Tancil v. Seaton.

Such being their character, we can see no good reason why the finder of a bank note of a solvent institution does not acquire by the finding the same title as the finder of a personal chattel, and why he is not entitled to the same remedies against third parties.

That his title and remedies are the same, notwithstanding what is said by the chancellor in McLaughlin v. Waite, supra, would seem deducible from the case of Bridges v. Hawkesworth, 7 Eng. L. & Eq. 424. The plaintiff in that case having picked up from the floor of the shop of the defendant a parcel containing bank notes, handed them over to the defendant to keep till the owner should claim them. They were advertised by the defendant, but no one appearing to claim them, and three years having elapsed, the plaintiff requested the defendant to return them, tendering the costs of the advertisements, and offering an indemnity. The defendant having refused to return them, it was decided that the plaintiff was entitled to the note as against the defendant. The recent case (1874), New York & Harlem R. R. Co. v. Haws & al., 56 N. Y. 175, though not directly to the point, is suggestive.

Now, if the reasoning of Chancellor WALWORTH in the case cited from 5 Wend., supra, justly applies to bank notes, then the plaintiff was not entitled to recover in the case of Bridges v. Hawkesworth, supra. It is true, that in the last-named case indemnity was offered to the defendant before action brought; but it would seem that was necessary in that case because the notes were deposited by the finder with the defendant "to keep until the owner appeared to claim them." It is so expressly stated; and the defendant having, by the terms of the bailment and the advertisements, come under obligation to the owner, it was but just and reasonable that before he should be required to return the notes to the finder he should be indemnified against the liability he had incurred to the owner, should he afterward appear and establish his right. There would seem to have been no necessity for the indemnity but for the undertaking of the bailee by his contract of bailment and by his advertisements, to account to the owner for the notes if he should appear.

As a general rule, the bailee is not allowed to dispute the title of his bailor, and we see no good reason why the depositary of a lost bank note, as between himself and the finder, should be an exception to this rule, where the owner is unknown and there is no

Baltimore and Ohio Railroad Co. v. Wightman's Administrator. assertion of claim on his part against the depositary. To permit the latter, under such circumstances against his contract of bailment, to withhold the note from the finder, and if the owner never appears, to appropriate it to his own use, would be to protect him in his fraud and dishonesty a thing not to be tolerated, much less sanctioned, in any court of justice.

The defendant being a mere depositary of the note, a bailee without reward, holding the note only for the benefit and accommodation of the plaintiff, he was not bound to use as great care and diligence in the custody of the note as if he had been a bailee with compensation, and, therefore, if the note was stolen from his possession he was not accountable for it unless the loss was the result of gross negligence on his part.

The first instruction given to the jury on the motion of the defendant, and the two instructions prayed by the plaintiff, and refused by the court, are in conflict with our views of the law hereinbefore expressed. The second and third instructions given seem free from error.

The court is, therefore, of opinion that while the corporation court of the city of Alexandria did not err in giving the second and third instructions as prayed by the defendant, nor in rejecting the instructions prayed by the plaintiff, yet the said court committed an essential error in giving the first instruction asked for by the defendant; and for this error the judgment of the corporation court must be reversed and annulled, the verdict of the jury set aside and a new trial ordered.

Judgment reversed.

BALTIMORE AND OHIO RAILROAD Co. v. WIGHTMAN'S ADMINIS

TRATOR.

(29 Gratt. 431.)

Foreign corporation — liability to be sued as resident.

A railroad corporation, incorporated in Maryland, but leasing and operating & railroad in Virginia, is subject to suit in Virginia, and is not entitled to a removal of the cause to the Federal court.

A

Baltimore and Ohio Railroad Co. v. Wightman's Administrator.

CTION for negligence. Verdict and judgment for plaintiff, and defendant appealed. The opinion states the facts.

Williams & Brother, for appellants.

M. Walton, for appellee.

STAPLES, J. A preliminary question in this case to be settled is, whether the Circuit Court erred in refusing to remove the case to the Circuit Court of the United States for the Western District of Virginia. The defendant, the Baltimore and Ohio Railroad Company, is a corporation chartered by the State of Maryland. It is also, and was when this suit was brought, the lessee of a railroad from Strasburg to Harrisonburg, in this State, belonging to the Virginia Midland Railroad Company, a Virginia corporation, and was controlling and operating said railroad under said lease, as owner and proprietor, at the time of the injuries committed, as set forth in the declaration. The defendant has not produced the lease nor given evidence of its contents. We are, therefore, not informed as to the precise terms and conditions upon which the lease was granted. All that we know is, that the defendant is operating the road as owner and exercising the powers and privileges granted its lessor by the charter of incorporation. What, then, is the status in Virginia of the defendant, a Maryland corporation, with reference to this road?

The cases generally agree that a corporation created by the laws of one State can have no legal existence outside of the limits of that State. It may, however, make contracts, transact business, and even exercise corporate functions in another State with the consent of the latter, express or implied. In the Baltimore and Ohio R. R. Co. v. Gallahue's Administrator, 12 Gratt. 655, this court decided that, under the statutes authorizing that company to construct its road across the territory of Virginia, the Baltimore and Ohio Railroad Company, as to such road, was to be regarded as a Virginia corporation.

In Railroad Company v. Harris, 12 Wall. 65, the Supreme Court of the United States decided that the Baltimore and Ohio Railroad Company having under an act of Congress constructed a lateral branch of its road in the District of Columbia, was by reason thereof liable to suit in that district as if it had been an independent corporation of that locality.

VOL. XXVI-49

Baltimore and Ohio Railroad Co. v. Wightman's Administrator.

The court did not rest its decision upon the ground, however, that the act of Congress had made the Baltimore and Ohio Railroad Company a corporation of the district, but upon the ground that the act operated as a license to the company to construct its road there; and having accepted the license, the company had placed itself in the position of a domestic corporation for all the purposes at least of being sued in that locality. The court say they could see no reason why one State may not make a corporation of another State, as there organized and conducted, a corporation of its own, quo ad hoc any property within its territorial limits. See, also, Maryland v. Northern Central R. R. Co., 18 Md. 193; Sprague v. Hartford, Prov. & Fishk. R. R. Co., 5 R. I. 233; Goshorn v. Super visors, 1 W. Va. 308; The Pennsylvania R. R. Co. v. Sly, 65 Penn. St. 205; Pomeroy v. New York and New Haven R. R. Co., 4 Blatchf. 122. The Baltimore and Ohio Railroad Company, as a corporation of Maryland, can, of course, have no legal existence outside of that State, but as the lessee of a Virginia railroad company, exercising all the functions and powers of the latter, it may be subject to all its duties and obligations. This must necessarily be so, upon the authority of the cases cited, if that company is acting under any license granted by the State of VirginiaUnder such circumstances, so acting, it must be treated as a Virginia corporation quo ad hoc the line of railroad under its control, so far at least as its liability to our own citizens is concerned. It can only escape these consequences by showing that it is exercising corporate powers here without permission of the State, and consequently that it is a tort feasor or trespasser. Whether the company obtained the lease under any statute or provision in the charter of Virginia roads does not appear · - none was shown to the court and none was claimed in the argument. It may be a very grave question whether a corporation of this State can be permitted to convey its franchises to a foreign corporation, so as to enable the latter to exercise corporate rights and powers here without some such authority. The purposes of this case do not require a decision of this question.

If the Baltimore and Ohio Railroad Company is controlling and operating the Valley road without permission of the State, it certainly cannot, therefore, claim exemptions and immunities to which it could not be entitled if it had obtained such permission. The company derives all its powers and privileges from the charter of

Chrisman's Admx. v. Harman.

the company which owns the road; it must be subject to all the duties imposed on that company, and among these is the obligation to answer in our own courts to our own citizens for any damage resulting from its conduct.

If under authority of law or on principles of comity a foreign corporation is allowed to hold property and exercise corporate functions in this State, it must also submit to the jurisdiction of our courts in controversies with our citizens. If it claims the privi leges and immunities of a domestic corporation, it must also perform the duties and answer to all the liabilities of a Virginia corporation.

It is estopped by its conduct - by its exercise of corporate functions here under a Virginia charter to deny that it is a Virginia corporation for all the purposes of Virginia jurisdiction.

The learned counsel for the defendant referred to the case of Ballimore & Ohio R. R. Co. v. Cary, decided by the Supreme Court of Ohio, 28 Ohio St. 218, in which a somewhat different view is taken from that which is here presented. It will be seen that the decision in that case is, in a great measure, based upon the statute of Ohio, not in force here. The court was not unanimous, and we think the dissenting opinion contains the more satisfactory doctrine upon the question. We are, therefore, of opinion that the Circuit Court did not err in refusing to remove the case to the Circuit Court of the United States.

[Omitting questions of pleading, evidence, and damages.]

Judgment affirmed.

CHRISMAN'S ADMX. V. HARMAN.

(29 Gratt. 494.)

Subrogation-former adjudication.

A second indorser having given an injunction bond in a suit upon the note, his surety in that bond, who has been compelled to pay the amount of the note, may recover it from the first indorser.

In a suit upon a note against maker and indorser, a decree was rendered in favor of the first indorser; but it not appearing upon the face of the record, nor by extrinsic evidence, that the adjudication was upon the merits, and