WEIDENFELD ". SUGAR RUN· R.
contract by parol evidence, but we are simply seeking to discover what the contract actually was, as exhibited in writing made at the time. I . understand the rule to be that all contemporaneous writings relating to the same subject-matter, while the controversy exists between the original parties or their representatives, are admissible as evidence, and that extrinsic evidence is admililsible to show which· paper expresses the real intention and agreement of the parties. Payson v. Lam8on, 134 Mass. 593; Hunt v. !Jivermore, 5 Pick. 395. The defendant argues that the writing on the stub was a mere private memorandum made by the cashier for bis own convenience. There is no allegation in the bill to this effect. The bill alleges that, at the time the certificate was given, "said cashier made a memorandum thereof by making, or to bemade, the figures 2i per cent. on the stub or margin of the book from which said certificate was taken.» In a certain sense, the stub and the certificate cut from it may be said to constitute but one at all events, in my opinion, both may be consulted in order to ascertain what was the real contract between the parties. Demurrer overruled.
WEIDENFELD ". SUGAR
RUN R. 00. etal.
(Circuit Court, W. D. Pennsywanw. January 7, 1899.)
L RAILROAD ·COMPANIES-DuTIES 011' DIRECTORS-DELEGATION Oll' POWER-LoCATING
Under Act Po.. Feb. 19,1849, imposing upon the president and directors of a rail· road company the duty of locating its road, this duty cannot be delegated to an executive committee appointed under the by-laws to have "general supervision of the operations and policy of the company," with power to authorize its officers to execute "such contracts and agreements" as the committee may deem expedient; and a location made by such a committee is void,as against a subsequent location on the Same ground by the directors of another company baving the right of emi· nent domain. 9. SAHE-E1tIINENT DOMAIN-PRIVATE USB. A railroad to be solely for the private use of the controlling stockholder in conveying tan-bark from a certain tract of land to his mills is not entitled to exercise tbe right of eminent domain, thougll company Is organized under Ac' Po.. April 4, 1868, whiob provicles for the formation and regulation of publio raU· road companies. 8. SAHE-JumSDICTION OF FEDERAL CoURTS. . Act Po.. June 19, 1871, provides that when it Is alleged that the private rigllts 01 individuals or corporations are injured by any corporation claiming a franchise to do the aot from which the injury results, the court may inquire whether such COliporation does in fact possess such franchise, and, if it does not, may enjoin it from committing the injurious acts. Betd, that this equitable right may be administered in a federal court, by Inquiring whether a corporation organized under the general, railroad luw is not Intended for a purely private purpose.
" SAHE-RIGHTS 01' STOCKHOLDERS.
A stockholder of a railroad compa.ny wbich bas located and. partially constructed its line may mai/ltain a bill to enjoin a rival company from appropriating this work to its own use, when be shows that the directors of his own ·company are acting in sympatby with the rival company, have furnished it with knowledge of certain defects which render their own lOcation invalid, and have refused to resist such appropriation.
In Equity. Bill by O. Weidtmfeld against the Sugar Run Railroad Company and others to restrain that compary from appropriating the
right ()f way 'of. the Allegheny & :Kinzua Railroad Company, in which C,bmplainant is a stockholder. Preliminary injunction granted. O. W<tlterArlz, for complainant. H. O. Dornan and John Ormerod, for defendants.
REED, J. T.he complainant's bill shows that, in a proceeding in the circuit courtdor the northern district of New York between the same complainant and the Ailegheny & Kinzua Railroad Company, S. S. Bullis. and :Mills & Barse, as defendants, a preliminary injunction was granted on the 18th of July, 1891. restraining those defendants from interfering or aiding any interference with the Interior Construction & Improvement Company in the execution of its duties under certain agreements with the defendants, and from constructing or aiding the construction of any competitive or other line of railroad; in violation of said agreements. That among the lines of railroad prop,osed to be .constructed uuder said agreements was what is known as the "Sugar Run Branch of the Allegheny & Kinzua. which wlls designed, ,anwng other things, to reach certain timber land of Messrs. Bullis and Barse, which they had agreed to place under the lien of a mortgage given to secure the bondholders of the Allegheny & Kinzua Railroad Company, and from which branch the latter company expected to derive a large rev· enue in transporting theltimber coming from said lands. That Run,Railroad Company, subsequently,in November, 1891, the defendant in this case, was incorpomted, and the route of its rail. road surveyed and located in greater part over the route of the Sugar of the & Kinzua Railr.oad,.,That the Sugar Run Railroad Company wllsorganized byA. A. Healy and others named as pefendants, in collusioll with the said Bullis,with the especial purpose of evading the injunction of the said circuit court. The of colluil.i()uis denied both by the answers ofthe defendants and by their affidavits, alld has not been established by the plaintiff. While there is shown to lead to the conclusibnthat the <;>f:ficers of the Allegheny & Kinzua Railroad, and particularly its president, Mr. Bullis, have regarded with complacency the organization of this rival railroad, and its appropriation of the route and grading of one of the branches of their ;railroad, and while they have made no effort to protect the interests of iheir company, yet, so far as sh6wn, the defendant company has organized and is proceeding with its work as a separate enterprise, and its promoters are acting in independence °of Mr. Bullis or the Allegheny Kinzua Railroad. The injunction cannot be continued on this ground. In this connection it may be said that the defendant Healy is the owner of a large quantity of bark, which he reserved in a sale of timber land Bullis in 1887, and which the defendants allege he is anxious to transport to his tanneries, and therefore he and his associates are. constructing the defendant company's railroad with that object in view; Mr. Bullis and his assignee, the Allegheny & Kinzua Railroad Company, having failed, according to the terms of the agreement between Messrs. .Bullis and Healy ·. to construct said railroad and transport said bark.
WEIDENFELD '11. SUGAR RUN R. CO.
So far Mr. Healy seems to be acting for his own protection and in his own interest, and not in the interests of Mr. Bullis. The plaintiff further contends, however, that, as a stockholder of the Allegheny & Kinzua Railroad Company, he is entitled to ask that its rights in the Sugar Run branch be protected; that it had located this branch, and had graded and cleared several miles of its route, which work the defendant company has appropriated, and is preparing to lay its railroad in part upon this graded road-bed. The defendant company c1air,nspriority oflocation and title, as between itself and the Allegheny & KinzuR Company, to the route; and its counsel contend that under thela\V of Pennsylvania it is entitled to appropriate this route regardless of thew()rk done by the latter company.' It appears from the affidavits that the actual location in behalf of the latter company was made by the Inleriof Construction & Iinprove[l}ent Company, the contractor' for itl,le construction of its' lines of railroad. The Hne' as located :by 'fhe contractor was appro,ved by ,the executive committee of the' Allegheny && Kinzu'!i, RliilroadCoPlpany, but was never authorized or appll6ve'(l by its board'.of directors. 'The.by-Iaws of the latter company provide for tne of an executive committee, and provide "said committee shall H,ave a generalsu'pervision of the ()p'erations and' policy of the c&m" pany. and shall have power to atlthorize the execution by the president, secretary, or treasurer of such contracts or agreements as saId executi \'e may deem expedient." Thisau'thorization has reference only to' the conduct of the ordinary business and operations of the COlli pany', and does not extend to such important acts as the direction and approval ofthe location of ita lines of railroad. The statute of Pennsylvania, (Act }I'eb. 19, 1849,)nnder which this railroad company'aetsin the structi\>nof its ''railroad, impQses the duty of location upon the presidenit and of the company; and this discretion cannot be 'delegated; nor Cilll.'the board of directors approve and ratify, the unauthorized action of its officers in making such locatidn, as against the rights of another railroad company, which may have attached to the property in question prior to such ratification. Appeal of New Brighton Ry. Co., 105 Pa.St.13; Willia:rMport &: N. B. R. Co. v. Philadelphir'/' &: E. RCa.· 141 Pa. St. 407, 21 Atl. Rep. 645. This question can only arise between two corporations having the right of eminent domain. If the defendant company has' this power, ,and is entitled to its exercise, then, as between it and the Allegheriy' & Kinzua Railroad Company, it would seem entitled to the location, because, as appears, its board of directors have proceeded wIth the location of its line in the manner prescribed by statute; and this is so, although the other company has actually done work \lpon the ground. William.sport &: N. B. R. Co. v. Philadelphia &: E. 'B. Ca., etc., R. Co. v. Warren, etc., R. Co., 12 Phila. 642;, Davia v. Railroad Co., 114 Pa. St. 308, 6 Atl. Rep. 736. It becomes important, then, to ascertain what rights and powers the defendant company possesses. ' It is organized under the general railroad law of Pennsylvania, being the act of assembly approved Aprl14, 1868, entitled" An act to authorize the formation and regulation, of rail-
road corporatipns." Its articles ofassociation state ilult it is to be constructed and maintained.for the term of 10 years, from Sugar Run Junction, McKeanc,ou,nty, Pa., to Sugar Run Station, on the river division of the Western New York & Pennsylvania Railr9ud, in Warren county, Pa., a distance of about 12 miles. Its authorized capital is $120,000, or 1,200 shares., of $100 each., . Of this capital stock 269 shares have 250 of which are subscribed for by A. A. Healy, 10 shares by .Mr.Lewis,llis attorney, and the remaining 9 shares by 9 persons.'rhe AllE1gheny '&;.Kjnzua Railroad Company has the right under its charter to build the Sugar Run branch over the route in question, the defect being, as in the location of its line upon the ground; and, the. coPlplainantcontends that the. defendant company is a private enterprise for .the beneS,t of the defendant Healy; that he is attempting the powers copferred by the statute for his own private purpose; to .and that the AlleghenY & I):inzua Cqmpany, or the complainant as a stockholder in the latter, company, have such standing as .io be able to mise the ,question. read on behalf of the defendants, of Healy,: and Browq, statements o(Mr. Healy to Messra"Smith and Byrne,. as stated in their affidavits. and .the comcqu,ncils of the city ,of Brad,ford, set munication of Mr.; Roberts to forthin,· affidavit .of A. G. McComb, satisfy me that .the purpose of of the Sugar Run Railroad Company was a private one, the namely, to reach and transport the bark belonging to or purchased by the firmo! Bealy & Sons for use at. their tanneries. Although its pro.moters proff;llls .that it is organized for a public purpose, yet they have faile<;l to show any public usc or necessity for the railroad, nor any pub,lictraUic. that it will obtain when constructed. Measrs. Healy and to secure Brown admit that tlleirpurpose In subscribing to the a means of reaching the bark they needed for the tannerieS; and as the stock is held by themselves, their attorneys and business associates, it is probable that their motive in subscribing to the stock actuated all the subscribers for one share each. The. company is organized for the short 10 years, and ismllnifestly intended to meet a temporary necessity. Rfollows, therefore, that its stockholders are endeavoring to use of. eminent domain, for a private its corporate powers, including , purpose. Whether the. use is a public one, for which privl;lte property may be is ajulUcial question. If the use itself is found to be only private, or, further, if, the use being public. the appropriation canin no respect subservient thereto, iqs the duty of the judicial department to prothe citizen by proper remedies from the taking of his propelty, :whether attempted in l;)pen disregard of or under color of Ia w. Pierce, BO,07n Q>.v. U. S.403. By .· statute of Pennsylvania, (Act June 19, 1871,) it is provided that, in proceedings ,in COl+l'tS of law or eq\*y, ill which .it is alleged that the private of individuals or of corporations are or invaded Qyany corporation claiming a right or franchise tq .do the act from which such injury results, the. cpurt may inquire and.asqertl:j.ip. whether sucb corporation
WEIDENFELD t7. SUGAR RUN B.CO.
does in fact possess the right or franchise to do the act,· and, if such rights or franchise have not been conferred on such>corporation, such courts, if exercising equitable powers, shall by injunction, at suit of the private parties or other corporations. restrain sueh injurious acts. This equitable right may be administered by a court of the United States. Ho'tland v. Challen, 110 U. S. 15, 3 Sup. Ct. Rep. 495. In the case of Appeal of Edgewood R. Co., 79 Pa.St. 257, it appeared, as in this case, tbat a number of persons had procured a charter for a railroad company, and, under cover of constructing a railroad for public use, were engaged in the construction of a railroad from a tract of coal owned by themselves to the Pennsylvania Railroad. A bill was filed by a property holder to restrain the appropriation, by virtue of the power of eminent domain conferred upon the railroad company, of a portion of his property for its uses. The supreme court of Pennsylvania, finding the facts to be that the railroad was projected and constructed with the primary object of connecting the coal mines with the Pennsylvania Railroad, held that the railroad was being constructed for private purposes under cover of a charter obtained under the general railroad laws of the state; that there appeared a perversion of an enactment passed for one purpose, in order to subserve other and inconsistent purposes; that the charter of the defendant company did not warrant the appropriation of the land of the plaintiff for· the purpose to which the defimdant had applied it; and that it did not possess the right or franchise to do the acts which had resulted in the injury of which the plaintiff complaiued. In Appeal of Western Pennsylvania R. Co·· 104 Pa. 81. 399, the same court, commenting upon the Edgewood R. Co. Case. .. A charter authorizing the building of a public railroad did not warrant the construction of a purely private one. * * * 'fhe question was one of corporate power. and t.hat qUl'stion was determined by the inspection of the charLer of the company proposing to exercise the power." In the present case it is stated in the affida vits that deeds for this land, upon which the Allegheny & Kinzua Company has partly constructed its railroad, are in the possession of its officers, but, however that may be, it is in possession of the land, and has by that possession sufficient interest to question therigbt of the defendant company to dispossess it and appropriate the land. One other question was raised, namely, the right of the complainant to maintain the bill in this case as a stockholder of the Allegheny & Kinzua Company. The hill contains the averments required by the rule in equity, that the complainant was a stockholder at. the time tbe transactions took place of which he complains, and thai the suit is not a collusive one. It furtber alleges thattbeofficers and directors of the Allegheny & Kinzua Company are not only not aoting for the interests of their corporation, but are acting in sympathy with the defendants interested iIi the8ugar Run Company; that the defendant Bul1is and his associates thus acting are II. majority of· the board of directors, and owns. major portion of the stoGk of the company; that they are nqw acting in such bad faith and disregard of their duties.
." f'J!;J!ERAL REPOR'l'ER,
Mr: Smith's4f1idavit ahows that the boaru refused to direct steps to be taken to resist the appropriation of the property of the· company and interference with its rights, and Mr. Bullis has been seen upon the line with the president of the Sugar Run Company since the latter company commenced work. It also appears that the information as to defects in location was furnished to the officers of the latter company by the om· c.Elrs of the Allegheny & Kinzua Company. The complainant, as a stockholder, is injured by these unlawful acts on the part of the Sugar BUI).Compuny, with the consent and acquiescence of the officers and directors of his company. It is clear that this iE! a real grievance, and areaLaud meritorious application by the complainant to prevent a to the corporation within. the ruling of Justice HARLAN in the cs-se of County of Tawwell. v. 1'1'/!;8tOo., 12 Fed. Rep. 75.2. Ina previous case between the same complainant and. the AIleKinlluaCompany and its directors,the complainant was seek. iUg .8sastockholder to settle the contract relations. between that company and ,the Interior Construction Company, of which, he was an offieer, and the officers aLtha, railroad company grew out of tposecoQtract relations. This court then thQught be had not shown suchstandhlg, in view oLthe requirements of rule 94, as, to sustain his bill·. " Weidenfeld v. Railroad Co., 47 Fed; Rep. I!. This is a different case'.: No contract relatLons are involved in ,this case. The attempt is tostdpthe company (:)! its propertYl in which the complainant as a stockholder bl\S a direct Jnterest, and there is such a disregard of duty of manifest official obligation, amounting to what the law considers a .breach ·of trust, that it is a case in which the stockholder .ha.s:alJ;ight to .interfere. Hdoes not involve a discretion as to thebringwKofsuit which ought properly to be left to the judgment of the'board(jf directors or ,of the majority of the stockholders, for here a portion of the corporate property and the exercise of the franchises of the route in questiouare in jeopardy, and its officers, duty, are consorting with itsenemies"andfurnishingthem ;witb to the defects in its rights to :the use of the route·.' While the CJuestion is not entirely free from doubt, yet I thinksuflicient.is shown by the ,complainant to give him standing in this application. . A, .preliminary injunotion should issue, therefore, restraining. the Company, its officers, agents,contractors, and employes, from interfering with the line of the Sugar Run Branch of the .4J.,legheny&.Kinzua Railroad Company; as.projected and, pattlygraded. So Jar as the· restraining' order relates to. construction by the Sugar Run' El.lilroadCompanyof portions of its railroad which do not interfere with the lineaf: ,branch, it should be dissolved; otherwise it should contlnue ip. until the writ of injl:lnction issue, which should only be upon theAiling by the complainant of an injunction bond, in the sum to indemnify the said Sugar Run Railroad Company,. with &"qretiesto be approved by the court. And it is so ordered.,
SIOUX 'FALLS NAT. BANK'
BANK 11. SWENSON
(Cf,rcuit COW1't, D. South. DaJrota. January 5,1892.)
TAXATION OF NA.TIONAL BANKS-INJUNCTION-FEDERAL QUESTION.
A bill to enjoin the collection of taxes assessed against a national bank and against the stockholders on their shares, on the grounds that the taxation was double, that the stockholders were not' allowed to set off debts against the valuation of their shares, and that the board of equalization illegally increased the assessment, raises the federal question of the validity of the tax, under Rev. St. U. S. § 5219, prescribing the method in which national bank shares may be taxed. Compo Laws S. D. § 1570, makes it the duty of a bank and its officers to retain so much of thll dividends belonging to its stockholders as shall be necessary to pay the taxes levied upon their shares until the tax has been paio, out does not require the bank to pay the tax out of the fund thus retained. Hc!q, that when a national bank sues in its own behalf and for its individual stockholders to enjoin the collection of a tax assessed against the capital stock, and also against the shares as the property of the stockholders,and does not aver that it has in its hands or under its control any dividend helonging to stockholders wllich could be aJlPlied to pay the taxes, the proceeding'is bi separate and distinct rights; and the jurisdictional amount must heideterminedbythe amount of the tax against each complainant, and not: by the tax llgainst all.
S,UlE-JURISI>ICTIONAL AMOUNT-How ASCERTAINED.
In Equity. Suit byihe Sioux Falls National Bank against Ole S. and others to enjoin the collection of taxes. Keith kBate8, fO!'COblplainant; , , D. R.' Bauey, Brockway, and Park Davis, for defendants. Befo!e'SHIRAsrtnd EDGERTON, JJ. SHIRAB, J. The bilHil this cause is file4 by complainant, the Sioux :J!'alls National Bank, in its own behalf, and also in behalf of itsstbCk. holder$,fof the purpose of restraining the collection of certain taxes year against said bank and its shareholdors for state, county, and city pnrposes, the defendants being the county treasurer of Minnehaha 'county, S. D., the county of Minnehaha, and the city 'of Siorix.Falls. It is averred in the bill that, in addition to ment made against the several shareholders of said complainant'bank; there was also assessed against said bank, upon its capital stock, the sum of $28,500, the same being in form an assessment made in the name of C. E. McKinney,the president of the bank, which said assessment was afterwards increased 75 +per cent. by the state board of equalization; and it is charged that this assessment, and the taxes levied are illegal and void, because, in effect, the same is a double as.. sessment. In theariswer filed herein it is admitted that the assessment and the taxes based thereon are void, and it is averred that the board of of Minnehaha county on the 31st day of January, 1891, adopted a resolution declaring the assessment and the ta)(es levied thereon null arid void. There is some question as to the power of the board to thus annul taxes payable ttfihe state and city, and therefore the complainant seeks an injunction restraining the enforcement of the taxes admitted to be ille. gally Touching the assessment made against the several share. holders inthe bank, it is averred in the bill that the assessor, in the first