from the main line of the railroad?-A. Three quarters of a mile, more or less. "Q. 8. Does the railroad of the defendant cross any arroyo ading from the Magdalena or Socorro mountains at any place north of the Magdalena branch of the New Mexican Railroad Company at its junction with the main line 14 miles?-A. Yes. "Q. 9. If you state in answer to the last question that there was such an arroyo, state where it is, its length, breadth, and the height of its banks-A. West of the city of Socorro and east of the Catholic graveyard; its banks are about 2 feet, its width about 60 feet, and about 1 mile in length, more or less. "Q. 14. How far from the main line of the railroad, in a westerly direction, are the mouths of the arroyos testified to by the witnesses?-A. Three-quarters mile to main arroyo, and mile to lower arroyo. Q. 15. What is the character of the land lying between the mouths of the arroyos and the main line of the railroad, is it level or sloping, and for what purposes was it used in 1886? A. It is level now and in 1886 it was an arroyo, and there is no ditch now excepting the company drain. Q. 22. How far is it from the mouths of the arroyos testified to by the witnesses to the Magdalena and Socorro mountains?-A. To the Socorro mountains 4 miles, and to the Magdalena mountains 18 miles. Q. 23. How far is it from plaintiff's property to the Socorro or Magdalena mountains? -A. More or less, the same distance as in the foregoing answer. "Q. 25. Which was constructed first, the railroad company embankment or the houses of plaintiff which were damaged by the water? -A. Railroad." the lower premises are subservient to the higher, and that the latter have a qualified easement in respect to the former, an easement which gives the right to discharge all surface water upon them. The doctrine of the common law, on the other hand, is the reverse, that the lower landowner owes no duty to the upper landowner, that each may appropriate all the surface water that falls upon his own premises, and that the one is under no obligation to receive from the other the flow of any surface water, but may in the ordinary prosecution of his business and in the improvement of his premises by embankments or otherwise prevent any portion of the surface water coming from such upper premises. In Atchison, T. & 8. F. R. Co. v. Hammer, 22 Kan. 763' [31 Am. Rep. 216], it was held that "the simple fact that the owner of one tract of land raises an embankment upon it which prevents the surface water falling and running upon the land of an adjoining owner from running off said land, and causes it to accumulate thereon to its damage, gives to the latter no cause of action against the former, nor is the rule [603 changed by the fact that the former is a railroad corporation, and its embankment raised for the purpose of a railroad track, nor by the fact that a culvert could have been made under said embankment sufficient to have afforded an outlet for all such surface water." In Gibbs v. Williams, 25 Kan. 214, 216 [37 Am. Rep. 241], it was said: "Now, the ordinary rule concerning surface water is settled and familiar; the lower estate owes no duty to the higher, and the owner of each may use or abandon surface water as he pleases." In Kansas City & E. R. Co. v. Riley, 33 Kan. 374, 376, 377, it was said: "The common law, as modified by constitutional and statu and wants of the people, is in force in this It is obvious not only that it was mere sur-tory law, judicial decisions, and the condition face water whose flow was obstructed, not only that no natural watercourses were filled up, but also that the channels which were ob structed were not such ravines, gorges, and outlets as in a mountainous district must be left 602] open to prevent the forming of *lakes and reservoirs therein, but simply the ordinary ditches and passageways which surface water will cut in a generally level district in its effort to reach some flowing stream. It also appears from the answer to the twenty-fifth question that the railroad embankment was constructed before the buildings of the plaintiff. It will be borne in mind that the mountains from which this surface water flowed were from 4 to 18 miles distant, and from the foot of those mountains to the Rio Grande river, naturally, the flowing water had dug channels and ditches through such portions of the soil as afforded the least obstruction to its passage, and such channels and ditches were all that the railroad embankment in any way obstructed. Does a lower landowner by erecting embankments or otherwise preventing the flow of surface water on to his premises render himself liable to an upper landowner for damages caused by the stopping of such flow? In this respect the civil and common law are different, and the rules of the two laws have been recog nized in different states of the Union-some accepting the doctrine of the civil law, that In Hoyt v. Hudson, 27 Wis. 656, 659 [9 Am. Rep. 473], the difference between the civil and the common law was thus stated in a carefully prepared opinion by Chief Justice Dixon: "The doctrine of the civil law is, that the owner of the upper or dominant estate has a natural easement or servitude in the lower or servient one, to discharge all waters falling or accumulating upon his land, which is higher, upon or over the land of the servient owner, as in a state of nature; and that such natural flow or passage of the water cannot be interrupted *or prevented by the servient owner to [604 the detriment or injury of the estate of the dominant or any other proprietor. The doctrine of the common law is, that there exists no such natural easement or servitude in favor of the owner of the superior or higher ground or fields as to mere surface water, or such as falls or accumulates by rain or the melting of snow; and that the proprietor of the inferior or lower tenement or estate may, if he choose, lawfully obstruct or hinder the natural flow of such water thereon, and in so doing may turn the same back upon or off on to or over the lands of other proprietors, with out liability for injuries ensuing from such obstruction or diversion." It would be useless to cite the many author ities from the different states in which on the one side or the other these doctrines of the civil and the common law are affirmed. The divergency between the two lines of authorities is marked, springing from the difference in the foundation principle upon which the two doctrines rest, the one affirming the absolute control by the owner of his property. the other affirming a servitude, by reason of location, of the one premises to the other. Washburn, in his treatise on Easements and Servitudes, 3d ed. side p. 353 and following, treats at length on these two lines of authorities. So, also, in Angell on Watercourses, 7th ed. § 108 and following, is the matter discussed. If a case came to this court from one of the states in which the doctrine of the civil law obtains, it would become our duty, having respect to this which is a matter of local law, to follow the decisions of that state. And in like manner we should follow the adverse ruling in a case coming from one of the states in which the common-law rule is recognized. New Mexico is a territory, but in it the legislature has all legislative power except as limited by the Constitution of the United States and the organic act and the laws of Congress appertaining thereto. There it was enacted in 1876 (N. M. Laws 1876, chap. 2, p. 31, § 2), that "in all the courts in this territory the common law as recognized in the United States of America shall be the rule of practice and decision." Browning v. Browning, 3 N. M. 371. The legisla605] ture of *New Mexico having thus adopt ed the common law as the rule of practice and decision, and there being no special statutory provisions in respect to this matter, it is not to be wondered at that the supreme court of the territory in its opinion in the present casc disposed of this question in this single sentence: "If the act of the territorial legislature of 1889 is constitutional, then we can find no error in the action of the court in setting aside the general verdict and entering judgment upon the special findings." Obviously the only question deemed of any moment by that court was the question in respect to the matter of special findings. It may be proper to notice that the exception suggested by Chief Justice Beasley in Bowlsby v. Speer, 31 N. J. L. 351, 353 [86 Am. Dec. 216], in these words: "How far it may be necessary to modify this general proposition in.cases in which, in a hilly region, from the natural formation of the surface of the ground, large quantities of water, in times of excessive rains or from the melting of heavy snows, are forced to seek a channel through gorges or narrow valleys, will probably require consideration when the facts of the case shall present the question;" and noticed afterwards in Hoyt v. Hudson, 27 Wis. 656, 659 [9 Am. Rep. 473], and Palmer v. Waddell, 22 Kan. 352,-bas no application to the case before us, for, as appears from the findings, the mountainous district from which these waters flowed was from 4 to 18 miles distant from the place of the embankment and the damage. We must therefore overrule the second contention made by counsel for plaintiff in error. The third requires little notice. It does not seem as though there were any particular inconsistency between the various special findings. The only one that deserves any notice is that which is suggested by the first question and the answer thereto, as follows: "Q. 1. At the time of the injury complained of did any of the water flow or run over the plaintiff's land, except the water which fell from the clouds as rain?-A. It did run." It is a little difficult to understand exactly what is meant by this. It may be that the jury meant that the water came from the cloudburst as distinguished from an *ordinary rain-[606 fall, or it may be that their purpose was simply to affirm that this water coming down the arroyos did run over the land of the plaintiff. Considering the uncertainty as to the import of this question and answer, and in view of the clear and positive answers to other direct questions, and also in view of the averments in the original declaration, we think it would be going too far to hold that this is to be taken as a finding that there was a natural watercourse whose waters, increased by the rainfall and cloudburst, overflowed their banks and injured the plaintiff's property. These are all the questions in the case, and, finding no error in the record, the judgment is affirmed. NOTE. As to taxation of shares in national banks and of other corporations,-see note to Providence Bank v. Billings, 7: 939. As to powers and duties of receivers, see note to Davis v. Gray, 21: 447. As to receivers, appointment and powers; receivclaims and for damages; payment of wages, etc.; lien ers' certificates; contracts of receivers; liability for of receiver's certificates: liability of purchaser at foreclosure sale; suits by receiver; liability of for personal injuries and for taxes,-see note to Olcott Headrick, 35: 851. not appear to have been any intent of the real | 73 Cal. 302; Union Trust Co. v. Rigdon, 93 Ill. owner of the shares to escape responsibility. 458, Newton v. Fay, 10 Allen, 507; Easton v. 2. In determining who is liable as the owner of German-American Bank, 127 U. S. 532 (32: shares of stock in a national bank, the courts will look at the relations of the parties as they actually are, or as by reason of their conduct they must be assumed to be for the protection of creditors; and the object of the statute is not to be defeated by the mere forms of transactions be tween shareholders and their creditors. [No. 201.] Argued January 29, 1897. Decided March 1, 1897. 210); Hyatt v. Argenti, 3 Cal. 151; Heyland v. Badger, 35 Cal. 404; Brewster v. Hartley, 37 Cal. 15, 99 Am. Dec. 237; Lucketts v. Townsend, 3 Tex. 119, 49 Am. Dec. 723; Wright v. Ross, 36 Cal. 414; Hoppin v. Buffum, 9 R. I. 513, 11 Am. Rep. 291; Re Barker, 6 Wend. 509; Ex parte Willcocks, 7 Cow. 402, 17 Am. Dec. 525. Messrs. Edward W. Hutchins and Henry Wheeler filed, by leave of court, a brief for Thomas P. Beal, receiver of Maverick National IN ERROR to the United States Circuit Court Bank. IN a judgment affirming the judgment of the Circuit Court of the United States for the Southern District of California in favor of the defendant in an action brought by Frederick N. Pauly, Receiver of the California National Bank of San Diego, to recover the amount of an assessment made on the shareholders of said bank against the State Loan & Trust Company. Affirmed. See same case below, 56 Fed. Rep. 430, 15 U. S. App. 259. The facts are stated in the opinion. Messrs. Edward Winslow Paige and J. Wade Mc Donald, for plaintiff in error: The defendant was a shareholder within the letter as well as within the intent and purpose of the statutes. Messrs. George O. Shattuck and William A. Munroe filed, by leave of court, a brief for Essex Savings Bank in No. 366. Mr. Justice Harlan delivered the opinion of the court: This was an action to recover the amount of an assessment made on the shareholders of a national banking association in the hands of a receiver. Is the defendant in error, the State Loan & Trust Company, a "shareholder" of the California National Bank of San Diego within the meaning of the statute relating to national *banking associations? That is the sole [608 question presented by the pleadings. By the Revised Statutes of the United States it is provided Pullman v. Upton, 98 U. S. 328 (24: 818); "Sec. 5139. The capital stock of each assoGermania Nat. Bank v. Case, 99 U. S. 628 ciation shall be divided into shares of $100 (25: 448); Wheelock v. Kost, 77 Ill. 296; Nat-each, and be deemed personal property, and ional Commercial Bank v. McDonnell, 92 Ala. 387; Gilman v. Curtis, 66 Cal. 116; Johnson v. Laflin, 103 U. S. 800 (26: 532); Cecil Nat. Bank v. Watsontown Bank, 105 U. S. 217 (26: 1039); Easton v. German-American Bank, 127 U. S. 532 (32: 210); Anderson v. Philadelphia Warehouse Co. 111 U. S. 479 (28: 478); Richmond v. Irons, 121 U. S. 27 (30: 864); Cook, Stock & Stockholders (3d ed.) § 466. Affixing the word "pledgee" to its name on the books of the bank, but without giving the name or names of the pledgeors, did not prevent or affect the liability of the defendant to the creditors of the bank. Heath v. West, 28 N. H. 108; Peers v. McLaughlin, 88 Cal. 299. Messrs. W. P. Gardiner and W. A. Harris, for defendant in error: By delivery of a pledge as security for the payment of a debt, the pledgee acquires only a lien or special property in the article or things pledged. Story, Bailm. §§ 287, 307; 18 Am. & Eng. Enc. Law, 590. Even where in lieu of delivery an apparent transfer of title is made for the purpose merely of security, the general property remains in the pled geor. 18 Am. & Eng. Enc. Law, 591, note; Cross v. Eureka Lake & Y. Canal Co. 73 Cal. 302; Anderson v. Philadelphia Warehouse Co. 111 U. S. 479 (28: 478); Welles v. Larrabee, 36 Fed. Rep. 866. A pledgee is a trustee, and as such is by the statute exempted from liability. Flint, Trusts & Trustees, § 2; Perry, Tr. 243; Cross v. Eureka Lake & Y. Canal Co. transferable on the books of the association in such manner as may be prescribed in the bylaws or articles of association. Every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all the rights and liabilities of the prior holder of such shares; and no change shall be made in the articles of association by which the rights, remedies, or security of the existing creditors of the association shall be impaired.' "Sec. 5151. The shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares." Sec. 5152. Persons holding stock as executors, administrators, guardians, or trustees shall not be personally subject to any liabilities as stockholders; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in such funds would be, if living and competent to act and hold the stock in his own name." "Sec. 5210. The president and cashier of every national banking association shall cause to be kept at all times a full and correct list of the names and residences of all the shareholders in the association, and the number of shares held by each, in the office where its business is transacted. Such list shall be subject to the inspection of all the shareholders and creditors of the association, and the officers authorized to assess taxes under state authority, during business hours of each day in which business | certificates 308 and 309, respectively, the name The Comptroller of the Currency appointed the plaintiff in error receiver of the California National Bank of San Diego, California. U. S. Rev. Stat. § 5234. He gave bond as required by law, and thereafter entered upon the discharge of the duties of his trust. In virtue of the authority conferred upon him by law, the Comptroller made an assessment on the shareholders of the bank for $500,000, to be paid by them on or before the 18th day of June, 1892. The assessment was equally and ratably upon shareholders to the amount of 100 per cent of the par value of the shares of the capital stock of the bank held and owned by them respectively at the time of its failure or suspension, and the receiver was required by an order of the Comptroller to institute suits to enforce against each shareholder his personal liability to that extent. The receiver gave due notice of the assess ment, in writing, to the State Loan & Trust Company-which is a corporation of California, having its principal place of business at the city of Los Angeles in that state-and made demand upon it therefor, but the company did not pay the same or any part thereof. The facts upon which the claim against the defendant company is based are these: S. G. Havermale and J. W. Collins, owners and holders respectively of certificates numbered 286 and 297 issued to them for one hundred shares, each, of the capital stock of the California National Bank of San Diego, were in debted to the State Loan & Trust Company upon their promissory note for $12,500, besides interest. These certificates having been indorsed by the respective holders by writing their names across the back thereof, were transferred and delivered to the State Loan & Trust Company as collateral security for the payment of the above note, and, so indorsed, were, in the ordinary course of mail, transmitted and surrendered to the California National Bank of San Diego. New certificates, numbered 308 610]*and 309, respectively, were thereupon issued to the State Loan & Trust Company of Los Angeles, as "pledgee," in lieu of certificates 286 and 297. Each of the new certificates showed upon its face that it was issued to the "State Loan & Trust Company of Los Angeles, pledgee," and each purported to be for one hundred shares of the capital stock of the California National Bank of San Diego. The defendant, after receiving certificates 308 and 309, held them "as pledgee, and as collateral security for the payment of said note, and for the unpaid balance of the debt thereby represented." Otherwise than as just stated, the State Loan & Trust Company of Los Angeles never had, owned, or held any shares of the capital stock of the California National Bank of San Diego, and never was entitled to hold the usual stock certificate as such shareholder to the amount of two hundred shares or to any other amount. Except as pledgee of the stock represented by A jury having been waived by the parties in writing, the case was tried in the circuit court, and judgment was rendered for the defendant. 56 Fed. Rep. 430. Upon appeal to the circuit court of appeals that judgment was affirmed. 15 U. S. App. 259. Is one who does not appear upon the official list of the names and residences of the shareholders of a national banking association otherwise than as "pledgee" of a given number of shares of the capital stock of such association nothing else appearing-liable as a "shareholder" of such association under U. S. Rev. Stat. § 5151, declaring that "the shareholders of every national banking association shall be held individually responsible, equally and ratably, and not one for another, for all contracts, debts, and engagements of such asso-[611 ciation, to the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares?" As both sides contend that their respective positions are in harmony with decisions heretofore rendered in this court, it will be necessary to refer to some of the cases cited by counsel. In Pullman v. Upton, 96 U. S. 328, 330 [24: 818, 819], which was an action by the assignee in bankruptcy of an insurance company to compel a holder of shares of its stock to pay the balance due thereon, the court said: "The only question remaining is, whether an assignee of corporate stock, who has caused it to be transferred to himself on the books of the company, and holds it as collateral security for a debt due from his assignor, is liable for unpaid balances thereon to the company, or to the creditors of the company, after it has become bankrupt. That the original holders and the transferees of the stock are thus liable we held in Upton v. Tribilcock, 91 U. S. 45 [23: 203]; Sanger v. Upton, 91 U. S. 56 [23: 220]; and Webster v. Upton, 91 U. S. 65 [23: 384]; and the reasons that controlled our judgment in those cases are of equal force in the present. The creditors of the bankrupt company are entitled to the whole capital of the bankrupt, as a fund for the payment of the debts due them. This they cannot have, if the transferee of the shares is not responsible for whatever remains unpaid upon his shares; for by the transfer on the books of the corporation the former owner is discharged. It makes no difference that the legal owner-that is, the one in whose name the stock stands on the books of the corporation-is in fact only, as between himself and his debtor, a holder for security of the debt, or even that he has no beneficial interest therein." In Germania Nat. Bank v. Case, 99 U. S. 628, 631, 632 [25: 448-450],-which was an action to make the Germania National Bank of New Orleans liable as a shareholder of another national bank that had become insolvent, it appeared that Phelps, McCullough, & Co long to the bank. No case holds that such a transfer relieves the transferrer from his liability as a stockholder." It may be here observed that in Pullman v. Upton, 96 U. S. 328 [24: 818], the person who sought to escape liability as a shareholder appeared on the books of the insolvent insurance company as the owner of the stock; and that in Germania Nat. Bank v. Case, 99 U. S. 628, 631, 632 [25: 448-450], the Germania National Bank, after the original transfer under the power of attorney executed by its debtor, appeared on the books of the other bank as the owner of the stock, and that the liability aris by a transfer, however regular in form, to another who acquired no beneficial interest in it, and was to hold the stock simply for its benefit. Nothing appeared upon the stock list, in either case, to indicate that the person or corporation who appeared on such list as a shareholder was not, in fact, the actual owner. borrowed money from the defendant bank, in hand does not need the application of so and to secure the payment of the loan, evi rigorous a doctrine. While the evidence esdenced by note, pledged one hundred shares of tablishes that the Crescent City was in a failthe stock of the Crescent City National Bank, ing condition when the transfer to Waldo was with power on nonpayment of the sum bor made, and leaves no reasonable doubt that the 612] rowed to *dispose of the stock for cash Germania Bank knew it and made the transfer tr without recourse to legal proceedings, and to escape responsibility, it establishes much more. that end to make transfers on the books of the The transfer was not an out and out transfer. latter corporation. The note not having been The stock remained the property of the transpaid, the stock was transferred on the books of ferrer. Waldo was bound to retransfer it the Crescent City National Bank to the Ger- when requested, and all the privileges and mania National Bank. The latter subsequent-possible benefits of ownership continued to bely caused the stock to be transferred, on the books of the former, to one of its clerks, who acquired no beneficial interest in it, and between whom and the officers of his bank it was understood that he would retransfer the stock at their request. This court, observing that notwithstanding the transfer to the clerk the stock remained subject to the bank's control, and at the transfer to him was made to evade the liability of the true owners, said: "It is thoroughly established that one to whom stock has been transferred in pledge or as collateral security for money loaned, and who appears on the books of the corporation as the owner of the stock, is liable as a stockholdering therefrom could not be defeated or avoided for the benefit of creditors. We so held in Pullman v. Upton, 96 U. S. 328 [24: 818], and like decisions abound in the English courts, and in numerous American cases, to some of which we refer: Adderly v. Storm, 6 Hill, 624; Rosevelt v. Brown, 11 N. Y. 148; Holyoke Bank v. Burnham, 11 Cush. 183; Magruder . Colston, 44 Md. 849 [22 Am. Rep. 47]; Crease v. Babcock, 10 Met. 525; Wheelock v. Rost, 77 Ill. 296; United States Trust Co. v. United States F. Ins. Co. 18 N. Y. 199; Hale v. Walker, 81 Iowa, 344 [7 Am. Rep. 137]. For this several reasons are given. One is. that he is estopped from denying his liability by voluntarily holding himself out to the pub lic as the owner of the stock, and his denial of ownership is inconsistent with the represen tations he has made; another is, that by taking the legal title he has released the former owner; and a third is, that after having taken the apparent ownership and thus become entitled to receive dividends, vote at elections, and enjoy all the privileges of ownership, it would be in equitable to allow him to refuse the responsibilities of a stockholder. . . . When, therefore, the stock was transferred to the Germania Bank, though it continued to be held merely as a collateral security, the bank became subject to the liabilities of a stockholder, and the liabil613]ity accrued the instant the *transfer was made." After referring to some of the English cases, the court proceeds: "The American doctrine is even more stringent. Mr. Thomp son states it thus and he is supported by the adjudicated cases: 'A transfer of shares in a failing corporation, made by the transferrer with the purpose of escaping his liability as a shareholder, to a person who, from any cause, is incapable of responding in respect to such liability, is void as to the creditors of the company and as to other shareholders, although as between the transferrer and the transferee it was out and out.' Nathan v. Whitlock, 9 Paige, 152; McClaren v. Franciscus, 43 Mo. 452: Marcy v. Clark, 17 Mass. 329; Johnson v. Laflin, 5 Dill. 65, 6 Cent. L. J. 131. The case *In Adams v. Johnson (" Bowden v. [614 Johnson") 107 U. S. 251, 261 [27: 386, 389], which involved the liability as a shareholder of a national bank of one who became the purchaser and owner of some of its shares, and who in apprehension of the bank's failure, and in order to escape liability, transferred his stock to an irresponsible person, the court said: "The answer sets forth that Johnson became the purchaser and owner of the one hundred and thirty shares in 1869. As such shareholder, he became subject to the individual liability prescribed by the statute. This liability attached to him until, without fraud as against the creditors of the bank, for whose protection the liability was imposed, he should relieve himself from it. He could do so by a bona fide transfer of the stock. But where the transferrer, possessed of information showing that there is good ground to apprehend the failure of the bank, colludes and combines, as in this case, with an irresponsible transferee, with the design of substituting the latter in his place, and of thus leaving no one with any liability to respond for the individual liability imposed by the statute, in respect of the shares of stock transferred, the transaction will be decreed to be a fraud on the creditors, and the transferrer will be held to the same liability to the creditors as before the transfer. He will be still regarded as a shareholder quoad the creditors, although he may be able to show that there was a full or a partial consideration for the transfer, as between him and the transferee. The appellees contend that the statute does not admit of such a rule, because it declares that every person becoming a shareholder by transfer succeeds to all the liabilities of the prior holder, and that therefore the lia |