executor, having received the same, retain it for purposes of administration, but each child is entitled to an equal share, and may recover it of the executor in an action for money had and received. Fogg v. Perkins, 19 N. H., 101; Walton v. Cotton, 19 How., 357 [60 U. S., XV., 659].

It is competent for Congress to enforce, by suitable penalties, all legislation necessary or proper to the execution of power with which it is intrusted, and any act committed with a view of evading such legislation or fraudulently securing its benefits may be made an offense against the United States. U. S. v. Fox, 95 U. S., 670 [XXIV., 538].

Acts of Congress granting such donations to officers, soldiers and seamen, or to their widows or children, in some cases direct that the pay.

and that the circuit court is vested with the jurisdiction to try the offender and sentence him to the punishment which the Act of Congress imposed. 2. That the defendant, under the circumstances disclosed in the record, was liable to indictment in the Circuit Court of the United States. 3. That the Act of Congress defining the offense set forth in the indictment is a valid and constitutional law enacted in pursuance of the Constitution.

Let answers be certified in conformity with this opinion; that is, the answer to the first question must be in the affirmative, and the answers to the second and third questions should be in the negative.

ment may be made to the attorney or agent of THE ATLANTIC AND GULF RAILROAD

the beneficiary, and in other Acts the direction is that the payment may be made to the guard. ian of the party, and in still another class of such Acts the requirement is that the money shall be paid directly to the beneficiary. 4 Stat. at L.. 350; 3 Stat. at L., 569.

(See S. C., 8 Otto, 359-366.)

Consolidation of railroad companies-exemption from taxation-state judgment.

*1. By the statutory Code of Georgia which came

in force January 1, 1863, it was enacted that private corporations were subject to be changed, modified or destroyed at the will of the creator, except so far as the law forbids it: and that in all cases of private charters thereafter granted, the State reserved the right to withdraw the franchise, unless such right is expressly negatived in the charter. Two railroad corporations created prior to 1863, emption from taxation, were consolidated by virteach of which enjoyed by its charter a limited ex

For the defendant, it is insisted that when the payment is made to the guardian the money paid ceases to be within the constitutional control of the United States, and that the Act of Congress, which enacts that the guardian who embezzles the money or fraudulently converts the same to his own use is guilty of a misdemeanor, is unconstitutional and void. But the court is unhesitatingly of a different opinion, for several reasons: 1. Because the United States, as the donors of the pensions, may, through the Legislative Department of the Gov-ue of an Act of the Legislature passed on the 18th ernment, annex such conditions to the donation of April, 1863, which authorized a consolidation of as they see fit, to insure its transmission unim. their stocks, conferred upon the consolidated companies full corporate powers, and continued to it paired to the beneficiary. 2. Because the guard the franchises, privileges and immunities which ían no more than the agent or.attorney of the the companies had held by their original charters. pensioner is obliged by the laws of Congress to Held: 1. That, by the consolidation a new Correceive the fund'; but if he does, he must ac-poration was created and the original companies were dissolved. 2. That the new corporation becept it subject to the annexed conditions. 3. came subject to the provision of the Code which reBecause the word “guardian," as used in the served the right of the Legislature to withdraw its Acts of Congress, is merely the designation of charter or to change, modify or destroy it. 3. That a subsequent legislative Act, taxing the property the person to whom the money granted may be of the Corporation as other property in the State is paid for the use and benefit of the pensioners. taxed, was not prohibited by that provision of the 4. Because the fund proceeds from the United State the power of passing a law impairing the obConstitution of the United States which denies to a States, and inasmuch as the donation is a vol ligation of contracts. untary gift, the Congress may pass laws for its protection, certainly until it passes into the hands of the beneficiary, which is all that is necessary to decide in this case. 5. Because the elements of the offense defined by the Act of Congress in question consist of the wrongful acts of the individual named in the indictment, wholly irrespective of the duties devolved upon him by the state law. 6. Because the theory of the defendant that the Act of Congress augments, lessens or makes any change in respect to the duties of a guardian under the state law is entirely erroneous, as the Act of Congress merely provides that the pension may be paid to the person designated as guardian, for the use and benefit of the pensioner, and that the person who receives the pension, if he embezzles it or fraudulently converts it to his own use, shall be guilty of a misdemeanor, and be punished as therein provided.

Viewed in the light of these suggestions, it is clear that Congress possessed the power: 1. To define the offense set forth in the indictment,

2. The judgment of the highest court of a State, that a statute has been enacted in accordance with the requirements of the State Constitution, is conclusive upon this court, and it will not be reviewed. [No. 103.] Argued Dec. 23, 24, 1878. Decided Jan. 27, 1879.

Ν

IN ERROR to the Supreme Court of the State

of Georgia.

An issue was formed in this case, in the Superior Court of Fulton County, Georgia, upon an affidavit of illegality, concerning a fieri facias

*Head notes by Mr. Justice STRONG.

NOTE. When consolidation dissolves former companies. See note to Shields v. Ohio, 95 U. S., XXIV.,

357.

Jurisdiction of U. S. Supreme Court to declare state taw void as in conflict with state constitution; to revise decrees of state courts. Power of state courts to Lamphire, 28 U. S. (3 Pet.), 280.

construe their own statutes. See note to Jackson v.

It is for state courts to construe their own statutes. Supreme Court will not review their decisions, except when specially authorized to by statute. See note to Commercial Bank v. Buckingham, 46 U.S. (5 How.),

317.

for collecting a certain tax. Judgment was given in favor of the validity of the tax, and affirmed by the Supreme Court of the State; whereupon the defendant sued out this writ of

error.

The case is fully stated by the court.

any contract theretofore entered into by either but that this Company should be liable on the same. By the 2d section it was enacted that the stockkolders of said consolidated railroad companies, by such corporate name, and in such corporate capacity, should be capable in law to have, purchase, and enjoy such real and per

Messrs. Robert Falligant, Julian Hart ridge & W. S. Chisholm, for plaintiff in er-sonal estate, goods and effects as might be nec

ror.

Messrs. Robert Toombs, Robert N. Ely, Atty-Gen. of Georgia and C. N. West, for defendant in error.

Mr. Justice Strong delivered the opinion of the court:

The single question presented in this case is, whether the Act of the Legislature of Georgia approved Feb. 28, 1874, whereby it was enacted that the property of all railroad companies in the State should be taxed as other property of the people of the State, impairs the obligations of the contract contained in the charter of the plaintiff in error. The question compels consideration of the inquiry: what was the contract into which the State entered with the Company and what are the rights which the Company holds under it?

essary and proper to carry out the objects there. in specified, and to secure the full enjoyment of all the rights therein and thereby granted, and by said name to sue and be sued, plead and be impleaded, in any court of competent jurisdiction; to have and use a common seal, and the same to alter at pleasure; to make and establish by-laws, and generally to exercise corporate powers.

The 3d section of the Act declared that the several immunities, franchises and privileges granted to the said Savannah, Albany and Gulf Railroad Company, and the Atlantic and Gulf Railroad Company, by their original charters and the amendments thereof, and the liabilities therein imposed, should continue in force, except so far as they might be inconsistent with the Act of consolidation.

The 5th section repealed all laws and parts of laws militating against the Act.

It is conceded that under this Act a consolidation took place. It is, therefore, a vital question: what was its effect? Did the consolidated companies become a new corporation, holding its powers and privileges as such under the Act of 1863? Or was the consolidation a mere alli

Prior to the 18th day of April, 1863, there were two railroad companies in the State, one incorporated on the 25th day of December, 1847, as the "Savannah, Albany and Gulf Railroad," and the other incorporated on the 27th day of February, 1856, with the name, "The Atlantic and Gulf Railroad Company," the same name now borne by the plaintiffs. The charance between two pre-existing corporations, in ter of each of these companies contained a grant of all the rights, privileges and immunities, which had been granted to or were held and enjoyed by any other incorporated railroad company or companies, or which had been granted to the Central Railroad and Banking Company, or to the Georgia Railroad Company, or to either of them. Both these latter companies had been incorporated prior to 1840, and each held by its charter the privilege or immunity of not being subject to be taxed higher than one half of one per cent. upon its annual net income in the one case, and in the other, on the net proceeds of its investments. Consequently, the Savannah, Albany and Gulf Railroad Company, and the Atlantic and Gulf Railroad Company, severally acquired by their charters an exemption from taxation at any higher rate, or in any different manner. And such an immunity they severally continued to hold down to 1863. This, we think, admits of no reasonable doubt. And if their rights are now the same as they were when the original charters of the two companies were first granted, it is quite clear the provisions of the Taxing Act of 1874 could not be applied to them without impairment of the contracts they had with the State. Neither of the companies, however, is now existing under or by virtue of its original charter. On the 18th day of April, 1863, the Legislature of the State passed an Act whereby they were empowered to consolidate their stocks upon such terms as might be agreed upon by the directors and ratified by a majority of the stockholders; and the Act enacted, that when so consolidated they should be known as "The Atlantic and Gulf Railroad Company,' with a proviso that nothing therein contained should relieve or discharge either of them from

which each preserved its identity and distinctive existence? Or, still further, was it an absorption of one by another, whereby the former was dissolved, while the latter continued to exist? The answer to these inquiries must be found in the intention of the Legislature as expressed in the consolidating Act. We think that intention was the creation of a new corporation out of the stockholders of the two previously existing companies. The consolidation provided for was clearly not a merger of one into the other, as was the case of R. R. & Bkg. Co. v. Georgia, 92 U. S., 665 [XXIII., 757]. Nor was it a mere alliance or confederation of the two. If it had been, each would have preserved its separate existence, as well as its corporate name. But the Act authorized the consolidation of the stocks of the two companies, thus making one capital in place of two. It contemplated, therefore, that the separate capital of each company should go out of existence as the capital of that company; and, if so, how could either have a continued separate being? True, the proviso to the first section declared that nothing therein contained should relieve or discharge either of the companies from any contract theretofore entered into by either, adding: "But this company (that is, the company created by the Act) shall be liable on the same." It is thus distinguished between the two original companies and the one contemplated to be formed by their consolidation. And the proviso would have been quite unnecessary, had it not been thought by the Legislature that the consolidation would work a dissolution of the amalgamated companies. Hence it was considered necessary to preserve the rights of parties who might have contracted with them. Only their contracts

were mentioned in the proviso, and that in order to authorize a novation. The 3d section continued in force the several immunities, franchises and privileges granted by the original charters and the amendments thereof, and the liabilities therein imposed, but plainly for the benefit of the consolidated companies. Why speak of original charters, if a later charter was not intended by the Act? That such was the intention appears still more clearly in the 3d section. That conferred upon the consolidated stockholders complete corporate powers. It granted to them, when consolidated, not only a corporate name, but the right under that name to acquire and hold property, to sue and be sued, to have a common seal, to make by-laws and generally to do everything that appertains to corporations of like character. This full grant of corporate power must have been intended for some purpose. What was it, if not to create a corporation? For that purpose it was amply sufficient. For any other it was unmeaning. If the two original companies were to continue in being, if it was not contemplated that they should be dissolved by consolidation, a new grant of corporate power and existence was unnecessary. They had it already.

not have built their road or controlled its management. They could not, therefore, have performed the duties which by their original charter were imposed upon them. Those duties could only have been performed by another organization, composed partly of themselves and partly of others. Their powers, their franchises and their privileges were therefore gone, no longer capable of exercise or enjoyment. Gone where? Into the new organization, the consolidated company, which exists alone by virtue of the legislative grant, and which has all its powers, facilities and privileges by virtue of the consolidation Act. What, then, was left of the old companies? Apparently nothing. They must have passed out of existence, and the new company must have succeeded to their rights and duties. But the new company comes into existence under a fresh grant. Not only its being, but its powers, its franchises and immunities, are grants of the Legislature which gave it its existence.

ties ceased with them, and they have no existence except by virtue of the grant of corporate powers and privileges made by the consolidation Act of 1863. That Act created a new corporation, and endowed it with the several immunities, franchises and privileges which had previously been granted to the two companies, but which they could no longer enjoy.

It necessarily follows that the new company held the rights granted to it under and subject to the law as it was when the new charter was granted. And the Code of the State, which came of force on the 1st of Jan., 1863, before the charter was granted, contained the following provision:

"Section 1051. Persons are either natural or artificial. The latter are creatures of the law, and, except so far as the law forbids it, subject to be changed, modified or destroyed at the will of the creator; they are called corporations."

If, then, the old Atlantic and Gulf Railroad Company and the Savannah, Albany and Gulf Railroad Company went out of existence when their stocks were consolidated under the Act of the Legislature of 1863, their powers, their Looking thus at the legislative intent appear-rights, their franchises, privileges and immuniing in the consolidation Act, we are constrained to the conclusion that a new corporation was created by the consolidation effected thereunder in the place and in lieu of the two companies previously existing, and that whatever franchises, immunities or privileges it possesses, it holds them solely by virtue of the grant that Act made. That generally the effect of consolidation, as distinguished from an union by merger of one company into another, is to work a dissolution of the companies consolidating, and to create a new corporation out of the elements of the former, is asserted in many cases, and it seems to be a necessary result. In McMahan v. Morrison, 16 Ind., 172, the effect of a consolidation was said to be "A dissolution of the corporations previously existing, and, at the same instant, the creation of a new corporation, with property, liabilities and stockholders derived from those then passing out of existence." So in Lauman v. R. R. Co., 30 Pa., 42, the court said: "Consolidation is a surrender of the old charter by the companies, the acceptance thereof by the Legislature, and the formation of a new company out of such portions of the old as enter into the new. This court, in Clearwater v. Meredith, 1 Wall., 40 [68 U. S., XVII., 608], expressed its approval of what was said in the former of these cases. It is true these expressions have not all the weight of authority, for they were not necessary to the decisions made, but they are worthy of consideration, and they are in accordance with what seems to be sound reason. When, as in this case, the stock of two companies is consolidated, the stock holders become partners, or quasi partners, in a new concern. Each set of stockholders is shorn of the power which, as a body, it had before. Its action is controlled by a power outside of itself. To illustrate: the stockholders of the Savannah and Albany Railroad Company could not, after consolidation, have exercised any of the powers or franchises they had prior to their consolidation with the stockholders of the Atlantic and Gulf Railroad Company. They could

"Section 1082. In all cases of private charters hereafter granted, the State reserves the right to withdraw the franchise, unless such right is expressly negatived in the charter."

No such right was negatived in the charter granted to the plaintiffs in error. Consequently the franchise was held subject to a power in the State to withdraw it, and subject to be changed, modified or destroyed at the will of its grantor or creator. These provisions of the Code became, in substance, a part of the charter. R. R. Co. v. Maine, 96 U. S., 499 [XXIV., 836]. It is quite too narrow a definition of the word "franchise," used in this statute, to hold it as meaning only the right to be a corporation. The word is generic, covering all the rights granted by the Legislature. As the greater power includes every less power which is a part of it, the right to withdraw a franchise must authorize a withdrawal of every or any right or privilege which is a part of the franchise. So it was held in R. R. & Bkg. Co. v. Georgia, 54 Ga. 401, and so it must be held now, especially in view of the statutory provision of the Code, that private corporations are subject to be

Cited 105 U. S., 21; 106 U. S., 565; 112 U. S. 623; 16 648); Bk. v. North, 4 Johns. Ch., 370; Steam

Right of national banks to security by mortgage—that all incidental transactions were affected by

But it is alleged by the learned counsel for the defendent in error that in the jurisprudence Here the Bank never had any title, legal or of Missouri a deed of trust is the same thing in equitable, to the real estate in question. It effect as a direct mortgage, with respect to a may acquire a title by purchasing at a sale un-party entitled to the benefit of the security, and der the deed of trust; but that has not yet occurred, and never may.