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5. Earle, 13 Pet. 588,) though it may do business in all places where its charter allows and the local laws do not forbid. Railroad v. Koontz, 104 U. S. 12. But wherever it goes for business it carries its charter, as that is the law of its existence, (Relf v. Rundle, 103 U. S. 226,) and the charter is the same abroad that it is at home. Whatever disabilities are placed upon the corporation at home it retains abroad, and whatever legislative control it is subjected to at home must be recognized and submitted to by those who deal with it else. where. A corporation of one country may be excluded from business in another country, (Paul v. Virginia, 8 Wall. 168,) but, if admitted, it must, in the absence of legislation equivalent to making it a corporation of the latter country, be taken, both by the government and those who deal with it, as a creature of the law of its own country, and subject to all the legislative control and direction that may be properly exercised over it at the place of its creation. Such being the law, it follows that every person who deals with a foreign corporation impliedly subjects himself to such laws of the foreign government, affecting the powers and obligations of the corporation with which he voluntarily contracts, as the known and established policy of that government authorizes. To all intents and purposes, he submits his contract with the corporation to such a policy of the foreign government, and whatever is done by that government in furtherance of that policy, which binds those in like situation with him. self, who are subjects of the government, in respect to the operation and effect of their contracts with the corporation, will necessarily bind bim. He is conclusively presumed to have contracted with a view to such laws of that government, because the corporation must of necessity be controlled by them, and it has no power to contract with a view to any other laws with which they are not in entire harmony. It follows, therefore, that anything done at the legal home of the corporation, under the authority of such laws, which discharges it from liability there, discharges it everywhere.

No better illustration of the propriety of this rule can be found than in the facts of the present case. This corporation was created in Canada to build and work a railway in that dominion. Its principal business was to be done in Canada, and the bulk of its corporate property was permanently fixed there. All its powers to contract were derived from the Canadian government, and all the contracts it could make were such as related directly or indirectly to its business in Canada. That business affected the public interests, and the keeping of the railway open for traffic was of the utmost importance to the people of the dominion. The corporation had become financially embarrassed, and was and had been for a long time unable to meet its engagements in the ordinary way as they matured. There was an urgent necessity that something be done for the settlement of its affairs. In this the public, the creditors, and the shareholders were all interested. A large majority of the creditors and shareholders had agreed on a plan of adjustment which would enable the company to go on with its business, and thus accommodate the public, and to protect the creditors to the full extent of the available value of its corporate property. The dominion parliament had the legislative power to legalize the plan of adjustment as it had been agreed on by the majority of those interested, and to bind the resident minority creditors by it terms. This power was known and recognized throughoute the dominion when the corporation was created, and when all its* bonds were executed and put on the market and sold. It is in accordance with and part of the policy of the English and Canadian governments in dealing with embarrassed and insolvent railway companies, and in providing for their reorganization in the interest of all concerned. It takes the place in England and Canada of foreclosure sales in the United States, which in general accomplish substantially the same result with more expense and greater delay, for it rarely happens in the United States that foreclosures of railway mortgages are anything else than the machinery by which arrangements between the creditors and other parties in interest are carried into effect, and a reorganization of the affairs of the corporation under & new name brought about. It is in entire harmony with the spirit of bankrupt laws, the binding force of which, upon those who are subject to the jurisdiction, is recognized by all civilized nations. It is not in conflict with the constitution of the United States, which, although prohibiting states from passing laws imparing the obligation of contracts, allows congress "to establish

uniform lawe on the subject of bankruptcy throughout the United States." Unlese all parties in interest, wherever they reside, can be bound by the arrangement which it is sought to have legalized, the scheme may fail. All home creditors can be bound. What is needed is to bind those who are abroad. Under these circumstances the true spirit of international comity requires that schemes of this character, legalized at home, should be recognized in other countries. The fact that the bonds made in Canada were payable in New York is unimportant, except in determining by what law the parties intended their contract should be governed, and every citizen of a country, other than that in which the corporation is located, may protect himself against all unjust legislation of the foreign government by refusing to deal with its corporations.

On the whole we are satisfied that the scheme of arrangement bound the defendants in error, and that these actions cannot be maintained. The same result was reached by the court of queen's bench in the province of Ontario when passing on a similar statute in Jones v. Canada Cent. Ry. Co., supra.

The judgments are reversed and the causes remanded, with instructions to enter judgment on the facts found in favor of the railway company in each of the cases.

Mr. Justice FIELD not being present at the argument of this case took no part in the decision.

HARLAN, J., dissenting. The Canada Southern Railway Company is a corporation created and organized under the laws of the dominion of Canada. It was given, by its charter, power to borrow in Canada or "elsewhere," at a rate of interest not exceeding 8 per cent. per annum, such sums of money as might be necessary to complete, maintain, or work its railway; to issue bonds therefor, payable eitber in currency or in sterling, at such place, within Canada "or without," as might be deemed advisable; to sell the same at such prices or discount as might be deemed expedient or necessary; and to hypothecate, mortgage, or pledge the lands, tolls, revenues, and other property of the company for the payment of the said sums and the interest thereon. In pursuance of the authority thus conferred, the company, in 1871, issued its bonds in the customary form of negotiable securities, and made them payable in the year 1906, at the of. fice of the Union Trust Company in the city of New York, with interest at the rate of 7 per cent. per annum, coupons being given for such interest. These bonds, with their interest, were secured by a deed of trust to William L. Scott and Kenyon Cox, citizens of the United States, conveying to them, and their successors in the trust, the railway of the company, its lands, tolls, revenues, present and future, property, effects, franchises, and appurtenances. That deed declared that the bonds, and also the rights and benefits arising therefrom, should pass by delivery. In 1873 the company issued certain bonds, of the denomination of $105 each, for the purpose of funding unpaid coupons. They were made payable, principal and in. terest in gold, at the office of the Union Trust Company in the city of New York. In order to effect this arrangement for funding, the latter company was made a trustee to deliver the bonds of $105 each to the parties surrendering the unpaid coupons. Of some of these bonds defendants in error, who are citizens of New York, became the holders. They were delivered to them at the city of New York Upon their non-payment at maturity, the present suits at law were brought in one of the courts of that state, and judgment asked for the amount of the bonds. The railway company appeared, and upon its petition the suits were removed into the circuit court of the United States for the southern district of New York. In the latter court an answer was filed, to which the plaintiff demurred. The demurrer being sustained and the company declining to answer further, judgment was rendered for the amount due on the bonds in suit.

What is the defense which my brethren have declared to be suffi. cient to deprive the plaintiffs of their right to judgment? That the company had paid the bonds in suit, in whole or in part? No. That, by the terms of the contract, it was discharged from liability to pay them? By no means. Its defenge is placed wholly upon av



act of the parliament of Canada, ratifying & certain scheme or ar. rangement, which is inconsistent with the contract between the parties, and to which a large minority of the bondholders and stockhold. ers have never given their assent. That scheme provided for the surrender of the old bonds, bearing 7 per cent. interest, and the suh. stitution of other bonds, maturing at a later date, and bearing a lesa rate of interest—3 per cent. for the first three years, and 5 per cent. thereafter, the interest on the new bonds being guarantied by the New York & Hudson River Railroad Company. To this scheme the circuit court finds as a fact that the plaintiffs never assented. They stood, as they had the right to do, upon their contract with the com. pany. But the parliament of Canada declares that this scheme “shall be deemed to have been assented to by all the holders of the original first mortgage bonds of the company,” and that this arrangement "shall be binding upon all the holders of the first and second mortgage bonds and coupons and bonds for interest thereon respectively, and upon all the shareholders of the company."

* This defense, asserting the power of a foreign government, by its legislation, to destroy the contract rights of citizens of the United States, was well characterized, as it seems to me, by the learned cir. cuit judge who tried this case, as a most extraordinary one to be made in a country where the obligation of contracts against impairment by legislative enactment, as well as the rights of persons and property, are carefully guarded by constitutional provisions. In this country, no state can pass any law impairing the obligation of contracts; the constitution of the United States forbids such legislation. And the principle is founded in justice, independently of this constitutional provision. The statute of Canada here relied on disregards this principle, and openly and in terms impairs the obligation of the contract which each holder of these bonds has with this foreign railway company. It assumes, without a hearing and without the consent of those who hold its bonds, to discharge the railway company from all liability thereon. If any state in this Union should assume to pass a law with reference to a railway corporation she had created, requiring the holders of its bonds, for which they had paid value, to surrender them and take in their place others of less value, and payable at a different time, our courts, federal and state, would be constrained, by their obligation to support the constitution of the United States, to declare such legislation to be in conflict with that instrument. More than that, a citizen of Canada, or even a railway corporation of that dominion, could have the benefit, in our courts, of the constitutional inhibition upon state laws impairing the obligation of contracts.

In the Sinking-fund Cases, 99 U. S. 718, we said that while the United States are not included within the constitutional prohibition which prevents states from passing laws impairing the obligation of contracts, yet "equally with the states they are prohibited from de

priving persons or corporations of property without due process of law. They cannot legislate back to themselves, without making compensation, the lands they have given this corporation to aid in the

construction of its railroad. Neither can they by legislation compel 3 the corporation to discharge its obligations in respect to the subsidy

bonds otherwise than according to the laws of the contract already made in that connection. The United States are as much bound by their contracts as are individuals. If they repudiate their obligations, it is as much repudiation, with all the wrong and reproach that term implies, as it would be if the repudiator had been a state, or a municipality, or a citizen. No change can be made in the title created by the grant of the lands, or in the contract for the subsidy bonds, without the consent of the corporation."

But the laws of Canada, by the judgment now rendered, are given effect here, to the injury of our own citizens, notwithstanding those laws arbitrarily deprive them of their contract rights. This railroad company, under express authority conferred by its charter, executed bonds payable, as we have seen, in New York, and secured them by mortgage executed to citizens of the United States. It sent them to this country for sale and our people invested their money in them. Intrenched behind the arbitrary edict of a foreign government, it now says to American bolders of its bonds that it will not comply with its contract; that if they do not surrender those securities and take others of less value they shall not receive anything.

It is claimed by my brethren that the Canada statute provides & scheme which, in its practical effect, resembles a composition in bankruptcy. It seems to me that there are several answers to this sug. gestion: (1) It does not purport to be a scheme of bankruptcy in the sense of the word "bankruptcy" as used either in England or America. (2) It is unlike a composition in bankruptcy in this: that whereas à composition is never had except upon notice, so that creditors may have their day in court, with opportunity to show that the proposed composition should not be made, here, no such opportunity was given to the holders of this company's bonds, in any court or other tribunal, to show that the arrangement which the Canadian parliament sanctioned ought not, in justice, to be made; but the arrangement was, by legislative enactment, made absolutely binding upon every bondholder and stockholder, even those who are citizens of other countries. It is said that the Canadian scheme is practically nothing more than might be accomplished in foreclosure proceedings instituted in one of our own courts by or at the instance of the assenting bondholders. My answer is that all bondholders and stockholders have their day in court in such proceedings; and when, upon the judicial sale of a railway and its appartenances, they fail to realize ihe full amount of their claims, they are not deprived of their proporty without due process of law.

Reference is made by the court to the act of the English parliament

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