
    *Eliza A. Johns v. Roberta Johns and others.
    Shares in railroad companies are personal property, whether the companies are, or are not, subject to the provisions of the “act regulating railroad companies,” passed February 11, 1848.
    This is a petition, in which the plaintiff, the widow of Benjamin Johns, deceased, claims dower in 46 shares of the capital stock of “ The Mansfield & Sandusky City Railroad Company,” and in 10 shares of the capital stock of “ The Ohio and Pennsylvania Railroad Company,” of which shares her deceased husband, the said Benjamin Johns, was the owner at the time of his death.
    The defendant Sherman, as executor as aforesaid, answers, admitting the facts alleged in the petition, but insisting that said shares are personal and not real estate. The defendant Roberta has not answered.
    
      Isaac J. Allen, for petitioner.
    
      G. T. Sherman, for defendants. -
   Thurman, J.

The Ohio and Pennsylvania Railroad Company was-incorporated February 24,1848. 46 Ohio L. L. 261. The 5th section of its charter provides that the company shall have all the powers and privileges, and be subject to all the restrictions and provisions of the act regulating railroad companies,” passed February 11,1848. 46 Ohio L. 40. The third section of this latter act declares that the shares of stock in the companies that maybe subject-to its provisions, shall be regarded as personal property, and shall be subject to execution at law.” It is therefore manifest that the-petitioner is not entitled to dower in the 10 shares of the stock of The Ohio & Pennsylvania Railroad Company, for they are clearly personalty. But the question in respect to the stock in The Mans.field & .Sandusky City Railroad Company is not so easily disposed of. For that company is not, so far as the case shows, subject to-the provisions of said act of February 11,1848. It was previously ^chartered and organized, and that act does not interfere with companies created before its passage. Turning then to the charter of the company, we find in it no provision declaring whether its-stock is realty or personalty. We are thus brought to the genera1question, whether railroad shares in Ohio are, in the absence of express legislative enactment, to be considered as real or personal ■estate. This question must be determined by a reference to the. principles of the common law and the general statutes of the state that have a bearing upon it. And its solution is not without difficulty ; for, as to the common law, the adjudicated cases are directly ■conflicting, and'when we resort to our statutes the chief aid we derive is from analogies and inferences.

In Drybutter v. Bartholomew, decided in 1723, 2 P. Wms. 127, the master of the rolls said that a fine may be, and usually is, levied of New River shares by the description of so much land covered with water,” but the case does not inform us what these shares were, nor how they were created; and whether they were real or personal estate was not discussed. They appear to have had their origin in the statutes of 3 James 1, chap. 18, and 4 James 1, chap. 12, to enable the mayor, commonalty, and citizens of London to supply the city with water; but these acts simply authorized the construction of the works and the acquisition of the necessary right of way. They created no stock, nor is any mention made in them of shares or shareholders. Yet it would seem, from the case cited as well as the case of Townshend v. Ash, decided in 1745, 3 Atb. 336, that shares were created, and hence these cases have been frequently cited as showing that stock in a water works company is real estate.

By a statute of 10 Anne, the mayor, aldermen, and common council of the city of Bath, their successors or asigns, or such persons as they should appoint, were authorized to improve the navigation of the river Avon, and to charge tolls on persons and property transported thereon. By an agreement executed between the corporate authorities of the one part, and the Duke of Beaufort and several other ^-persons on the other p>art, the duke and his associates undertook to do the work in consideration of being allowed to take the tolls. By the 11th article of the agreement it was provided that “ no survivorship shall at any time take place between the said parties and undertakers; but if any or either of them shall happen to die, the share or part of such so dying shall descend ,and go to the heirs and assigns of the party or parties so dying.”

In Buckeridge v. Ingram, decided in 1795, 2 Ves. Jr. 651, the question was directly made, whether these shares were personal or real estate, and it was decided that they were real estate and subject to dower. The master of the rolls held that the right to take the tolls was an incorporeal hereditament arising out of realty, and was therefore a “ tenement.”

And he remarked: “ I have no difficulty in saying that wherever a perpetual inheritance is granted, which arises out of lands, or is in any way connected with, or, as it is emphatically expressed by Lord Coke, exercisable within it, it is that sort of property the law denominates real.”

The principle of these eases was followed, and possibly extended, by the supreme court of Connecticut, in 1818, in the case of Welles v. Cowles, 2 Conn. 567, in which it was held that shares of an incorporated turnpike company are real estate. The right to the tolls, said the court, “ is a right issuing out of real property, annexed to and exercisable within it; and comes within the description of an incorporeal hereditament of a real nature, on the same principle as a share in the New Oliver, in canal navigations and tolls of fairs and markets; ” citing Drybutter v. Bartholomew, 2 P. Wms. 127; Habergham v. Vincent, 2 Ves., 232, and The King v. The Inhabitants of Chipping Norton, 5 East, 239.

And in answer to the argument that the individual stockholders had only a claim on the company, and not upon the realty, and that this must be of a personal nature, the court said : “But the stockholders, as members of the company, are owners of the turnpike road; and it is in virtue of this interest that they have their claims for the dividends or their ^respective shares of the toll. It is not a mere claim on the corporation.”

This decision was recognized as law in 1822, in a suit between the same parties, 4 Conn. 182, though the question was not expressly made.

In 1835 the supreme court of Pennsylvania held that “ a toll bridge erected by two individuals across a river between their lands, by legislative authority is real estate.” The court said that the right was “ not only a right arising out of the soil, but, so far as the abutments of the bridge are concerned, it is the soil itself.” Hurst v. Meason, 4 Watts, 346. It is to be observed, however, that it does not appear that the builders were incorporated.

In Price v. Price’s Heirs, 6 Dana 107, the court of appeals of Kentucky, in 1838, held that the stock in the Lexington and Ohio Railroad Company is real estate. Without citing any adjudicated case, the court came to a conclusion which is thus expressed: “ The right conferi’ed on each shareholder is unquestionably an incorporeal heriditament. It is a right of perpetual duration, and though it springs out of the use of personalty, as well as lands and houses, this matters not. It is a franchise which has ever been classed in that class of real estate denominated an incorporeal hereditament.”'

On the other hand, the supreme court of Massachusetts, in 1798, in Russell et al. v. Temple et al. 3 Dana’s Abr. 108, held that shares in incorporated bridge and canal companies are personalty. The case was between the widow and heirs of Thomas Russell, the-former contending that the shares were personal property, and that consequently she was entitled to a distributive portion of them, and the latter insisting that they were realty, and that, therefore, she-had but a dower estate. The question was very fully discussed, and was decided (says Professor G-reenleaf in his edition of Cruise),. “ upon great consideration.”

“For the heirs it was urged that these shares were real estate;.’ because, it was said, the estates were real in the corporations ; and 1 that if the estates in the corporations were *real, the estates-of the individual members in them followed their nature, and were-real; and that the. frequent declarations of the legislature declaring such shares personal estate, at least show a doubt that when one has a right to receive rent, he has only a right to receive a sum of money, yet it does not follow that his estate is not real estate-out of which his rent issues.”

■ For the widow it was argued that the shares were personalty,, because the estate [in the bridges, canals, towing-paths, wharves and lands], “ can only exist in the corporation which alone can acquire-it, aloné be seized or possessed of it, alone pass.it away, manage, or repair it, and so must hold it entire; and that the corporation is a moral person to all the purposes of property. Its tenure is to-their successors, orto their successors and assigns. The estates can never vest in or be divided among the individual members, to hold as tenants in common, etc., in their private capacities. Only the corporation can possess the estate, and that only by possessing the charter; and only the corporation can be taxed for it on common law principles; and on these can it alone be taken in execution for the debts of the corporation.”

“ That the share is personal estate though the corporation hold real estate; for the individual member has no estate, but only a right to such dividends as the corporation from time to time assigns to him. He is unknown in the grants made to it, and he can not grant any part of the estate: nor can he be taxed for it but by statute law; nor can any private member of a corporation be dis-trained for a public concern of it ;-his only remedy for his dividend, is case in assumpsit, or an action on the case for a wrongful refusal, or neglect to pay, or allow him his part of the profits.”

The judgment of the court was, as I have stated, that the shares were per-sonal estate. “ The pxúncipal reason of the decision,” says Dana,11 appears to be, because the court considered that the individual member or shareholder had only a right of action for a sum of money, his pax*t of the net profits or dividends. And so the law has been held to be since this decision was made.”

*In his edition of Cruise, Greenleaf says: “Shares in the property of a corporation are real or personal property, according to the nature, object and manner of the investment. Where the corporate powex*s are to be exercised solely in land, as* where original axxthority is given by the charter to remove obstructions in a river and render it navigable, to open new channels, etc., to make a canal, erect water-works, and the like, as was the case of the New River water, the navigation of the river Avon and some othex*s and the property or interest in the land, though it be an incorporeal hereditament, is vested inalienably in the corporators themselves, the shares are deemed real estate. Such, in some of the United States, has been considered the nature of shares in toll bridge, canal and turnpike corporations by the common law; though latterly it has been thought that railway shares were more properly to be regarded as personal estate. But where the property originally entrusted is money, to be made profitable to the contributors by applying it to certain purposes, in the course of which it may be invested in lands or in personal property, and changed at pleasure, the capital fund is vested in the corporation, and the shares in the stock are deemed personal property, and as such are in all respects treated. In modern practice, however, shares in corporate stock, of whatever nature, are usually declared by statute to be personal estate.” 1 G-reenleaf’s Or. Dig. 39, 40.

In support of this statement, Mr. Greenleaf cites the eases we-have already noticed, and some others that require consideration. One of the most important of these is Bligh v. Bren, 2 Y. & C. Exch. 268, 294. It involved the question whether the shares in the Chelsea Water-works company were realty or personalty. The act of incorporation left the question open, as it contained no de'duration upon the subject. The court reviewed the eases bearing •■upon it, and came to the conclusion that the shares were personalty. 'This decision was afterward, in 1838, spoken of with approbation in Bradley v. Holdsworth, 3 M. & W. 422.

*In the latter case the question was whether shares in the •‘‘London and Birmingham Railway” might be sold by a verbal contract. On the part of the defendant it was contended that they constituted an interest in land within the meaning of the statute of frauds, and that, therefore, a contract for their sale was void unless reduced to writing. The court held the contract valid. True, the act of incorporation declared that the shai*es should, to all intents .and purposes, be deemed personal estate and transmissible as such, and should not be of the same nature of real property; but it is •evident from what was said, that, independent of this provision, the same decision would have been made. Parke, B., said: “No ■doubt the company are seized of real property, as well as possessed ■of a great deal of personal property; but the interest of each individual shareholder is a share of the net produce of both, when ■brought into one fund." And again: “I have no doubt whatever that the shares of the proprietors, as individuals, are personalty; they consist of nothing more than a right to have a share of the net produce of all the property of the company.”

Alderson, B., said : “All the cases were under review in Bligh v. Brent, where the question was as to the shares in the Chelsea Waterworks company. That was a stronger case than the present, be- • cause there was no clause of this kind in the act of parliament, and yet the shares were held personal property.” “ I conceive that all ■the shareholders would take even without such a clause.”

Bolland, B.,

concurred.

So in Duncuft v. Albrecht, 12 Sim. & S. 189, it was held that a parol agreement for the sale of railway shares is valid, for they are neither an interest in lands, nor goods, wares or merchandise, within the statute of frauds.

A careful examination of the adjudications upon the subject has 'brought us to the conclusion that, according to the weight of authority, the shares in question are personal property. In the early English cases the distinction, now well understood, between the property of a corporation and *the rights of its members, ■ does not seem to have been taken, and it appears to have been .assumed that each shareholder had an estate in the corporate prop■erty, and that, consequently, if that property was real, his share was also realty. But the eases we have cited abundantly show that the distinction above mentioned is now fully recognized in England, and that the property of a corporation may bo mainly, if not wholly real, and yet the shares of its members be personalty. This may possibly be an innovation upon the ancient principles -of the common law, but it is not more so than has taken place in the case of ordinary partnerships. Thus the old doctrine seems to have been that there could no partnership, properly so called, in -land, but the contrary doctrine is now universally held; and that a widow of a deceased partner is not dowable in lands which the firm owned and regarded as partnership stock, is settled by numerous decisions, among which are the cases in 1 Ohio, 535, and 8 Ohio, 328. As to the Connecticut caso, Welles v. Cowles, there is possibly no necessary conflict between it and the view we take of the present case. There the right to tolls may be said to have arisen wholly out of realty, the turnpike road; but in the case at bar, the profits of the company accrue from real and personal property, and personal sei’vices. The turnpike company did not carry either goods or persons. It furnished no vehicles for the transportation of either, and had no care of or responsibility for either. It merely allowed a transit over its road upon the payment of a toll. But a railway company is a common carrier. It furnishes not simply a road, but also the conveyances that pass over it; it undertakes the transportation of passengers and freight, and incurs the responsibility of a common carrier as to both.

It was therefore justly said by Parke, B., in the quotation before given, that the interest of each individual shareholder is a share of the net produce of both real and personal property, (and he might have added, of personal services,) when brought into one fund. But we would not be understood as ^approving the decision in Welles v. Cowles, for we are of opinion that shares in .an incorporated turnpike company, as well as in a railway corporation, are personal property. The same distinction we have drawn between a turnpike and railroad company, may be drawn between the latter and the Avon navigation case, and the cases of tolls upon fairs and markets, and rents issuing out of realty. And this distinction seems to be taken by G-reenleaf, in the quotation hereinbefore made. As to the case in 4 Watts, it is enough to say that it does not appear that the bridge builders were a corporation, or that they intended to convert the bridge and right of taking tolls-into a-stock. The decision in 6 Dana, 107, is certainly directly opposed to our views. The court in that case seems to have wholly overlooked tho distinction between the right of the company and the right of the shareholder, and to have concluded that if the company’s franchise of taking toll was an incorporeal hereditament, springing even in part from the realty, the shareholder’s interest could not be personalty. Indeed, the court call the shareholder’s right a franchise. Now, I imagine that it is the artificial being, the corporation, and not the individual shareholder, that has the franchise, and possibly it is not immaterial whether the toll arises wholly out of realty, or partly out of realty and partly out of personalty. “An annuity,” say the court, “though only chargeable upon the person of the grantor, is an incorporeal hereditament, and though the owner’s security is merely personal, yet he may have a real estate in it,” citing 2 Bl. Com. 40. True, such-an annuity is realty so far as descent is concerned, or, more properly speaking, though personal in itself, it descends as if it were realty, the reason of which is that it is limited by the grant to the heir, otherwise it would not be a hereditament. The authorities-cited by the defendant show conclusively that it is only as regards descent that it is considered as realty. But unless there is some provision in the charter of the Lexington and Ohio Railroad Company, limiting the stock to the heirs of the stockholder, the illustration put by the court is not in point.

*It must be admitted, however, that the definition of Lord Coke, cited with approbation in Buckeridge v. Ingram, sustains the position that the franchise was a tenement savoring of the realty; for, in the language of Coke, it was “ exerciseable within lands.” And, as before stated, we prefer to place our decision upon the distinction between the estate of the corporation and the individual rights of its members, rather than upon a distinction between the cases in which the profit arises wholly out of realty, and those in which it springs partly from realty and party from personalty, though this latter distinction seems to receive much support from both reason and authority.

One more inquiry remains: Is the question before us affected by our statute law? We have seen that the shares in all companies, subject to the provisions of the general railway act, are declared by it to be personal estate; but there is no such express legislative declaration respecting shares in other companies. Nevertheless, a review of our statutes will show that the general policy of the state has been to treat shares in incorporated companies as personalty. 'They are recognized as such in several acts of the legislature, and the distinction between the estate of the company and the individual rights of the stockholder seems to have been taken at an early day. Thus, by the act of February 8, 1826, amendatory of the general turnpike law (Swan’s St. 982), the right of turnpike companies to take tolls was subjected to sale on execution to pay corporate debts, but the shares of the members have never been thus subjected to satisfy individual debts. On the contrary, the mode of proceeding as to such shares is by bill in chancery, filed under the 16th section •of the chancery act of 1831 (Swan’s St. 704), which gives the court power to decree a sale of “ any interest, shares, or stock,” owned ■by a judgment debtor, 11 in any banking, turnpike, bridge or other joint stock company;” thus placing these shares, in this respect, in the same category with “ choses in action,” which are, by the same section, subjected in the same way.

* Again: Ever since the ordinance of 1787, a deed, duly executed, and acknowledged or proved, has been necessary to convey a legal title to any land, tenement, or hereditament in Ohio (certain leasehold estates excepted), and hence, if a turnpike, or railway share is a “ tenement,” as held by the courts of Connecticut and Kentucky, the legal title to it can not be transferred without such -deed. Thus, in Buckeridge v. Ingram, before cited, it being decided that the shares in the “ Avon navigation ” were real estate, the master of the rolls held that they did not pass by a codicil attested ■by but two witnesses, the statute requiring the attestation of three witnesses to a will devising realty. But in this state it has never been considered necessary that a transfer of turnpike or railway shares should be by deed. The practice has been almost, or quite, universal to make the transfer by an ordinary assignment, and were we now to hold that no legal title has thereby passed, there is no •telling the amount of mischief our decision would effect. It may be proper here to remark, that if the charter.requires the assignment to be made on the books of the company, it must, perhaps, be so made in order to convey the legal title; but it is a little singular that no such provision is found in the general turnpike or railway acts, or in any turnpike or railway charter that has come under our observation.

Again: The “ act regulating dower” provides “that the widow of any person dying shall be endowed of one full and equal third part of lands, tenements, and real estate of which her husband was seized, as an estate of inheritance, at any time during the coverture.” (Swan’s Stat. 296.) It follows, that if turnpike and railroad shares are real estate, every widow whose husband was, at anytime during-the coverture, the owner of such shares, is entitled to dower therein, although he may have sold and transferred the same; unless the transfer was by deed of the husband and wife, duly executed, attested, and acknowledged. We can not imagine that the legislature-ever intended any such thing.

*A reference to the tax laws will show that turnpike and railroad shares have never been treated, for purposes of taxation, as real estate. It would be an unnecessary consumption of time and space to comment on these laws in detail. I will only refer to the second section of the act of March 2, 1846 (44 Ohio L. 85), in which definitions are given of real and personal property. The-terms “real property” and “land,” are declared to mean and include not only the land itself, whether laid out in town lots or-otherwise, with all things contained therein, but also “ all buildings, structures, and improvements, trees and other fixtures of whatsoever kind thereon, and all rights-and privileges belonging, or in anywise appertaining thereto, including all stoves in any building belonging to the owner of such building, and used instead of fireplaces.” Under the head of “personal property,” various things are enumerated, among which are: “ the capital stock, undivided profits, and all other means, not forming part of the capital stock, of every company, whether incorporated or unincorporated, and' every share, portion, or interest in such stock, profits, or means, by whatsoever name the same may be designated.”

At the same session of the legislature, the “act relative to incorporations for manufacturing, and other purposes ” (44 Ohio L. 37), was passed. This act embraces manufacturing and mining companies, and gives them very large powers of buying, holding, and conveying any lands, tenements, etc. Yet, although the property of some of them, as, for instance, mining companies, must necessarily consist almost wholly of lands, it is nevertheless declared that the stock of the company shall be deemed personal estate, and shall be transferred in such manner as shall be prescribed by the by-laws of the company.

It is thus apparent that the general policy of our laws is to treat shares in incorporated companies as personal estate, and that whenever the mind of the legislature has been specially directed to the subject, it has settled all doubts by an express declaration to that effect.

*In whatever way we view the case, whether upon adjudication, reason, or our statute laws, we arrive at the conclusion that, the shares in question are personal property. The bill must, therefore, be dismissed.

Bill dismissed.  