud, the old company should be considered as having ac¬
quiesced in such sale, and should now be estopped from con¬
testing such validity as against them.
There are cases which show that acquiescence in sales made
by order of a court of competent jurisdiction for a long period
shall be regarded as a waiver of the right to contest the
validity of such sales. In extreme cases, where there has
been long acquiescence, sales made hy order of the court have
been sustained on the ground that judicial sales ought to
receive the highest possible sanction, and should be regarded
as giving the utmost possible protection to the purchaser.
But, in the first place, the acquiescence which is shown in
this case is not of such a character as I think should be re¬
garded as an estoppel.
The parties who alone could object for the old company
were in such a situation that, so far as they were concerned,
it was for nearly the whole period a forced acquiescence.
True, they had gone into the lines of public enemies against
the United States, and had gone voluntarily ; but whatever
may be said of the wrongful nature of said acts, yet they
were in such a situation that it cannot be said that, during
this period, they voluntarily acquiesced in the disposition of
their property. Besides, up to August, 1865, the Govern¬
ment was in the actual and exclusive possession and control
of all this property ; and while it was so, I do not think any
party could be justified in claiming to act in entire ignorance
of all claims that might be brought against it. I cannot
give any countenance to the claim that the Government held,
as a tenant of Hay under a contract made by him, as a mere
creditor and with no claim upon the road, except such as
might have beeu satisfied by the payment of $5,000.
Again, so far as the sale was concerned, it was not & judi¬
cial one. The court had nothing whatever to do with the
sale. The court simply substituted one trustee in the place of
another. The court did not direct the sale. The sale was
not professed to have been made by any other authority than
that of a trustee, with no power to guarantee the title, who
did not profess to guarantee the title, and the purchaser was
bound to make inquiry and to fully investigate the sources of
26
his authority, and if he neglected to do so, it was his own
negligence. And such a sale is not at all like one where a
purchaser has an order of a court of competent jurisdiction,
and which he is authorized to presume to be correct.
Again, a corporation cannot he created by mere acquies¬
cence. This can he done only by positive act of legislation,
or by some power authorized by some legislative act.
Still, under the circumstances of this case, the new com¬
pany ought to have reimbursed to it the money which it has
actually expended for the benefit of the road, which ought
to go to its stockholders.
A very large portion of the money invested by the stock¬
holders seems to have been upon representations for which
the old company could be in no wise responsible, and it cer¬
tainly could not be regarded as having acquiesced in them.
Much of it has been upon false and spurious certificates of
stock, issued by the new company ; but the remedy of those
who have thus been deceived is upon those whom they have
trusted. Their case is an extremely hard one, and appeals
strongly to our sympathies, and so far as they can be law¬
fully protected they should he.
They claim that a very large amount (several hundred
thousand dollars) has been expended for the benefit of the
road, and provision should be made for the repayment of so
much of this as they can establish, and this can be done un¬
der the decree as it now stands, and such further orders as
may be made by the court upon a consideration of the evi¬
dence which may be produced.
The new company procured a special act to be passed by
the Alexandria legislature, February 5, 1863, declaring this
sale to be a valid one.
This act was in plain violation of the constitution, and
therefore void.
It was an assumption of judicial power by the legislature.
Art. II, constitution of Virginia, declared "the legislative,
executive, and judicial departments shall be separate and
distinct, so that neither shall execute the powers properly
belonging to either of the others."
Art. lY, section 35, provides that the General Assembly
shall not, by special legislation, grant relief in a case of
which the courts or other tribunals may have jurisdiction.
Besides, it attempts to divest antecedently vested rights,
and also to impair the obligation of the contracts between
the parties. (See Taylor vs. Stearns and others, 18 Grattan,
244, 274.)
27
I can see no necessity for giving a construction to the
statute relating to the sale of the works and property of a
corporation, and the powers and privileges of the purchaser
at such sale. (Sections 28 and 29, ch. 61 of Code of 1860.)
This is a matter rather for the new company and those con¬
nected therewith to settle among themselves, and suits are
now pending, as I am informed, to determine the questions
between them.
The decree of the court below very properly provides for
an investigation into the equitable interests of the several
parties to this controversy, and for security for their protec¬
tion, and I see no reason why it should not be fully affirmed.
Decree.
Virginia :
Ata Supreme Court of Appeals held at the Capitol, in the city
of Richmond, on Monday, February \iih, 1870.
The Washington, Alexandria & Georgetown Eailroad
Company, The National Union Bank of Baltimore, National
Exchange Bank of Baltimore, Horatio K. Eiddle, Allen Chap¬
man, D. A. Given, J. W. Jones, L. M. Flournoy, N. S. Eay,
the last four named of whom are trading under the name of
Given, Jones & Co., appellants, against The Alexandria &
Washington Eailroad Company, Alexander Hay, J. B. Stew¬
art, Benjamin Thornton, Joseph Thornton, Joseph Davison,
the Mayor, Board of Aldermen and Board of Common Council
of the City of Washington, Joseph H. Bradley, Sr., A.Thomas
Bradley,Walter Lenox, and William H. Fowle and Edward
Snowden, partners, trading under the style and firm of Fowle,
Snowden & Company, appellees, upon an appeal pronounced
by the district court of the fourth judicial district, on the 6th
day of January, 1869, affirming, with costs, &c., a decree
pronounced by the circuit court of Alexandria county, on the
28th day of August, 1868, in a suit in which the Alexandria
& Washington Eailroad Company, by James S. French, their
president, were plaintiffs, and The Washington, Alexandria
& Georgetown Eailroad Company, Alexander Hay, J. B
Stewart, Benjamin Thornton, Joseph Thornton, Joseph Da¬
vison, the Mayor, Board of Aldermen and Board of Common
Council of the city of Washington, Joseph H. Bradley, Sr.,
A. Thomas Bradley, Walter Lenox, and William H. Fowle
and Edward Snowden, partners, lately trading under the
style and firm of Fowle, Snowden & Co., Charles E. Cole¬
man, and others, were defendants.
28
This day came the parties, by their counsel, and the court
having maturely considered the transcript of the record of
the decrees aforesaid, and the arguments of counsel, are of
opinion, for reasons stated in writing, and filed with the rec¬
ord, that there is no error in the said decree of the dis¬
trict court ; therefore, it is considered that the same be
affirmed, and that the appellees recover against the appel¬
lants their costs by them expended in the prosecution of their
suit aforesaid here, which is ordered to be certified to the
clerk of the said district court, who is directed to certify the
same to the clerk of the said circuit court.
[A copy.] Test;
H. 0. CURTIS, Clerk.
DECREES AND OPINIONS OF JUDGE THOMAS.
Opinion read May Term, 1867.
Alexandria and Washington R. R. Co. I
vs. j.
Wash., Alexandria k Georgetown R. R. Co. J
In this case the plaintiffs instituted suit against the de¬
fendant in April, 1866, seeking to set aside a sale, under
which the road had been sold and transferred to the said
defendants by Joseph B. Stewart, one of the defendants to
this hill, who had been substituted as trustee in lieu of Wal¬
ter Lenox, under an order of the county court of Alexandria,
made on the 3d day of February, 1862. This suit has been
matured, and came upon the docket at the November term,
1866. At that court a general demurrer was filed to the bill
of the plaintiffs, and fully argued, involving the whole merits
of the controversy, and the court at that time being of the
opinion that the sale made by the trustee substituted by the
county court of Alexandria was illegal, and not sufficient to
protect the defendants from the claim of the plaintiffs in
this suit, overruled the demurrer, and the court being then
of the opinion that it was necessary to a complete adjust¬
ment of the various equities involved, and to a proper termi¬
nation of the litigation, that an account should be taken,
ordered and decreed that one of the master commissioners
do state, settle, and report an account, showing—
1st. The amount of the liabilities of every kind existing
against the Alexandria and Washington Railroad Company,
on the 10th day of April, 1862.
2d. The amount of liabilities or indebtedness of tbe said
railroad company aforesaid, or discharged by Alexander
Hay, by tbe Washington, Alexandria and Georgetown Rail¬
road Co., or other person, since said period.
3d. The amount of money expended or debts incurred
during the said period by Alexander Hay, the Washington,
Alexandria and Georgetown Railroad Company, or other
person, in building, reparing, equipping, and operating the
said railroad.
4th. The amounts received during the period aforesaid by
the Washington, Alexandria and Georgetown Railroad Co.',
I
30
from all sources, and stating any further matter that said
commissioner may deem pertinent, or that either party may
require, and that the hooks and papers of the Washington
and Alexandria Eailroad Company, and of the Washington,
Alexandria and Georgetown Eailroad Company, shall he
produced before the commissioner taking such accounts by
any person having possession of the same. And that said
commissioner shall make his report to the next term (gen¬
eral or special) of this court.
This account was taken by the commissioner, was duly
returned in accordance with the statute, and the cause being
regularly matured for hearing at this term, was called by
the court for trial.
Thereupon the defendants, Jos. Thornton and Jos. Davi¬
son, who this day filed their answers, moved to continue the
cause, representing that neither the complainants, in person
or by attorney, had made any motion for its hearing.
The court, upon inquiry as to the reason, was then in¬
formed by the counsel for the complainants, that an injunc¬
tion had been served upon him and them, forbidding them
from appearing in this court, as appears from a copy of the
order in the following words, to wit :
[Copy.J
United States Circuit Court, District of Virginia, sa :
Horatio R. Riddle et al.
vs.
James S. French et al.
Ordered, this 25th February, 1867, that James S. French,
his agents, attorneys, solicitors, aiders and abettors, and ser¬
vants, be enjoined and restrained until the further orders of
this court, from using the corporate name or seal of the
Washington and Alexandria Eailroad Company, or from
authorizing any person to use the same, or from pretending
or asserting any right, title, or claim to the franchises or
property of the Washington, Alexandria and Georgetown
Eailroad Company, or from setting up or claiming, or au¬
thorizing any person to set up or claim, that the dissolved
corporation, formerly known as the Washington and Alex¬
andria Eailroad Company, is a legal and existing corpora¬
tion, or from instituting any action at law, or proceeding in
equity for the recovery of the possession of the franchises
and route now held by the Washington, Alexandria and
Georgetown Eailroad Company, or by persons claiming by,
through, or under it, or from impeaching the validity of the
deed executed 14th April, 1862, by Joseph B. Stewart, trus-
31
tee, substitiited by order of the county court of Alexandria
county in lieu of Walter Lenox, in favor of Alexander Hay,
Joseph Thornton, and the Washington, Alexandria and
Georgetown Railroad Company, which deed is duly recorded
among the land records in said Alexandria county, or from
selling, or disposing of, or hypothecating, or agreeing so to
do, any alleged property of, or interest, or capital stock in
the said dissolved corporation, called the Washington and
Alexandria Railroad Company, or from creating or under¬
taking to create or acknowledge any obligation or contract
against or in respect to the same.
And the question now presented is, shall the court, under
all the circumstances, refrain from hearing, and forbear to
make, any decree in the cause ?
The act of Congress of March 2d, 1793, vide Brightly's
Digest, which said act is now in full force, provides that the
courts of the United States shall not grant a writ of injunc¬
tion to stay proceedings in any court of a State, and I am
now to decide whether the order of the United States court
does not indirectly effect that which the law of Congress de¬
clares it shall not do directly. For if it be conceded that the
United States court can, by injunction, forbid the parties liti¬
gant, in the courts of the State, from appearing either in
person or by attorney, thus enabling the defendants, upon
their motion, to control the action of the court in such case,
will it not be effectual to stay proceedings in the State courts ?
That a United States court cannot enjoin proceedings in a
State court has been repeatedly settled. (See Diggs vs. Wal-
cott, 4th Cranch, 179.) A recognition of the same principle
is to be found in Peck i?«. Jenness, (7th Howard, 612.)
In this case it appeared that an act of Congress had con¬
ferred on the courts of the United States exclusive jurisdic¬
tion of all suits and proceedings of bankruptcy, and had
provided that the act should not be held to impair or destroy
existing rights, liens, mortgages, &c., on the estate of the
bankrupt.
A district court of the United States decided that its juris¬
diction extended to administer the entire estate of the bank¬
rupt court, and that the liens on the property, whether judi¬
cial or consensual, must be asserted exclusively in that court,
and that all other jurisdiction had been suspended.
The Court, in its opinion delivered by Justice Grier, say :
" The district court have exclusive jurisdiction 'of all suits
nd proceedings in bankruptcy.' " But the suit pending be¬
fore the court of common pleas was not a suit of proceeding
32
in bankruptcy ; and although the plea of bankruptcy was
interposed by the defendants, the court was as competent to
entertain and judge ofthat plea as of any other. It had full
and complete jurisdiction over the parties and the subject-
matter of the suit, and its jurisdiction had attached more
tlian a month before any act of bankruptcy was committed.
It was an independent tribunal, not deriving its authority
from the same sovereign, and, as regards the district court,
a foreign forum, in every way its equal. The district court
had no supervisory power over it. The acts of Congress
point out hut one mode by which the judgment of State
courts can be revised or annulled, and that is by this Court,
under the twenty-fifth section of the judiciary act. In cer¬
tain cases, where one of the parties is a citizen of another
State, he has the privilege of removing his suit to the courts
of the United States ; but in all other respects they are to he
regarded as equal and independent tribunals.
" It is a doctrine of law too long established to require a
citation of authorities, that where a court has jurisdiction,
it has a right to decide every question which occurs in the
cause, and whether its decision be correct or otherwise, its
judgment, till reversed, is regarded as binding in every other
court ; and that where the jurisdiction of a court, and the
right of a plaintiif to prosecute his suit in it, have once at¬
tached, that right cannot he arrested or taken away by pro¬
ceedings in another court.
"These rules have their foundation not merely in comity,
hut in necessity, for if one may restrain, the other may re¬
tort by injunctions, and thus the parties he without remedy ;
being liable to a process for contempt in one, if they dare to
proceed in the other. Neither can one take property from
the custody of the other by replevin, or any other process,
for this would produce a conflict extremely embarrassing to
the administration of justice. In the case of Kennedy vs.
The Earl of Cassilis, Lord Eiden at one time granted an
injunction to restrain a party from proceeding in a suit pending
in the court of sessions of Scotland, which, on more mature
reflection, he dissolved, because it was admitted if the court
of chancery could in that way restrain proceeding in an
independent foreign tribunal, the court of sessions might
equally enjoin the parties from proceeding in chancery, and
thus they would he unable to proceed in either court. The
fact, therefore, that an injunction issues only to the parties
before the court, and not to the court, is no evasion of the
difficulties that are the necessary result of an attempt to
33
exercise that power over a party who is litigant in another
and independent forum."
The-act of Congress of the 2d of March, 1793, ch. 66, § 5,
declares that a writ of injunction shall not be granted " to
stay proceedings in any court of a State." In the case of
Diggs vs. Wolcott, (4 Cranch, 119,) the decree of the circuit
court had enjoined the defendant from proceeding in a suit
pending in a State court, and this court reversed the decree,
because it had no jurisdiction to enjoin proceedings in a
State court.
The same doctrine is to be found in the case of Orton vs.
Smith, (18th Howard.) This case is not unlike, in some of
its features, the case under consideration. The Court say :
"The decree in this case demonstrates the impropriety of
the interference of the court of the United States, and of its
entertaining jurisdiction of a question of title then pending
in the State court. It is true, if this were an ejectment in
a court of law, the precedency of another ejectment between
the same parties might not have afforded sufficient ground
for a plea of outer action pendant, nor would the court have
been bound even by comity to await the decision of the State
court, or suffer the cause pending before them to be in any
way affected by it. But a decree of a court of chancery on
a bill of peace, must necessarily operate by way of estoppel,
as to the title of the land, and conclude all the parties to it,
because it would put an end to all litigation between them.
If they have suits pending in other courts, on the same
question of title, they must cease. This bill acts by injunc¬
tion on the party—no injunction ever goes to thi court hav¬
ing a concurrent jurisdiction of the question. The courts of
the United States have no such power over suitors in a State
court ; but a decree on a bill of peace, which dare not put
an end to litigation, is a mere brutum fulmen. Unless the
court can make a decree which it can execute, it is a suffi¬
cient reason for refusing to take cognizance of the case. It
is a rule absolutely necessary to be observed by courts who
have a concurrent jurisdiction, that in all cases ' where the
jurisdiction of a court and the right of a plaintiff to prose¬
cute his suit in it have once attached, that right cannot be
arrested or taken away by proceedings in another court.'
This rule, it is said, ' has its foundation not merely in com¬
ity, but in necessity. If one may enjoin, the other may re¬
tort by injunction, and thus the parties be without remedy.' "
(See Peck vs. Jennis, 7 Howard, 625 ; Taylor vs. Koyal,
Saxon, 1 Wall., 311.)
34
If the decree in this case can be of any value whatever, let
ns look at the consequence which may possibly and probably
will arise, in case it is enforced.
Orton, claiming as the bona fide assignee and purchaser of
the title bond given by Knob, has a hill pending in the State
court to compel a transfer of the legal title. Pending this
litigation, Knob assigns the legal title to a citizen of an¬
other State, who comes into the court of the United States
praying an injunction against Orton from setting up his
title. Suppose the State court decree the title to he in Orton,
and compels Knob, and Smith, his assignee, to release the
legal title to him ? Now, the court below has made a decree
that enjoins Orton from ever setting up his title against
Smith. It is true the decree protests against interference
with proceedings in a State court ; but unless it is construed
so as to be a perfect "/eZo c?e se," it must be enforced in
favor of complainant somehow. When the sheriff puts
Orton in possession under the decree of the State court, and
expels Smith, the circuit court, by its officer, must replace
Smith or imprison Orton for contempt. This would, indeed,
he a humiliating spectacle. Such a disreputable collision of
jurisdictions should be sedulously avoided. This can only
be done by refusing to entertain a bill of peace for an injunc¬
tion wben the title is in litigation in a court of concurrent
jurisdiction ; otherwise, the result of a bill of peace may be
not peace, but war ; and instead of dispelling a "cloud"
from the title of either party, will doubly increase the dark¬
ness and difficulty with which it was environed. These
principles have been further recognized in Tayloe vs. Col-
buth, (20th Howard, 584 ;) Fruman vs. Howe, 24th How¬
ard, 450 ;) Buck vs. Colhuth, (3d Wallace, 841.) Judge
Miller, delivering the opinion of the Court in this case, says :
" A departure from this rule would lead to the utmost con¬
fusion and to endless strife between courts of concurrent
jurisdiction deriving their powers from the same source ; but
how much more disastrous would be the consequences of such
a course in the conflict of jurisdiction between courts where
powers are derived from entirely different sources, while the
jurisdiction is concurrent as to the parties, and the subject-
matter of the suit."
The complainants and their counsel, however, having de¬
clined, in obedience to the order of injunction of the United
States court, which has been executed upon them, to take
any steps in the case further than to submit the matter to
the discretion of the court for its action under the circum-
35
stances, and the court being unwilling so to act as to produce
a collision between it and the United States court, further
than its duty to the parties litigant in the court demand,
and the ends of justice require, and it appearing that Fowle,
Snowden «fc Co., one of the co-defendants, and largely inter¬
ested in its decision, have, through their attorney, H. 0.
Claughton, Esq., who is not subject to the order of injunc¬
tion, moved the court to hear the case, at least so far as their
interests are involved ; but the court being of the opinion
that it would be improper, in the present condition of the
case, to hear the case in part, will allow the said Fowle,
Snowden & Co., or any other of the defendants, similarly
situated, who may deem it necessary, to file cross bills, as¬
serting their various equities and priorities against the plain¬
tiffs and their co-defendants ; and this cause is recommitted
to the commissioner for any further report that either of the
parties may deem expedient, and for such further execution
of the order of November 1, 1866, as maybe necessary.
Decree, November Term, 1867.
This cause coming on again this day to be heard on the
papers formerly read, the report of Commissioner Wm. C.
xeaton, the petition of the Mayor, Board of Aldermen and
Board of Common Council of the city of Washington, and
the petition of Coleman, the National Union Bank
of Baltimore, the National Exchange Bank of Baltimore,
Horatio K. Eiddle, Allan Chapman, D. A. Given, D. W.
Jones, L. M. Flournoy, and V. S. Bay, trading as Given,
Jones & Co., citizens of the States of Maryland, New York,
and Kentucky, and being argued by counsel ; on considera¬
tion whereof, the court being of opinion that the request of
the Mayor, Board of Aldermen and Board of Common Coun¬
cil of the city of Washington is reasonable and ought to be
granted, doth order and direct that the said petitioners be
united and joined as complainants in this cause. And it
further appearing to the court that the petitioners, Coleman,
the National Bank of Baltimore, and others, who have filed
their said petition to be made parties defendants to this cause,
are the same persons who have heretofore obtained an in¬
junction from the honorable circuit court of the United
States for the State of Virginia against James S. French and
others, enjoining the said French from the prosecution of
this suit ; and it appearing to the court, for the reasons set
forth in the said petition, that the prayer of the petitioners
36
is reasonable, doth order and direct that said petitioners be
made parties hereto, and that the suit be proceeded in here¬
after against them as co-defendants, and to this end the
plaintiffs are required to amend their bill.
And the court deeming proper, at this stage of the cause,
to express its opinion on some of the questions herein in¬
volved, with a view to a speedy determination of the same,
doth adjudge, order, and decree that the whole proceeding
of the county court of Alexandria county, at its February
term, 1862, substituting Joseph B. Stewart as trustee, in lieu
of Walter Lenox, under the deed of trust of the 16th of
July, 185T, was without authority of law, and null and void ;
and that all the subsequent proceedings of the said Stewart
under said deed, his sale of the said road and its franchises
to Alexander Hay, and the incorporation of the said Wash¬
ington, Alexandria and Georgetown Kailroad Company grow¬
ing out of the said sale, are null and void, and that the same
should be set aside and annulled.
And it further appearing to the court from the petition of
Coleman and others, that since the proceedings aforesaid
various interests of large magnitude have supervened, which
will render it inexpedient at this time to make a decree for
the restoration of the road to the complainant, the Alexan¬
dria and Washington R. R. Co., until said interests shall
have been further investigated, the court doth permit that
the said road remain under its present management, subject
to the future orders and decrees of this court. And all other
questions not embraced in this order are reserved for future
consideration, and leave is granted to any and all of the
defendants in this cause to apply to this court for such other
and further relief, either by petition or cross bill, as they
may be advised by counsel to be expedient and proper, and
leave is granted to all or any of the parties to file exceptions
to report of Commissioner W. C. Yeaton.
Opinion of the Court, August Teem, 1868.
Upon the application of Charles R. Coleman and others,
defendants, for a removal of the cause to the circuit court of
the United States.
By article 3d, section 2d of the Constitution of the United
States, it is declared that the judicial power shall extend
to cases between citizens of different States, and by the judi¬
ciary act passed September, 1789, it is provided, " If a suit
be commenced in any State court by a citizen of the State in
which the suit is brought against a citizen of another State,
37
and the matter in dispute exceeds the sum or value of $500,
the defendant may, at the time of entering his appearance
in such State court, file a petition for the removal of the
cause for trial into the next circuit court of the United States,
and it shall he the duty of the State court, upon the party
petitioning complying with the provisions of the act, to pro¬
ceed no further."
Under this act, it has been settled that a suit cannot be
removed when a part of the plaintiffs or defendants are citi¬
zens of the State where the suit is brought, and of some
other State, (4 McLean, 363,) and in order to remove a cause
from the State to the United States court, all the defendants
must join in the petition for the removal. (2 Sum., 339.)
This right of removal is then an individual personal right
which must be exercised by each individual party, and each
one must assert the right for himself.
Thus the law remained under the construction given by
the courts until July, 1866, when the Congress of the Uni¬
ted States, by an act of that date, provided, that in any suit
already commenced, or that may hereafter be commenced, in
any State court, by a citizen of the State in which the suit is
brought, against a citizen of another State, a citizen of the
State in which suit is brought is or shall be a defendant, and
if the suit, so far as relates to the defendant who is the citi¬
zen of a State other than that in which the suit is brought,
or if the suit is one in which there can be a final determina¬
tion of the controversy, so far as it concerns him, without
the presence of the other defendants as parties in the cause,
then he may, at any time before the trial or final hearing of
the cause, file a petition for the removal of the cause as against
him into the circuit court of the United States.
By this act, the right to the removal of causes from the
State court is enlarged to embrace cases then pending, or
which might thereafter be brought, and the time extended
to any period, prior to the final hearing of the case as to the
defendant seeking the removal, and not necessarily embra¬
cing the other defendants, but with the condition, however,
that there can be a final determination of the controversy, so
far as it concerns him, without the presence of the other de¬
fendants. In other words, that the suit can be proceeded
in as a separate and independent proceeding, to which the
others are not necessary parties.
This act of July, 1866, was amended by an act passed
March 2d, 1867, and provides, that where a suit is now pend¬
ing, or may be hereafter brought in any State court between
38
a citizen of the State in which the suit is brought and a cit¬
izen of another State, such citizen of another State, whether
he be plaintiff or defendant, if he will make and file an affi¬
davit in such State court that he has reason to and does be¬
lieve that from prejudice or local influence he will not be
able to obtain justice in such State court, may, at any time
before the final hearing or trial, file a petition for removal,
and it shall be the duty of the State court to proceed no fur¬
ther.
The original defendants in this cause, prior to the passage
of this act, filed their petition for a removal of this cause,
which was overruled by the court, and now the defendants
made, under the order of the court, under the amended hill
filed, now file their petition, accompanied by the necessary
affidavit, and ask for a removal of the case.
If this latter act stood alone, it may he that its terms are
sufficiently comprehensive to include this application ; hut
as one part of a statute is properly called in to help the con¬
struction of another part, and is fitly so expounded as to
support and give effect, if possible, to the whole, so is the
comparison of one law with other laws made by the same
legislature, or upon the same subject, or relating expressly
to the same point, enjoined for the same reason, and attended
with like advantage.
It is, therefore, an established rule of law that all acts in
pari materia are to he taken together, as if they were one
law, and they are directed to he compared in the construc¬
tion of statutes, because they are considered as framed upon
one system, and having one object in view. And the rule,
it is said, equally applies, though some of the statutes may
have expired, or are not referred to in the others. Da—.,
699, 700, 16 Grat., 8, in which Judge Moncure ably exam¬
ines the subject of the construction of statutes.
Again, this last act contains no repealing clause or words,
and therefore it repeals nothing expressly, neither does it
by implication ; for there is nothing in the act repugnant to
or contrary to the provisions of the act of 1866. It merely
enlarges the right to the plaintiff, as well as to the defend¬
ant, to remove a cause, with no modification of the act of
1866, which provides that the case can he removed as to the
particular party when final judgment can he had, so far as
it concerns him, without the presence of the other defend¬
ants as parties to the cause. This the court has heretofore
decided as to the original defendants, who are citizens of an¬
other State, prior to the defendants now submitting this
39
motion being admitted as parties to the cause, and it now
decides, for the same reasons, that the petitioners are not en¬
titled to a removal.
The petitioners also demand that the case shall he removed
under the provisions of the act of March, 1863, amended hy
the act of May, 1866.
I do not think these acts can apply to this case ; they are
confined to the suits brought in the State courts against offi¬
cers and others for acts done hy them hy virtue or under
color of any authority derived from or executed hy or under
the President of the United States or any act of Congress ;
and as the case, nor any act done, arose under any such order
or authority, the application cannot he granted.
Motion overruled.
Decree, August Term, 1868.
This cause coming on this day to he heard upon the papers
formerly read, on the amended hill, answers, and exhibits,
and upon the application of C. R. Coleman and others for a
removal of this cause to the circuit court of the United States
for the district of Virginia, the motion of the same parties
to strike out the setting of this case for hearing hy the clerk,
and that the case he set down for hearing on demurrer, and
the exceptions of the said Charles R. Coleman and others to
the commissioner's report returned in this cause, and argu¬
ment of counsel being heard : On consideration whereof the
court overrules the said several motions of the said Coleman
and others, and the court proceeding to make such decree
herein as it is advised it is right and proper, doth adjudge,
order, and decree, that the order of the county court of Alex¬
andria, made on the 3d day of February, 1862, removing
Walter Lenox, trustee, under the deed of 16th July, 1857,
and substituting Joseph B. Stewart in his stead, was witli-
out authority of law, the same is hereby declared null and
void and set aside, and that all the proceedings of said Jo¬
seph B. Stewart as substituted trustee subsequent thereto,
his sale and conveyance of the said road to Alexander Hay
and Joseph Thornton on the 14th April, 1862, and the or¬
ganization thereunder of the company styled the Washing¬
ton, Alexandria and Georgetown Railroad Company, were
illegal, and are hereby annulled and set aside. But it ap¬
pearing to the court, that hy virtue of the said sale and con¬
veyance, a new company styled the Washington, Alexandria
and Georgetown Railroad Company was organized, which
40
took possession of the said road, has equipped and operated
the same, and has issued large amounts of stock, by virtue
of an act of the General Assembly passed January 23, 1864,
authorizing an increase of its capital stock to an amount not
exceeding in the aggregate five hundred thousand dollars,
and to issue and sell its bonds to an additional amount of
two hundred thousand dollars ; and it further appearing
that the said company has created debts and incumbrances
upon the same ; and further, that under the authority afore¬
said, to issue stocks and bonds to a limited amount, a large
amount has been issued in excess of said authority, which
have been sold, and are now in the hands of the purchasers
thereof, and with a view to ascertain what equities may ex¬
ist, growing out of said transactions, the court doth further
order, adjudge, and decree, that one of the commissioners of
this court do inquire into, ascertain, and report :
1st. What was the amount of the liabilities of the Alex¬
andria and Washington Kailroad Company on the day of
the sale made by Joseph B. Stewart, viz ; 10th April, 1862,
to whom due, with the priorities.
2d. What was the condition of the road at the date of the
sale, as regards its capacity for transportation, and in whose
use was the road at the time, and when the parties then in
possession transferred the same, and to whom.
3d. What amount of liabilities has been contracted by the
Washington, Alexandria and Georgetown Kailroad Company
since the 10th April, 1862, to whom due, by whom, and by
what authority said liabilities were contracted, and if any
such since that date have been paid, by whom, under what
authority, and from what source were the funds necessary
derived.
4th. What amount of stock of the said new company was
issued, by whom, and by what authority ; what amount was
paid for, and by whom, and by whom received.
5th. How much of said stock thus issued was genuine
stock issued by the company under its authority, and how
much was spurious, and by whom, and under what circum¬
stances the same was issued.
6th. What amounts have been expended in the reconstruc¬
tion and equipment of said road since 10th April, 1862, to
whom paid, and from what source the funds were derived.
7th. What real estate in Virginia has been purchased since
that date, at what price, how much remains due thereupon,
and to whom.
8th. What amount was received from the United States
41
Government for the transportation of troops, and how ex¬
pended, and what amounts are now due for that service.
9th. That he take an account of the earnings of the said
road since the 10th April, 1862, and any amounts received
by the new company for earning prior thereto, what amount
of improvements since that date have been placed upon it,
and by whom, and how paid for, and what amount of prop¬
erty belonging to the Alexandria and Washington Railroad
Company was received by the said new company, and how
disposed of, or by the defendants or any of them.
10th. That the exceptions taken to the former report by
Coleman, &c., as well as the report itself, be recommitted ;
that the commissioner be required to take any further testi¬
mony that may be submitted by any of the parties to the
cause, and that he proceed to take the account and make the
inquiries required under the former decree, except so far as
they may be comprised in this order, and that in executing
this decree, he will state any other matter which he may
deem pertinent or that any of tlie parties may require ; and
to carry this order into effect, that he may propound such
interrogatories to either of the parties to this cause that he
may deem material, and that of the taking of this account
he give notice according to law by publication, which shall
be deemed equivalent to personal service.
And the court doth further order, adjudge, and decree,
that inasmuch as the Washington, Alexandria and George¬
town Railroad Company have acquired no legal title to the
said road under the proceedings of the county court of Alex¬
andria, or the acts of the said substituted trustee, tbat the
said road now in possession of the officers, agents, lessees,
or servants of the said Washington, Alexandria and George¬
town Railroad Company be restored to the possession of the
Alexandria and Washington Railroad Company, its duly
constituted officers and agents.
But it appearing to the court, from the proofs filed in this
cause, that the said Alexandria and, Washington Railroad
Company is largely indebted, and has cioated incumbrances
upon the said road, by deeds of trust in favor of the city of
Washington, Fowle, Snowden & Co., and Benjamin Thorn¬
ton, and that there are other liens existing thereupon prior
to the organization of the new company, and that the said
company may be, upon a further and final hearing of this
cause, held to a certain extent res[ionsible for the debts and
liabilities incurred by the new company, upon which the
court ex])resscs no opinion, doth further order, adjudge, ami
42
decree_, that before so mach of this decree as requires the
restoration of the road to the Alexandria and Washington
Kailroad Company shall take effect, the said company, or
some one for them, shall enter into bond, with sufi&cient
security, to be approved of by the clerk of this court, or the
judge thereof, in the penalty of $50,000, faithfully to ac¬
count for the receipts and expenditures of the said road.
And it is further required and directed that" said company
shall report its proceedings, with a full account of its re¬
ceipts and expenditures, with the cash on hand, to the first
day of each term of this court, subject to its order.
And at the instance of the defendants, who desire to pre¬
sent an appeal, the execution of this order is suspended until
15th November next, upon such person or persons giving
bond before the clerk of this court in the penalty of five
thousand dollars, conditioned according to law.