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three months the public notice required by law of such entry, the first publication being on November 24, 1871. Within the time allowed by law for occupants to assert their claims to the lands embraced in said town-site, Townsend applied for a conveyance to himself of the premises in controversy, and in due course of proceedings in the probate court was adjudged to be the rightful occupant thereof and entitled to a deed therefor. Whereupon, the mayor, on May 1, 1873, executed and delivered to him a deed, under his corporate seal of the city, purporting to convey to him the whole of said premises in fee in execution of said trust, but said deed was without witnesses. The appellant did not, within six months after the first publication of notice of entry of said town-site by the mayor, or at any time, make or deliver to the clerk of the probate court of said county any description of said premises, or of any right, interest, or estate claimed by her therein, or make any claim as an occupant or otherwise to a conveyance of any interest therein under the town-site laws.

After his purchase of the possessory right to said premises, and before the fall of 1868, Townsend expended in the erection of buildings thereon the sum of $16,000. On October 1, 1868, he borrowed of defendant Hooper the sum of $5,000, and on December 8, 1868, a further sum of $5,000. For these sums he executed his several notes, and deeds of trust on the premises to secure the same. On September 24, 1873, the indebtedness of Townsend to Hooper on these notes amounted to $12,500, and on that day he renewed the same by giving Hooper his three notes, two for $5,000 each and one for $2,500, due in one year, and at the same time executed a deed of trust to trustees to secure the same. On October 10, 1876, Townsend gave his note to defendant Roberts for $5,000, payable in one year, and secured it by a deed of trust upon the same premises. This note afterwards by assignment became the property of defendants Hooper and Jennings. Afterwards Townsend contracted other debts, which, either by deed of trust or judgment, became liens on said premises, and by various assignments the defendants Hooper and Jennings became the owners and holders of all the debts secured by lien on said premises. On April 10, 1878, the sum of $16,425 was due on the notes executed by Townsend to Hooper on September 24, 1873, and the trustees named in the deed of trust to secure the same, in pursuance of the power thereby conferred, sold said premises to defendant Jennings for $22,500, which sum he paid and it was applied to the discharge of the several liens on the property in the order of their priority. Jennings afterwards conveyed an undivided half of the premises to his codefendant Hooper. During all their transactions with Townsend the defendants Hooper, Jennings, and Roberts dealt with him, prior to the proceedings in the probate court under the town-site law, as the

sole owner of said premises, as against every one save the United 19 States, and subsequently thereto as absolute sole owner, without any actual or constructive notice of any claim of the appellant, and neither the trustees in said trust deed, nor the defendants Hooper, Jennings, and Roberts, nor any of them, had any notice of the claim of the appellant to any interest in or right to said premises until after the bringing of this suit.

Upon this finding of facts the district court dismissed the bill of complaint. Its decree was carried to the supreme court of the territory by appeal, where it was affirmed. The decree of the latter court affirming the decree of the district court is brought under review by the present appeal.

J. G. Sutherland, J. R. McBride, Arthur Brown, and Jas. H. Mandeville, for appellant.

P. L. Williams and Legrand Young, for appellees.

Woods, J. The facts found by the court leave no ground for the appellant's case to rest on. Whatever rights, if any, she might have as against Townsend, nad he continued the owner of the premises in controversy, she certainly has none against innocent bona fide incumbrancers and purchasers, without notice of her claim. The arrangement between Townsend and the appellant was a secret agreement known only to themselves, and, as found by the court, they, after the agreement, continued to live together, as they had previously done, in order that the public might not know that any change had taken place in their relations to each other. A secret agreement, as between herself and Townsend, which they purposely kept concealed, cannot be set up against bona fide purchasers without notice. The finding of the court that neither Hooper, Jennings, nor Roberts had notice, either actual or constructive, of appellant's alleged rights, cuts up by the roots all claim on her part as against them to the premises in controversy.

Appellant contends, however, that her joint physical occupancy with Townsend of the premises, as found by the court, was constructive notice to the defendants Hooper and Jennings of her alleged rights, and that they, therefore, purchased in subservience thereto. When Townsend, in 1866, entered into possession of the premises which he had previously bought with his own money, he took with him his lawful wife and the appellant, his polygamous wife. At that time it is not disputed that he was the sole occupant under the act of congress. The appellant was no more a joint possessor at that time than any servant or guest of the hotel. A secret agreement subsequently entered into between Townsend and the appellant, and purposely kept concealed from the public by them, cannot be held to change the nature of Townsend's occupancy so as to affect with constructive notice persons who had no actual notice. Constructive notice is defined to be in its nature no more than evidence of notice, the presumption of which is so violent that the court will not even allow of its being controverted. Plumb v. Fluitt, 2 Anstr. 438; Kennedy v. Green, 3 Mylne & K. 719. Where possession is relied on as giving constructive notice it must be open and unambiguous, and not liable to be misun.

derstood or misconstrued. Ely v. Wilcox, 20 Wis. 523; Patten v. Moore, 32 N. H. 384; Billington v. Welsh, 5 Bin. 132. It must be sufficiently distinct and unequivocal so as to put the purchaser on his guard. Butler v. Stevens, 26 Me. 484; Wright v. Wood, 11 Harr. (Pa.) 130; Bogue v. Williams, 48 Ill. 371. As said by STRONG, J., in Mee. han v. W’illiams, 12 Wright, 238, what makes inquiry a duty is such & visible state of things as is inconsistent with a perfect right in him who proposes to sell. See, also, Holmes v. Stout, 3 Green, Ch. 492; McMechan v. Griffing, 3 Pick. 149; Hanrick v. Thompson, 9 Ala. 409.

Tested by these rules, it is plain that the physical occupancy of the premises in question by appellant, as found by the district court, was not such possession as to put a purchaser on inquiry and charge him with constructive notice. On the contrary, viewed in connection with the other facts found, it was such as to mislead him.

The case of appellant is therefore an attempt to set up a secret trust as against bona fide purchasers for value without notice. But nothing is clearer than that a purchaser for a valuable consideration, without notice of a prior equitable right,'obtaining the legal estate at the time of his purchase, is entitled to priority in equity as well as at law, according to the well-known maxim that when equities are equal the law shall prevail. Williams v. Jackson, 107 U. S. 478; [2 SUP. Cr. REP. 814;] Willoughby v. Willoughby, 1 Term Rep. 763; Carlton v. Low, 3 P. Wms. 328; Ex parte Knott, 11 Ves. Jr. 609; Tildesley v. Lodge, 3 Smale & G. 543; Shine v. Gough, 1 Ball & B. 436; Bowen v. Evans, 1 Jones & La. T. 178; Vattier v. Hinde, 7 Pet. 252. This is the case of defendants Hooper and Jennings.

The appellant contends, however, that as the deed executed by the mayor of Salt Lake City to Townsend was without witnesses, as required by the general law of the territory, it did not convey the legal title. But the act of the territorial legislature providing for the conveyance to occupants, by the mayor, of lands included in the town-site, did not require witnesses to his deed. It merely directed that "deeds of conveyance for the same shall be executed by the mayor of the city or town under the seal of the corporation. Ac. cording to the well-settled rule, that general and specific provisions, in apparent contradiction, whether in the same or different statutes, and without regard to priority of enactment, may subsist together, the specific qualifying and supplying exceptions to the general, this provision for the execution of a particular class of deeds is not controlled by the law of the territory requiring deeds generally to be executed with two witnesses. Pease v. Whitney, 5 Mass. 380; Nichols v. Bertram, 3 Pick. 342; State v. Perrysburg, 14 Ohio St. 472; London, etc., Ry. V. Wandsworth Board of Works, L. R. 8 C. P. 185; Bish. Writ. Laws, $ 112a. The deed of the mayor to Townsend having been executed in conformity with the special act, was therefore valid and effectual to convey the legal title.


The result of these views is that the appellant has failed to show herself entitled to the relief prayed in her bill. The decree of the Bupreme court of the territory of Utah affirming the decree of the district court, by which her bill was dismissed, must be affirmed.

(109 U, S. 627)

CANADA SOUTHERN Rr. Co. v. GEBHARD and another, Ex'rs, etc.



SAME 0. GEBHARD and another, Ex'rs, eto.

(December 10, 1883.)



In a country whero no constitutional prohibition exists against the passage of laws

impairing the obligation of contracts, there is no reason why the legislature may not, by statute, compel individual bondholders of a domestic corporation to accept an arrangement or compromise made when the corporation is in financial embarrassment, for the benefit of all the bondholders, and accepted by a majority of them. Such statutes are on a footing with bankrupt acts, and cannot be said to deprive any person of his property without due process of

law. A citizen of the United States purchasing the bonds of a corporation organized un

der such foreign government, takes them subject to the policy of that government, and is bound by its statutes. This is the case, though the bonds are payable in the United States, and though their payment could be enforced by

the courts of this country. HARLAN, J., dissenting. Whatever force such a statute may have where it is en

acted, it cannot bind the courts of a different country. Such an act differs from a composition in bankruptcy in the fact that the bondholders have no oppor. tunity to be heard in court in opposition to the arrangement.

Error to the Circuit Court of the United States for the Southern District of New York.

Jos. H. Choate, for railway company.
John M. Bowers, for defendants in error.

WAITE, C. J. What is now known as the Canada Southern Railway Company was originally incorporated on the twenty-eighth of February, 1868, by the legislature of the province of Ontario, Canada, to build and operate a railroad in that province between the Detroit and Niagara rivers, and was given power to borrow money in the province or elsewhere and issue negotiable coupon bonds therefor, secured by a mortgage on its property, “for completing, maintaining, and working the railway." Under this authority the company, on the Becond of January, 1871, at Fort Erie, Canada, made and issued a series of negotiable bonds, falling due in the year 1906, amounting in all to $8,703,000, with coupons for semi-annual interest attached, payable, principal and interest, at the Union Trust Company, in the city of New York. To secure the payment of both principal and in. terest as they matured, a trust mortgage was executed by the company covering “the railway of said company, its lands, tolls, revenues present and future, property and effects, franchises and appurtenances.” Every bond showed on its face that it was of this kind and thus secured. Before the thirty-first of December, 1873, the company became satisfied that it would be unable to meet the interest on these bonds maturing in the coming January, and so it requested the hold. ers to fund their coupons falling due January 1, 1874, July 1, 1874, and January 1, 1875, by converting them into new bonds payable on the first of January, 1877, and by so doing only, in legal etfect, extend the time for the payment of the interest, without destroying the lien of the coupons under the mortgage, or otherwise affecting the obligation of the old bonds. Some of the bondholders funded their coupons, in accordance with this proposition, and accepted the extension bonds, but, under the arrangement, their coupons were not to be canceled until the new bonds were paid. In this condition of affairs the parliament of Canada, on the twenty-sixth of May, 1874, enacted that the Canada Southern Railway, which was the railway built by the Canada Southern Railway Company under its provincial act of incorporation, “be declared to be a work for the general advantage of Canada," and a “body corporate and politic within the jurisdiction of Canada,” for all the purposes mentioned in, and with all the franchises conferred by, the several incorporating acts of the legislature of the province. This, under the provisions of the British North America act, 1867, passed by the parliament of Great Britain "for the union of Canada, Nova Scotia, and New Brunswick, and the government thereof,” made the corporation a dominion corporation and subjected it to the legislative authority of the parliament of Canada.

1 Soe 8. C. 1 Fed. Rep. 387.

On the fifteenth of March, 1875, another series of bonds, amounting in the agregate to $2,044,000, or thereabouts, was issued and se. cured by a second mortgage to trustees. After the issue of all the bonds the company found itself unable to pay its interest and otherwise financially embarrassed, and a joint committee, composed of three directors and three bondholders, after full consideration of all the circumstances, submitted to the company and to the bondholders “a scheme of arrangement of the affairs of the company," which was approved at a meeting of the directors on the twenty-eighth of September, 1877. This scheme contemplated the issue of $14,000,000 of 30year bonds, bearing 3 per cent. interest for three years and 5 per cent. thereafter, guarantied, as to interest, for 20 years, by the New York Central & Hudson River Railroad Company, the first coupons

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