Year: 1875

Ing the Panama Railroad Company from running steam.
srs from New York TO Aspinwall and from Panama TO
San Francisco in connection with Its road should not
be continued Mr.. Aaron Freeman one OF tho stock
holders, brings the suit and upon his application tho
temporary injunction was granted. Ex-Judge Fuller
ton and Henry E. Knox appeared as counsel for Mr.
Freeman, and Mt Mcfarland and ex-Judge Shipman
represented the Panama Railroad Company.


Preliminary to the argument the complaint read,
and then followed an affidavit in reply made by the
President and directors OF tho road The latter docu
mcnt sets forth that at the time OF the granting OF the
injunction the directors negotiating for the
tablishment OF the steamship lines sought 10 be re-
strained that this done with the consent Of the
greater part OF the stockholders that the proposed
action the best interests OF the company that
M the time the Panama Railroad subscribed for Il
was we'll known that the Pacific Mail Company was
engaged in large operations, and the enterprise OF
the Panama Railroad was to be separate enterprise
having different termni and intended be carried
the Atlantic coast; that for this purpose they
granted extended powers and the instigators Of
the enterprise, well as all other interested parties,
we'll knew that the steamships would be necessary for
the carrying out OF the enterprise and accordingly
from 1850 until 1872 steamers run by the
pany under their charter from New York Aspinwa,
and also in the Pacific without their rights do be-
ing questioned by any one; that tho Pacific Mail Com
1919 succeeded In obtaining rfght TO navigate
the Atlantic, but their powers although equal to- did
not exceed the powers granted to the Panama Com
pany under their original charter, and that although
they agreed to extend their line they allowed
reasonable time to do IL Is further averred that
the officers OF he two companies practically the
samc that To" heaviest class Of frcghts turned
over the Union Pacific Railroad while the lowest
frcghts received by tho Pacific Mail; that this
present suit. deponcnts informed had been in
stuted in the Union Pacific interest and that the only
way to remedy this state of things establish this
line OF independent steamships the Atlantic
Pacific Another affidavit. made by Prosper N.
Wetman, was read in confirmation OF the above
Jnda. Fniier,on in onros,,,or Nd. hw Il
Senter first Vice President of the Panama Railroad
setting forth that the allegations made by Mr. wetman
were for the most part Incorrect. AS to the use OF
vessels and steamers by the defendant the facts as
alleged were that limo Of br'gs started by the
secretary as private speculation which the com
pany had q half interest but control; that IL
used to transport freight TO New York. That after
this the company bought line of steamers to New
York, but subsequently sold It TO the Pacific Mail; that
It untrue that the Panama road line OF steamers
for many years since the completion of its road, and
that the company did purchase any steamers until
after the completion of its road


The above anidavits having been read, Mr. Macfar-
land opened the argument behalf OF the company.
He urged that there was no clashing between the
,dayits IL was not denied that the road owned both
steam and sailing vessels. The plaintiff did not show
any loss or injury by such lines. The companys
charter gave William Z. Aspinwal, John H.





railroad across the Isthmus OF Panama, under a
grant by tho Republic OF Granada to purchase
and navigate such steamers and sailing vessels arc
proper be used in connection with the road which
broad enough to cover tho navigation OF the lines
objected TO- When VIC arc asked TO emasculae this
railroad must look at its charter carefully. An
enormous corporation, the Union Pacific Railroad Com
pany has possessed itself OF every feeder but the
Panama Railroad Company What principle of public
policy promoted by comforting upon the Panama
Railroad Company the power d o. extending M Us lines Sy
existing state of thing; and certainly there Is no
ground for scverng the charter right in two and saving
the and ignoring tho other The charter allows
the company to what is necessary and proper for
tho road. Who Judge OF this but the dIrectorsS
The limitation is only as to what IS necessary and
proper They have unrestricted permission to the
sea. IL was seen that they needed the functions OF
argument At srea length, citing numerous authorities
IN support OF the same


Exudge Fullerton made an equally lengthy response
che Panama Railroad Company, no said, claim the
right to establish line OF steamships for the trans
portaon Of passengers and freight from the port OF
New York TO tho port OF Aspinwa in the Republic OF
New Granada, and from the port OF Panama, also in
said last named Republic, TO the port Of San Francisco
In the State OF California, and are now taking the
necessary steps accomplish that purpose The
plaintiff claims that the company possesses no such
power and the object OF this action is TO restrain u
from It's EXERCISE upon the ground not only that IL Is
ultra rtres but Also that puts IN jeopardy the prop
cooperating the company he went on 70 say that in
order to discuss the question Of the power integcnty
and get at the intention OF the Legislature In making


this grant, they consider the circumstances which
existed at the time the grant made The Court VIII


lake Judicial notice OF The fact that the time Of tho
creation OF the corporation there well established
irado between the cities Of New York and San Fran
ssco The object OF this corporation, therefore, was
not to open channels OF commerce, but TO improve
those already existing Communication with San Fran
cisco was had only around Cape Horn wherc navigation
was tedious dangerous and expensive BY establishing
communication across the Isthmus OF Panama, the
dangers OF navigation materially lessened and the
expense OF conveying freight and passengers between
the two important ports OF Now York and San Fran
cisco materially diminished The corporation, however,
foresaw difficulty and provided against II by that
rla In sk~f~ .kk.l. nAlaA thmra IN
purchase and navigate steam or sailing vessels
As might be proper and convenient In
Owing TO the nature Of the harbor OF Panama ocean
steamers and sailing vessels under the necessity
b coming TO anchor At considerable distance from
The wharves and docks situated at that place This
owing to tho great rise and fall OF the Pan
The shaowness OF the water Of the bay between the


Islands OF Flamenco Perico, Caobra and Amos and tho
ihore Of the city Of Panama Passengers and freight In
bay 10 the steamers and from the steamers 10 the
wharves by vessels OF lighter drausht than the
Themselves and since the completion OF the railroad
they have been transported by means OF tugs and
launches belonging 10 said corporation. These tugs
used for that purpose in consequence Of the shallow
ness OF the water OF the bay, approach the wharf
OF the railroad company about three hours only mme-
diatey before and Immediately after flood tide. The
ebb OF the tide is such that during the greater part OF
the time the bottom of that part OF the bay where the
wharf situated barred for distance OF about haf
mile from the wharf The construction OF railroad,
therefore, as u was then contemplated and a. " now
exists, without the means 81 communicating between
tnc NuaTNeb A. respective suu sao 5N"a'Ni"
which piled between New York and San Francisco
would have failed to accomplish the object that was IN.
tended In addition, therefore, TO grant 70 construct
said road Il was necessary TO obtain other powers IL
In view OF this difficulty and for the purpose Of
providing against u that the power 70 purchase and
navigate steam or sailing vessels might be proper
and convenient Ia connection with the ROAD was
granted 10 this corporation.


reference to few elementary principles would
determine the question involved in this controversy.
IL was familiar principle that corporations being the
creatures OF legislation precisely what their organic
net makes them, and beyon that they arc nothing.
They act strictly within their limited sphere, and


Tor every Junction they claim 10 exercise they must
fhnd authority IN legislative grant II the steamers
soud have reached the wharvcs erected by this railroad
company without the intervention Ot other vessels the
Court even then, would have had difficulty in comingto
the conclusion that the Legislature intended TO granto
this corporation the extraordinary power which II now
aI-L aA.o Iln.