Railroad Companies v. Schutte Florida Central Railroad Company v. Schutte Jacksonville, Pensacola and Mobile Railroad Company v. Schutte Western North Carolina Railroad, Company v. Drew
| Decision Date | 01 October 1880 |
| Parties | RAILROAD COMPANIES v. SCHUTTE. FLORIDA CENTRAL RAILROAD COMPANY v. SCHUTTE. JACKSONVILLE, PENSACOLA, AND MOBILE RAILROAD COMPANY v. SCHUTTE. WESTERN NORTH CAROLINA RAILROAD, COMPANY v. DREW |
| Court | U.S. Supreme Court |
APPEALS from the Circuit Court of the United States for the Northern District of Florida.
The facts are stated in the opinion of the court.
Mr. George F. Edmunds, Mr. William A. Maury, Mr. Samuel F. Phillips, and Mr. James M. Baker for the Florida Central Railroad Company.
Mr. James M. Baker and Mr. James Baker for the Jacksonville, Pensacola, and Mobile Railroad Company.
Mr. George F. Edmunds, Mr. Samuel F. Phillips, and Mr. Joseph B. Stewart for the Western North Carolina Railroad Company.
Mr. Matthew H. Carpenter and Mr. Wayne Mac Veagh, contra.
These cases, although separate in form, are so connected in their facts that they may properly be considered and decided together. The facts are these:——
The Florida, Atlantic, and Gulf Central Railroad Company, incorporated by the General Assembly of Florida in 1853, built a railroad from Jacksonville to Lake City. The Pensacola and Georgia Railroad Company, also incorporated during the same year, built a road from Lake City through Tallahassee to Quincy in the direction of Mobile, with a branch to Monticello; and the Tallahassee Railroad Company, incorporated at a somewhat earlier date, built another road from Tallahassee to St. Marks. Each of these companies became indebted to the State of Florida under the provisions of the internal improvement law, and, as a consequence, the road of the Florida, Atlantic, and Gulf Central company was sold, on the 4th of March, 1868, by the trustees of the internal improvement fund, under the authority of law, to William E. Jackson and his associates, that of the Pensacola and Georgia company, on the 6th of February, 1869, to F. Dibble and his associates, and that of the Tallahassee company on the same day and to the same parties.
The road from Jacksonville to Lake City was paid for in full, and a conveyance in due form executed to the purchasers, who, on the 29th of July, 1868, were, under the name of the Florida Central Railroad Company, incorporated by the General Assembly of the State, with all the powers and franchises of the Florida, Atlantic, and Gulf Central company. They were also authorized to fix the amount of the capital stock of the company, and the number of shares into which it should be divided. In this way the capital was put at $550,000, with five thousand five hundred shares. Of these shares George W. Swepson afterwards became the purchaser of four thousand three hundred and seventy, which he paid for with money in his hands belonging to the Western Division of the western North Carolina Railroad Company, a North Carolina corporation, which he fraudulently diverted from the use to which it had been appropriated by that company.
Swepson also purchased, with the funds of the same North Carolina corporation, bonds of the Pensacola and Georgia and the Tallahassee companies to the amount of $960,000, or thereabouts, and on the 24th of April, 1869, he entered into a contract with the purchasers of the roads of those companies by which he was to deliver them these bonds to use in making their payments of purchase-money; and they, as soon as they could get the necessary authority from the legislature, were to raise money by a mortgage on the property and pay him what he had advanced to buy the bonds, with certain commissions and attorney's fees, and $100,000 in addition. The contract contemplated an incorporation of the purchasers after the manner of the Florida Central company, with a distribution of one-third of the stock to Swepson. As security for the payment of the sum agreed to be paid, the bonds issued under the contemplated mortgage were to be disposed of in a particular way, and Swepson was to be given certain privileges in the election of directors. Under this arrangement Swepson handed over $960,300 of Pensacola and Georgia and Tallahassee bonds to the purchasers; but after these bonds had been applied in the way contemplated there still remained a balance of the purchase-money, amounting to $472,065, to be paid. Deeds conveying the property to Dibble for himself and his associates were executed in due form, but their delivery was withheld on account of this default in payment. Dibble and his associates being unable to raise the money, Swepson, by putting off on the trustees of the improvement fund a worthless check that was never paid for the amount that was due, got possession of the deeds and had them duly recorded April 22, 1869. On the same day Dibble, for himself and his associates, party of the first part, executed a paper which on its face purported to convey the roads to Swepson, 'said party of the second part, in trust for the express purpose of enabling said party of the second part—which he hereby agrees and binds himself to do—to convey the same to that incorporation, consisting or to consist as incorporators of said F. Dibble and his associates, as soon as said Dibble and his associates shall have granted to them such a similar relief as the legislature of the said State of Florida granted to William E. Jackson and his associates by act for relief of William E. Jackson and his associates, approved July 29, 1868, and also for the further purpose of securing said party of the second part in all advances made as specified and agreed upon in the said agreement between these parties, executed and dated March 26, 1869, and the advancement, as aforesaid, of said sum of four hundred and seventy-two thousand and sixty-five dollars, until such time as said relief shall have been granted and said party of the second part shall have conveyed said property to said incorporation, as hereinbefore prescribed.'
This instrument was never acknowledged or recorded.
On the 24th of June, 1869, the proposed act of incorporation was obtained, by which Dibble and his associates, as purchasers of the roads, were made a body corporate under the name of the Tallahassee Railroad Company, to hold, operate, and enjoy the property purchased, with all the powers, privileges, and franchises of the Pensacola and Georgia and the original Tallahassee companies, and with power to issue bonds secured by mortgage; 'Provided, that any deed of trust, mortgage, or conveyance, bond or bonds, or security which may have been executed, made, created, or contracted for, as a lien on said railroad or otherwise, by said Franklin Dibble, in behalf of himself and his associates, prior to the passage of this act, shall be valid and effectual to all intents, either at law or in equity, as a lien or a mortgage, or security on said railroad, as if the same had been made by virtue of this act, and shall in nowise be affected by any provisions thereof.' Sect. 6.
The new Tallahassee company was duly organized under this charter, and took possession of and operated the roads. Afterwards, to remove all doubts as to the title of the corporation to the property of the old companies, Dibble, for himself and his associates, at some time during the year 1870, executed a paper which purported to be a conveyance, in due form, for that purpose, by which he professed to relinquish and quitclaim to the corporation all his rights. This paper was not acknowledged, and was not in fact a legal conveyance of the property. No conveyance in form was ever executed by Swepson, neither has he at any time, so far as appears, attempted to exercise any rights under the conveyance or transfer which was made to him.
On the 24th of June, 1869, an act was passed by the General Assembly of Florida to 'perfect the public works of the State.' By this act, 'in order to secure the speedy completion, equipment, and maintenance of a connection by railroad between Jacksonville, on the Atlantic coast, and Pensacola, on the Gulf coast, and Mobile, in Alabama,' George W. Swepson, Milton S. Littlefield, J. P. Sanderson, J. L. Re Qua, William H. Hunt, their associates, successors, and assigns, were constituted a body politic and corporate under the name of the Jacksonville, Pensacola, and Mobile Bailroad Company. This company was authorized to build a railroad from Quincy to the Alabama State line, and there connect with any road running to Mobile, and to consolidate with the several companies owning roads from Quincy to Jacksonville, from Tallahassee to St. Marks, and the branch to Monticello. The original charter was somewhat amended on the 28th of January, 1870, after which sects. 9, 10, 11 of the original charter, and sect. 4 of the amended charter, were as follows:——
'SECT. 9. In order to aid the said Jacksonville, Pensacola, and Mobile Railroad Company to complete, equip, and maintain its road, and to aid in perfecting one of the public works embraced in the internal improvements of the State, the governor of the State is hereby directed to deliver to the president of the said company coupon bonds of the State to an amount equal to sixteen thousand dollars per mile for the whole line of road and length of railroad owned by or belonging to said Jacksonville, Pensacola, and Mobile Railroad Company, in exchange for first-mortgage bonds of said railroad company, of the denomination of one thousand dollars, when the president thereof shall certify upon his oath that the road or parts of road for which he asks for an exchange of bonds is completed, and is in good running order. The said bonds shall be of the denomination of one thousand dollars, signed by the governor, countersigned by the treasurer, sealed with the great seal of the State; shall bear eight per cent interest, payable semi-annually, and shall be payable to bearer. They shall be dated on the first day of January, A. D. 1870, and shall be due thirty years thereafter, and principal and interest shall be...
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