* * under the government of the United States, "The Central Pacific Railroad Company was constituted by the consolidation of two state corporations of California, but derived many of its franchises and privileges from the government of the United States" (p. 35). And, after setting forth the findings of the Court the opinion continued: "If we turn to the acts of Congress referred to by the Court, we shall find that franchises of the most important character were conferred on this 'company. Originally the Central Pacific Railroad Company of California had only power to construct a railroad from Sacramento to the eastern boundary of the State" (p. 38). Referring to the Act of Congress of 1862, Mr. Justice BRADLEY proceeded:-- "Thus, without referring to the other franchises and privileges conferred upon this company, the fundamental franchise was given by the acts of 1862, and the subsequent acts, to construct a railroad from the Pacific Ocean across the State of California and the Federal Territories, until it should meet the Union Pacific; which it did meet at Ogden in the Territory of Utah. This important grant, though in part collateral to, was independent of that made to the company by the State of California, and has ever since been possessed and enjoyed. The present company has it by transfer from a consolidation of the original companies, by which its existence and capacities were constituted. Such consolidation was authorized by the 16th section of the act of Congress of July 1, 1862, and the 16th section of the act of July 2, 1864, taken in connection with the second section of the act of March 3, 1865, referred to in the findings of the Court. The last named act ratified the transfer by the Central Pacific to the Western Pacific of a portion of its road, extending from San José to Sacramento, and conferred upon the latter company all the privileges and benefits of the several acts of Congress relating thereto, and subject to all the conditions thereof. If, therefore, the Central Pacific Railroad Company is not a Federal corporation, its most important franchises, including that of constructing a railroad from the Pacific Ocean to Ogden city, were conferred upon it by Congress. * * * "Assuming, then, that the Central Pacific Railroad Company has received the important franchises referred to, by grant of the United States, the question arises whether they are legitimate subjects of taxation by the State. They were granted to the company for national purposes and to subserve national ends. It seems very clear that the State of California can neither take them away nor destroy nor abridge them, nor cripple them by onerous burdens. Can it tax them? It may undoubtedly tax outside, visible property of the company situated within the State. That is a different thing. But, may it tax franchises which are the grant of the United States? In our judgment it cannot (p.40). Guided by the light thus shed upon the general rules of construction applicable to this series of statutes, we may now proceed to the solution of the particular question of the personal liability of stockholders to the United States in respect to these subsidy bonds, first, of the Union Pacific Railroad Company, and next of all the other aided companies, including the Central Pacific. In so doing, there must be borne in mind the facts of the transactions between the Central Pacific of California and the Western Pacific, set forth in the bill, ending in their consolidation to form the present Central Pacific. This company took all the property and all the liabilities of the two preceding companies, and became by the mere fact of consolidation under the acts of Congress, a Federal corporation, at least to the extent of all the matters involved in the subsidy bonds. The Acts Show that it was the Intention of Congress to Treat all the Companies Alike. The exact question here is, whether it was the will of Congress in the Pacific Railroad Acts that the stockholders of the Central Pacific should be liable to the Government for the repayment of the subsidy bonds. We have nothing to do with the liability of stockholders in that corporation to creditors in general. It may well be that all other creditors, and the United States, on all other claims against the company, if any they have, might have a recourse to the personal liability of the stockholders, and yet the stockholders not be liable on these subsidy bonds. We do not see how it can be doubted that Congress had the power so to enact and so to agree; and what we claim is that, whether regarded as a statute imposing the will of the sovereign upon the subject, or a proposition of terms, which, accepted by the company, made a contract, the true construction of the statute is that the stockholders of the Central Pacific should not be liable for these subsidy bonds. One thing must be conceded at the outset-that, by the terms of the acts, there was to be no personal liability of the stockholders of the Union Pacific Railroad Company. That is the starting point of the argument. It is certainly the settled law in the United States, both in the State and Federal courts, that personal liability of stockholders for debts of a corporation can only be created by statutory enactment. It is also settled that if there is nothing to that effect in the statute creating the corporation, or in the Constitution, under which, by virtue of a general act, a corporation may be formed, there is and can be no personal liability. Much was said in the argument below about the status of stockholders at common law, but we believe that no case can be found which will in the least impair or discredit the proposition that, unless a statute imposes it, there is no stockholders' liability. It is equally true that, in the case of no other of the group of corporations that were to have the benefit of the subsidy bonds could there be any liability of stockholders, because, whether created by State or Territorial legislation, there was no such incident imposed upon the corporations in question. If, then, we can establish that the relation of the United States to the Central Pacific Company was intended by Congress to be the same as in the case of all the other companies; that the security of the Government, for its reimbursement of the amounts represented by subsidy bonds issued, was, in the case of all these corporations, to be identical; that it took by the statute certain securities and obligations from the Union Pacific and the Kansas Pacific and other companies, and did not take, or intend to take, from the Central Pacific an additional security, in stockholders' liability, to the extent of sixty million dollars, we shall present an impregnable point. We submit that it is a matter of common sense and of necessary construction that it was the intention of Congress, by the Act of 1862, and the acts amendatory thereof, to cover and provide for the entire relations which were to exist between the Government and the several Pacific Railroad Companies in respect to the subject of the subsidy bonds. The Government was laying out a plan for the prosecution of a great work of internal improvement of the last necessity to it. It recognized that no hand less powerful than its own-no individual, no corporation, no State, without its powerful aid— could enter upon the undertaking or carry it to a successful conclusion. It was a project which, as the act shows, was understood to be likely to occupy twelve years in its accomplishment, and on which a credit of thirty years was to be given by the Government. Exactly what duty, what obligation, what liabilities, were to be exacted from the companies in return for the Government aid was necessarily to be provided for in the acts with the same exactness and precision as the duties and advances which were to be assumed and made by the Government itself. Congress had it in its power in passing the acts to prescribe the very terms and conditions, and all the terms and conditions, under which the subsidy bonds were to be issued; and it was in its power, and it was its duty, to do this without any reference to any State law whatever. The region which the great work of internal improvement was to traverse was already occupied in part by States, and would inevitably, as the result has shown, be entirely occupied by States to be created, and which have since been created. It can hardly be imagined, therefore, that Congress should intend to omit any element or feature of the things to be done and performed on either side in accomplishing the work. Besides, although the road to be built was to be constructed in part through the State of California and in part through other States, yet Congress was, by virtue of its Federal power, supreme over the whole land alike, whether within State boundaries or in Federal territory, where the work was to be done. The power of Congress to construct a road for military and other purposes, such as this was intended to be, through and across the |