Southern Pac. R. v. Orton

32 F. 457, 6 Sawy. 457, 22 F. Cas. 826, 1879 U.S. App. LEXIS 1550

• Court: United States Circuit Court
• Decided: December 15, 1879
• Status: Published

Opinion

Sawyer, J.,

(after stating the facts.) This ease has been argued with great ability by the counsel on both sides. It presents a question of great importance, as upon the decision of the points raised by defendant apparently depends the validity of the entire land grant made by congress to aid in the construction of the Southern Pacific Railroad under the act of 1860. If some of the points made are tenable, then, the legislature of California, and the United States congress, both in their original and subsequent legislative action; the officers of the Southern Pacific Railroad Company, and those who have purchased the granted lands from the company, and those who have purchased the bonds of the company secured by these lands,- — have all been mistaken as to the rights of the plaintiff derived under these various acts. Under the circumstances, there, certainly, ought to be a very clear case to justify a court in annulling all the rights hitherto supposed to have been acquired by the plaintiff, and those claiming under it in these lands.

The points relied upon by defendant’s counsel, as stated in their own language, are as follows: (1) “That the grant was confined to lands along the, line of its lawful route [the lawful route of the road] as fixed by its articles of association (articles incorporating the company) and the laws of California.” (2) “That the route indicated by the map filed in the general land-office on January 3, 1867, and upon which the road is thus far constructed, is without authority of law, and that the grant has not, and cannot attach to lands along that route.” (3) “ Conceding, for the purposes of the argument, that the route of January 3, 1867, at first unlawful, was subsequently made lawful by the act of the legislature of California of April 4, 1870, and the grant was floated to such new route by the joint resolution of congress of June 28, 1870; yet, by that joint resolution the land in question was excepted from the grant, and that the patent, failing to save or reserve the defendant’s rights to this land, is issued contrary to the provisions of the joint resolution, and is therefore void.”

The first point, then, is, that the land in question does not lie on the line intended by the act of congress making the grant, and is, therefore, not within the grant. In the development and argument of this point it is said, in substance, that congress found a corporation existing under the laws of California, which had adopted in its articles of association a certain line on which it was authorized to construct a road; that it had authority to construct a road on that line, and no other; that its rights must be presumed to have been known to congress, and it must be presumed that congress intended to make its grant along the line indicated in its articles of association, and no other; that the route generally indicated was from a point on the bay of San Francisco, “through the counties of Santa Clara, Monterey, San Luis Obispo, Tu-lare, Los Angeles,and San Diego, to the town of San Diego; thence, through the said county of San Diego, to the eastern line of the state of California, there to connect with a contemplated railroad from the said eastern line of the state of California to the Mississippi river;” that this was the line upon which the Southern Pacific Railroad Company was, at the time of the passage of the act, authorized to build a road under the laws of California, and of its organization; and that congress contemplated, and could have contemplated, no other line. I agree with counsel, that congress must bo presumed to have passed the act in question with full knowledge of the laws of California under which the Southern Pacific Railroad Company was organized, and of the extent of the authority of the company under its organization. And the intention of congress in making the grant must be ascertained from the language of the act in view of this presumption; that is to say, we must construe the act in the light of the circumstances existing at the date of its passage relating to the subject-matter of the act; but the intention must be derived at last fronr the language of the act itself, thus considered. There was but one Southern Pacific Railroad Company to which the grant was made; and the grantee named in the act of congress is “the company incorporated under the laws of the state of California, ” not the road, or the line of road to be built by the company. And it was “authorized to connect with the Atlantic & Pacific Railroad, formed under this act, at such point near the boundary line of the state of California as they shall deem most suitable for a railroad to San Francisco. ”

Row, what was the manifest intent of this provision ? Obviously to have a road from the point of connection to San Praneisco, and the point of connection most suitable for constructing a road therefrom to San Praneisco was left to the judgment and discretion of the company, — “such point * * * as they shall deem most suitable for a railroad line to San Praneisco.” It was left to the company, then, by this provision of the statute, to designate thb point of connection within the limits, and the line also; butanother provision to be referred to is more specific un the latter point. It is manifestly the intention from this language, if taken by itself, to have a road from the point of connection to San Praneisco by the route slated. This intention becomes more apparent by considering other provisions. The Atlantic & Pacific road, by section 1 of the act, was to run “along the thirty-fifth parallel of latitude, as near as may be found most suitable for a railway route to the Colorado river at such point as may be selected by said company for crossing; thence by the most practicable and eligible route to the Pacific, ” — not to San Praneisco. Congress could not have intended the Southern Pacific Railroad Company to build a road to the Pacific merely, as the Atlantic & Pacific was authorized to do that by a direct route; but a road to connect the Atlantic & Pacific road at some point near the place of crossing the Colorado river, which is the eastern line of the state, by the most suitable line with San Praneisco. It would be absurd to suppose, in view of the language used, and the provision for extending the Atlantic & Pacific Railroad directly to the Pacific, that congress contemplated the building by the Southern Pacific Company a railroad from the point of connection near the thirty-fifth parallel, a hundred miles south, and some two hundred or more miles to San Diego, at which point, when reached, the road would be as far from San Praneisco as from the point of connection whence it started.

San Francisco being the objective point, it could be reached from many points on tlie Atlantic & Pacific road by lines several hundred miles shorter than from the point of connection near the intersection of the thirty-fifth parallel of latitude and the Colorado river, by the way of San Diego. So, also, upon defendant’s own theory, this construction of the language is inadmissible, for it is insisted that congress could not have intended to grant lands along a line not specified in the articles of incorporation of the Southern Pacific Railroad Company. If this be so, then congress could not have intended to make any grant at all, for the general line specified in the articles would not touch either point mentioned in the act, — either the point of intersection near the Colorado river, or San Praneisco. The line specified in the articles of association is through the county of “San Diego to the town of San Diego in said state; thence eastward through the said county of San Diego, to the eastern line of the state of California.” The town of San Diego is in the south-western angle of the state, and a line from the town of San Diego “eastward through the said county of San Diego” would strike the Colorado river in the extreme south-eastern corner of the state, where the Texas Pacific Railroad is now to cross the river, and more than two degrees of latitude south from the point of connection named in the act, near the point where the thirty-fifth parallel of latitude crosses the state line. The county of San Diego embraces about the same extent of territory as the three states of Massachusetts, Connecticut, and Rhode Island, and the county of San Bernardino is considerably larger, yet there is no point of the county of Sail Diego that is within less Ilian a degree of latitude of the point of connection named in said act of congress near the intersection of tho eastern line of the state and the thirty-fifth parallel of latitude; the said point being in tiie county of Ban Bernardino, through which it would be necessary for a line of road to run many miles away from San Francisco before it could possibly touch the county oi' Ban Diego at ail; and the articles of association do not mention the county of Ban Bernardino as one through which the proposed road is to extend. A line of road from any point on the bay of San Francisco, following the route indicated in the articles of association, through Los Angeles and Ban Diego counties to the town of San Diego, thence easterly through the latter county to the Colorado river, could not at any point be within two degrees of latitude of the point near the intersection of the thirty-fifth parallel of latitude and the Colorado river, or eastern lino of the state.

So, also, to reach San Francisco a road would necessarily pass from Santa Clara county through the county of San Mateo and the city and county of San Francisco, or the county of Alameda; neither of which counties is mentioned in the article's of association, nor is San Francisco mentioned in the articles as a point to or from which the road is to extend. The Southern Pacific Railroad Company thus far had no better authority under its articles of association for constructing its road from the designated point of intersection to San Fran cisco by tho route which defendant’s counsel insisted it should have followed, than by the route adopted in the plat filed. There would be quite as great a deviation from tiie route claimed by defendant to be the only one that could be pursued, and quite as much unauthorized road to he constructed, as by the route actually adopted. In fact, upon defendant’s theory, the Southern Pacific Railroad Company could have constructed no road at all which would have entitled it to the benefit of the grant, and the grant was entirely nugatory. The object of the grant undoubtedly was to secure a lino of railroad from a point on the Atlantic & Pacific Railroad, designated as near the line of tho state of California, and which road was to cross the state line as near as practicable to the thirty-fifth parallel of latitude to San Francisco, and, upon defendant's theory, the grantee was not authorized to build any road for a long dislance on each end of the lino which congress desired to have built, and the construction and use of which formed tho sole consideration of tiie grant.

Tho fact, then, that the line adopted does not pass through San Luis Obispo and San Diego counties, to the town of Sail Diego, and thence easterly through San Diego county to the Colorado'river, affords no reason for supposing that congress intended to adopt the absurd route of running a hundred miles or more south and away from Ban Francisco, then by a roundabout way return, in order to secure a railroad line to San Francisco from tho point of intersection designated in the act; espeeialiy when it made tho grant along the line from the point Indicated, which the grantee itself “shall deem most suitable for a railroad to San Francisco. ” There can be no reasonable doubt, therefore, whatever the effect upon tho rights of the parties, or whether the purpose was accomplished or not, that congress intended the Southern Pacific Railroad Company to construct a line of road from the Atlantic & Pacific Railroad line, as Indicated in tiie act, at a point in California near the point of intersection of the thirty-fifth parallel of latitude with tho eastern line of tiie state, by the most direct and feasible route to San Francisco; that the question as to which is the most direct and feasible route was left to the company; and that the lands granted a,re lands lying along said route to be so determined. That the grantee was to locate the lino between tho points designated is also provided for in section 3 of the act of congress; which section, and all others of the act specifying the rights granted, is applicable to the Southern Pacific Railroad Company as well as to the one created by the act, and is to be read with reference to this part of the line as though the words “Southern Pacific Railroad Company” were substituted for “Atlantic & Pacific Railroad Company” in the section. It grants the odd sections “on each side of said railroad line as said company may adopt, * * * whenever on the line thereof the United. States have full title, not reserved, sold, granted, or otherwise appropriated, and free from pre-emption or other claims or rights, at the time the line of said road is designated by a 'plat thereof, filed in the office of the commissioner of the general land-office. ” On January 3,1867, the Southern Pacific Railroad Company filed its plat in pursuance of these several provisions of the act, and the line laid down on the plat ran in a nearly direct line — as direct, doubtless, as practicable — from the supposed point of intersection near the eastern boundary of the state towards San Francisco, to-Santa Clara county, where it intersected the San Francisco & San Jose Railroad, which extended to San Francisco, and along the route deemed most suitable by the company.

There can be no doubt, therefore, that the line adopted is the one contemplated by the act of congress, and the odd sections on each side of it are the lands actually contemplated by the congressional grant. If the grant was not effectual, then, it was because of an incapacity then, or at any future time, in the company to receive a grant which should in fact vest the legal title; and if the incapacity to receive a grant along this line existed then, as we have seen, for the same reason, it was incapable of receiving any grant under this act as it actually passed, along any line it might have adopted, and the grant was futile. At the date of filing the plat no pre-emption or other right had attached to the lands in question, and they were, therefore, subject to grant, and were impressed with every right, restriction, or effect which resulted .from the operation of the act, whatever they might be. In section 6 it is provided “that the president of the United States shall cause the lands to be surveyed for forty miles in width on both sides of the entire line of said road after the general route shall be fixed, and as fast as may be required by the construction of said railroad; and the odd sections of land hereby granted shall not be liable to sale, entry, or pre-emption before or after they 'are surveyed, except by said company as provided in this act; but the provisions of the act of September, 1841, granting pre-emption rights, and acts amendatory thereof, and of said act entitled, ‘An act to secure homesteads to actual settlers on the public domain, ’ * * * shall be, and the same are hereby, extended to all other lands on the line of said road when surveyed, EXCEPTING- those hereby granted to said company. ” Instantly upon the filing of the plat, the odd sections within the prescribed limits on each side of the line indicated became affected by these provisions; and the statute itself, pro-pria vigore, withdrew them from sale, entry, or pre-emption except by the company, From that time forth to the present time, no man could acquire a pre-emption right, because it was expressly prohibited by the statute, and these provisions of the statute have never yet been repealed or modified. And this is so, whether the grantee was capable of receiving title or not.

The withdrawal is not made to depend upon the capacity of the grantee to take, or upon the grantee’s performance of the conditions subsequent, so as to perfect the title, but it is absolute, without conditions, upon the performance of certain designated acts, which were in fact actually performed. The reason for withdrawal, doubtless, was to secure the construction of the road, but there was no provision for restoration of the lands to their former condition in case the object failed. That was left for future consideration by congress. In this act there is not even the provision usual in other acts granting lands for public improvements, that in case of failure to perform the conditions subsequent the lands shall revert to the United States; but the subject is not overlooked, as there is a substitute for such provision in the ninth section, which provides “that if the said company make any breach of the conditions hereof, and allow the same to continue for upwards of one year, then, in such case, at any time hereafter, the United States may do any and all acts and things which may be needful and necessary to insure a speedy completion of the road.” It does not provide that the lands shall be open to sale or preemption in case of a failure to complete the road. The United States by the act has devoted these odd sections to a construction of the contemplated road; and if the grantee fails to complete it for any cause, whether through incapacity to do it or otherwise, the government reserves to itself the right to take such other action as it may, upon consideration of the circumstances, deem needful to accomplish the purpose. If the title did not pass to the intended grantee, it might grant the land to other parties for performing the same service. At all events, they have been devoted to that object, and withdrawn absolutely and without conditions from any other disposition. There is no provision requiring the secretary of the interior to issue any order withdrawing them; the act itself lias that operation by its own force. The order was, doubtless, proper as a matter of information to those seeking pre-emption locations, so that they might not ignorantly or recklessly settle upon these lands, in which they could acquire no rights, but it is without legal effect. Mr. Justice Miller in Knevals v. Hyde, 20 Alb. Law J 371.

So there is no authority anywhere in the act for the secretary of the interior to revoke the withdrawal, or restore the lands to market, or subject them to pre-emption. His various orders were nullities, as lie had no authority whatever to repeal or modify the act of congress, expressly withdrawing these lands from pre-emption, or other disposition. Besides, his orders never took effect, for eacli was revoked or suspended before the time appointed for It to go into operation arrived. As the defendant entered upon these lands after the filing of the plat, and the statutory withdrawal, he was a naked trespasser without right, and without the ability to acquire any right from that day to the present, whether the grantee in the act had the capacity to acquire any right or not, and the question may be considered without feeling any embarrassment on account of any right of his, for he is wholly without any, whatever the rights of the railroad company may be. He is a total stranger to the title. But as the plaintiff must recover, if at all, upon its own right, and not on the want of any right in the defendant, it is still necessary to determine whether it is in a position to maintain this action, notwithstanding the total absence of any right to the land in defendant.

This brings us to the second point made by defendant, — that the grant along the line indicated in the plat is without authority of law, and did not, and could not, attacii to the lands there situated; that is to say, that by the Jaws of California the grant could not attach to the lands, whatever the intent of congress, as the company was not authorized, by the statute under which it was organized, to construct a- road along that line, for the reason that it was not indicated in its articles of association.

The Southern Pacific Railroad Company was a corporation duly organized. It was a railroad corporation organized expressly to build a railroad, and a railroad extending from the bay of San Francisco in a south-eastern direction to the eastern boundary of the state, intended ultimately to connect with some transcontinental road which it was supposed would be built at no distant day; but at wliat point it would enter the state was unknown, and, consequently, the point of the state line which the company desired to reach could not be definitely fixed. It was authorized to receive lands by gift, grant, purchase, or otherwise, for the purposes of its road, and to aid in its construction, without limitation as to amount or location. These facts are undisputed. Congress found this corporation thus organized for the purposes, and with the powers, indicated, and made a grant of land to it for the purposes, and on consideration that it should accept the terms, and build a road along the line before indicated; which grant and the conditions were actually accepted, and the road was in fact built according to the'conditions of the grant, to entitle it to a patent for the land in question, provided it was capable of receiving the grant. The line of the road adopted, also, started at the point indicated in the articles of association, and ran in a south-easterly direction through the state to its eastern line, to connect with a road to the Mississippi river, the general line of which latter road had in the mean time been fixed, and it ran in the general direction through all the counties, including the one in which the lands are situated, named in the articles of association, except San Luis Obispo, which was left to westward, and the county of San Diego, which was ■further south, and the line adopted turned to the eastward before reaching it; the general object and purpose of the line finally definitely located and adopted being the same as that expressed in the articles of association.

The question in this case, as in many others, to place it in the strongest light for defendant, is one of doubt as to whether the corporation exceeded its original powers, or abused its corporate franchise. It was empowered to receive grants of lands for proper purposes, and the question is, whether the building of the road, as actually built, is the proper purpose. It is not like a corporation without capacity, and positively forbidden by the statute to take lands at all for any purpose. It was competent to take and hold lands for some purposes, and the settled rule in cases like this, is that strangers cannot litigate the question. It is a matter between the state and the corporation. The company had the physical capacity to perforin, and it has performed, in fact, whether rightfully or not, its part of the contract, and the United States is satisfied, and has issued its patent in pursuance of the terms of the act. The United States has done all in its power to vest the title in the company. The state has not complained of any misuse or abuse of the corporate powers of the company All parties in interest being satisfied, strangers cannot complain. The authorities settle this question.

In Mining Co. v. Virginia & G. H. W. Co., 1 Sawy. 478, I had occasion to consider an analogous question, and said. “By express provisions of statutes, corporations are usually limited in their purchases of real estate; for instance, to such as are actually necessary to the exigencies of their business. But suppose a much larger amount should be conveyed to a corporation than it was authorized to take, it would not be contended, I apprehend, that a trespasser, who had taken possession of a portion of such excess of land, could successfully set up a want of capacity in the corporation to take, as a defense to an action of ejectment by the corporation. As between the party despoiled and the wrongdoer, the courts will not enter upon the inquiry.” And I cited the following authorities which sustain the position: Bank v. Railroad Co., 17 Wis. 872; Class Co. v. Dewey, 16 Mass. 94, 102; Mining Co. v. Baker, 3 Nev. 391; Mining Co. v. Clarkin, 14 Cal. 552. The court says, in 3 Nev. 391, after discussing the question: “A deed then, to a mining corporation is not void upon its face. If they have violated the law, in taking a greater quantity of land than is allowable, then they have committed a wrong, not against any particular individual, but against the whole community, and this wrong caii only be inquired into by a proceeding on the part of the state. Their deed to the land, if they buy from one having title, or their possession, if they only derive title from occupation, gives them aright to hold against all the wo rid except the state.” In Mining Co. v. Clarkin, 14 Cal. 552, Mr. Chief Justice Field, speaking for the court, says: “Whether or not the premises in controversy are necessary for these purposes, [of the corporation,] it is not material to inquire; that is a matter between the government and the corporation, and is no concern of the defendants. It would lead to infinite inconveniences and embarrassments, if, in suits by corporations to recover the possession of property, inquiries were permitted as to the necessity of such property for the purposes of their corporation, and the title made to rest upon the existence of such necessity. See Bank v. Poitiaux, 3 Rand. (Va.) 136, and Ang. & A. Corp. §§ 113-121.”¹ To the same effect are Telegraph Co. v. Telegraph Co.. 22 Cal. 429, 430; Railroad Co. v. Proctor, 29 Vt. 93; Bissell v. Railroad Co., 22 N. Y. 259; People v. Society, 1 Paine, 653; Bank v. North, 4 Johns. Ch. 371; Terrett v. Taylor, 9 Cranch, 51, 52; Knevals v. Hyde, 20 Alb. Law J. 371.

Numerous other cases might be cited to show that whether a corporation has violated its charier by misuse or abuse of its corporate franchise by usurpation of powers, is a question between it and the state alone, to be inquired into on a direct proceeding for that purpose. The same principle is recognized by the United States supreme court in Schulenberg v. Harriman, 21 Wall. 62. In discussing the mode by which a present grant to land by the government to the state of Wisconsin to aid the construction of a railroad, becomes attached to specific land by a location of the road, Mr. Justice Field, speaking for the court, said: “No individual can call in question the validity of the proceedings by which precision is thus given to the title, when the United States are satisfied with them.” Again, on page 63, speaking of failure of title for breach of condition subsequent: “And the same doctrine obtains whero the grant upon condition proceeds from tiie government; no individual can assail the title it has convoyed on the ground that the grantee has failed to perform the condition annexed.” See, also, U. S. v. Repeutigny, 5 Wall. 267, 268.

The state of California and the United States being satisfied with the acts of the plaintiff in respect to the use of its franchise, the grant, and construction of the road, the defendant, a mere stranger, without any interest whatever, cannot raise the question relied on in this point.

But by holding that defendant is not in a position to attack the validity of the grant on this point, I do not mean to cast any susjiieiou upon the validity of plaintiff's title upon the facts herein stated, even if the question could be raised by defendant and determined in this action. Considering the vast interests involved, and the number of persons who must have become interested as purchasers from the plaintiff, and in securities resting on the plaintiff’s title, I do not feel at liberty to leave the case on that point alone. 1 may be wrong in the conclusion reached; and the point made on the validity of the title is presented by the record, and must be determined if the defendant turns out to be entitled to urge it; and it has been fully argued and relied on by counsel for the defense. 1 shall, therefore, proceed to decide it as one of the points in the case.

In my judgment, the title of the plaintiff is valid, and, so far as it can be done in this action, the question ought to be determined and finally set at rest. As before stated, the object of congress in making the grant was to secure a railroad from a point in Missouri already having eastern connections, through the states of Missouri and northern Texas, the territorities of the United States, and the state of California to the Pacific ocean, with a branch extending from the point designated near the eastern line of the state of California to San Francisco, which road could be used by the government for the purposes and upon the terms specified in the act, among which were that it was to be a postal and military road. The act authorizes the corporation created by it to construct portions of its road through three different states, without any provision for procuring authority from, or the consent of, the respective states. If congress has power to create a corporation with such authority, it is, doubtless, found in those provisions of the constitution relating to the regulation of commerce among the states, its war power, its control over postal matters, and other cognate powers. If congress can create an instrument and confer upon it such authority without consent of the states, it would seem that it might select an instrument already created by a state, and confer upon it such additional powers and authority, if any are required, as may be necessary to effect the same objects. If it could confer the authority upon a corporation of its own creation, it could confer it upon a natural person, and why not upon a state railroad corporation ? However this may be, congress in making this grant must be presumed to have been familiar with the organization and powers of the Southern Pacific Railroad Company, and to have made the grant in question with full knowledge of the situation, and the grants were made upon the condition subsequent of building the road. To ultimately perfect the title, it was necessary for the grantee to do everything necessary to complete the road, and, if the procurement of additional powers from the state was essential to that object, then it was as necessary to procure those powers in some proper mode, as to do any other essential act; and, whether necessary or not, the legislature of California did in fact pass the act of April 4, 1870, mentioned in the statement of facts, authorizing said company to change the line of its road if necessary, and authorizing it to construct and maintain the road provided for in said act of congress. If, therefore, there was before a want of such authority, it was given by this act, provided the act itself in these particulars is constitutional.

But it is insisted that this act was passed in violation of the provisions of section 31 of article 4 of the constitution of California, which reads: “Corporations may he formed under general laws, but shall not be created by special act, except for municipal purposes.” After a careful consideration of the question, I am myself unable to perceive wherein that portion of the act, at least, which authorizes the company to change the line of its road, and to accept the grant made by and to build the road provided for in the act of congress, is in contravention of this provision of the constitution. It is unnecessary to consider the provision of this act authorizing the corporation to file amended articles of association, for, if that be conceded to be in excess of the legislative power, it can be separated from the others, and does not vitiate the other provisions. I do not perceive that any amendment of the articles was necessary, for the corporation was already formed or created, — was already in existence, with all the essential faculties that go to make up a corporation for building a railroad; and the act authorizing the change of line and acceptance of the congressional grant, with its conditions, only granted to an existing person permission to do a thing which had no necessary relation to the corporate grantee, and was not at all essential to the existence of the legal entry created by law, or to any other person, natural or artificial. But if an amendment to the articles was necessary, it was already authorized and provided for by the prior act of March 1, 1870; and it was not necessary to repeat the authority in this act; and the act of March 1 is a general act, and, therefore, not obnoxious to the objection urged against the said act of April 4, 1870. The settled rule of construction of state constitutions is that they are not special grants of power to legislative bodies, like the constitution of the United States; but general grants of all the usually recognized powers of legislation not actually prohibited or expressly excepted. In the language of Mr. Justice Shafter in Bourland v. Hildreth, 26 Cal. 183: “The constitution is not a grant of power, or an enabling act to the legislature. It is a limitation on the general powers of a legislative character, and restrains only so far as the restriction appears either by express terms or by necessary implication; and the delicate office of declaring an act of the legislature unconstitutional and void, should never be exerci sed unless there be a clear repugnancy between the statute and the organic law.” See, also, Id. 215, 225, et seq.; People v. Sassovich, 29 Cal. 482; Railroad Co. v. City of Stockton, 41 Cal. 161. And it is equally well settled that the exception must be strictly construed. In the language of Air. Chief Justice Wallace in the last case cited: “ The construction is ‘ strict against tiiose who stand upon the exception; and liberal in favor of the government itself.’ ” Id. 162. And in Sharpless v. Mayor of Philadelphia, 21 Pa. St. 160, Mr. Chief Justice Black said upon the same subject: “ The federal constitution confers powers expressly enumerated; that of the state contains a general grant, of all powers not excepted. The construction of the former instrument is strict against those who claim under it; the interpretation of the latter is strict against tiiose who stand upon the exceptions, and liberal in favor of the government itself; the federal government can do nothing but what is authorized expressly, or by clear implication; the state may do whatever is not prohibited.”

The authorities establishing this canon of construction are numerous, and, so far as I know, uniform. Bearing this rule of construction in mind, what does the constitutional prohibition relied on mean? The only prohibitory words are, that corporations of the class in question “shall not be created by special act.” The word “create,” has a clear, well-settled, and well-understood signification. It means to bring into being; to cause to exist; to produce; to make, etc. To my apprehension, it appears to be one tiling to create, or bring into being, a corporation, and quite another to deal with it as an existing entity, a person, after it is created by regulating its intercourse, relations, and acts as to other existing persons, natural and artificial. “A corporation is a franchise possessed by one or more individuals, who subsist as a body politic, under a special denomination, and are vested, by the policy of the law, with the capacity of perpetual succession, and of acting in several respects, however numerous the association may be, as a single individual.” 2 Kent, Comm. (9th Ed.) 806; Railroad Co. v. Commissioners, 112 U. S. 609, 5 Sup. Ct. Rep. 299. The ordinary incidents to a corporation are to have perpetual succession, and the power of electing or otherwise providing members in the place of those removed by death or otherwise; to sue and be sued; to grant and receive and to purchase and hold lands and chattels by their corporate name; to have a common seal; to make by-laws for the government of the corporation; and sometimes the power of amotion or removal of members. “ The essence of a corporation consists only of a capacity to have perpetual succession under a special denomination, and an artificial form, and to take and grant property, contract obligations, and sue and be sued by its corporate name, and to receive and enjoy in common grants of privileges and immunities.” Id. 325.

The creative act necessarily extends only to the bringing into being of an artificial person, with the Capacities stated, among which is “a capacity to receive and enjoy in common grants and privileges and immunities;” that is to say, a capacity to receive and enjoy such grants, privileges, and immunities as maybe made either at the time of the creation or any other time. The creation of the being with the capacity to receive grants is one thing; the granting of other privileges and immunities, which it has the capacity to receive when created, is another. When such a being is brought into existence, a corporation has been created. A legal entity, a person, has been created, with a capacity to do by its corporate name such things as the legislative power may permit, and receive such grants of such rights and privileges, and of such property, as the legislature itself or private persons with the legislative permission may give. But I do not understand that every light, privilege, or grant that can be conferred upon a corporation, must be given simultaneously with the creative act of incorporation. On the contrary, I suppose the artificial being must be created with a capacity to receive before anything can be received. The right to be a corporation is itself a separate, distinct, and independent franchise, complete within itself. And a corporation having been created, enjoying this franchise, may receive a grant and enjoy other distinct and independent franchises, such as may be granted to and enjoyed by natural persons; but because it enjoys the latter franchises, they do not, therefore, constitute a part of the distinct and independent essential franchise, — the right to be a corporation. They are additional franchises given to the corporation, and not parts of the corporation itself, — not of the essence of the corporation. ¡Natural persons, with certain physical capacities, being brought into existence through the processes appointed by nature, maybe prohibited by law from doing one thing, and permitted to do another; may enjoy one franchise, and be excluded from the enjoyment of another; but these permissions and prohibitions constitute no part of the person, and were in no manner connected witli the creative act. So, with reference to corporations, being once created, they have the physical capacity, through their officers, to do anything that a natural person may do; such as building a church, a steamship, or a’railroad. But, being created, they may be .prohibited from doing one thing and permitted to do another, like natural persons; but this permission or prohibition is not a creative act, but an act regulating the conduct of the corporation, and determining its rights and relations to the public, and to other existing persons, natural and artificial. Corporate powers, strictly speaking, I suppose, are those peculiar and essential to a corporation, — not those which are or may be possessed in common with natural persons; and they are very few in number, embraping those which pertain to the essence of the corporation. The term is, undoubtedly, often and conveniently used in a broader sense, but it is not found in the constitutional provision in question. Section 33, art. 4, defines the term “corporation,” as used in the constitution, and says it “shall be construed to include all associations and joint-stock companies having any of the powers of corporations not possessed by individuals or partnerships.” Of course, it excludes all associations that do not have any powers other than those possessed by individuals and partnerships. And this provision is a recognition of the idea that corporate powers are only such as are not possessed in common with individuals and partnerships, — or natural persons. The power to create a corporation, as the terms are used in section 33, extends, therefore, to the bringing into being of a legal entity, having powers and privileges not possessed by individuals; that is to say, possessing the powers, which, as before stated, constitute the essence of a corporation, or corporate powers, strictly speaking, and has no reference to the legislative dealings with that artificial person after its creation. I suppose the constitution might have devolved the power of creating a corporation on some other body, as the supreme court, and the power to deal with it after its creation — to regulate its conduct and relations' to the public, and to prescribe its rights, powers, and duties, other than those strictly corporate, to the legislature. Had it been so provided, there can be no doubt that such powers would have been wholly distinct and independent. I do not perceive that they are any the less so, because exercised by the same body. The act of creating a corporation by conferring upon an association of individuals certain strictly corporate powers, embracing only powers and privileges not possessed by individuals and partnerships, and then granting to it other privileges, enlarging or restricting its right to the enjoyment of other franchises that may be possessed in common with natural persons, and regulating its externa] relations, are, to my mind, distinct and independent, and I find nothing in the constitution prohibiting the latter power to the legislature. There are numerous distinct, independent franchises, any one or more of which may be granted indifferently either to natural persons or existing corporations, and, in my judgment, the constitution no more prohibits the granting of any one of thosefranchises, except such as are expressly prohibited to corporations by special act, than to individuals. It only prohibits the creation of a corporation hy special act; that is to say, that tlie creating or granting of the particula.r fzanehise constituting a corporation shall not lie by special act. The prohibition applies to no other of the numerous franchises which are subjects of legislative grant.

In this case there was a corporation, — a railroad corporation, — duly created under the general act, for the purpose of building a railroad in a south-eastern direction through the state of California to the eastern line of tlie state, to intersect with a road which it was supposed would soon be built to tlie eastern states, tlie route of which was still undetermined and uncertain. It had all tlie faculties physically necessary to enable it to build any railroad. Afterwards congress authorized tlie building of a road across the continent on or near the thirty-fifth parallel of latitude to intersect the line of the state at a point different from that designated in the articles of association of said corporation, and made a grant to tlie corporation on condition that it should build a road from a point of intorsuciion with said transcontinental road, near the eastern line of the state, to San Francisco, and tlie legislature, by special act, authorized tlie said corporation already in existence with authority and capacity io build a railroad, to build its road upon said line, and accept and receive said grant. In my judgment this is in no sense an act creating a corporation, or a new corporate power, or new corporate franchise within the proper meaning of the term, but a dealing with a corporation already in existence authorized to build a road in the samo general direction, with the same object in view; that the change of line, was a matter of detail only, and if not, but on the contrary, the grant of an independent right, and an additional privilege or franchise, it was still one entirely competent for the legislature to confer upon the existing corporation, as well as on any natural person, and in no way obnoxious to the provision prohibiting the creation of a corporation for such purpose by special act. To reach any other conclusion would be to violate the canon of constitutional construction before slated; to disregard the plain meaning of the terms used in the constitution, and upon imaginary grounds interpolate into that instrument language which tlie people have not seen fit to place there themselves. As said, in substance, by Mr. Justice Crocker in Telegraph Co. v. Telegraph Co., 22 Cal. 425, to give the constitution any such construction as claimed, we would have to make it read thus: “Corporations may be formed, and other franchises and special privileges granted, under general laws, but shall not ho created, nor shall other franchises or special ‘privileges be granted by special act, except for municipal purposes.” Howell remarks: “If such had been the meaning intended by the framers of the constitution, they could easily have expressed it in apt words. The language used by them is clear, and they well knew that it included but one of the numerous class of franchises the subject of legislative grant, and that a regulation of one could not hy any reasonable implication be extended to others not mentioned."

The constitution descends to particulars when it is necessary to express the intent of its framers, as in section 34, which reads as follows: “The legislature shall have no power to pass any act granting any charter for banking purpose's; hut associations may he formed, under general laws, for the deposit of gold and silver; but no such association shall make, issue, or put in circulation any bill, check, ticket, certificate, promissory note, or other paper, or tlie paper of any bank, to circulate as money.” There is no restriction upon the legislative power to grant tlie right to build railroads and other privileges and franchises to natural persons, and our statutes are full of such grants. As examples, see railroad grants, St. 1862, pp. 97, 295, and St. 1878-79, 698, 841. There would seem to be no good reason for a prohibition of such grants to railroad companies once duly organized, when the same character of grants can be made ad libitum to natural persons.

The United States supreme court"sustains these views in the recent case of Wallace v. Loomis, 97 U. S. 154, arising under a provision of the constitution of Alabama in the identical words of our constitution under consideration. A special statute of Alabama “authorized the Mills Yalley Railroad Company, a pre-existing corporation, to purchase the railroad and franchises of the Northeast & Southwestern Railroad Company, another pre-existing corporation ; and, after doing so, to change its own name to that of the Alabama & Chattanooga Railroad Company.” This act was claimed to be in violation of the constitutional provision referred to, and Mr. Justice Bradley, speaking for the coprt, in overruling the point, says: “We are unable to see anything in this legislation repugnant to the constitutional provision referred to. That provision cannot simply be construed to prohibit the legislature from changing the name of the corporation, or from giving it power to purchase additional property, and this was all it did, in this case. No new corporate powers or franchises were created.” See, also, Bank v. De Ro, 37 Cal. 540. The court must necessarily have taken the view as to what constitutes corporate powers and franchises maintained in this opinion. Ifor it will not be denied that the power to purchase and own a railroad which a company was not before authorized to do, is a highly important one, and embraces highly important franchises; and, in fact, all the powers and franchises necessary to enable a corporation to build and own a railroad; and, if the power was not possessed before, it must be new. If they are not corporate powers and franchises when held and exercised by a corporation, it is because they are not peculiar to corporations, but such as may be granted to, possessed, and enjoyed by natural persons in common with corporations, or else that the granting of corporate powers and franchises to an existing corporation is not the creation of a corporation or a corporate power. This case clearly covers the case in hand; for if this right to purchase and enjoy another wholly different and independent road, and to change the name of the corporation, does not create a new corporate power, much less would the right to change the line of a road only generally indicated and not definitely located.

I should have contented myself with a simple reference to this authority» without any discussion of the question, but for the fact that defendant has cited the case of San Francisco v. Water-Works, 48 Cal. 493, decided by the supreme court of the state, in which it is held that corporations can exercise no powers except such as are conferred by the general laws under which they are formed, and that the legislature cannot confer on such corporations any powers, or grant them any privileges, by special act; which decision they claim to be controlling in this court, notwithstanding the decision of the-United States supreme court upon a like provision in the constitution of another state to the contrary, it is true that the settled construction of the provision of a state constitution by the highest court of the state, not in conflict with any provision of the constitution of the United States, will be adopted and followed by the national courts, .whatever their opinion as to the correctness of the settled construction may be. It becomes necessary, therefore, to. consider whether the decision cited is within the rule invoked. In my opinion, it is not. In 1863, the same question arose in Telegraph Co. v. Telegraph Co., 22 Cal. 398, and was elaborately considered. It was then held that the legislature might confer upon existing corporations by special act, a direct grant of special privileges and franchises; and that there was no restriction upon the power imposed by the constitution, except as to the particular privileges therein specified. The court was then composed of three justices, but. only two of them appear to have participated in the decision. This construction does not appear to have ever been questioned till the case of San Francisco v. Water-Works, which arose in 1874, 11 years afterwards. This case was vigorously and persistently contested on every point that the ingenuity of able counsel could suggest, yet, upon th e first appeal, and upon th a first hearing of the second appcai, the point was not even made, doubtless for the reason that the construction of the constitution was supposed to be finally settled. But, failing upon all other points, counsel obtained a rehearing, then raising and urging foi the first time, seemingly as a forlorn hope, the constitutional point under consideration with the result-before stated. At this time the supreme court was composed of live justices, of whom the chief justice, having been interested, took no part in the decision. Of the other four, three, concurred, while the fourth delivered a vigorous dissenting opinion. Thus, of the six justices of the supreme court, who have considered the question, three took one view and three the other, so they stand in number equally balanced. The able and eminent justice who delivered the opinion of the court in the last case, for whose opinion I entertain profound respect, very ably presented the same views adopted in his opinion, in his argument as counsel in the former case, so that the court in the first case did not overlook, but on the contrary, fully considered, them. II¡u,l the justices who have passed upon the question in. the two cases sat as one court, there would have been no decision of the question. Thus the matter stands equally balanced, the only difference as authority being that the decision against the constitutionality of the power is last.

Tlie supreme court, as it will be hereafter organized, consists of seven members, — six justices and a chief justice, — who may be called upon to decide the point, only one of whom was a member when the former cases were decided. What view' the now court may take of the question, of course, cannot now be known; but probably, under the circumstances, the justices will feel at liberty to consider the question as still unsettled, and upon further consideration to give effect to their own views, whatever they may turn out to be; especially so as the view adopted in the last case must invalidate a large amount of legislation, Tinder which important rights must have become vested, had before the promulgation of the decision, if not some of the legislation since that time. Upon the strict doctrine of the last case, it would seem to tie impossible to legislate at all by special act, so as to affect in any way any existing corporation; because, under the view of the court, any legislation at all must add to or take from its corporate powers and privileges, and to that extent modify its charter and create a new corporation. A construction resulting in so numerous and manifest inconveniences should not be adopted unless the language of the constitution clearly and imperatively requires it, and, unless clearly apparent, cannot be adopted without violation of the canon of construction before stated. Jf the construction given in the first ease cited, acquiesced in for 11 years, did not become “settled,” the second decision, under the circumstances, certainly cannot be regarded as setting the question at rest.

For these reasons, under the following authorities, I feel at liberty to adopt my own, and the views of the United States supreme court, which accord with the first case decided by the supreme court of California, and not with the second. Insurance Co. v. Debolt, 16 How. 431, 432; Gelpeke v. City of Dubuque, 1 Wall. 206. But this ease falls within the principle decided in the two cases cited, as well as others, in another particular. The act in question was passed and acted upon by the railroad company four years before the decision in San Francisco v. Water-Works, and rights have become vested under it. During all that time it was the settled construction of the constitutional provision in question that such legislation was valid. The act, therefore, became a contract between the state and the company, under which the latter entered upon the construction of its road in pursuance of the terms of the several statutes mentioned.

In the last case cited, the court, quoting from the opinion in the next preceding case, says: “The sound and true rule is, that if the contract, when made, was valid by the laws of the state, as then expounded by all the departments of the government and administered in its courts of justice, its validity and obligation cannot be impaired by any subsequent legislation, or decüion of its courts altering the construction of the law. The same principle applies when there is a change of judicial decisionas to the constitutional power of the legislature to enact the law. To this rule we adhere. It is the law of this court. It rests upon the plainest principles of justice. To hold otherwise would be as unjust as to hold that rights acquired under statutes may be lost by repeal. The rule embraces this case. ” 1 Wall. 206. And so it does .the case now in hand.

The settled judicial construction of a constitutional provision, as well as of a statute, is regarded as incorporated into and becoming a part of the instrument itself. Says the supreme court of the United States: “The exposition of both [constitution and statute] belongs to the judicial department of the government of the state, and its decision is final and binding upon all other departments of that government, and upon the people themselves until they see fit to change their constitution, and this court receives such settled construction as a part of the fundamental law of the state.” Webster v. Cooper, 14 How. 504.

Upon the principle established by these eases, and many others that might be cited, the construction of the constitutional provision in question adopted in the Telegraph Case, in 22 Cal., became and continued a part of the fundamental law of the state for 11 years, till what in effect became, under these authorities, the judicial amendment in Water-Works Case, in 1874; and the act in question was valid at the time it was passed, and the rights acquired under it are not vitiated by the change in the personnel of the court, and the consequent change in the construction of the constitution. I, therefore, hold the act of April 4, 1870, authorizing the defendant to build its road upon the line indicated in the plat filed with the commissioner of the general land-office, and to accept the congressional grant, was a valid act, and at the time of its passage conferred the rights and powers indicated upon the Southern Pacific Railroad Company.

But, if mistaken in these views; the rights contemplated by the act vested in the company upon still another ground. We have seen by the preceding statement of facts, that on March 1, 1870, the legislature of California passed a general act authorizing “any corporation now or hereafter organized under the laws of this state” to amend its articles of association by filing new and amended articles in the same office in which the originals are filed. This power of amendment is unlimited except as provided in the act, none of which limitations affect the questions involved in this case. This is not a special, but a general act, and is applicable to all corporations. It lias not even been suggested that there is any constitutional objection to this act, or that it is in any particular invalid. In pursuance of the provisions of this act, the Southern Pacific Railroad Company, on April 15, 1871, filed amended articles of association reciting the act, and also the said act of April 4, 1870, in which it declared its objects to be “to purchase, construct, own, maintain, and operate a continuous line of railroad from the city of San Pranciseo, in the state of California, through the city and county of San Pranciseo, the counties of San Mateo, Santa Clara, Monterey, Presno, Tulare, Kern, San Bernandino, and San Diego, to some point on the Colorado river, ” etc.; also a line from Tahuchapa pass by way of Los Angeles to the Texas Pacific Railroad, and such branches as the board of directors might afterwards deem advantageous. These articles cover the line embraced in the plat contiguous to the lands in question, and also a continuation from Talmchapa pass to connect with the Texas Pacific Railroad, which in the mean time had been authorized by congress. So that the rights of the Southern Pacific Railroad Company, along the 1 me contiguous to the lands in question, were perfected under this general act, and the amended articles of association, if not under the other act considered of April 4, 1870.

It only remains to consider the last point made upon the effect of the joint resolution passed by congress mentioned in the statement of facts. It is insisted that the closing paragraph of the resolution directing the issue of patents, “expressly saving and reserving all rights of actual settlers, together with the other conditions and restrictions provided for in the third section of said act,” extended the exceptions of the grant which only embraced rights vested at the date of the filing of the plat, and protected all parties entering with intent to pre-empt after as well as before the filing of the plat, at least down to the date of tlie passage of the joint resolution, or to the date of the passage of the said act of April 4, 1870, authorizing the building of the road on the line indicated in the plat. I do not think tlie saving clause was intended to refer to any other settlers than those who were actual settlers before and at the time of the filing of the plat. Those settling subsequently could acquire no rights. Whatever may be the proper construction of this clause of the joint resolution, it cannot affect the rights of the parties. So far as the rights of the United States are concerned, the words of grant in the act of congress, “there be and hereby is granted,” are words of present grant, and pass the title out of the United States — at least the equitable title—only to bo defeated by failure to perform the conditions subsequent. Tlie right to so much land vested at the date of the passage of the act, and attached to the specific land at the moment of filing the plat as provided in tlie act. This is thoroughly settled by a long line of decisions. Schulenberg v. Harriman, 21 Wall. 60; Railroad Co. v. U. S., 92 U. S. 741; Railroad v. Smith, 9 Wall. 95; Ryan v. Railroad Co., 5 Sawy. 262, 99 U. S. 383; Railroad Co. v. Dyer, 1 Sawy. 641; Knevals v. Hyde, 20 Alb. Law J. 370; Van Wyck v. Knevals, 106 U. S. 360, 1 Sup. Ct. Rep. 336.

After the right vested, congress itself could not affect it by legislation. It could only be divested by failure to perform the conditions and proper proceedings to revest the title in the government. These lands were absolutely and unconditionally withdrawn from pre-emption by the act of congress Itself, proprio vigore, without any other act or notice, upon filing the plat, and the right to the land vested in defendant before the passage of the resolution. Knevals v. Hyde, supra. So, also, the act making the grant provided for the issue of patents “confirming” the title to the grantees without those conditions, and it was not in the power of congress by joint resolution to annex other conditions. Even if the right to the lands did not become perfect until the right to build the road was perfected by tlie said acts of the legislature of California, and the amendments of the articles of association, as before stated, the lands were, protected from pre-emption claimants by the sixth section of the act of congress, so that the defendant could acquire no rights whatever upon which the saving clause could operate. Tlie joint resolution, therefore, did not divest the title which had vested under the act of congress, and did not affect the rights of the parties. The object of the resolution seems to have been to relieve the doubts of the secretary of the interior as to what the rights of the company v/we, — a formal expression of congressional opinion. Rut if the clause be regained as prescribed by law, its omission does not affect tlie patent so far as it is otherwise valid. The most that can be said is, that its omission does not vitiate any rights that ought to have been protected by its insertion. Those, like the defendant, wlio have no rights to protect, cannot complain of the omission.

It follows that the title to the lands in question is in the plaintiff, and the defendant has no title, and his possession is wrongful. There must be findings and judgment for the plaintiff, and it is so ordered.