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Graham v. Boston, Hartford & Erie Railroad Company, 118 U.S. 161 (1886)

Graham v. Boston, Hartford & Erie Railroad Company

Argued April 15-16, 19, 1886

Decided May 10, 1888

118 U.S. 161


The Boston, Hartford & Erie Railroad Company became a corporation of the State of New York, by virtue of the Act of the legislature of that state passed April 25, 1864, Laws of New York, 1864, c. 385, p. 884, it being already a corporation of Connecticut, Massachusetts and Rhode Island. A meeting in one of several states of the stockholders of a corporation chartered

Page 118 U. S. 162

by all those states is valid in respect to the property of the corporation in all of them, without the necessity of the repetition of the meeting in any other of those states.

A railroad corporation which, though made up of distinct corporations, chartered by the legislatures of different states, has a capital stock which is a unit, and only one set of shareholders, who have an interest, by virtue of their ownership of shares of the stock, in all of its property everywhere, has a domicil in each state, and the corporation or shareholders can, in the absence of any statutory provision to the contrary, hold meetings and transact corporate business in anyone state, so as to bind the corporation as to its property everywhere.

The Berdell mortgage, executed by the Boston, Hartford & Erie Railroad Company March 19, 1866, was valid originally, and the proceedings of the company whereby the mortgage was made were ratified by the legislatures of the four states above named, which included the holding in the City of New York of the meeting of the shareholders which authorized the making of the mortgage.

The invalidity of some of the bonds secured by the mortgage cannot affect the validity of the mortgage or the validity of proceedings for its foreclosure.

The mortgage having been duly foreclosed under proceedings in a suit to which the corporation was a party, and the suit being still pending, a shareholder in the corporation cannot, by a bill in equity in another court, attack the foreclosure proceedings for fraud in conducting them. His remedy is by an application in the foreclosure suit.

Such shareholder is a party to proceedings in involuntary bankruptcy against the corporation, and therefore cannot collaterally impeach the proceedings. His remedy is to apply to the bankruptcy court or to seek a review in the circuit court.

The bill being filed fourteen years after the making of the mortgage, ten years after the commencement of the bankruptcy proceedings, nine years after the entry of the decree of foreclosure, and seven years after the foreclosure became absolute and the road was conveyed to a new corporation formed by the holders of bonds secured by the mortgage, a demurrer to the bill for laches was sustained.

Bill in equity. The case is stated in the opinion of the Court.

Page 118 U. S. 163

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