the legislature so conferred upon them. Now, this is the theory of the Indiana cases which are referred to by Judge Davis, in the case of Clearwater v. Meridith, 1 Wallace 40, and of all the cases which we have examined. If this is so, how is it possible that the capital stock of the G. & C. U. R. R. Co. is still in existence when it has been merged into a new company?

The way and manner in which the defendants state their position, in their answer, in regard to this matter is as follows:

"These defendants further answering say, that the five millions eight hundred and two thousand six hundred and two dollars of stock of the consolidated corporation called the Galena and Chicago Union Railroad Company so exchanged for the stock of the North Western Railroad Company as aforesaid, was for the purpose of protecting and perfecting the consolidation made between said companies; if need be, assigned by the respective holders thereof to William B. Ogden and Samuel J. Tilden, in trust, with power to do all such acts and things as might be necessary in the premises, and that said William B. Ogden and Samuel J. Tilden now hold the said stock so assigned by them as aforesaid, uncancelled in trust for the present Chicago and North Western Railway Company for the uses and purposes aforesaid."

Now, we care not, for our purposes, whether the capital stock of the G. & C. U. R. R. Có. is held in trust for the C. & N. W. R. Co. or not; the moment that it is admitted, that the capital stock is still in existence, and that the certificates of stock have never yet been cancelled, that moment, the pretended consolidation falls to pieces, and the whole agreement becomes nudum pactum. The very statement of the case by the defendants is, to them, felo de se. How can the capital stock of a company exist and be extinct at one and the same time? How can the franchises of a corporation become merged in a new corporation and still exist in the old? How can a thing which is dead at the same time be alive?

The trust which is claimed to exist, is self-created, and is another of the anomalies of this most extraordinary transaction. It is nothing more or less than an expedient, and is a provision, un

doubtedly, against the contingences of this very suit. We admit the wisdom of such a provision, and admire the foresight, but it is perfectly fatal to the consolidation.

The defendants, we repeat, admit that the capital stock of the G. & C. U. R. R. Co. is still in existence, but is held in trust for the C. & N. W. R. Co., and was, they say, for "the protecting and perfecting the consolidation made between said companies; if need be, assigned by the respective holders thereof to William B. Ogden and Samuel J. Tilden, in trust, with power to do all such acts and things as might be necessary in the premises, and that said William B. Ogden and Samuel J. Tilden now hold the stock so assigned by them as aforesaid, uncancelled," &c.

Now, suppose that William B. Ogden and Samuel J. Tilden should, under such a power of attorney as is here described, throw the whole of that stock upon the market and sell it the certificates of stock have been regularly assigned to them and they hold them; if put in circulation and sold in large or small quantities, who is to step forward and say that there is now no longer any G. & C. U. R. R. Co.? Can William B. Ogden and Samuel J. Tilden say so, when they pretend to hold five million dollars of its stock in trust, and that trust is a subsisting, live trust. If this trust has any other meaning thau the one here described, we are unable to understand the force of language. If it is contended that the certificates of stock have lost all their vitality, and that the consolidation has shorn them of their strength, what are they acting as trustees for waste paper for? The court will mark well the language which is used; they do not, it will be observed, state that they have preserved for future reference or as precious relics, the old certificates of stock of the G. & C. U. R. R. Co.-that they are holding the cast off and worn out paper in trust for the paper mill; but they announce it as a fact, with ostentation and exultation, that over five millions of dollars of the stock of G. & C. U. R. R. Co. has been assigned to them by the respective holders, and that they hold that stock now; and we insist, that the defendants cannot escape from the logical consequences of their admission by any finesse, however elaborate and picturesque.

When the defendants themselves admit that the consolidation is still incomplete, and that the capital stock of the G. & C. U. R. R. Co. which the stockholders gave to the officers of the C. & N. W. R. Co. to be exchanged is still in existence, what conclusion must the court come to? Does it make any difference as to the legal effect of the matter, whether the stock of the G. & C. U. R. R. Co. is in the hands of the original holders, or whether they put their names on the back of the certificates and handed them to William B. Ogden and Samuel J. Tilden and let them hold them? This trusteeship is new-it is the novum organum-it is the last card, and if it does not prove a piece of news to hundreds of stockholders of the G. & C. U. R. R. Co., who have been beguiled into exchanging their stock for that of the C. & N. W. R. Co., then there is no reliance to be placed in human veracity.

But, taking this statement to be true, just as it is made, then the entire consolidation becomes a nudum pactum.

Stript of its verbiage, and William B. Ogden and Samuel J. Tilden have got into their possession over five millions of dollars of the capital stock of the G. & C. U. R. R. Co., for which the C. & N. W. R. Co., paid the stockholders three dollars in cash, as a bonus, (which bonus was obtained at the time of the consolidation, from the treasury of the G. & C. U. R. R. Co. itself,) and one share of common stock, and one share of preferred stock, which stock has since been watered by pouring in the stock and bonds of the Peninsula R. R. of Michigan at par, which were sold for, from 25 to 50 cents on the dollar.

The consolidation and amalgamation of the G. & C. U. R. R. Co., with the C. N. W. R. Co., was either a fixed fact on the 1st of June, 1864, or it was not. If it was, then the manner in which it was accomplished, and the power of the directors to do the deed, has been correctly discussed. If it was not so accomplished, and the capital stock of the G. & C. U. R. R. Co. is still in existence, then the C. & N. W. R. Co. has no business whatever with the road, and they can be held liable for every dollar of its earnings, which they have received and are receiving, and for a reasonable sum for

its use, and for all damages arising from their management of the

same.

In either aspect of the case, the acts of the defendants cannot be reconciled with the established principles of law, and are directly in conflict with the rule laid down by the United States Supreme Court, in the case of Clearwater v. Meredith, in 1 Wallace, 40.

CONCLUSION.

1. Powerful as the corporations are, against which we contend, the law is more powerful.

II. "If principles can ever be settled by authority; if the slightest respect is due to the opinions of other tribunals, it would seem that no court could resist the overwhelming weight of the decisions which have been cited."-(SELDEN, J.)

III. The term, "capital stock," in an act of incorporation, means the amount contributed or advanced by the stockholders as meinbers of the company.

The capital of every corporation is represented in the property and franchises of the corporation, and the owner of each share is entitled to a fixed and unalterable proportion of that capital. It is as much his individual property as any other possession.

The owner of one share will be protected in the exercise of all his rights, and the enjoyment of all his privileges, precisely as if he owned a million. Hence, it follows, that any attempt to create a greater number of shares by issuing additional shares or additional certificates, is not only a violation of the organic law of the corporation, but a direct invasion of the contract existing between the corporation and each individual stockholder. Therefore, when the directors of the G. & C. U. R. R. Co. entered into an agreement with the C. & N. W. R. Co., under the name and style of consolidation," whereby the capital stock was increased several

millions of dollars beyond the amount fixed by the charter, it was unauthorized, and a direct violation of the fundamental law of the corporation, and void, as to the complainant, and all others similarly situated to him.

IV. Neither the G. & C. U. R. R. Co. or the C. & N. W. R. Co. had any right, power or authority either to issue common or preferred stock for the purpose of purchasing each other; neither of them had any right to compel their stockholders to sell out their stock against their will, or exchange it for any other product, and as no railroad stock is a legal tender, therefore the complainant cannot be expelled from the corporation of which he was a member, or be compelled to submit to any such terms as are prescribed by the articles of consolidation which are set forth in this case.

V. The stock which is owned by a stockholder in a corporation, is his property. It is not the property of the corporation. There cannot well be two entire owners of the same property. The stockholders have the property and the corporation the management of it. The corporation is not even the trustee; for it has not the legal estate, and no power to sell. It has merely the naked possession, with the perpetual legal right of using the funds for the benefit of the legal and equitable owners.

The stock, then, which a stockholder owns, being property, cannot be sold and disposed of without his consent.

The immunities of private property and the inviolability of vested rights have been asserted by political and legal writers, and established by judicial decisions, for three centuries. It is, indeed, a part of Magna Charta itself.

VI. The charter of a corporation is a contract— 1. Between the State and the Corporation;

2. Between the Corporation and the stockholders, &c.

The legal effect of a contract is to bind all the parties to it; to bind them to all the stipulations of it, and in the capacity in which they contracted, and to bind them equally. It was intended,