SAME, Appt.,

0.

Scott and Allen County Railway Company), and against the County Commissioners of Bourbon County and against that County.

The only question presented for our determi- THE CAÑON CITY AND SAN JUAN nation is whether the demurrer was properly sustained.

Our judgment will be confined to a single point.

RAILWAY COMPANY.

See (S. C., 9 Otto, 463-482.)

Dismissal of appeal-railroad grant—location— appropriation-use of cañon in common with

others.

1. Where appeals are being prosecuted to final judgment by order of the directors or trustees of a corporation, this court will not, upon the suggestion of strangers to the decrees appealed from, go behind the official action of the Board of Directors or Trustees and, in plain disregard of their wishes, dismiss the appeals.

There is no privity between the County of Bourbon and the complainant. There has been no assignment, legal or equitable, to him by the Railroad Company of its claim against the County. If there had been an assignment, the Circuit Court could not have taken jurisdiction of the case, because the assignor, if there had been no assignment, could not have maintained a suit upon the thing assigned in that forum. R. S., 109; Sere v. Pitot, 6 Cranch, 332. The rela tionship of the complainant to the Company is that he is its creditor while the County is as sumed to be, and perhaps is, its debtor. The complainant has no lien upon the fund he is 3. Where such location and appropriation were seeking to reach. His case is, therefore, a com-made, the title, which was previously imperfect, mon creditor's bill; nothing more and nothing acquired precision, and by relation took effect as less. There is no statutory provision in Kan of the date of the grant. sas touching such bills. The distinction there between legal and equitable remedies has been abolished. 2 Dasslor's Stat. of Kan., p. 643, sec. 3230.

The law of procedure there recognizes but two forms of action: one is designated a civil, the other a criminal action. The former relates to the assertion of civil rights by suit; the latter, to criminal prosecutions. The Circuit Court of the United States of that district has, nevertheless, full equity jurisdiction. The Federal Courts have it to the same extent in all the States, and state legislation cannot affect it.

Boyle v. Zacharie, 6 Pet., 648. The States, however, may create equitable rights, which those courts will enforce where there is jurisdiction of the parties and of the subject-matter. Clark v. Smith, 13 Pet.,195; Ex parte Me Niel, 13 Wall., 236 [80 U. S., XX., 624]. This bill, as regards this point, was well filed in the court to which it was addressed. But nothing is better settled than that such a bill must be preceded by a judgment at law establishing the measure and validity of the demand of the complainant for which he seeks satisfaction in chancery. Wiggins v. Armstrong, 2 Johns. Ch..144; Hendricks v. Robinson, 2 Johns. Ch., 296; Greenway v. Thomas, 14 Ill.,271; Mizell v. Herbert, 12 Smed. & M. (Miss.),550; Gorton v. Massey, 12 Minn., 147; Skeele v. Stanwood, 33 Me.,309; Sexton v. Wheaton,1 Am. L. Cas., 5th ed., 59.

There are exceptions to this rule, but they do not affect its application to the case in hand. It is, therefore, unnecessary to pursue the subject further.

The decree of the Circuit Court is affirmed.

2. By the Act of June 8, 1872, Congress granted to the Denver Company a present beneficial easement in the particular way over which the routes designated in its charter lay, capable, however, of enjoyment only when the way granted was actually located and, in good faith, appropriated for the purposes contemplated by the charter of the Company, and the Act of Congress.

3. The surveys of the Denver Company of 1871-72, followed by an occupancy of the cañon on the 19th of April, 1878, in advance of the Cañon City Company, for the purpose of constructing its road through that defile, was a final appropriation of the way granted by Congress.

5. When it accepted the benefits of the Act of March 3, 1877, it must be held to have assented to it was declared that any other railroad company, the provisions of the Act of March 3, 1875, whereby duly organized under the laws of any State or Territory, might use and occupy the cañon, for the purpose of its road, in common with the road first located.

[Nos. 811, 812.] Submitted Jan. 6, 1879. Decided Apr. 21, 1879.

APPEALS from the Circuit Court of the Unit

ed States for the District of Colorado. The case is fully stated by the court. Messrs. John P. Usher, James Grant, Hanson A. Risley, Wells, Smith & Macon and Lyman K. Bass, for appellant:

That the Act of Congress granting the right of way to the complainant, approved June 8, 1872, was a grant in præsenti, will not be questioned, for it is established by a multitude of decisions.

Schulenberg v. Harriman, 21 Wall., 44 (88 U. S., XXII., 551); Leavenworth, etc., R. R. Co.v. U. S., 92 U. S., 733 (XXIII., 634).

That the grant is paramount and must override all subsequent grants and dispositions of the public domain, along the designated route, whether to individuals or corporations, is also true. It was so decided by Mr. Justice Field in Nevada, in construing the grant to the Central Pacific Railway Company, which is like this.

Cent. Pac. R. R. Co. v. Dyer, 1 Sawyer, 641. The question, then, may be said to be controlled by the doctrine of stare decisis, and further argument upon it superfluous.

A right of way acquired by grant or deed, can never be lost by non-user.

Smiles v. Hastings, 24 Barb., 48.

The charter proposed and designated that gorge of the Arkansas for complainant's route.

THE DENVER AND RIO GRANDE RAIL- Congress, by the Act of June 8, 1872, expressly

WAY COMPANY, Appt.,

v.

EBENEZER T. ALLING ET AL.

approved the charter, and so expressly approved this route, and granted the right of way of two hundred feet in width through that cañon, to the complainant,

|

Since a right of way ex vi termini, imports a right of passing in a particular line," (Jones v. Percival, 5 Pick., 485), a grant of right of The Denver Company became incorporated way must designate some line, to which the in the year 1870, in conformity to the laws of grant may apply. It must, as was said by Judge the then Territory of Colorado. Its object, exHallet, of the circuit court, in this case, "come pressed in articles of incorporation filed in the within something less than forty miles of the proper office of the Territory, was to locate, conline of location.' The certificate simply indi- struct, operate and maintain certain railway and cates the general course and direction of the telegraph lines, viz.: the Denver and Rio Grande lines, and was not such a designation or descrip- Railway, the Denver and Southern Railway, the tion of its way between the points named, as South Park Railway, the Western Colorado could either charge the public lands lying be- Railway, the Moreno Valley Railway, the San tween the points named, with an easement, or Juan Railway, the Gallesto Railway, and the prohibit the government from granting a right Santa Rita Railway. The general route of each of way over the same tract by subsequent legis-line was designated in the articles of incorporalation, a subsequent grantee having designated its right of way by survey, plats, etc.

point at or near the mouth of Plum Creek; also, gave to the Company the rights, powers thence up the valley of Plum Creek, to a point and privileges conferred upon the Union Pacific at or near the forks of East Plum Creek and West Railroad Company by section 3 of the Act of Plum Creek: thence up the main east branch July 2, 1864. But the rights thus granted and of Plum Creek Valley to the lake in township conferred were accompanied by the proviso that 11, range 67 west, on the east of the ridge di- the Company should complete its railway to a viding the waters of Plum Creek and Monu- point on the Rio Grande as far south as Santa ment Creek; thence down the valley of Monu- Fé, within five years after the passage of the Act ment Creek to a point at or near the junction of Congress, and complete each year thereafter of the valleys of the Monument and Fountain fifty miles additional south of that point. qui bouille, or to a point in the Fountain Val- By an Act of Congress approved March 3, ley, below the mouth of the Monument, if the 1875, the Act of June 8, 1872, was corrected by detailed survey shall determine the latter to be adding thereto a proviso, which was declared the most eligible; thence by the valley of the to have been omitted by mistake of the copyist Fountain or across its west tributaries to such from the last named Act. That proviso declares, a point on the Arkansas River at or above Pueblo among other things, that the "Denver and Rio as may be found upon a detailed survey to be | Grande Railway Company is hereby recognized the most eligible for intersecting the same; as a lawful corporation from the date of its inthence up the valley of the Arkansas to a point at corporation under the laws of Colorado, and all or near Cañon City; thence continuing up the the powers, privileges and franchises by said valley of the Arkansas through the Big Cañon of laws conferred upon said Company are hereby the same to a point at or near the mouth of the expressly ratified, confirmed and legalized as exArkansas River; thence by the valleys or the isting from the said date of incorporation." 18 adjoining slopes of the Arkansas River and of Stat. at L., 516. Pueblo Creek to the summit of the divide be On the same day, March 3, 1875, Congress tween the waters of the Arkansas and the San passed an Act granting a "right of way through Luis Park, known as Poncho Pass; thence by the public lands of the United States," to any the most eligible route in a general southerly di- railroad "company duly organized under the rection down the San Luis Valley to the valley laws of any State or Territory, except the Disof the Rio Grande del Norte; thence in a gen-trict of Columbia, or by Congress, which shall eral southerly direction, by the particular route which may be determined upon by a detailed survey to be most eligible, down the valley of the Rio Grande to the southern boundary of Colorado; thence continuing down the valley of the Rio Grande, on either side of the river, as may be found expedient, or crossing from one side to the other when desirable, to El Paso, in the State of Chihuahua, with the privilege of consolidating or uniting with and operating any connecting railway in the Republic of Mexico."

The remaining seven roads are, or were intended to be, branches or feeders of the main line.

By an Act of Congress, approved June 8, 1872, 17 Stat. at L., 339, The right of way over the public domain, one hundred feet in width, on each side of the track, together with such public lands adjacent thereto as may be needed for depots, shops and other buildings for railroad purposes, and for yard room and side tracks, not exceeding 20 acres at any one station, and not more than one station in every ten miles, and the right to take, from the public lands adjacent thereto, stone, timber, earth, water and other material required for the construction and repair of its railway and telegraph line," was granted and confirmed unto the Denver Company, its successors and assigns. It is described in the Act as a corporation created under the incorporation laws of the Territory of Colorado. By the Act, all the rights, powers and franchises conferred by those laws on corporations created thereunder for constructing and operating railroad and telegraph lines, were granted, ratified and confirmed to that Company for the extension and operation of its railway and telegraph lines in and through any contiguous territory of the United States, to the northern boundary line of Mexico, subject to the conditions and requirements of the territorial statutes so far as the same were applicable and not inconsistent with the laws of the United States. The Act,

have filed with the Secretary of the Interior a copy of its articles of incorporation, and due proofs of its organization under the same, to the extent of one hundred feet on each side of the central line of said road; also the right to take from the public lands adjacent to line of the road, material, etc., necessary for the construction of the road, and grounds for station buildings, depots, machine-shops, side tracks, turnouts, and water stations," etc.

The 2d section provides:

"That any railroad company whose right of way or whose track or road-bed upon such right of way passes through any cañon, pass or defile shall not prevent any other railroad company from the use and occupancy of said cañon, pass or defile, for the purposes of its road, in common with the road first located, or the crossing of other railroads at grade. And the location of such right of way through any cañon, pass or defile shall not cause the disuse of any wagon or other public highway now located therein, nor prevent the location through the same of any such wagon road or highway where such road or highway may be necessary for the public accommodation; and where any change in the location of such wagon road is necessary to permit the passage of such railroad through any cañon, pass or defile, said Railroad Company shall, before entering upon the ground occupied by such wagon road, cause the same to be reconstructed at its own expense in the most favorable location, and in as perfect a manner as the original road; Provided, That such expenses shall be equitably divided between any number of railroad companies occupying and using the same cañon, pass or defile.

Section 4 declares that any railroad company desiring to secure the benefits of that Act shall, "Within twelve months after the location of any section of twenty miles of its road, if the same be upon surveyed lands, and if upon unsurveyed lands, within twelve months after the

survey thereof by the United States, file with | sume active work on the 19th April, 1878; that, the register of the land-office for the district although plaintiff was in the occupancy of the where such land is located, a profile of its road; narrow portion of the cañon, where only one and upon the approval thereof by the Secretary road could be located, the defendants threatened of the Interior, the same was required to be by force to drive away its engineers and servnoted upon the plats in said office, and there- ants then working in said cañon, and thereby after all such lands over which such right of dispossess plaintiff of its located line and grade way passes should be disposed of subject to such in the narrow part of said cañon; that the deright of way." All rights thereby granted to fendants were aided and abetted in said course be forfeited as to any section located but un- by the Atchison, Topeka and Santa Fé Railcompleted, within five years after such location. way Company, who sought to build a road from 18 Stat. at L., 482. Pueblo, by the valley of the Arkansas, and through said cañon, and to that end had confederated with the defendants to compel the plaintiff to abandon the extension of its railway as authorized by its charter and the Act of Congress. The plaintiff, by its bill, claimed an exclusive right of way through the Big Cañon, upon the line of its survey, and one hundred feet upon each side of its road, and to that effect relief was asked by final decree. In that suit a temporary injunction was granted against the Cañon City Company, restraining it from occupying or attempting to occupy the Big Canon, and from, in any way or manner, constructing or attempting to survey, locate or construct their line of railroad through the cañon, which, for the purposes of that suit, was taken and decreed to begin at what is known as the "Point of Rocks," at the mouth of the cañon, and extending to the twelve-mile bridge. That injunc tion was subsequently modified and limited in its operation to that part of the cañon known as the Royal Gorge, and the defendant was allowed to enter upon that part of the cañon and grade the same for a railroad, but not to lay ties or rails on any part thereof until the future order of the court.

On the 15th of February, 1877, Alling, Locke and Megrue became incorporated under the laws of Colorado, as "The Cañon City and San Juan Railway Company," with a capital stock of $100,000, for the purpose of constructing and maintaining a railroad from Cañon City; thence up the valley of the Arkansas River through the Grand Cañon thereof; thence, by the most practicable route, following that river to South Arkansas postoffice, in Lake County, Colorado. The articles of incorporation were filed in the office of the Secretary of State of Colorado, on the 19th February, 1877. On the 22d June, 1877, the Secretary of the Interior, in an official communication, declared his approval of the proofs of organization filed by the Cañon City Company, and of the map showing the line of its road for a distance of 20 miles.

On the 3d March, 1877, Congress passed an Act amending that of June 8, 1872, so as to read that the Denver Company should have ten years, from the passage of the original Act, to complete its railway as far south as Santa Fé, in default of which, the rights and privileges granted to it should be null and void as to the unfinished part of said road.

And on 20th April, 1878, the Cañon City Company filed its complaint for injunction and relief against the Denver Company, in the Third Judicial District Court of Colorado, Fremont County, claiming that it had complied, in all respects, with the Act of Congress of March 3, 1875, and had acquired a prior right to construct its road through the Grand Cañon, one hundred feet on each side of its line as surveyed in 1877. It charged that the defendant was interfering with the construction of its road upon that line.

In the action instituted by the Cañon City Company, the Denver Company filed a crossbill, setting up substantially the same facts as in its original bill against Alling and others. Upon final hearing a decree was rendered in the suit of the Cañon City Company against the Denver Company, which, among other things, recognized the prior right of the former to proceed in the construction and operation of its road through the Grand Cañon, without interference or obstruction, in any way, by the latter Company, but with liberty to the Denver In accordance with the prayer of the bill, an Company to exhibit its bill in any court of cominjunction was granted by the state court, re-petent jurisdiction to compel the Cañon City straining the defendant from interfering with its further operations in the cañon. On 22d April, 1878, that action upon the petition of the defendant Company was removed for trial into the Circuit Court of the United States for the District of Colorado.

Company to so change, locate and construct its road as to permit the convenient and proper location by the Denver Company of its own road, or to compel the Cañon City Company to permit the Denver Company to occupy the track and roadway of the former Company, if at any point in that defile it should be impracticable to conveniently lay down or safely operate two distinct lines of railway. From that decree the Denver Company appealed, and it also appealed from the decree in its own suit, whereby the preliminary injunction granted to it was dis

On 27th April, 1878, the Denver Company filed its bill in the Circuit Court of the United States for the District of Colorado, against Alling and others, who are designated in the charter of the Cañon City Company as its trustees for the first year, and against the Atchison, Topeka and Santa Fé Railway Com-solved, and its bill dismissed. pany, charging that the Cañon City Company was not a legally constituted corporation; that the individual defendants, wrongfully claiming to be such Corporation, had, by force occupied the Grand Cañon, and were proceeding to locate These causes were determined in the circuit their road upon a line in that cañon which court, by final decree, on the 24th August, 1878. plaintiff had surveyed in 1871-72, and upon Upon stipulation between the parties they were which plaintiff had made preparations to re-submitted here on 10th of January last. On the

OPINION.

A preliminary question, presented for our consideration, must be first disposed of.

March, this court, in the meantime, suspending any action upon the appeals. At that date the Denver Company appeared by its attorneys and resisted each motion.

20th January it was represented to this court, in proper form, that the Pueblo and Arkansas Valley Railroad Company owned a railroad which, with its branches and extensions, is a continuation, in the State of Colorado, of the Upon the hearing of the motions it appeared, line of the Atchison, Topeka and Santa Fé among other things, that on the 1st day of Railroad Company in the State of Kansas; that March, 1879, the Denver Company had issued since the pendency in this court of these causes, 85,000 shares of stock, of which the plaintiffs in certain contracts and arrangements had been the motions claimed to own or control a bare made and executed between the Denver Com- majority-42,510 shares. It was also shown pany, the Atchison, Topeka and Santa Fé Rail- that, at a meeting of the directors of the Denver road Company, and the Pueblo and Arkansas Company held on 7th February, 1879, a quorum Valley Railroad Company, with the consent of being present, resolutions were unanimously the appellees in both suits; that they were made adopted, declaring that these motions were hosafter the filing of the stipulation for the argu- tile to the interests of that Company; that the ment of these causes, and completed and in part claims of the Atchison, Topeka and Santa Fé executed after the filing of the printed argu- Railroad Company and the Pueblo and Arkanments herein; that by said contracts and ar- sas Valley Railroad Company were unfounded, rangements, the Atchison, Topeka and Santa and their assertion for the fraudulent purpose of Fé Railroad Company had taken a lease of all depriving the Denver Company, its stockholdthe constructed lines of the Denver Company ers and creditors, of valuable rights, interests for 30 years from December 1, 1878, had re- and property, without compensation. The resoceived, and was then in the possession of and lutions instructed the president and the attoroperating said lines; had purchased and received neys of the Company not only to oppose these all the railroad supplies and materials of that motions but, by all legal means, prevent the disCompany; and had ‍purchased and had trans-missal of these appeals or the intervention hereferred to a trustee for its use, a majority of all in for any purpose of any company or person the shares of its capital stock, with an agree not a party to the record. They were also rement providing for a further purchase and own-quired to prosecute the appeals in this court ership of the remainder of such stock, and with with the utmost diligence. At the argument of the further agreement that the Pueblo and the motions, copies of all the contracts, resoluArkansas Valley Railroad Company and the tions, and writings relied upon by the respective Atchison, Topeka and Santa Fé Railroad Com- parties were submitted for our examination. pany should have the selection of a majority of Upon careful consideration of the suggestions of the directors of the Denver Company, the other learned counsel, we do not doubt that our duty third being selected by the bondholders of the is to decline any expression of opinion as to latter Company; that those contracts and agree- the effect or proper construction of the numerments were made with the intent and design of ous documents which, it is claimed, give the ending all controversies, and especially all com- plaintiffs in the motions the right to have the petitive construction of railroad lines, between appeals of the Denver Company dismissed. It the Denver Company on the one part, and the is apparent that there are serious differences Atchison, Topeka and Santa Fé Railroad Com- among the stockholders of that Company, not pany and the roads operated by it, including only as to its general policy in the future, but the Pueblo and Arkansas Valley Railroad Com as to the validity and interpretation of the conpany, on the other part; that, by reason of the tracts and writings under which the Atchison, premises, the Atchison, Topeka and Santa Fé Topeka and Santa Fé Railroad Company and Railroad Company, in its own right, and in con- the Pueblo and Arkansas Valley Railroad Comnection with the Pueblo and Arkansas Valley pany claim to be equitably the owners, and en Railroad Company, had become and was equi-titled to the control of the affairs, property and tably the owner and entitled to the control of suits of the Denver Company. We cannot now all the affairs, suits, interests and property of enter that field of controversy. The present apthe Denver Company, and especially to the dis- peals are being prosecuted to final judgment by continuance of all litigation hostile to the in-order of the directors or trustees of the appellant terests of the Atchison, Topeka and Santa Fé Railroad Company and the Pueblo and Arkansas Valley Railroad Company. Upon these grounds, the Pueblo and Arkansas Valley Railroad Company (the present name of the Cañon City Company), and Alling and others, ap pellees, moved the court that the stipulation for the submission of these causes, upon printed arguments, be canceled and discharged, such printed arguments withdrawn from the files, and the appeals dismissed. Upon the part of the Atchison, Topeka and Santa Fé Railroad Company a motion was submitted that it be allowed to intervene and take charge of these suits in the name of the Denver Company, and appear by its solicitor, on behalf of the appellant, that it may give consent, of record, to the dismissal of the appeals. The trustee referred to in the alleged contracts gave his consent to the motions, and their hearing was set for the 20th

Corporation. To them, by law, is committed the management of the property and concerns of the Corporation. In all litigation involving the action of the Corporation they are its representatives in court. In the discharge of their duties they represent not only the stockholders but the bondholders and creditors of the Company. Their right, while in the exercise of their legitimate functions, to manage the affairs and suits of the Company, ought not to be controlled or interfered with by this court, by reason of anything which appears upon the pending motions. Upon their responsibility as directors and trustees they insist that these causes shall proceed to final judgment, in accordance with the stipulation heretofore made by the parties to the appeals. If, in prosecuting them to final judgment, they violate any trust committed to their hands, or any agreement which is binding upon the Corporation and the minority stock