Opinion of the Court.

"Office of the Farmers' Loan and Trust Company, 26 Exchange Place, cor. William St.

"NEW YORK, June 17, 1881. "Received from the Farmers' Loan and Trust Company certificates for the delivery of eighty-six hundred and fifty shares of the capital stock of the Chicago, Portage and Superior Railway Company in accordance with the terms of said certificates.

"J. C. BARNES. "Per E. D. HOTCHKISS."

"NEW YORK, Oct. 22, 1881.

"To the Farmers' Loan and Trust Co., New York:

"You are hereby authorized and directed to deliver to John C. Barnes, Esq., of the city of New York, all the certificates of the capital stock of the Chicago, Portage and Superior Railway Company, referred to and described in 90 certain orders signed and accepted by you, on the surrender to you of all of said orders, without regard to any of the conditions or limitations contained or specified in said orders.

"CHICAGO, PORTAGE AND SUPERIOR RAILWAY COMPANY, "By WILLIAM H. SCHOFIELD, President."

Further, on the stubs of the stock book of the company, in the handwriting of the president, except the signature of J. C. Barnes, appear these entries:

On the stub of certificate numbered 1 (the stubs of certificates from 1 to 90, inclusive, being precisely similar except in number of shares): "On acc't stock, bonds & interest cancelled and returned. No. 1 for 500 shares June 18, 1881. Issued to A. A. Jackson of Janesville, Wisconsin. Received certificate No. 1, as above described, June 18, 1881."

And on stub No. 132: "On account of stock, bonds & int. cancelled & returned. No. 132 for 1350 shares October 24, 1881. Issued to A. A. Jackson of Janesville, Wis. To make bal. of 1,000,000 June 18, '81. Received certificate No. 132, as above described, Oct. 24, 1881, for A. A. Jackson, $1,000,000

Opinion of the Court.

in ten thousand shares. Dated June 18, '81, and present date. J. C. Barnes."

On the day of receiving the last of these stock certificates, to wit, October 24, Barnes wrote to Jackson, advising him of the issue of the 10,000 shares in his name; that the certificates were in his (Barnes') hands, and that he, Jackson, could vote on that stock. On October 31 Jackson, being in New York, received from Barnes this receipt:

"A. S. Barnes & Co., publishers.

"NEW YORK, Octo. 31, 1881. "Received from A. A. Jackson ninety-one (91) certificates of stock of the Chicago, Portage and Superior Railway Company, aggregating ten thousand (10,000) shares, as follows:

"The above certificates are issued to A. A. Jackson and have not been transferred, but are held for his future order. "J. O. BARNES."

Jackson took that receipt, as he testifies, simply because he did not care to carry the certificates home, and wished something to show where they were and that they were held subject to his order. On November 15 thereafter J. C. Barnes transmitted to his nephew, C. J. Barnes, in Chicago, the stock, accompanied by this letter and power of attorney:

"Charles J. Barnes:

"NEW YORK, Nov. 15, 1881.

"By express to-day I send you ten thousand shares of C., P. & S. railway stock, issued to A. A. Jackson, and which belonged to him for settlement of construction company's claims, etc. I send these shares at the request of Mr. Jack

son.

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He will explain why they are sent, and his argument agrees with my own convictions. These shares are not ever to be parted from your custody, except as it shall be deemed necessary to protect the mutual interest of Jackson, yourself and myself, and are only to be used in extreme case of necessity for our mutual benefit. I also enclose authority to sell the ten thousand shares which stand in my name on the company book. J. C. BARNES.

"NEW YORK, November 15, 1881.

"This is to say that Charles J. Barnes is my true and lawful attorney for negotiation and sale of a certain number of certificates of stock standing in my name on the books of the Chicago, Portage and Superior Railway Co., said certificates dated June, 1881, and aggregating $1,000,000.

"J. C. BARNES."

It would seem clear from this evidence, not depending on imperfections of memory, but contained in writings, (many of them on the books of the company and made by its officers,) that Jackson was the legal holder of this million of dollars of stock, free from all obligation to the company, and subject only to the trust in favor of J. C. Barnes. It is difficult to see why Jackson did not have the legal right, with the assent of Barnes, to dispose of this stock to whomsoever he saw fit, and at any price he could obtain. The debt of the railway company to the construction company is not disputed; the documentary evidence establishes that for that debt the company issued this stock as full paid stock; no limitations are expressed in the proposition of Jackson or the resolution of acceptance, and for aught that these records disclose he had the same right and control over this stock, subject only to his trust in favor of Barnes, that any stockholder in any corporation has over his. It is true that the transaction between Jackson and the railway company seems to involve some departure from the arrangement indicated by the contract between Gaylord and others, of September 20, 1880, for that apparently contemplated the issue of $700,000 of bonds,

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$1,000,000 stock and the payment of $40,000 in cash in satisfaction of all the debts of the railway company; but this transaction was the later one, and, in so far as it modified the earlier arrangement, superseded it. It is probable that there was in fact no modification, but only an addition, and that Gaylord and J. C. Barnes still expected to receive $700,000 in bonds and $1,000,000 in stock, in addition to this $1,000,000 of stock issued to Jackson, for additional certificates of stock to the amount of $1,000,000 were made out by the officers of the company in the name of J. C. Barnes, though never delivered to him. Apparently they regarded this as a bonus for their services.

It is this last $1,000,000 of stock which is referred to in the authority given by J. C. Barnes to C. J. Barnes of November 15, 1881, heretofore quoted, and also in the following letter of authority given on November 19 by J. C. Barnes to Jackson:

"A. A. Jackson, Esq., Janesville, Wis. :

"I hereby authorize and empower you to negotiate the sale for me of the certain ten thousand (10,000) shares of stock now standing in my name on the books of the Chicago, Portage and Superior Railway Company, said shares representing the par value of one million dollars.

It was evidently the doubt as to the validity of this latter stock as full paid stock that induced the parties in making the transfer to Cable to thus describe it in their contract of sale: "And so much of the ten thousand shares of the capital stock standing in the name of John C. Barnes, aforesaid, on the books of said company (which last named stock said Jackson and C. J. Barnes, as agents of said John C. Barnes, are authorized and empowered to sell upon such terms as they shall see fit, a copy of the said authority from said John C. Barnes to said A. A. Jackson being hereto annexed and made a part hereof) as is absolutely valid and full paid stock.”

We do not deem it necessary to enter into any consideration of the question of its validity, or whether it was full paid

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stock, and only refer to it for the purpose of showing that the transaction with Jackson was independent of the arrangement between Gaylord and Barnes, and was unaccompanied by any conditions which may be claimed to have attached to the stock issued in Barnes' name.

The testimony further discloses that, from some time in the latter part of 1881 until the sale made by Jackson to Cable, Schofield, as the president of the railway company, was negotiating with the officers of the Grand Trunk Railway Company with a view to securing their interest in the Portage Company, and their aid in floating its bonds in European markets, and that those negotiations had proceeded finally so far as to disclose a possibility, perhaps a probability, of success. Jackson and J. C. Barnes were aware of the pendency of these negotiations, and of the various steps therein, so far as they were disclosed by the records of the Portage Company, and the contracts which were reported by Schofield to the directors of that company. The Grand Trunk Company having secured an entrance into Chicago, evidently saw the possibility of benefit to itself in obtaining control of a road running into the far Northwest, and upon that view entered into these negotiations. It is also true that when the Grand Trunk Company found that Cable, acting for the Omaha Company, had purchased this Jackson stock, it abandoned all negotiations and gave up the thought of attempting to secure control of the Portage Company. It is claimed by Jackson that the delays in negotiations with the Grand Trunk Company were such that he had lost all confidence in their sucthat he offered the stock to officers of that company at the same price that Cable subsequently paid for it, and that they declined to take it.

cess;

Putting the most unfavorable construction upon the testimony, it does not seem to us that either Jackson or Barnes can be condemned of any breach of trust, or other obligation, to the Portage Company when, having offered the stock to the Grand Trunk Company, at the price afterwards paid by Cable, and such offer having been declined, they sold it to the Omaha Company. It may be that thereby Schofield and