A railroad company organized under a charter from Pennsylvania
is responsible for the infraction of a patent right respecting
cars, although the entire capital stock of the company was held by
a connecting railroad company in Maryland, which latter company
also worked the road by the instrumentality of its agents, and
motive power, and cars.
The obligations to the community which the Pennsylvania company
is placed under by its charter cannot be evaded by any transfer of
its rights and powers to another company, and in this case, the
Pennsylvania company contributes to the expense of working the
road, and of paying the officers and agents who are employed.
Courts will not allow corporations to escape from their proper
responsibility, by means of any disguise.
Page 58 U. S. 31
Where the patent was signed by an acting commissioner of
patents, it was not necessary to aver or prove that he was legally
entitled to act in that capacity. The court will judicially take
notice of the persons who preside over the patent office, whether
they do so permanently or transiently.
The case is stated in the opinion of the Court.
Page 58 U. S. 38
MR. JUSTICE CAMPBELL delivered the opinion of the Court.
The plaintiff is a corporation existing under a charter from the
State of Pennsylvania, and authorized to construct a railroad from
the Town of York to the Maryland line. Its stock was subscribed for
by the Baltimore & Susquehanna Railroad Company, a Maryland
corporation, and their joint capital is vested in a continuous
railroad from the City of Baltimore to York. The management of the
road is committed to the Maryland company, which appoints the
officers and agents upon it, and furnishes the rolling stock
necessary for its operation. The president and secretary of the two
companies are the same. The directors of the Pennsylvania
corporation plaintiff are selected by the Maryland company, and are
qualified by a transfer of one or more shares of its stock to them,
shortly before an election, and which they return on vacating their
office. This nominal organization is made necessary by the charter,
which requires that the majority of the officers shall be citizens
of Pennsylvania, and that annual reports of the condition and
business of the company shall be rendered to the legislature. To
preserve appearances with the legislature, an annual statement is
made.
Page 58 U. S. 39
In this, the gross receipts of the entire road for the year are
ascertained, and the expenses deducted; the balance is then
divided, one third being assigned to the plaintiff, but no money
passes between the corporations. In these expense accounts, the
salaries of officers, conductors, and engineers, the cost of
locomotives and fuel, of the repairs and insurance of cars, and the
losses of business, enter as constituent items. It was admitted
upon the trial of the cause, that a number of cars made according
to the specification of the patent of the defendant, had been used
upon the road without his license, and for which he brought this
suit. A verdict was rendered in his favor, and the judgment thereon
is brought to this Court, upon exceptions to the instructions of
the circuit court, to the jury.
The court charged the jury, that the road on which the
infraction was committed was held under a Pennsylvania charter to
the defendant in that court; that the transportation on the road
was carried on by the Maryland corporation; and that the profits
accruing from the use of the cars upon the road, that is, the
profits of the infraction, are nominally divided between the two
companies. That upon these facts the plaintiff is entitled to
recover against the present defendants, whether they are to be
regarded as partners, or as principal, or agent of the Maryland
corporation.
The plaintiff complains here of this charge, for that the cars
employed were not built by, and did not belong to the company; that
they were the exclusive property of the Maryland corporation; and
that the agreement to divide the profits did not constitute a
partnership, nor evince a relation of principal or agent to impose
a liability. This conclusion implies, that the duties imposed upon
the plaintiff by the charter, are fulfilled by the construction of
the road, and that by alienating its right to use, and its powers
of control and supervision, it may avoid further responsibility.
But those acts involve an overturn of the relations which the
charter has arranged between the corporation and the community.
Important franchises were conferred upon the corporation to enable
it to provide the facilities to communication and intercourse,
required for the public convenience. Corporate management and
control over these were prescribed, and corporate responsibility
for their insufficiency provided, as a remuneration to the
community for their grant. The corporation cannot absolve itself
from the performance of its obligations, without the consent of the
legislature.
Beman v. Rufford, 1 Simon N.S. 550.
Winch
v. B. & L. Railway Company, 13 L. & E. 506.
If, then, the case had terminated with the facts that the
infringement of the defendant's patent had taken place, by the
Page 58 U. S. 40
acts of persons using the corporate name of the plaintiff, with
the assent of the corporate authorities, their liability would have
been fixed.
But the case before us is that the motive power on the road
partly belongs to the plaintiff; that the agents and officers
employed are in its service and are paid by it; and that the cars
are fitted and repaired at the common expense of the two
corporations. It follows, therefore, that the plaintiff is a
principal, cooperating with another corporation, in the infliction
of a wrong, and is directly responsible for the resulting
damage.
Nor will the plea that the corporation has no independent nor
responsible existence, as regards the Maryland company, and that
its display of a president and directors, of conductors, engineers,
and agents, of annual elections and annual statements, import only
a formal and illusive representation before the Legislature of
Pennsylvania, or their constituents, of a compliance with the
conditions of the charter, avail the plaintiff. It is certainly
true that the law will strip a corporation or individual of every
disguise, and enforce a responsibility according to the very right,
in despite of their artifices. And it is equally certain that, in
favor of the right, it will hold them to maintain the truth of the
representations to which the public has trusted, and estop them
from using their simulation as a covering or defense.
Walland
Canal Co. v. Hathaway, 8 Wend. 480.
The Supreme Court of Pennsylvania, in
Peters v. Ryland,
8 Harris 497, has announced principles decisive of this case.
The court held that the owner of a passenger car employed on a
railroad belonging to the state, and the motive power and
superintendence of which is furnished by the state, is responsible
for the misconduct of the public agents. It says:
"The case before them is
sui generis, but it comes much
nearer to that class of decisions in which it has been held, that
several parties engaged in carrying over different portions of the
same line of conveyance, each sharing in the profits of the whole
route, and of course of each section of it, are all responsible for
the faithful discharge of their duty, and liable to respond in
damages for any injury which results from the negligence or
unskillfulness of any of the proprietors and servants."
11 Wend. 571; 18
id. 175; 19
id. 534.
"The state as well as the carrier is paid for every passenger
transported on this railroad, which shows their community of
interest, and if there be a common liability, that of the state
cannot be enforced by action; and this circumstance does not
diminish that of the carrier; because they have a common interest,
however, and share the business of transportation, it is apparent
that in holding the party before us to answer for the
Page 58 U. S. 41
negligence of the state's agents, we do not punish one man for
the misfeasance of another's servants."
The objection taken to the patent, that it is signed by "an
acting commissioner of patents," and that the record contains no
averment nor proof of his title to the office, is not tenable. The
court will take notice judicially of the persons who from time to
time preside over the patent office, whether permanently or
transiently, and the production of their commission is not
necessary to support their official acts.
Wilson
v. Rousseau, 4 How. 686.
The judgment of the circuit court is affirmed.
Order
This cause came on to be heard, on the transcript of the record,
from the Circuit Court of the United States for the Eastern
District of Pennsylvania, and was argued by counsel. On
consideration whereof, it is now here ordered and adjudged by this
Court, that the judgment of the said circuit court in this cause
be, and the same is hereby, affirmed with costs, and interest until
paid, at the same rate per annum that similar judgments bear in the
State of Pennsylvania.