1. Where the trustees or directors of a corporation have
appealed from a decree and directed their counsel to prosecute the
appeal, this Court will not dismiss it on the motion of strangers
to the decree who, since it was rendered, have become the owners of
a majority of the stock of the corporation.
2. Such trustees or directors are in law the managers of the
property and affairs of the corporation. As such, they, in all
litigation involving its action, represent it, its stockholders and
creditors. If they violate their trust, the remedy must be sought
in some court of original jurisdiction.
3. An act entitled "An Act granting the right of way through the
public lands to the Denver and Rio Grande Railway Company,"
approved June 8, 1872, 17 Stat. 339, an act amendatory thereof,
approved March 3, 1877, 10 Stat. 405, and an act entitled "An Act
granting to railroads the right of way through the public lands of
the United States," approved March 3, 1870, 18 Stat. 482,
considered with reference to the conflicting claims of the Denver
and Rio Grande Railroad Company, and the Canon City and San Juan
Railway Company, to occupy and use the Grand or Big Canyon of the
Arkansas for railroad purposes.
Held: 1. That said act of 1872 granted an immediate
beneficial easement in a particular way over which the routes
designated in the charter of the Denver Company lay, capable,
however, of enjoyment only when such way should actually and in
good faith be appropriated for the purposes contemplated by that
charter, and then the title thereto would take effect by relation
as of the date of the act; 2. that that company finally
appropriated the right of way through the canyon April 9, 1878, and
was by its prior occupancy entitled to the benefits conferred by
said act of 1872; 3. that both companies should be allowed to
proceed with the construction of their respective roads through
said canyon where it is broad enough for them to do so without
interfering with each other; but where, in the narrow portions of
the defile, this is impracticable, the court below, while
recognizing and enforcing the prior title of the Denver Company,
should, by proper orders, secure upon just and equitable terms the
right of the Canyon City Company, under said act of 1875, to use,
in common with the Denver Company, the same roadbed and track after
the same shall have been completed.
These causes involve the conflicting claims of two railroad
corporations -- the Denver and Rio Grande Railway Company and the
Canyon City and San Juan Railway Company -- to occupy and use the
Grand or Big Canyon of the Arkansas for
Page 99 U. S. 464
railroad purposes. For the sake of brevity, the former will be
hereafter designated as the Denver Company, and the latter as the
Canyon City Company.
The Denver Company was incorporated in the year 1870, in
conformity to the laws of the then Territory of Colorado. Its
object, expressed in the articles of incorporation filed in the
proper office of the territory, was to locate, construct, operate,
and maintain certain railway and telegraph lines,
viz.,
the Denver and Rio Grande Railway, the Denver and Southern Railway,
the South Park Railway, the Western Colorado Railway, the Morena
Valley Railway, the San Juan Railway, the Gallesto Railway, and the
Santa Rita Railway. The general route of each line was designated
in the articles of incorporation. That of the main line -- the
Denver and Rio Grande Railway -- was as follows:
"Commencing at Denver, Colorado Territory, thence running up the
valley of the South Platte River, on the southeast side thereof, to
a point at or near the mouth of Plum Creek; thence up the valley of
Plum Creek, to a point at or near the forks of East Plum Creek and
West Plum Creek; thence up the main east branch of Plum Creek
Valley to the lake in township 11, range 67 west, on the east of
the ridge dividing the waters of Plum Creek and Monument Creek;
thence down the valley of Monument Creek to a point at or near the
junction of the valleys of the Monument and Fountain
qui
bouille, or to a point in the Fountain Valley, below the mouth
of the Monument, if the detailed survey shall determine the latter
to be the most eligible; thence by the valley of the Fountain or
across its west tributaries to such a point on the Arkansas River
at or above Pueblo as may be found upon a detailed survey to be the
most eligible for intersecting the same;
thence up the valley
of the Arkansas to a point at or near Canyon City; thence
continuing up the valley of the Arkansas through the Big Canyon of
the same to a point at or near the mouth of the Arkansas
River; thence by the valleys or the adjoining slopes of the
Arkansas River and of Pueblo Creek to the summit of the divide
between the waters of the Arkansas and the San Luis Park (known as
Poncho Pass); thence by the most eligible route in a general
southerly direction down the San Luis Valley to the valley of the
Rio Grande del Norte; thence in a general southerly direction, by
the particular route which may be determined upon by a detailed
survey to be
Page 99 U. S. 465
most eligible, down the valley of the Rio Grande to the southern
boundary of Colorado; thence continuing down the valley of the Rio
Grande, on either side of the river, as may be found expedient, or
crossing from one side to the other when desirable, to El Paso, in
the State of Chihuahua, with the privilege of consolidating or
uniting with and operating any connecting railway in the Republic
of Mexico."
The remaining seven roads are or were intended to be branches or
feeders of the main line.
By an Act of Congress approved June 8, 1872, 17 Stat. 339,
"he right of way over the public domain, one hundred feet in
width, on each side of the track, together with such public lands
adjacent thereto as may be needed for depots, shops, and other
buildings for railroad purposes, and for yard room and sidetracks,
not exceeding twenty acres at any one station, and not more than
one station in every ten miles, and the right to take from the
public lands adjacent thereto stone, timber, earth, water, and
other material required for the construction and repair of its
railway and telegraph line"
was granted and confirmed unto the Denver Company, its
successors and assigns. The act describes the company as a
corporation created under the incorporation laws of the Territory
of Colorado, and grants, ratifies, and confirms to it all the
rights, powers, and franchises conferred by those laws on
corporations created thereunder for constructing and operating
railroad and telegraph lines, for the extension and operation of
its railway and telegraph lines in and through any contiguous
territory of the United States, to the northern boundary line of
Mexico, subject to the conditions and requirements of the
territorial statutes so far as the same were applicable and not
inconsistent with the laws of the United States. The act also gave
to the company the rights, powers, and privileges conferred upon
the Union Pacific Railroad Company by sec. 3 of the Act of July 2,
1864. But the rights thus granted and conferred were accompanied by
the proviso that the company should complete its railway to a point
on the Rio Grande as far south as Santa Fe within five years after
the passage of the act, and complete each year thereafter fifty
miles additional south of that point.
Page 99 U. S. 466
By an Act approved March 3, 1875, 18
id. 576, that of
June 8, 1872, was corrected by adding thereto a proviso which was
declared to have been omitted by mistake of the copyist. That
proviso enacts, among other things, that the
"Denver and Rio Grande Railway Company is hereby recognized as a
lawful corporation from the date of its incorporation under the
laws of Colorado, and all the powers, privileges, and franchises by
said laws conferred upon said company are hereby expressly
ratified, confirmed, and legalized as existing from the said date
of incorporation."
On the same day, Congress passed an act "granting to railroads a
right of way through the public lands of the United States.'"
18 Stat. 482. It grants that right to any railroad
"company duly organized under the laws of any state or territory
except the District of Columbia or by Congress which shall have
filed with the Secretary of the Interior a copy of its articles of
incorporation, and due proofs of its organization under the same,
to the extent of one hundred feet on each side of the central line
of said road; also the right to take from the public lands adjacent
to line of the road, material &c. necessary for the
construction of the road, and grounds for station buildings,
depots, machine shops, side tracks, turnouts, and water
station,"
&c.
The second section provides:
"That any railroad company whose right of way or whose track or
roadbed upon such right of way passes through any canyon, pass, or
defile, shall not prevent any other railroad company from the use
and occupancy of said canyon, pass, or defile for the purposes of
its road in common with the road first located or the crossing of
other railroads at grade. And the location of such right of way
through any canyon, pass, or defile shall not cause the disuse of
any wagon or other public highway now located therein, nor prevent
the location through the same of any such wagon road or highway
where such road or highway may be necessary for the public
accommodation, and where any change in the location of such wagon
road is necessary to permit the passage of such railroad through
any canyon, pass, or defile, said railroad company shall, before
entering upon the ground occupied by such wagon road, cause the
same to be reconstructed at its own expense in the most
Page 99 U. S. 467
favorable location and in as perfect a manner as the original
road,
provided that such expenses shall be equitably
divided between any number of railroad companies occupying and
using the same canyon, pass, or defile."
Section 4 declares that any railroad company desiring to secure
the benefits of that act shall,
"within twelve months after the location of any section of
twenty miles of its road, if the same be upon surveyed lands, and,
if upon unsurveyed lands, within twelve months after the survey
thereof by the United States, file with the register of the land
office for the district where such land is located a profile of its
road, and upon the approval thereof by the Secretary of the
Interior,"
the same was required to "be noted upon the plats in said
office, and thereafter all such lands over which such right of way
passes should be disposed of subject to such right of way." All
rights thereby granted to be forfeited as to any section located
but uncompleted within five years after such location.
On Feb. 15, 1877, Alling, Locke, and Megrue became incorporated
under the laws of Colorado as "The Canyon City and San Juan Railway
Company," with a capital stock of $100,000, for the purpose of
constructing and maintaining a railroad from Canyon City, thence up
the valley of the Arkansas River through the Grand Canyon thereof,
thence, by the most practicable route, following that river to
South Arkansas Post Office in Lake County, Colorado. The articles
of incorporation were filed in the office of the Secretary of State
of Colorado Feb. 19, 1877. The Secretary of the Interior, in an
official communication, declared, June 22, 1877, his approval of
the proofs of organization filed by that company and of the map
showing the line of its road for a distance of twenty miles.
Congress, March 3, 1877, passed an act amending that of June 8,
1872, so as to read that the Denver Company should have ten years
from the passage of the original act to complete its road as far
south as Santa Fe, in default of which, as to the unfinished part
of it, the rights and privileges granted should be null and
void.
The Canyon City Company filed, April 20, 1878, its complaint
against the Denver Company, in the Third Judicial District
Page 99 U. S. 468
Court of Colorado, Fremont County, claiming that it had complied
in all respects with the Act of Congress of March 3, 1875, and
acquired a prior right to construct its road through the Grand
Canyon, one hundred feet on each side of its line as surveyed in
1877, and charging that the defendant was interfering with the
construction of its road upon that line.
In accordance with the prayer of the bill, an injunction was
granted by the state court restraining the defendant from
interfering with its further operations in the canyon. That suit,
upon the petition of the defendant, was, April 22, 1878, removed
into the Circuit Court of the United States for the District of
Colorado.
The Denver Company, April 27, 1878, filed its bill in the latter
court against Alling and others, who are designated in the charter
of the Canyon City Company as its trustees for the first year, and
against the Atchison, Topeka, and Santa Fe Railway Company,
charging that the Canyon City Company was not a legally constituted
corporation; that the individual defendants, wrongfully claiming to
be such corporation, had, by force, occupied the Grand Canyon, and
were proceeding to locate their road upon a line in that canyon
which the complainant had surveyed in 1871-72, and upon which it
had made preparations to resume active work on the 19th of April,
1878; that although it was in the occupancy of the narrow portion
of the canyon, where only one road could be located, the defendants
threatened by force to drive away its engineers and servants then
working in said canyon, and thereby dispossess it of its located
line and grade in the narrow part of said canyon; that the
defendants were aided and abetted in said course by the Atchison,
Topeka, and Santa Fe Railway Company, who, seeking to build a road
from Pueblo, by the valley of the Arkansas and through said canyon,
had to that end confederated with the defendants to compel the
complainant to abandon the extension of its railway as authorized
by its charter and the act of Congress. The complainant, by its
bill, claimed an exclusive right of way through the Big Canyon,
upon the line of its survey, and one hundred feet upon each side of
its road, and to that effect relief was asked by final decree. In
that suit, a temporary injunction was granted against the Canyon
City Company restraining it
Page 99 U. S. 469
from occupying or attempting to occupy the Big Canyon and from
in any way or manner constructing or attempting to survey, locate,
or construct their line of railroad through the canyon, which, for
the purposes of that suit, was taken and decreed to begin at what
is known as the "Point of Rocks," at the mouth of the canyon, and
extending to the twelve-mile bridge. That injunction was
subsequently modified and limited in its operation to that part of
the canyon known as the Royal Gorge, and the defendant was allowed
to enter upon that part of the canyon and grade the same for a
railroad, but not to lay ties or rails on any part thereof until
the future order of the court.
In the suit instituted by the Canyon City Company, the Denver
Company filed a cross-bill, setting up substantially the same facts
as in its original bill against Alling and others, and a decree was
rendered which, among other things, recognized the prior right of
the former to proceed in the construction and operation of its road
through the Grand Canyon without interference or obstruction in any
way by the Denver Company, but with liberty to the latter to
exhibit its bill in any court of competent jurisdiction to compel
the Canyon City Company to so change, locate, and construct its
road as to permit the convenient and proper location by the Denver
Company of its own road or to compel the Canyon City Company to
permit the Denver Company to occupy the track and roadway of the
former company if at any point in that defile it should be
impracticable to conveniently lay down or safely operate two
distinct lines of railway. From that decree the Denver Company
appealed, and it also appealed from the decree in its own suit,
dissolving the preliminary injunction granted to it, and dismissing
its bill.
Page 99 U. S. 470
MR. JUSTICE HARLAN, after stating the case, delivered the
opinion of the Court.
A preliminary question presented for our consideration must be
first disposed of.
These causes were determined in the circuit court by final
decree Aug. 24, 1878. Upon stipulation between the parties, they
were submitted here on the 10th of January last. On the 20th of
January, it was represented to this Court in proper form that the
Pueblo and Arkansas Valley Railroad Company owned a railroad which,
with its branches and extensions, is a continuation in Colorado of
the line of the Atchison, Topeka, and Santa Fe Railroad Company in
Kansas; that certain contracts and arrangements had, with the
consent of the appellees in both suits and after the filing of that
stipulation, been entered into between the Denver Company, the
Atchison, Topeka, and Santa Fe Railroad Company, and the Pueblo and
Arkansas Valley Railroad Company and had been in part executed
after the filing of the printed arguments herein; that by said
contracts and arrangements, the Atchison, Topeka, and Santa Fe
Railroad Company had taken a lease of all the constructed lines of
the Denver Company for thirty years from Dec. 1, 1878, and was then
in the possession of and operating them; had purchased and received
all the railroad supplies and materials of that company; had
purchased and transferred to a trustee for its use a majority of
all the shares of the capital stock of that company, with an
agreement providing for a further purchase and ownership of the
remainder of them, and with the further agreement that the Pueblo
and Arkansas Valley Railroad Company and the Atchison, Topeka, and
Santa Fe Railroad Company should have the selection of a majority
of the directors of the Denver Company, the other third being
selected by the bondholders of the latter company; that those
contracts and agreements were made with the intent and design of
ending all controversies, and especially all competitive
construction of railroad lines, between the Denver Company on the
one part, and the Atchison, Topeka, and Santa Fe Railroad Company
and the roads operated by it, including the Pueblo and Arkansas
Valley Railroad Company, on the other part; that by reason of the
premises, the Atchison, Topeka,
Page 99 U. S. 471
and Santa Fe Railroad Company, in its own right and in
connection with the Pueblo and Arkansas Valley Railroad Company,
had become and was equitably the owner and entitled to the control
of all the affairs, suits, interests, and property of the Denver
Company, and especially to the discontinuance of all litigation
hostile to the interests of the Atchison, Topeka, and Santa Fe
Railroad Company and the Pueblo and Arkansas Valley Railroad
Company. Upon these grounds the Pueblo and Arkansas Valley Railroad
Company (the present name of the Canyon City Company) and Alling
and others, appellees, moved the court that the stipulation for the
submission of these causes, upon printed arguments, be cancelled
and discharged, such printed arguments withdrawn from the files,
and the appeals dismissed. Upon the part of the Atchison, Topeka,
and Santa Fe Railroad Company, a motion was submitted that it be
allowed to intervene and take charge of these suits in the name of
the Denver Company and appear by its solicitor on behalf of the
appellants, that it may give consent of record to the dismissal of
the appeals. The trustee referred to in the alleged contracts gave
his consent to the motions, and their hearing was set for the 20th
of March, this Court in the meantime suspending any action upon the
appeals. At that date the Denver Company appeared by its attorneys
and resisted each motion.
Upon the hearing of the motions, it appeared, among other
things, that on the first day of March, 1879, the Denver Company
had issued 85,000 shares of stock, of which the plaintiffs in the
motions claimed to own or control a bare majority -- 42,510 shares.
It was also shown that at a meeting of the directors of the Denver
Company held on Feb. 7, 1879, a quorum being present, resolutions
were unanimously adopted declaring that these motions were hostile
to the interests of that company; that the claims of the Atchison,
Topeka, and Santa Fe Railroad Company and the Pueblo and Arkansas
Valley Railroad Company were unfounded, and their assertion for the
fraudulent purpose of depriving the Denver Company, its
stockholders and creditors, of valuable rights, interests, and
property without compensation. The resolutions instructed the
president and the attorneys of the company not only to
Page 99 U. S. 472
oppose these motions, but by all legal means prevent the
dismissal of these appeals or the intervention herein for any
purpose of any company or person not a party to the record. They
were also required to prosecute the appeals in this Court with the
utmost diligence. At the argument of the motions, copies of all the
contracts, resolutions, and writings relied upon by the respective
parties were submitted for our examination. Upon careful
consideration of the suggestions of learned counsel, we do not
doubt that it is our duty to decline any expression of opinion as
to the effect or proper construction of the numerous documents
which, it is claimed, give the plaintiffs in the motions the right
to have the appeals of the Denver Company dismissed. It is apparent
that there are serious differences among the stockholders of that
company not only as to its general policy in the future, but as to
the validity and interpretation of the contracts and writings under
which the Atchison, Topeka, and Santa Fe Railroad Company and the
Pueblo and Arkansas Valley Railroad Company claim to be equitably
the owners and entitled to the control of the affairs, property,
and suits of the Denver Company. We cannot now enter that field of
controversy. The present appeals are being prosecuted to final
judgment by order of the directors or trustees of the appellant
corporation. To them by law is committed the management of the
property and concerns of the corporation. In all litigation
involving the action of the corporation, they are its
representatives in court. In the discharge of their duties, they
represent not only the stockholders but the bondholders and
creditors of the company. Their right while in the exercise of
their legitimate functions to manage the affairs and suits of the
company ought not to be controlled or interfered with by this Court
by reason of anything which appears upon the pending motions. Upon
their responsibility as directors and trustees, they insist that
these causes shall proceed to final judgment in accordance with the
stipulation heretofore made by the parties to the appeals. If, in
prosecuting them to final judgment, they violate any trust
committed to their hands or any agreement which is binding upon the
corporation and the minority stockholders, remedy may be sought in
some court of original jurisdiction, into which, upon proper
Page 99 U. S. 473
pleadings, all persons interested may be summoned. No such
proceeding has been instituted, so far as we are informed, and we
do not fell at liberty, upon the suggestion of strangers to the
decrees appealed from, to go behind the official action of the
board of directors or trustees and, in plain disregard of their
wishes and their directions to counsel, dismiss the appeals and
thereby refuse to consider questions regularly presented for our
determination.
The motions are therefore denied, and we proceed to an
examination of the cases upon their merits, premising that our
present duty is limited to a determination of the rights of the
parties as they existed when the final decrees were rendered and as
they are manifested in the records before us. If, since these
decrees were entered, the Atchison, Topeka, and Santa Fe Railroad
Company or the Pueblo and Arkansas Valley Railroad Company have by
valid contract acquired a controlling interest in the property,
rights, and affairs of the Denver Company, that interest can be
asserted by appropriate proceedings, and will not be affected by
anything we may determine upon the issues presented by these
appeals.
The several acts of Congress upon which the Denver Company and
the Canyon City Company rest their respective claims to priority of
right in the Big or Grand Canyon are cited, and the history of the
organization of both companies given in the statement of the case.
But there are other facts of an important character to which
attention will be called in the course of this opinion.
The first question upon the merits necessary to be considered is
as to the proper construction of the Act of June 8, 1872. In its
determination, however, we should not overlook what had previously
transpired in the history of the company to which was granted by
that act a right of way over the public domain. In January and
February, 1871, very shortly after its articles of incorporation
were filed in the proper office of the territory, the Denver
Company caused a survey to be made of the route through the Grand
or Big Canyon of the Arkansas for the purpose, as declared by the
engineer who conducted it, of retaining control of the canyon for
that company. That survey, extending through the entire length
of
Page 99 U. S. 474
the canyon, is described by him as a "close preliminary" -- that
is, a line very near location, without an actual location of the
curves. But the location of the curves, he testifies, could have
been made in his office away from the canyon. With that exception,
he pronounces it to have been a complete survey. The line thus
surveyed was marked by stakes every hundred feet, numbered
consecutively, and at points where it seemed necessary, a plus or
stake between the hundred feet was added. Of the work then done a
map and profile were made and returned to the chief engineer of the
company and estimates sent to its general manager. Upon the
occasion of that survey or shortly thereafter, employees of the
company, under the direction of its engineer, removed several
hundred yards of material, graded several hundred feet at the upper
outlet of the canyon, and put up a retaining wall ten to fifteen
feet high and about one hundred yards in length. In January, 1872,
the survey was continued west of the canyon for a distance of four
or five miles. While these surveys were being made, the company was
employed in the construction of its road from Denver to Pueblo, and
completed it to the latter place within a few days after or about
the date of the passage of the act of June 8, 1872. It may also be
stated in this connection that it completed its road from Pueblo to
Labran, within eight miles of Canyon City, about the 1st of
October, 1872, and to Canyon City in July, 1875. All this was
consistent with a purpose upon the part of the Denver Company to
avail itself ultimately, and within the time prescribed by law, of
the granted right of way through the Grand Canyon.
Of what the company had done prior to the passage of the act of
1872 towards effecting the objects of its incorporation Congress,
it is fairly to be presumed, was not uninformed. It was aware, we
must also presume, of the routes designated in the charter of the
company, for the main road and its several branches, all so
connected as to constitute, when completed, an extended railway
system for that entire region. That Congress was so informed is
quite clearly indicated by the terms employed in the act of 1872.
That act must therefore receive the same construction which would
be adopted had it contained a full or detailed description of the
routes of the main line and
Page 99 U. S. 475
branches. In this view, and having due regard to all the
circumstances and condition of the company when the act was passed,
we do not doubt that the intention of Congress was to grant to the
company a present beneficial easement in the particular way over
which the designated routes lay, capable, however, of enjoyment
only when the way granted was actually located, and, in good faith,
appropriated for the purposes contemplated by the charter of the
company and the act of Congress. When such location and
appropriation were made, the title, which was previously imperfect,
acquired precision, and by relation took effect as of the date of
the grant. The settled doctrines of this Court would seem to
justify that conclusion.
Railroad Company v.
Smith, 9 Wall. 95;
Schulenberg
v. Harriman, 21 Wall. 44;
Leavenworth, Lawrence
& Galveston Railroad Co. v. United States, 92 U. S.
733;
Missouri, Kansas & Texas Railway Co. v.
Kansas Pacific Railway Co., 97 U. S. 1.
It is here suggested by counsel for the Denver Company that the
surveys made in the Grand Canyon in 1871 and 1872 constituted,
without further action on its part, a sufficient location and
appropriation of at least that part of the designated route. To
this proposition we cannot yield our assent. The right of way
through that pass was not, in itself, and separate from the right
of way along the whole route, of any special value, except the
company surveyed its line and located its road east and west of
that defile. The grant was an entirety as to the right of way over
all the lands lying on the route designated in the charter of the
company, and it would be unreasonable to say that, as to a
particular part of that route, a mere preliminary survey was in
itself equivalent to a fixed location of the road and an
appropriation of the way granted, while as to another part of the
general route a similar survey would not be an appropriation of the
way granted, unless followed by actual occupation and use for
railroad purposes. Any such construction of the statute must be
held altogether inadmissible.
When was there, then, an appropriation by the Denver Company of
the Grand Canyon within the principle we have stated? In 1877 and
1878 it became evident that that pass was of vital importance to
any company desiring to reach the trade and business of the country
beyond it, whether to
Page 99 U. S. 476
the west, northwest, or southwest. Discoveries then recently
made of mineral wealth in Western Colorado gave it immense
pecuniary value in railroad circles, since, as the evidence tends,
to establish the occupancy of the Royal Gorge of the Grand Canyon
by one line of railroad would practically exclude all competing
companies from using it for like purposes, except upon such terms
as the first occupant might dictate. From the date of the survey
made in 1872 down to April 19, 1878, the record furnishes no
evidence that the Denver Company actually occupied that defile for
any purpose whatever. On that day, however, Congress having
extended the time to ten years from the date of the original act
within which to complete its road as far south as Santa Fe, that
company did, by its agents, occupy the narrow portion of the canyon
known as the Royal Gorge with the avowed intention of constructing
its road upon the line of the surveys made in 1871 and 1872. But
during the night of April 19, 1878, the board of directors of the
Canyon City Company were convened and Robinson and Strong, the
chief engineer and manager, respectively, of the Atchison, Topeka,
and Santa Fe Railroad Company were elected to the same positions in
the Canyon City Company. They made preparations to take immediate
possession of the canyon in behalf of the last-named company.
Evidence of their diligence and activity in that direction is found
in the fact that on the morning of the 20th, as early as four
o'clock, a small squad of their employees, nine or ten in number,
under the charge of an assistant engineer, swam the Arkansas River
and in the name of their company took possession of the canyon.
Under the circumstances, it is not material that they failed to
find a rival force in the canyon at such an unseasonable hour. That
squad was followed the same day by a large and overpowering force
of workmen under the control of Robinson. These movements were
succeeded by a suit instituted the same day in the state court in
the name of the Canyon City Company against the Denver Company in
which an injunction was obtained restraining the latter from
occupying or attempting to occupy the canyon for railroad purposes
or from interfering with the Canyon City Company in the
construction of its own road therein.
The last-named company now insists that it has the prior
Page 99 U. S. 477
right to occupy and use the canyon for its line of road. In
support of this claim, it contends that the other company had lost
whatever rights it acquired in the canyon through the imperfect
survey of 1871 and 1872, by its long inaction after the
construction of the road to Canyon City and by its failure within a
reasonable period to follow up those surveys by actual location and
occupancy for railroad purposes. The conduct of the Denver Company,
it is urged, evinced a settled purpose upon its part to abandon its
grant of a right of way through that canyon. The answer to all this
seems very obvious.
The surveys of 1871 and 1872, although defective in some
particulars and not equivalent to an actual location or
appropriation of the way, were quite as complete and extended as
the survey which the Canyon City Company caused to be made in 1877.
The evidence shows beyond all question that when the latter survey
was made, there was seen in the canyon all or very many of the
stakes which the engineer of the Denver Company had put there in
1871 and 1872. Those who made the survey in 1877 undoubtedly knew
when, by whom, and for what purpose those stakes had been there
placed. Nor had they sufficient reason to suppose that the Denver
Company had finally abandoned its purpose of constructing a road
through the canyon. We have already referred to the completion of
the road from Denver to Pueblo and from Pueblo to Canyon City by
July, 1875. In 1873, the Denver Company commenced the construction
of one of its branches -- the Denver and Southern Railway.
Commencing at Pueblo, it completed that road to Cucharas, fifty
miles from Pueblo, by February, 1876; to Garland, sixty miles from
there, by August, 1877; and to the valley of the Rio Grande, by
July, 1878. After July, 1875, the company, it is true, suspended
active work upon the line west of Canyon City. But the cause of
such suspension, as its officers testify, was the widespread
depression in business and financial circles and the belief, shared
by all interested in the prosperity of the company, that the
extension of the line southward from Pueblo gave promise of quicker
returns and more immediate results in every way. They state that it
was the purpose of the company to resume work upon its line through
the canyon as soon as the necessary means therefor could be
obtained, and
Page 99 U. S. 478
that there was no intention at any time to abandon the route
west of Canyon City. Their delay in the construction of the road
west of Canyon City and through the Grand Canyon seems to have been
in the interest of the stockholders they represented, and not
inconsistent with an honest purpose, within the period fixed by
law, to meet the objects for which Congress granted to it the right
of way. Its surveys of 1871-72, followed by an occupancy of the
canyon on the 19th of April, 1878, in advance of the Canyon City
Company, for the purpose of constructing its road through that
defile was, in our judgment, a final appropriation of the way
granted by Congress. The Denver Company then, if not before, came
into the enjoyment of the present beneficial easement conferred by
the act of June 8, 1872, and was entitled to have secured against
all intruders whatever privileges or advantages belonged to that
position.
But the important question remains as to the effect of the Act
of March 3, 1875, granting the right of way through the public
lands of the United States to any railroad company duly organized
under the laws of any State or territory, except the District of
Columbia, or by the Congress of the United States. The explicit
language of that act leaves no doubt as to its object. It
declares
"that any railroad company whose right of way, or whose track or
roadbed upon such right of way, passes through any canyon, pass, or
defile, shall not prevent any other railroad company from the use
and occupancy of said canyon, pass, or defile, for the purposes of
its road, in common with the road first located, or the crossing of
other railroads at grade."
At the date of that act the road of the Denver Company, as we
have seen, had not been located through the Grand Canyon of the
Arkansas. But it had a subsisting grant of a right of way through
that defile. According, therefore, to the act of March 3, 1875, the
Canyon City Company, if it belonged to the class described in the
first section of the act, might, for the purposes of its road,
occupy and use that canyon in common with the Denver Company.
Upon this branch of the case, the first contention of the latter
company is that the Canyon City Company was not "duly organized"
under the laws of Colorado, and therefore by the terms of the Act
of March 3, 1875, was not entitled to
Page 99 U. S. 479
its benefits. But this objection is not well taken. The articles
of incorporation filed by that company seem to be in substantial
compliance with the statutes of Colorado. This objection need not
be further considered.
But its right to claim the benefit of the act of March 3, 1877,
is impeached upon the further ground that it was not organized in
good faith, for the purpose of constructing a road for itself, but
was the mere instrument of the Atchison, Topeka, and Santa, Fe
Company, by whom the real work of construction through the canyon
was carried on. It is not to be doubted, under the evidence, that
the Atchison, Topeka, and Santa Fe Railroad Company is the active
power behind all the movements made in the name of the Canyon City
Company for the occupation of the canyon, and that the former
company, or some of its stockholders, were deeply interested in the
success of the movement to drive the Denver Company from the Grand
Canyon. But the Canyon City Company is none the less a railroad
company, duly organized under the laws of Colorado. It is therefore
embraced by the very letter of the Act of March 3, 1875. We are
unable to perceive upon what sound principle the courts can go
behind its regular and lawful organization, and exclude it from the
rights granted by that act, because in the prosecution of its work
it derives assistance or accepts aid from another corporation, with
which it may choose to share the benefits secured under the act of
Congress.
Our next inquiry is as to the extent to which the rights of the
Denver Company were affected or modified by the Act of March 3,
1875. When that act was passed, its grant of the right of way by
the Act of June 8, 1872, had not been acted upon as to the Grand
Canyon of the Arkansas. There had not been, on March 3, 1875, an
actual location of its line through that defile, nor any occupancy
thereof, in good faith, for the purpose of constructing its road.
The five years originally given to that company, within which to
complete its railway to a point on the Rio Grande as far south as
Santa Fe, expired on the 8th of June, 1877. Before, however, the
expiration of that period, the time was extended to ten years from
the passage of the original act. Now it is solely by reason of such
extension that the Denver Company had the right, on the
Page 99 U. S. 480
19th of April, 1878, to take possession of the Grand Canyon, and
prepare for the final location and construction of its road through
that pass. When, therefore, it accepted the benefits of the act of
March 3, 1877, it must be held to have assented to the provisions
of the Act of March 3, 1875, whereby it was declared, in the
interest of the public, that any other railroad company duly
organized under the laws of any state or territory might use and
occupy the canyon, for the purpose of its road, in common with the
road first located. At the time of the passage of the Act of March
3, 1875, Congress had become convinced of the importance to the
country, and particularly to the Western States, of preserving
canyons, passes, and defiles in the public domain for the equal and
common use of all railroad companies organized under competent
state or territorial authority, and to which might be granted by
national authority the right of way. We may well presume that the
extension of time accorded to the Denver Company by the Act of
March 3, 1877, would not have been given except subject to the
conditions contained in the Act of March 3, 1875. This conclusion
renders it unnecessary that we should in this case consider whether
Congress might legally have subjected the Denver Company, without
its consent, to the provisions of the Act of March 3, 1877, had
that company actually located and constructed its road in or
through the Grand Canyon within five years after the passage of the
Act of June 8, 1872.
It results from what we have said that the court below erred in
enjoining the Denver Company from proceeding with the construction
of its road in the Grand Canyon. The decree, as entered, can only
be sustained upon the assumption that the Canyon City Company had
by prior occupancy acquired a right superior to any which the
Denver and Rio Grande Railway Company had to use the canyon for the
purpose of constructing its road. But that assumption, we have
seen, is not sustained by the evidence and is inconsistent with the
rights given by the acts of Congress to the Denver Company. The
Denver Company should have been allowed to proceed with the
construction of its road unobstructed by the other company. Where
the Grand Canyon is broad enough to enable both companies to
proceed without interference with each other in
Page 99 U. S. 481
the construction of their respective roads, they should be
allowed to do so. But in the narrow portions of the defile where
this course is impracticable, the court, by proper orders, should
recognize the prior right of the Denver and Rio Grande Railway
Company to construct its road. Further, if in any portion of the
Grand Canyon it is impracticable or impossible to lay down more
than one roadbed and track, the court, while recognizing the prior
right of the Denver Company to construct and operate that track for
its own business, should, by proper orders and upon such terms as
may be just and equitable, establish and secure the right of the
Canyon City Company, conferred by the Act of March 3, 1875, to use
the same roadbed and track, after completion, in common with the
Denver Company.
The decrees in these causes are therefore reversed with
directions to set aside the order granting an injunction against
the Denver and Rio Grande Railway Company and also the order
dissolving the injunction granted in its favor and dismissing its
bill. By proper orders entered in each suit, the court below will
recognize the prior right of that company to occupy and use the
Grand Canyon for the purpose of constructing its road therein, and
will enjoin the Canyon City and San Juan Railway Company, its
officers, agents, servants, and employees, from interfering with or
obstructing that company in such occupancy, use, and construction.
It may be that during the pendency of these causes in the court
below or since the rendition of the decrees appealed from, the
Canyon City and San Juan Railway Company has, under the authority
of the circuit court, constructed its roadbed and track in the
Grand Canyon or in some portion thereof. In that event, the cost
thus incurred in those portions of the canyon which admit of only
one roadbed and track for railroad purposes may be ascertained and
provided for in such manner and upon such terms and conditions as
the equities of the parties may require.
The court will make such further orders as may be necessary to
give effect to this opinion.
MR. CHIEF JUSTICE WAITE dissenting.
I dissent from the judgment in this case. In my opinion,
Page 99 U. S. 482
the grant of the right of way to the Denver and Rio Grande
Company contained in the Act of June 8, 1872, is no more than a
license to enter upon and use such of the public lands of the
United states as should be unoccupied and not appropriated to other
purposes when the permanent location of its road with a view to
actual construction should be made. Words which, in a grant of land
to aid in building a railroad, imply a present grant need not
necessarily have that effect in a grant of right of way only.
I think also the Canyon City and San Juan Company made the first
permanent location with a view to actual construction through the
pass in controversy. Consequently it secured the preference of
routes, subject to a reasonable use of the route it occupied, if
necessary, by the Denver Company in common with itself.
