Covington Drawbridge Co. v. Shepherd.

called herself, in her will, of Charleston;' if, when absent from that place, she always spoke of returning to it as her home, and did return to it as such, till hindered by sickness-if the jury believed this evidence of defendant's witnesses, testimony which has not been contradicted or denied, it would be absurd to say her domicile was not where she asserted it to be, to wit, in the city of Charleston."

Regarding this portion of the charge as tending to confound the powers of the court and the jury, I think that the judgment of the circuit court should be reversed, and the case remanded for a new trial.

THE COVINGTON DRAWBRIDGE COMPANY AND RICHARD M. NEBEKER, Appellants, v. ALEXANDER O. SHEPHERD and others.

21 H. 112.

CITIZENSHIP OF CORPORATION-EQUITY.

1. The case of The Covington Drawbridge Company v. Shepherd, 20 How. 227, as to citizenship of corporation, reaffirmed.

2. Where a judgment has been rendered against a bridge corporation, and execution returned nulla bona, a court of equity can take possession of the bridge, appoint a man to collect the tolls and pay them into court, to answer the demand of the judgment creditor.

APPEAL from the circuit court for the district of Indiana. The case is stated in the opinion.

Mr. O. H. Smith, for appellants.

Mr. Thompson, for appellees.

[* 122] * Mr. Justice CATRON delivered the opinion of the court. In December, 1854, Shepherd and others recovered a judgment against the Covington Drawbridge Company, for upwards of six thousand dollars. At the same time, Davidson recovered a judgment against the same company for upwards of a thousand dollars.

The corporation was created by an act of the legislature of Indiana, and built a drawbridge over the Wabash river, in that State, pursuant to its charter; was sued for a tort in the circuit court of the United States for Indiana district, where the recoveries were had. Executions at law were regularly issued, and at March term, 1855, of that court, were returned by the marshal, "nothing found." Alias writs of fi. fa. were taken out and levied on the

Covington Drawbridge Co. v. Shepherd.

bridge as real estate, and in November, 1855, the marshal proceeded to sell the rents and profits of the same on Davidson's judgment for the term of one year, at the sum of $4,666.62, Davidson, the execution creditor, becoming the purchaser. The agent of Shepherd and others instructed the marshal not to sell the bridge on their judgment, and he returned the special facts. Davidson demanded possession of the bridge from the corporation, so that he might obtain the tolls, but the keeper of the bridge, and a principal owner of the stock, refused to surrender possession. In May, 1856, Shepherd, and those interested in the large judgment jointly with Davidson, filed their bill in equity in the circuit court of the United States for the district of Indiana, against the bridge company and Richard M. Nebeker, as keeper, agent, and manager of the bridge; praying that the court should appoint a suitable receiver to take possession of the same, and receive the tolls and income, and apply them to discharge the judgments at law, after defraying expenses. The court made the decree prayed for, from which the bridge company appealed to this court.

The first objection made to the decree is, that it does not appear by the bill that the defendant is properly described as

* incorporated by the State of Indiana. The bill alleges [* 123 ] that "The Covington Drawbridge Company, of Covington, is a corporation and citizen of the State of Indiana;" and it is also insisted, that the judgments at law are void, because jurisdiction was not given to the United States courts by the averment of citizenship in either of the declarations. The judgment at law, in Shepherd's case, was brought before this court at the last term, when it was held that the averment of citizenship here objected to was sufficient. (20 Howard, 227.) That decision is conclusive of the two foregoing exceptions.

The consideration whether by a creditor's bill corporate property and franchises can be subjected to pay the debts of the corporation, by taking possession and administering its affairs, and drawing to the court its revenues, is a question of great importance and some difficulty. In advance of this question, it is insisted here that there exists in Indiana an adequate remedy at law; that Davidson's judgment is satisfied by the levy and sale of the tolls of the bridge; and Davidson having obtained a remedy by fi. fa., Shepherd may do the same. To ascertain whether Davidson obtained satisfaction by the marshal's sale, we must inquire what property was sold, and what title to it acquired, that could be made available by possession and the receipts of tolls.

The Covington Drawbridge Company was duly incorporated to

Covington Drawbridge Co. v. Shepherd.

build a bridge across the Wabash river where it was navigable for steamboats, and not subject to be bridged by an individual assuming to exercise a mere private right. The corporation had conferred on it a public right of partially obstructing the river, which is a common highway, and which obstruction would have been a nuisance, if done without public authority. This special privilege, conferred on the corporation by the sovereign power, of obstructing the navigation, did not belong to the country generally by common right, and is therefore a franchise; and, secondly, the authority of taking tolls from those who crossed the river on the bridge was also a franchise, and freedom to do that which could not be lawfully done by

one without public authority; this franchise could only be [* 124 ] conferred by the legislature directly, or indirectly* through

public agents and tribunals, in pursuance of a statute. The bridge is part of a road, and an easement, like the road; and the privilege of making the bridge, and taking tolls for the use of the same, is a franchise in which the public have an interest; the corporation, as owner of the franchise, is liable to answer in damages if it refuses to transport individuals on being paid or tendered. the usual fare; the law secured the tolls as a recompense for the duty imposed to provide and maintain facilities for accommodating the public. Whether the timbers and materials of this bridge could be sold at auction by the marshal, by virtue of a fieri facias in his hands, as was held could be done by the laws of North Carolina in the case of The State v. Rives, 5 N. C. R., 297, we are not called on to decide in this case, as here the annual tolls were sold, and not the bridge itself.

By the laws of Indiana, lands and tenements cannot be sold under execution, until the rents and profits thereof for a term not exceeding seven years shall have been first offered for sale at public auction; and if that term, or a less one, will not satisfy the execution, then the debtor's interest or estate in the land may be sold, provided it brings two-thirds of its appraised value. The tolls, under bridge, were sold

the idea that they were rents and profits of the for one year, according to the forms of this law. The tolls of the bridge being a franchise and sole right in the corporation, and the bridge a mere easement, the corporation not owning the fee in the land at either bank of the river, or under the water, it is difficult to say how an execution could attach to either the franchise or the structure of the bridge as real or personal property. This is a question that this court may well leave to the tribunals of Indiana to decide on their own laws, should it become necessary. One thing, however, is plainly manifest, that the remedy at law of these

Covington Drawbridge Co. v. Shepherd.

execution creditors is exceedingly embarrassed, and we do not see how they can obtain satisfaction of their judgments from this corporation, (owning no corporate property but this bridge,) unless equity can afford relief.

By the laws of Indiana, stocks in a corporation may be

sold by virtue of an execution against the owner of the [125] stocks, which the sheriff may transfer to the purchaser; but this law does not help these complainants; they did not proceed against the stocks; their judgment at law did not affect individual property, but corporate property. The question whether a railroad company's property, including the franchises, can be subjected to the debts of the corporation by a decree in equity, is treated very fully by Redfield on Railways, ch. 32, section 2, p. 571; there the substance of the decisions affecting the doctrine is given in cases where there were liens by mortgage. The subject was well examined by the supreme court of Georgia in the case of The Macon and Western Railroad Company v. Parker, 9 Geo. R. 378. The contest there involved claims of creditors. When speaking of the necessity of equity exercising jurisdiction, the court say "that the whole history of equity jurisprudence does not present a case which made the interposition of its powers not only highly expedient, but so indispensably necessary in adjusting the rights of creditors to an insolvent estate as this did." The road was sold according to the decree; but, to settle the difficulty as to the sale of a franchise. without the consent of the power granting it, upon application, an act was passed by the legislature, creating the purchaser and his associates a body corporate, with the powers and privileges of the old company. In England, the practice is, to order a receiver to be appointed to manage the corporate property, take the proceeds of the franchises, and apply them to pay the creditors filing the bill. (Blanchard v. Cawthorn, 4 Simons's R. 566; Tripp v. The Chard Railway Company, 21 E. Law and E. R. 53.)

All that we are called on to decide in this case is, that the court below had power to cause possession to be taken of the bridge; to appoint a receiver to collect tolls, and pay them into court, to the end of discharging the judgments at law; and our opinion is, that the power to do so exists, and that it was properly exercised. It is therefore ordered that the decree below be affirmed, and the circuit court is directed to proceed to execute its decree.

*Mr. Justice DANIEL dissented, for want of jurisdiction [* 126] of the courts of the United States over corporations. (Marshall v. Balt. and Ohio R. R. Co., 16 How. Reports.)

Livermore v. Jenckes.

EDWARD M. LIVERMORE and another, Appellants, v. THOMAS A. JENCKES and others.

21 H. 126.

ASSIGNMENTS CONFLICT OF LAWS.

1. An assignment for the benefit of creditors, which prefers some creditors, and which directs that the dividend of all other creditors who refuse to accept the dividend as full satisfaction shall be paid to the assignor, is valid by the law of Rhode Island and void by the law of New York.

2. The assignor and assignee resided in Rhode Island. Some of the property was in New York, and some of the creditors resided there.

3. The assignment was valid as to the property in both States, in the absence of any actual fraud in the assignment.

THIS is an appeal from the circuit court for the southern district. of New York, and the case is sufficiently stated in the opinion.

Mr. Morrill, for appellants.

Mr. Jenckes and Mr. C. Sevard, for appellees.

[* 144]

*Mr. Justice WAYNE delivered the opinion of the court. This bill was filed by the appellants in the circuit court of the United States for the southern district of New York, as judgment creditors of the respondents, Waterman & Samuel Harris, to avoid an assignment made by Waterman to the respondents, Jenckes & Farnum, in trust for the payment of the creditors of Harris & Waterman, and of Waterman individually.

The appellants seek to avoid the assignment, on the ground that it was voidable, from its tending to hinder, delay, and defraud creditors; because there is a reservation in it to the assignee of the dividends of such creditors as should refuse to become parties to it, and to release their demands in consideration of the dividends they might receive. It appears that a large amount of the property conveyed was in the State of New York; that the appellants resided there, and that they were then creditors of Harris & Waterman. The trusts in the deed were, first, to pay the expenses of the assignment; secondly, to pay the debts of several preferred creditors of Harris & Waterman, and of Waterman individually; and, thirdly, to pay all the residue of the debts of Waterman individually, and as a member of the firm of Harris & Waterman. The assignment contained the following proviso: "Provided, That none of my said creditors named in the third class of this assignment shall be entitled to receive any dividend or benefit under the deed of assignment, unless they shall execute and deliver to my