derstood or misconstrued. Ely v. Wilcox, 20 Wis. 553; Patten v. Moore, 32 N. H. 384; Billington v. Welsh, 5 Bin. 132. It must be sufficiently distinct and unequivocal so as to put the purchaser on his guard. Butler v. Stevens, 26 Me. 484; Wright v. Wood, 11 Harr. (Pa.) 130; Bogue v. Williams, 48 Ill. 371. As said by STRONG, J., in Meehan v. Williams, 12 Wright, 238, what makes inquiry a duty is such a visible state of things as is inconsistent with a perfect right in him who proposes to sell. See, also, Holmes v. Stout, 3 Green, Ch. 492; McMechan v. Griffing, 3 Pick. 149; Hanrick v. Thompson, 9 Ala. 409.

Tested by these rules, it is plain that the physical occupancy of the premises in question by appellant, as found by the district court, was not such possession as to put a purchaser on inquiry and charge him ⚫ with constructive notice. On the contrary, viewed in connection with the other facts found, it was such as to mislead him.

The case of appellant is therefore an attempt to set up a secret trust as against bona fide purchasers for value without notice. But nothing is clearer than that a purchaser for a valuable consideration, without notice of a prior equitable right, obtaining the legal estate at the time of his purchase, is entitled to priority in equity as well as at law, according to the well-known maxim that when equities are equal the law shall prevail. Williams v. Jackson, 107 U. S. 478; [2 SUP. CT. REP. 814;] Willoughby v. Willoughby, 1 Term Rep. 763; Carlton v. Low, 3 P. Wms. 328; Ex parte Knott, 11 Ves. Jr. 609; Tildesley v. Lodge, 3 Smale & G. 543; Shine v. Gough, 1 Ball & B. 436; Bowen v. Evans, 1 Jones & La. T. 178; Vattier v. Hinde, 7 Pet. 252. This is the case of defendants Hooper and Jennings.

Sup.

The appellant contends, however, that as the deed executed by the mayor of Salt Lake City to Townsend was without witnesses, as required by the general law of the territory, it did not convey the legal title. But the act of the territorial legislature providing for the conveyance to occupants, by the mayor, of lands included in the town-site, did not require witnesses to his deed. It merely directed that "deeds of conveyance for the same shall be executed by the mayor of the city or town under the seal of the corporation." According to the well-settled rule, that general and specific provisions, in apparent contradiction, whether in the same or different statutes, and without regard to priority of enactment, may subsist together, the specific qualifying and supplying exceptions to the general, this provision for the execution of a particular class of deeds is not controlled by the law of the territory requiring deeds generally to be executed with two witnesses. Pease v. Whitney, 5 Mass. 380; Nichols v. Bertram, 3 Pick. 342; State v. Perrysburg, 14 Ohio St. 472; London, etc., Ry. v. Wandsworth Board of Works, L. R. 8 C. P. 185; Bish. Writ. Laws, § 112a. The deed of the mayor to Townsend having been executed in conformity with the special act, was therefore valid and effectual to convey the legal title.

The result of these views is that the appellant has failed to show herself entitled to the relief prayed in her bill. The decree of the supreme court of the territory of Utah affirming the decree of the district court, by which her bill was dismissed, must be affirmed.

(109 U. S. 527)

CANADA SOUTHERN RY. Co. v. GEBHARD and another, Ex'rs, etc.1

SAME v. GEBHARD.

SAME V. SAME.

SAME V. GEBHARD and another, Ex'rs, etc.

(December 10, 1883.)

IMPAIRING OBLIGATION OF CONTRACT-ABSENCE OF CONSTITUTIONAL LIMITATION -FORCE OF FOREIGN STATUTE-BONDS OF FOREIGN CORPORATION.

In a country where no constitutional prohibition exists against the passage of laws impairing the obligation of contracts, there is no reason why the legislature may not, by statute, compel individual bondholders of a domestic corporation to accept an arrangement or compromise made when the corporation is in financial embarrassment, for the benefit of all the bondholders, and accepted by a majority of them. Such statutes are on a footing with bankrupt acts, and cannot be said to deprive any person of his property without due process of law.

A citizen of the United States purchasing the bonds of a corporation organized under such foreign government, takes them subject to the policy of that government, and is bound by its statutes. This is the case, though the bonds are payable in the United States, and though their payment could be enforced by the courts of this country.

HARLAN, J., dissenting. Whatever force such a statute may have where it is enacted, it cannot bind the courts of a different country. Such an act differs from a composition in bankruptcy in the fact that the bondholders have no opportunity to be heard in court in opposition to the arrangement.

Error to the Circuit Court of the United States for the Southern District of New York.

Jos. H. Choate, for railway company.

John M. Bowers, for defendants in error.

WAITE, C. J. What is now known as the Canada Southern Railway Company was originally incorporated on the twenty-eighth of February, 1868, by the legislature of the province of Ontario, Canada, to build and operate a railroad in that province between the Detroit and Niagara rivers, and was given power to borrow money in the province or elsewhere and issue negotiable coupon bonds therefor, secured by a mortgage on its property, "for completing, maintaining,

1 See 8 C. 1 Fed. Rep. 387.

and working the railway." Under this authority the company, on the second of January, 1871, at Fort Erie, Canada, made and issued a series of negotiable bonds, falling due in the year 1906, amounting in all to $8,703,000, with coupons for semi-annual interest attached, payable, principal and interest, at the Union Trust Company, in the city of New York. To secure the payment of both principal and interest as they matured, a trust mortgage was executed by the company covering "the railway of said company, its lands, tolls, revenues present and future, property and effects, franchises and appurtenances." Every bond showed on its face that it was of this kind and thus secured. Before the thirty-first of December, 1873, the company became satisfied that it would be unable to meet the interest on these bonds maturing in the coming January, and so it requested the holders to fund their coupons falling due January 1, 1874, July 1, 1874, and January 1, 1875, by converting them into new bonds payable on the first of January, 1877, and by so doing only, in legal effect, extend the time for the payment of the interest, without destroying the lien of the coupons under the mortgage, or otherwise affecting the obligation of the old bonds. Some of the bondholders funded their coupons, in accordance with this proposition, and accepted the extension bonds, but, under the arrangement, their coupons were not to be canceled until the new bonds were paid. In this condition of affairs the parliament of Canada, on the twenty-sixth of May, 1874, enacted that the Canada Southern Railway, which was the railway built by the Canada Southern Railway Company under its provincial act of incorporation, "be declared to be a work for the general advantage of Canada," and a "body corporate and politic within the jurisdiction of Canada," for all the purposes mentioned in, and with all the franchises conferred by, the several incorporating acts of the legislature of the province. This, under the provisions of the British North America act, 1867, passed by the parliament of Great Britain "for the union of Canada, Nova Scotia, and New Brunswick, and the government thereof," made the corporation a dominion corporation and subjected it to the legislative authority of the parliament of Canada. On the fifteenth of March, 1875, another series of bonds, amounting in the agregate to $2,044,000, or thereabouts, was issued and secured by a second mortgage to trustees. After the issue of all the bonds the company found itself unable to pay its interest and otherwise financially embarrassed, and a joint committee, composed of three directors and three bondholders, after full consideration of all the circumstances, submitted to the company and to the bondholders "a scheme of arrangement of the affairs of the company," which was approved at a meeting of the directors on the twenty-eighth of September, 1877. This scheme contemplated the issue of $14,000,000 of 30year bonds, bearing 3 per cent. interest for three years and 5 per cent. thereafter, guarantied, as to interest, for 20 years, by the New York Central & Hudson River Railroad Company, the first coupons.

being payable January 1, 1878. These new bonds were to be secured by a first mortgage on the property of the company, and exchanged for old bonds at certain specified rates. The old bonds of 1871 were to be exchanged for new at the rate of one dollar of principal of the old for one dollar of the new, nothing being given either for the pastdue coupons or the extension bonds executed under the arrangement in December, 1873. The proposed issue of bonds was large enough to take up all the old indebtedness at the rates proposed, whether bonded or otherwise, and leave a surplus, to be used for acquiring furthe equipment, and for such other purposes of the company as the directors might find necessary. This scheme was formerly assented to by the holders of 108,132 shares of the capital stock out of 150,000; by the holders of the bonds of 1871 to the amount of $7,332,000 out a $8,703,000; and by the holders of $1,590,000 of the second series of bonds out of $2,029,000 then outstanding. Upon the representation of these facts to the parliament of Canada the "Canada Southern arrangement act, 1878," was passed and assented to in the queen's name on the sixteenth of April, 1878. This statute, after reciting the scheme of arrangement, with the causes that led to it, and that it had been assented to by the holders of more than two-thirds of the shares of the capital stock of the company, and by the holders of more than three-fourths of the two classes of bonds, enacted that the scheme be authorized and approved; that the new bonds be a first charge "over all the undertaking, railway works, rolling stock, and other plant" of the company; and that the new bonds be used for the purposes contemplated by the arrangement, including the payment of the floating debt. Section 4 is as follows:

"4. The scheme, subject to the conditions and provisos in this act contained, shall be deemed to have been assented to by all the holders of the original first mortgage bonds of the company secured by the said recited indenture of the fifteenth day of December, one thousand eight hundred and seventy, and of all coupons and bonds for interest thereon, and also by all the holders of the second mortgage bonds of the company secured by the said recited indenture of the fifteenth day of March, one thousand eight hundred and seventy-five, and of all coupons thereon, and also by all the shareholders of the Canada Southern Railway Company, and the hereinbefore recited arrangement shall be binding upon all the said holders of the first and second mortgage bonds and coupons, and bonds for interest thereon, respectively, and upon all the shareholders of the company."

Under the arrangement thus authorized the New York Central & Hudson River Railroad Company executed the proposed guaranty, and the scheme was otherwise carried into effect.

The several defendants in error are, and always have been, citizens of the state of New York, and were, at the time the scheme of arrangement was entered into and confirmed by the parliament of Canada, the holders and owners of certain of the bonds of 1871, and of certain extension bonds, these last having been delivered to them respectively at the Union Trust Company in the city of New York,

where the exchanges were made, in December, 1873. Neither of the defendants in error assented in fact to the scheme of arrangement, and they did not take part in the appointment of the joint committee. Their extension bonds have never been paid, neither have the coupons on their bonds of 1871, which fell due on the first of July, 1875, and since, though demanded. The company has been at all times ready and willing to issue and deliver to them the full number of new bonds, with the guaranty of the New York Central & Hudson River Railroad Company attached, that they would be entitled to receive under the scheme of arrangement.

These suits were brought on the extension bonds and past-due coupons. The company pleaded the scheme of arrangement as a defense, and at the trial tendered the new bonds in exchange for the old. The circuit court decided that the arrangement was not a bar to the actions, and gave judgments in each of them against the company for the full amount of extension bonds and coupons sued for. To reverse these judgments the present writs of error were brought. Two questions are presented for our consideration: (1) Whether the "arrangement act" is valid in Canada, and had the effect of binding nonassenting bondholders within the dominion by the terms of the scheme; and (2) whether, if it did have that effect in Canada, the courts of the United States should give it the same effect as against citizens of the United States whose rights accrued before its passage.

1. There is no constitutional prohibition in Canada against the passage of laws impairing the obligation of contracts, and the parliament of the dominion had, in 1878, exclusive legislative authority over the corporation, and the general subjects of bankruptcy and insolvency in that jurisdiction. As to all matters within its authority, the dominion parliament has "plenary legislative powers as large and of the same nature as those of the imperal parliament." City of Fredericton v. The Queen, 3 Can. Sup: Ct. 559. On the twentieth of August, 1867, the parliament of Great Britain passed the "railway companies act, 1867." 2 St. 1332; 30, 31, Vict. c. 127. This act provides, among other things, for the preparation of "schemes of arrangement" between railway companies unable to meet their engagements and their creditors, which can be filed in the court of chancery, accompanied by a declaration in writing, under the seal of the com pany and verified by the oaths of the directors, to the effect that the company is unable to meet its engagements with its creditors. Notic of the filing of such a scheme must be published in the Gazette, and the scheme is to be deemed assented to by the holders of mortgages. bonds, debenture stock, rent-charges, and preference shares, when assented to in writing by the holders of three-fourths in value of each class of security, and by the ordinary shareholders when assented to at an extraordinary general meeting specially called for that purpose. Provision is then made for an application to the court by the company for a confirmation of the scheme. Notice of this application must be